Document:

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                                                                    EXHIBIT 10.2

              EMPLOYEE SUPPLEMENTAL COMPENSATION BENEFITS AGREEMENT
              -----------------------------------------------------

     This Employee Supplemental Compensation Benefits Agreement (the
"Agreement") is made and entered into effective as of January 1, 1998, by and
between Greater Bay Bancorp, a California corporation (the "Employer"), and
David L. Kalkbrenner, an individual residing in the State of California (the
"Employee").

                                 R E C I T A L S
                                 ---------------

     WHEREAS, the Employee is an employee of the Employer, and, since July 1,
1987, has become eligible to participate in the Employee Supplemental
Compensation Benefits Plan represented by this Agreement(the "Plan");

     WHEREAS, the Employer desires to establish a compensation benefits program
as a fringe benefit for certain officers of the Employer in order to attract and
retain individuals with extensive and valuable experience in the banking
industry;

     WHEREAS, the Employee's experience and knowledge of the affairs of the
Employer and the banking industry are extensive and valuable;

     WHEREAS, it is deemed to be in the best interests of the Employer to
provide the Employee with certain benefits, on the terms and conditions set
forth herein, in order to reasonably induce the Employee to remain in the
Employer's employment and to compensate the Employee for valuable services
heretofore rendered to the Employer; and

     WHEREAS, the Employee and the Employer wish to specify in writing the terms
and conditions upon which this additional compensatory incentive will be
provided to the Employee, or to the Employee's spouse or the Employee's
designated beneficiaries, as the case may be.

     NOW, THEREFORE, in consideration of the services to be performed by the
Employee in the future, as well as the mutual promises and covenants contained
herein, the Employee and the Employer agree as follows:

                                A G R E E M E N T
                                -----------------

     1. Terms and Definitions.

        1.1 Administrator. The Employer shall be the "Administrator" and, solely
            -------------
for the purposes of ERISA, as defined in subparagraph 1.11 below, the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

                                      -1-
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        1.2 Applicable Percentage. The term "Applicable Percentage" shall mean
            ---------------------
that percentage listed on Schedule "A" attached hereto which is adjacent to the
number of calendar years which shall have elapsed from the date of the
Employee's commencement of employment with and providing personal services to
the Employer or, if later, the date on which the Employee became eligible to
participate in the Plan represented by this Agreement, and ending on the date
payments are to first begin under the terms of this Agreement. Notwithstanding
the foregoing or the percentages set forth on Schedule "A", but subject to all
other terms and conditions set forth herein, the "Applicable Percentage" shall
be:

             (a) provided payments have not yet begun with respect to the
Employee Benefits specified in Schedule "B", one hundred percent (100%) upon the
termination of the Employee's employment by the Employer if such termination is
in connection with a "Change in Control" as defined in subparagraph 1.4 below. A
termination shall be deemed to be in connection with a Change in Control if,
within two (2) years following the occurrence of a Change in Control: (i) the
Employee's employment with the Employer is terminated by the Employer other than
a Termination for Cause; or (ii) by reason of the Employer's actions any adverse
and material change occurs in the scope of the Employee's position,
responsibilities, duties, salary, benefits or location of employment; or (iii)
the Employer causes an event to occur which reasonably constitutes or results in
a demotion, a significant diminution of responsibilities or authority, or a
constructive termination (by forcing a resignation or otherwise) of the
Employee's employment;

             (b) provided payments have not yet begun with respect to the
Employee Benefits specified in Schedule "B", one hundred percent (100%) upon the
occurrence of (i) the Employee's death prior to the termination of the
Employee's employment by the Employer, or (ii) the Employee's Disability (as
defined in subparagraph 1.6 below) other than a Disability that occurs after the
termination of the Employee's employment by the Employer; and

             (c) notwithstanding subclauses (a) and (b) of this subparagraph
1.2, zero percent (0%) in the event the Employee takes any intentional action
which prevents the Employer from collecting the proceeds of any life insurance
policy which the Employer may happen to own at the time of the Employee's death
and of which the Employer is the designated beneficiary (the "Employer Cost
Recovery Policy"). Furthermore, notwithstanding the foregoing, or anything
contained in this Agreement to the contrary, in the event the Employee takes any
intentional action which prevents the Employer from collecting the proceeds of
any Employer Cost Recovery Policy, then: (1) the Employee, the Employee's
estate, designated beneficiary or Surviving Spouse shall no longer be entitled
to receive any of the amounts payable under the terms of this Agreement, and (2)
the Employer shall have the right to recover from Employee's estate and/or
Surviving Spouse all of the amounts paid to the Employee's estate or Surviving
Spouse, as the case may be (with respect to amounts paid prior to the Employee's
death or paid to the Employee's estate or Surviving Spouse) or from the
Employee's designated beneficiary (with respect to amounts paid to the
designated beneficiary) pursuant to the terms of this Agreement prior to and
after Employee's death.

                                      -2-
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        1.3 Beneficiary. The term "beneficiary" or "designated beneficiary"
            -----------
shall mean the person or persons whom the Employee shall designate in a valid
Beneficiary Designation, a copy of which is attached hereto as Schedule "E," to
receive the benefits provided hereunder. A Beneficiary Designation shall be
valid only if it is in the form attached hereto and made a part hereof and is
completed and signed by the Employee and received by the Administrator prior to
the Employee's death.

        1.4 Change in Control. The term "Change in Control" shall mean the first
            -----------------
to occur of any of the following events with respect to the Employer (with the
term "Employer" being defined for purposes of determining whether a "Change in
Control" has occurred to include any parent bank holding company which owns 100%
of the Employer's outstanding voting capital stock):

             (a) Any "person" (as such term is used in sections 13 and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
becomes the beneficial owner (as that term is used in section 13(d) of the
Exchange Act), directly or indirectly, of twenty-five percent (25%) or more of
the Employer's capital stock entitled to vote in the election of directors,
other than a group of two or more persons not (i) acting in concert for the
purpose of acquiring, holding or disposing of such stock or (ii) otherwise
required to file any form or report with any governmental agency or regulatory
authority having jurisdiction over the Employer which requires the reporting of
any change in control;

             (b) During any period of not more than two (2) consecutive years,
not including any period prior to the adoption of the Plan represented by this
Agreement, individuals who, at the beginning of such period, constitute the
Board of Directors of the Employer, and any new director (other than a director
designated by a person who has entered into an agreement with the Employer to
effect a transaction described in clause (a), (c), (d) or (e) of this
subparagraph 1.4) whose appointment to the Board of Directors or nomination for
election to the Board of Directors was approved by a vote of at least
three-fourths (3/4ths) of the directors then still in office, either were
directors at the beginning of such period or whose appointment or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority thereof;

             (c) The effective date of any consolidation or merger of the
Employer (after all requisite shareholder, applicable regulatory and other
approvals and consents have been obtained), other than a consolidation or merger
of the Employer in which the holders of the voting capital stock of the Employer
immediately prior to the consolidation or merger hold more than fifty percent
(50%) of the voting capital stock of the surviving entity immediately after the
consolidation or merger;

             (d) The shareholders of the Employer approve any plan or proposal
for the liquidation or dissolution of the Employer; or

                                      -3-
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             (e) The shareholders of the Employer approve the sale or transfer
of substantially all of the Employer's assets to parties that are not within a
"controlled group of corporations" (as that term is defined in section 1563 of
the Code) in which the Employer is a member.

     1.5 The Code. The "Code" shall mean the Internal Revenue Code of 1986, as
         --------
amended (the "Code").

     1.6 Disability/Disabled. The term "Disability" or "Disabled" shall have the
         -------------------
same meaning given such terms in any policy of disability insurance maintained
by the Employer for the benefit of employees including the Employee. In the
absence of such a policy which extends coverage to the Employee in the event of
disability, the terms shall mean bodily injury or disease (mental or physical)
which wholly and continuously prevents the performance of the Employee's duties
to the Employer for at least ninety (90) days.

     1.7 Early Retirement Date. The term "Early Retirement Date" shall mean the
         ---------------------
Retirement, as defined below, of the Employee on a date which occurs prior to
the Employee attaining sixty-two (62) years of age, as defined below, but after
the Employee has attained fifty-nine and one-half (59.5) years of age.

     1.8 Effective Date. The term "Effective Date" shall mean the date first
         --------------
written above.

     1.9 Employee Benefits. Except as otherwise stated in this Agreement, the
         -----------------
term "Employee Benefits" shall mean the Index Employee Benefits, if any,
described in and determined in accordance with Schedule "B" and the supplemental
benefits described in and determined in accordance with Schedule "C", and
reduced or adjusted to the extent: (i) required under the other provisions of
this Agreement; (ii) required by reason of the lawful order of any regulatory
agency or body having jurisdiction over the Employer; or (iii) required in order
for the Employer to properly comply with any and all applicable state and
federal laws, including, but not limited to, income, employment and disability
income tax laws (e.g., FICA, FUTA, SDI).

     1.10 Employer. Except as otherwise set forth in this Agreement, the term
          --------
"Employer" shall mean Greater Bay Bancorp; provided, however, that for purposes
of subparagraph 1.15 (definition of Termination for Cause) and Paragraph 5
(including its subparagraphs, regarding termination of employment), the term
"Employer" shall mean Greater Bay Bancorp and its subsidiaries and affiliated
entities.

     1.11 ERISA. The term "ERISA" shall mean the Employee Retirement Income
          -----
Security Act of 1974, as amended.

     1.12 Plan Year. The term "Plan Year" shall mean the Employer's fiscal year.
          ---------

                                      -4-
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     1.13 Retirement. The term "Retirement" or "Retires" shall refer to the date
          ----------
which the Employee acknowledges in writing to the Employer to be the last day
the Employee will provide any significant personal services, whether as an
employee or independent consultant or contractor, to the Employer or to, for, or
on behalf of, any other business entity conducting, performing or making
available to any person or entity banking or other financial services of any
kind. For purposes of this Agreement, the phrase "significant personal services"
shall mean more than ten (10) hours of personal services rendered to one or more
individuals or entities in any thirty (30) day period for compensation excluding
services, if any, rendered by the Employee after Retirement pursuant to the
terms of a consulting agreement described in Schedule "C", if any.

     1.14 Surviving Spouse. The term "Surviving Spouse" shall mean the person,
          ----------------
if any, who shall be legally married to the Employee on the date of the
Employee's death.

     1.15 Termination for Cause. The term "Termination for Cause" shall mean
          ---------------------
termination of the employment of the Employee by reason of any of the following:

     (a) The Employee's deliberate violation of (i) any state or federal banking
or securities laws, or of the Bylaws, rules, policies or resolutions of the
Employer, or (ii) of the rules or regulations of the California Commissioner of
Financial Institutions, the Federal Deposit Insurance Corporation, the Federal
Reserve Board of Governors, the Office of the Comptroller of the Currency or any
other regulatory agency or governmental authority having jurisdiction over the
Employer, which has a material adverse effect upon the Employer; or

     (b) The Employee's conviction of any felony which has a material adverse
effect upon Employer.

     2. Scope, Purpose and Effect.
        -------------------------

        2.1 Contract of Employment. Although this Agreement is intended to
            ----------------------
provide the Employee with an additional incentive to remain in the employ of the
Employer, this Agreement shall not be deemed to constitute a contract of
employment between the Employee and the Employer nor shall any provision of this
Agreement restrict or expand the right of the Employer to terminate the
Employee's employment. This Agreement shall have no impact or effect upon any
separate written Employment Agreement which the Employee may have with the
Employer, it being the parties' intention and agreement that unless this
Agreement is specifically referenced in said Employment Agreement (or any
modification thereto), this Agreement (and the Employer's obligations hereunder)
shall stand separate and apart from, and shall have no effect upon, or be
affected by, the terms and provisions of said Employment Agreement.

        2.2 Fringe Benefit. The benefits provided by this Agreement are granted
            --------------
by the Employer as a fringe benefit to the Employee and are not a part of any
salary reduction plan or any arrangement deferring a bonus or a salary increase.
The Employee has no option to take any current payments or bonus in lieu of the
benefits provided by this Agreement.

                                      -5-
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     3. Payments Upon Early Retirement or Retirement and After Retirement.
        -----------------------------------------------------------------

        3.1 Payments Upon Early Retirement. The Employee shall have the right to
            ------------------------------
Retire on a date which constitutes an Early Retirement Date as defined in
subparagraph 1.7 above. In the event the Employee elects to Retire on a date
which constitutes an Early Retirement Date, the Employee shall be entitled to be
paid the Applicable Percentage of the Employee Benefits specified in Schedule
"B", payable in substantially equal monthly installments on the first day of
each month, beginning with the month following the month in which the Early
Retirement Date occurs (or on such later date as may be mutually agreed upon by
the Employee and the Employer in advance of such Early Retirement Date) (i) for
the period designated in Schedule "F", in the case of the balance in the Benefit
Account and (ii) until the Employee's death, in the case of the Index Benefit
defined in Schedule "B".

                                     EXAMPLE
                         Payments Upon Early Retirement
<TABLE>
<CAPTION>
Assumptions:
-----------
<S>                                                                        <C>
Age at Early Retirement                                                    60
Normal Retirement Age                                                      62
Projected Benefit Account Value at Age 62                                  $100,000
Actual Benefit Account Value at Age 60                                     $20,000
Distribution Period Elected for Benefit Account (Schedule F)               10 yrs.
Projected Index Benefit at Age 62                                          $50,000
Projected Index Benefit at Age 60                                          $25,000
Applicable Percentage at Age 60                                            75%
                     First Year Benefit Calculation: Age 60
1) Benefit Account  [($20,000 /10) x .75]                                  $ 1,500
2) Index Benefit  ($25,000 x .75)                                          $18,750
                                                                           -------
                   Total First Year Benefit                                $20,250
                                                                           =======
</TABLE>

        3.2 Payments Upon Retirement. If the Employee shall remain in the
            ------------------------
continuous employment of the Employer until attaining sixty-two (62) years of
age, the Employee shall be entitled to be paid the Applicable Percentage of the
Employee Benefits specified in Schedule "B", payable in substantially equal
monthly installments on the first day of each month, beginning with the month
following the month in which the Employee Retires (or on such later date as may
be mutually agreed upon by the Employee and the Employer in advance of said
Retirement date) (i) for the period designated in Schedule "F", in the case of
the balance in the Benefit Account and (ii) until the Employee's death, in the
case of the Index Benefit defined in Schedule "B".

                                      -6-
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        3.3 Payments in the Event of Death After Retirement. The Employer agrees
            -----------------------------------------------
that if the Employee Retires, but shall die before receiving all of the Employee
Benefits, the Employer will make such payments to which the Employee may be
entitled, to the Employee's designated beneficiary in lump sum. If a valid
Beneficiary Designation is not in effect, then the remaining amounts due to the
Employee under the terms of this Agreement shall be paid to the Employee's
Surviving Spouse. If the Employee leaves no Surviving Spouse, the remaining
amounts due to the Employee under the terms of this Agreement shall be paid to
the duly qualified personal representative, executor or administrator of the
Employee's estate.

     4. Payments in the Event Death or Disability Occurs Prior to Retirement.
        --------------------------------------------------------------------

        4.1 Payments in the Event of Death Prior to Retirement. If the Employee
            --------------------------------------------------
dies while actively employed by the Employer at any time after the Effective
Date of this Agreement, but prior to Retirement, the Employer agrees to pay the
Employee Benefits to which the Employee is then entitled to the Employee's
designated beneficiary in lump sum. If a valid Beneficiary Designation is not in
effect, then the remaining amounts due to the Employee under the terms of this
Agreement shall be paid to the Employee's Surviving Spouse. If the Employee
leaves no Surviving Spouse, the remaining amounts due to the Employee under the
terms of this Agreement shall be paid to the duly qualified personal
representative, executor or administrator of the Employee's estate.

        4.2 Payments in the Event of Disability Prior to Retirement. In the
            -------------------------------------------------------
event the Employee becomes Disabled at any time after the Effective Date of this
Agreement but prior to Retirement, the Employee shall be entitled to be paid the
Applicable Percentage of the Employee Benefits specified in Schedule "B",
payable in substantially equal monthly installments on the first day of each
month, beginning with the month following the month in which the Employee
becomes Disabled (or on such later date as may be mutually agreed upon by the
Employee and the Employer not less than fifteen (15) days prior to such
commencement date) (i) for the period designated in Schedule "F", in the case of
the balance in the Benefit Account and (ii) until the Employee's death, in the
case of the Index Benefit defined in Schedule "B".

     5. Payments in the Event Employment Is Terminated Prior to Retirement.
        ------------------------------------------------------------------
As indicated in subparagraph 2.1 above, the Employer reserves the right to
terminate the Employee's employment, with or without cause but subject to any
written employment agreement which may then exist, at any time prior to the
Employee's Retirement. In the event that the employment of the Employee shall be
terminated, other than by reason of death, Disability or Retirement, prior to
the Employee's attaining sixty-two (62) years of age, then this Agreement shall
terminate on the date of such termination of employment; provided, however, that
the Employee shall be entitled to the following benefits as may be applicable
depending upon the circumstances surrounding the Employee's termination:

        5.1 Termination Without Cause. If the Employee's employment is
            -------------------------
terminated by the Employer without cause, and such termination is not subject to
the provisions

                                      -7-
<PAGE>

of subparagraph 5.4 below, the Employee shall be entitled to be paid the
Applicable Percentage of the Employee Benefits specified in Schedule "B",
payable in substantially equal monthly installments on the first day of each
month, beginning with the month following the month in which the Employee
attains sixty-two (62) years of age (or on such later date as may be mutually
agreed upon by the Employee and the Employer not less than fifteen (15) days
prior to such commencement date) (i) for the period designated in Schedule "F",
in the case of the balance in the Benefit Account and (ii) until the Employee's
death, in the case of the Index Benefit defined in Schedule "B".

        5.2 Voluntary Termination by the Employee. If the Employee's employment
            -------------------------------------
is terminated by voluntary resignation, and such resignation is not subject to
the provisions of subparagraph 5.4 below, the Employee shall be entitled to be
paid the Employee Benefits specified in Schedule "B", payable in substantially
equal monthly installments on the first day of each month, beginning with the
month following the month in which the Employee attains sixty-two (62) years of
age (or on such later date as may be mutually agreed upon by the Employee and
the Employer not less than fifteen (15) days prior to such commencement date)
(i) for the period designated in Schedule "F", in the case of the balance in the
Benefit Account and (ii) until the Employee's death, in the case of the Index
Benefit defined in Schedule "B.

        5.3 Termination for Cause. If the Employee suffers a "Termination for
            ---------------------
Cause", as defined in subparagraph 1.15 of this Agreement, the Employee shall
forfeit any and all rights and benefits the Employee may have under the terms of
this Agreement and shall have no right to be paid any of the amounts which would
otherwise be due or paid to the Employee by the Employer pursuant to the terms
of this Agreement.

        5.4 Termination by the Employer on Account of or After a Change in
            --------------------------------------------------------------
Control. In the event the Employee's employment with the Employer is terminated
-------
by the Employer "in connection with a Change in Control" as described in
subparagraph 1.2(a) and as defined in subparagraph 1.4 above, the Employee shall
be entitled to be paid the Applicable Percentage of the Employee Benefits
specified in Schedule "B", in substantially equal monthly installments on the
first day of each month, beginning with the month following the month in which
the Employee attains fifty-nine and one-half (59.5) years of age or any month
thereafter, as requested in writing by the Employee and delivered to the
Employer or its successor thirty (30) days prior to the commencement of
installment payments; provided, however, that in the event the Employee does not
request a commencement date as specified, such installments shall be paid on the
first day of each month, beginning with the month following the month in which
the Employee attains sixty-two (62) years of age. The installments shall be
payable (i) for the period designated in Schedule "F" in the case of the balance
in the Benefit Account and (ii) until the Employee's death in the case of the
Index Benefit defined in Schedule "B".

        5.5 Payments in the Event of Death Following Termination. If the
            ----------------------------------------------------
Employee shall die prior to receiving all of the applicable benefits described
in this Paragraph 5 to which the Employee is entitled, then the Employer will
make such payments to the Employee's designated beneficiary. If a valid
Beneficiary Designation is not in effect, then the

                                      -8-
<PAGE>

remaining amounts due to the Employee shall be paid to the Employee's Surviving
Spouse. If the Employee leaves no Surviving Spouse, the remaining amounts due to
the Employee shall be paid to the duly qualified personal representative,
executor or administrator of the Employee's estate.

        6. Section 280G Benefits Adjustment. If all or any portion of the
           --------------------------------
amounts payable to the Employee under this Agreement, either alone or together
with other payments which the Employee has the right to receive from the
Employer, constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), that are
subject to the excise tax imposed by Section 4999 of the Code (or similar tax
and/or assessment), the Employer (and its successor) shall increase the amounts
payable under this Agreement to the extent necessary to afford the Employee
substantially the same economic benefit under this Agreement as the Employee
would have received had no such excise tax been imposed on the payments due the
Employee under this Agreement. The determination of the amount of any such
excise taxes shall be made initially by the independent accounting firm employed
by the Employer immediately prior to the occurrence of the event constituting a
Change in Control.

     If, at a later date, it is determined (pursuant to final regulations or
published rulings of the Internal Revenue Service, final judgment of a court of
competent jurisdiction, or otherwise) that the amount of excise taxes payable to
the Employee is greater than the amount initially so determined, then the
Employer (or its successor) shall pay to the Executive an amount equal to the
sum of (i) such additional excise taxes, and (ii) any interest, fines and
penalties resulting from such underpayment, plus (iii) an amount necessary to
reimburse the Employee substantially for any income, excise or other taxes
payable by the Employee with respect to the amounts specified in (i) and (ii)
above, and the reimbursement provided by this clause (iii).

     7. Right To Determine Funding Methods. The Employer reserves the right to
        ----------------------------------
determine, in its sole and absolute discretion, whether, to what extent and by
what method, if any, to provide for the payment of the amounts which may be
payable to the Employee, the Employee's spouse or the Employee's beneficiaries
under the terms of this Agreement. In the event that the Employer elects to fund
this Agreement, in whole or in part, through the use of life insurance or
annuities, or both, the Employer shall determine the ownership and beneficial
interests of any such policy of life insurance or annuity. The Employer further
reserves the right, in its sole and absolute discretion, to terminate any such
policy, and any other device used to fund its obligations under this Agreement,
at any time, in whole or in part. Consistent with Paragraph 9 below, neither the
Employee, the Employee's spouse nor the Employee's beneficiaries shall have any
right, title or interest in or to any funding source or amount utilized by the
Employer pursuant to this Agreement, and any such funding source or amount shall
not constitute security for the performance of the Employer's obligations
pursuant to this Agreement. In connection with the foregoing, the Employee
agrees to execute such documents and undergo such medical examinations or tests
which the Employer may request and which may be reasonably necessary to
facilitate any funding for this Agreement including, without limitation,

                                      -9-
<PAGE>

the Employer's acquisition of any policy of insurance or annuity. Furthermore, a
refusal by the Employee to consent to, participate in and undergo any such
medical examinations or tests shall result in the immediate termination of this
Agreement and the immediate forfeiture by the Employee, the Employee's spouse
and the Employee's beneficiaries of any and all rights to payment hereunder.

     8. Claims Procedure. The Employer shall, but only to the extent necessary
        ----------------
to comply with ERISA, be designated as the named fiduciary under this Agreement
and shall have authority to control and manage the operation and administration
of this Agreement. Consistent therewith, the Employer shall make all
determinations as to the rights to benefits under this Agreement. Any decision
by the Employer denying a claim by the Employee, the Employee's spouse, or the
Employee's beneficiary for benefits under this Agreement shall be stated in
writing and delivered or mailed, via registered or certified mail, to the
Employee, the Employee's spouse or the Employee's beneficiary, as the case may
be. Such decision shall set forth the specific reasons for the denial of a
claim. In addition, the Employer shall provide the Employee, the Employee's
spouse or the Employee's beneficiary with a reasonable opportunity for a full
and fair review of the decision denying such claim.

     9. Status as an Unsecured General Creditor. Notwithstanding anything
        ---------------------------------------
contained herein to the contrary: (i) neither the Employee, the Employee's
spouse or the Employee's designated beneficiaries shall have any legal or
equitable rights, interests or claims in or to any specific property or assets
of the Employer as a result of this Agreement; (ii) none of the Employer's
assets shall be held in or under any trust for the benefit of the Employee, the
Employee's spouse or the Employee's designated beneficiaries or held in any way
as security for the fulfillment of the obligations of the Employer under this
Agreement; (iii) all of the Employer's assets shall be and remain the general
unpledged and unrestricted assets of the Employer; (iv) the Employer's
obligation under this Agreement shall be that of an unfunded and unsecured
promise by the Employer to pay money in the future; and (v) the Employee, the
Employee's spouse and the Employee's designated beneficiaries shall be unsecured
general creditors with respect to any benefits which may be payable under the
terms of this Agreement.

     Notwithstanding subparagraphs (i) through (v) above, the Employer and the
Employee acknowledge and agree that, in the event of a Change in Control and at
the written request of the Employee, the Employer shall establish, not later
than the effective date of the Change in Control, a Rabbi Trust or multiple
Rabbi Trusts (the "Trust" or "Trusts") upon such terms and conditions as the
Employer in its sole discretion deems appropriate and in compliance with
applicable provisions of the Code in order to permit the Employer to make
contributions and/or transfer assets to the Trust or Trusts to discharge its
obligations pursuant to this Agreement. The principal of the Trust or Trusts and
any earnings thereon shall be held separate and apart from other funds of the
Employer to be used exclusively for discharge of the Employer's obligations
pursuant to this Agreement and shall continue to be subject to the claims of the
Employer's general creditors until paid to the Employee or its beneficiaries in
such manner and at such times as specified in this Agreement.

                                      -10-
<PAGE>

     10. Discretion of Board to Accelerate Payout. Notwithstanding any of the
         ----------------------------------------
other provisions of this Agreement, the Board of Directors of the Employer may,
if determined in its sole and absolute discretion to be appropriate, accelerate
the payment of the amounts due under the terms of this Agreement, provided that
Employee (or the Employee's spouse or designated beneficiaries): (i) consents to
the revised payout terms determined appropriate by the Employer's Board of
Directors; and (ii) does not negotiate or in anyway influence the terms of
proposed altered/accelerated payout (said decision to be made solely by the
Employer's Board of Directors and offered to the Employee [or Employee's spouse
or designated beneficiaries] on a "take it or leave it basis").

     11. Miscellaneous.
         -------------

        11.1 Opportunity To Consult With Independent Advisors. The Employee
             ------------------------------------------------
acknowledges that the Employee has been afforded the opportunity to consult with
independent advisors of his or her choosing including, without limitation,
accountants or tax advisors and counsel regarding both the benefits granted to
the Employee under the terms of this Agreement and the (i) terms and conditions
which may affect the Employee's right to these benefits and (ii) personal tax
effects of such benefits including, without limitation, the effects of any
federal or state taxes, Section 280G of the Code, and any other taxes, costs,
expenses or liabilities whatsoever related to such benefits, which in any of the
foregoing instances the Employee acknowledges and agrees shall be the sole
responsibility of the Employee notwithstanding any other term or provision of
this Agreement. The Employee further acknowledges and agrees that the Employer
shall have no liability whatsoever related to any such personal tax effects or
other personal costs, expenses, or liabilities applicable to the Employee and
further specifically waives any right for the Employee and his or her heirs,
beneficiaries, legal representatives, agents, successors, and assigns to claim
or assert liability on the part of the Employer related to the matters described
above in this subparagraph 11.1. The Employee further acknowledges and agrees
that the Employee has read, understands and consents to all of the terms and
conditions of this Agreement, and that the Employee enters into this Agreement
with a full understanding of its terms and conditions.

        11.2 Arbitration of Disputes. All claims, disputes and other matters in
             -----------------------
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
in San Francisco, California. In the event JAMS is unable or unwilling to
conduct the arbitration provided for under the terms of this Paragraph, or has
discontinued its business, the parties agree that a representative member,
selected by the mutual agreement of the parties, of the American Arbitration
Association ("AAA"), in San Francisco, California, shall conduct the binding
arbitration referred to in this Paragraph. Notice of the demand for arbitration
shall be filed in writing with the other party to this Agreement and with JAMS
(or AAA, if necessary).

                                      -11-
<PAGE>

In no event shall the demand for arbitration be made after the date when
institution of legal or equitable proceedings based on such claim, dispute or
other matter in question would be barred by the applicable statute of
limitations. The arbitration shall be subject to such rules of procedure used or
established by JAMS, or if there are none, the rules of procedure used or
established by AAA. Any award rendered by JAMS or AAA shall be final and binding
upon the parties, and as applicable, their respective heirs, beneficiaries,
legal representatives, agents, successors and assigns, and may be entered in any
court having jurisdiction thereof. The obligation of the parties to arbitrate
pursuant to this clause shall be specifically enforceable in accordance with,
and shall be conducted consistently with, the provisions of Title 9 of Part 3 of
the California Code of Civil Procedure. Any arbitration hereunder shall be
conducted in San Jose, California, unless otherwise agreed to by the parties.

        11.3 Attorneys' Fees. In the event of any arbitration or litigation
             ---------------
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the
non-prevailing party reasonable expenses, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by the
arbitrator(s) or court, as the case may be, to have most nearly prevailed, even
if such party did not prevail in all matters, not necessarily the one in whose
favor a judgment is rendered.

        11.4 Notice. Any notice required or permitted of either the Employee or
             ------
the Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

      If to the Employer:       Greater Bay Bancorp
                                2860 W. Bayshore Road
                                Palo Alto, California 94303

                                Attn:  President and Chief Executive Officer

      If to the Employee:       David L. Kalkbrenner
                                [omitted]

        11.5 Assignment. Neither the Employee, the Employee's spouse, nor any
             ----------
other beneficiary under this Agreement shall have any power or right to
transfer, assign, anticipate,

                                      -12-
<PAGE>

hypothecate, modify or otherwise encumber any part or all of the amounts payable
hereunder, nor, prior to payment in accordance with the terms of this Agreement,
shall any portion of such amounts be: (i) subject to seizure by any creditor of
any such beneficiary, by a proceeding at law or in equity, for the payment of
any debts, judgments, alimony or separate maintenance obligations which may be
owed by the Employee, the Employee's spouse, or any designated beneficiary; or
(ii) transferable by operation of law in the event of bankruptcy, insolvency or
otherwise. Any such attempted assignment or transfer shall be void and shall
terminate this Agreement, and the Employer shall thereupon have no further
liability hereunder.

        11.6 Binding Effect/Merger or Reorganization. This Agreement shall be
             ---------------------------------------
binding upon and inure to the benefit of the Employee and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement. Upon
the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such surviving or successor firm, person, entity or
corporation.

        11.7 Non-waiver. The failure of either party to enforce at any time or
             ----------
for any period of time any one or more of the terms or conditions of this
Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.

        11.8 Partial Invalidity. If any term, provision, covenant, or condition
             ------------------
of this Agreement is determined by an arbitrator or a court, as the case may be,
to be invalid, void, or unenforceable, such determination shall not render any
other term, provision, covenant or condition invalid, void or unenforceable, and
the Agreement shall remain in full force and effect notwithstanding such partial
invalidity.

        11.9 Entire Agreement. This Agreement, including the schedules and
             ----------------
exhibits attached hereto and incorporated herein by this reference, contains all
of the covenants and agreement, and supersedes any and all other agreements,
either oral or in writing, between the parties with respect to the subject
matter of this Agreement. Each party to this Agreement acknowledges that no
other representations, inducements, promises, or agreements, oral or otherwise,
have been made by any party, or anyone acting on behalf of any party, which are
not set forth herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding on either party.

        11.10 Modifications. Any modification of this Agreement shall be
              -------------
effective only if it is in writing and signed by each party or such party's
authorized representative.

                                      -13-
<PAGE>

        11.11 Paragraph Headings. The paragraph headings used in this Agreement
              ------------------
are included solely for the convenience of the parties and shall not affect or
be used in connection with the interpretation of this Agreement.

        11.12 No Strict Construction. The language used in this Agreement shall
              ----------------------
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

        11.13 Governing Law. The laws of the State of California, other than
              -------------
those laws denominated choice of law rules, and, where applicable, the rules and
regulations of the California Commissioner of Financial Institutions, the
Federal Deposit Insurance Corporation, the Federal Reserve Board of Governors
and the Office of the Comptroller of the Currency, shall govern the validity,
interpretation, construction and effect of this Agreement.

        11.14 Waiver of Prior Plan Benefit. To the extent that the Employee is a
              ----------------------------
participant in any other supplemental benefit plan provided by the Employer
which affords the Employee benefits in the event of the Employee's retirement or
death or a change in control of the Employer, it is an express condition
precedent to the effectiveness of this Agreement that the Employee execute and
deliver the Waiver of Prior Plan Benefit attached as Schedule "D" to this
Agreement.

     IN WITNESS WHEREOF, the Employer and the Employee have executed this
Agreement on the date first above-written in the City of Palo Alto, Santa Clara
County, California.

THE EMPLOYER                            THE EMPLOYEE

GREATER BAY BANCORP,
a California corporation

By:  /s/ Duncan L. Matteson             By: /s/ David L. Kalkbrenner
     ----------------------                 ------------------------
       Duncan L. Matteson               DAVID L. KALKBRENNER
       Chairman of the Board

                                      -14-
<PAGE>

                                  SCHEDULE A
                                  ----------

                                                Applicable
                Calendar Year                   Percentage

          Inception to 12/31/97                    100%
          Per Year Vesting Thereafter              100%

                                      -15-
<PAGE>

                                  SCHEDULE B
                                  ----------

                            INDEX EMPLOYEE BENEFITS
                            -----------------------

     1. Index Employee Benefits Determination. The Index Employee Benefits
        -------------------------------------
consist of (i) accruals to the Employee's Benefit Account (as described in
subparagraph (a) below) during the Employee's employment by the Employer and
(ii) the Index Benefit (as described in subparagraph (b) below) after the
Employee's employment by the Employer terminates. The Index Employee Benefits
shall be determined based upon the following:

        a. Benefit Account: A Benefit Account shall be established as a
           ---------------
liability reserve account on the books of the Employer for the benefit of the
Employee. Prior to the date on which the Employee becomes eligible to receive
payments under the Plan, such Benefit Account shall be increased (or decreased)
each Plan Year by an amount equal to the annual earnings (or loss) for that Plan
Year determined by the Index (described in subparagraph c below), less the
Opportunity Cost (described in subparagraph d below) for that Plan Year.

        b. Index Benefit: After the date on which the Employee becomes eligible
           -------------
to receive payments under the Plan, the Index Benefit for the Employee for any
Plan Year shall be determined by subtracting the Opportunity Cost for that Plan
Year from the annual earnings (if any) for that Plan year determined by the
Index.

        c. Index: The Index for any Plan Year shall be the aggregate annual
           -----
after-tax income from the life insurance contracts described hereinafter as
defined by FASB Technical Bulletin 85-4. This Index shall be applied as if such
insurance contracts were purchased on the Effective Date.

<TABLE>
<S>                                                   <C>
                  Insurance Company:                  [omitted]
                  -----------------
                  Policy Number:                      [omitted]
                  -------------
                  Premiums Paid:                      $892,375
                  -------------

                  Insurance Company:                  [omitted]
                  -----------------
                  Policy Number:                      [omitted]
                  -------------
                  Premiums Paid:                      $970,000
                  -------------

                  Insurance Company:                  [omitted]
                  ------------------
                  Policy Number:                      [omitted]
                  --------------
                  Premiums Paid:                      $970,000
                  --------------
</TABLE>

                                      -16-
<PAGE>

If such contracts of life insurance are actually purchased by the Employer, then
the actual policies as of the dates purchased shall be used in calculations to
determine the Index and Opportunity Cost. If such contracts of life insurance
are not purchased or are subsequently surrendered or lapsed, then the Employer
shall receive and use annual policy illustrations that assume the above
described policies were purchased from the above named insurance company(ies) on
the Effective Date to calculate the amount of the Index and Opportunity Cost.

     d. Opportunity Cost: The Opportunity Cost for any Plan Year shall be
        ----------------
calculated by multiplying (a) the sum of (i) the total amount of premiums set
forth in the insurance policies described above, (ii) the amount of any Index
Benefits (described at subparagraph b above), and (iii) the amount of all
previous years after-tax Opportunity Costs; by (b) the average annualized
after-tax cost of funds calculated using a one-year U.S. Treasury Bill as
published in the Wall Street Journal. The applicable tax rate used to calculate
the Opportunity Cost shall be the Employer's marginal tax rate until the
Employee's Retirement, or other termination of service (including a Change in
Control). Thereafter, the Opportunity Cost shall be calculated with the
assumption of a marginal forty-two percent (42%) corporate tax rate each year
regardless of whether the actual marginal tax rate of the Employer is higher or
lower.

     2. Employee Benefits Payments. The Employee shall be entitled to payment of
        --------------------------
the Index Employee Benefits on the terms as specified in the Agreement.

                                     EXAMPLE
                             INDEX EMPLOYEE BENEFITS

                      Assume Initial Insurance = $1,000,000
<TABLE>
<CAPTION>
      [n]                      [A]                       [B]                    [C]                    Benefit
  End of Year     Cash Surrender Value of Life          Index             Opportunity Cost             Account
  -----------     -----------------------------         -----             ----------------          [Cumulative]
                         Insurance Policy          [Annual Policy     [After-Tax One Year U.S.           B-C
                         ----------------              Income]            Treasury Yield]
                                                       An-An-1

<S>               <C>                              <C>                <C>                           <C>

      0                    $1, 000,000                   --                      --                      --

      1                     $1,050,000                 $50,000               $(30,000)                 $20,000

      2                     $1,102,500                 $52,500               $(31,500)                 $41,000

      3                     $1,157,625                 $55,125               $(33,075)                 $63,050

</TABLE>

                                      -17-
<PAGE>

                                   SCHEDULE C
                                   ----------

                              SUPPLEMENTAL BENEFITS
                              ---------------------

     Provided that the Employee has become entitled to receive payment of the
Employee Benefits described in Schedule "B" as provided in the Agreement
(whether or not the Employee has elected to defer receipt of any such payments,
as provided in the Agreement), the Employee shall be entitled to receive the
following supplemental benefits (the "Supplemental Benefits"):

     1. Consulting Agreement Payments. The Employee shall receive the Applicable
Percentage of the sum of $250,000 per annum, payable in substantially equal
monthly installments commencing on the first day of the calendar month
immediately following the month in which the Employee attains age sixty-two (62)
and continuing through and including the month in which the Employee attains age
sixty-five (65). In consideration for such payments, the Employee shall render
such consulting services and advice to the Employer as the Employer may
reasonably require, such commitment not to require more than forty (40) hours of
the Employee's time per month.

     2. Defined Benefit Payments. The Employee shall receive the Applicable
Percentage of the sum indicated in column (a) below, per annum, payable in
substantially equal monthly installments commencing on the first day of the
calendar month immediately following the month in which the Employee attains the
age indicated below in column (b) and continuing through and including the month
in which the Employee attains the age indicated below in column (c).

<TABLE>
<S>                           <C>             <C>
           (a)                (b)             (c)

         $250,000             65              67

        $150,0000             67              69

         $125,000             69              73

          $90,000             73              81

          $50,000             81              85
</TABLE>

     If the Employee shall die before receiving all of the Supplemental Benefits
described in this Schedule "C", the Employer will make such payments to which
the Employee may be entitled, to the Employee's designated beneficiary in lump
sum. If a valid Beneficiary Designation is not in effect, then the remaining
amounts due to the Employee under the terms of

                                      -18-
<PAGE>

this Schedule "C" shall be paid to the Employee's Surviving Spouse. If the
Employee leaves no Surviving Spouse, the remaining amounts due to the Employee
under the terms of this Schedule "C" shall be paid to the duly qualified
personal representative, executor or administrator of the Employee's estate.

     In the event that the Employee has not become entitled to receive payment
of the Employee Benefits described in Schedule "B" on or before the date on
which the Supplemental Benefits described in this Schedule "C" would otherwise
commence (other than as a result of an agreement between the Employer and the
Employee to defer receipt of such payments), then the Employee shall forfeit
each monthly installment of payments otherwise payable under this Schedule "C"
for each month until the Employee becomes entitled to receive payment of the
Employee Benefits specified in Schedule "B".

     Notwithstanding anything herein or in the Agreement to the contrary, the
Supplemental Benefits set forth in this Schedule "C" shall terminate
automatically upon the forfeiture or other termination of the Employee's right
to receive the Employee Benefits specified in Schedule "B", as provided in this
Agreement.

                                      -19-
<PAGE>

                                   SCHEDULE D
                                   ----------

                          WAIVER OF PRIOR PLAN BENEFITS
                          -----------------------------

     In consideration for the Employee Benefits made available to the Employee
by this Employee Supplemental Compensation Benefits Agreement (the "Agreement"),
the Employee acknowledges and agrees as follows:

        (a) The Employee is a party to that certain Greater Bay Bancorp
Executive Salary Continuation Plan made with the Employer or its predecessor
dated April 26, 1995 (the "Prior Plan Agreement");

        (b) This Agreement and the Employee Benefits hereunder are provided as a
substitute for the Prior Plan Agreement and the benefits provided thereunder;

        (c) The Prior Plan Agreement and the benefits thereunder are hereby
terminated effective as of the date of this Agreement;

        (d) The Employee hereby waives and relinquishes for himself or herself,
and his or her heirs, beneficiaries, legal representatives, agents, successors
and assigns, any and all right, entitlement and interest that the Employee has
or may have pursuant to the Prior Plan Agreement and the benefits thereunder;

        (e) The Employee accepts the Employee Benefits afforded by this
Agreement in full and complete substitution for the benefits otherwise provided
by the Prior Plan Agreement; and

        (f) Without limiting the scope and effect of subparagraph 11.1 of the
Agreement, the Employee (i) has had an opportunity to consult with advisors of
the Employee's own choice in determining to enter into this Agreement and this
Waiver, (ii) understands that the effect of this Waiver is to terminate, waive
and relinquish forever all rights, entitlements and interests that the Employee
has or may have under the Prior Plan Agreement and the benefits thereunder as a
condition to receiving the Employee Benefits under this Agreement; and (iii) the
Employee is entering into this Agreement and this Waiver voluntarily and with
full appreciation of the effect of doing so.

Dated:                              , 1998
        ----------------------------          ---------------------------------
                                                     David L. Kalkbrenner

I consent to and agree to be bound by the foregoing Waiver:

                                              ---------------------------------
                                                Spouse of David L. Kalkbrenner

                                      -20-
<PAGE>

                                   SCHEDULE E
                                   ----------

                             BENEFICIARY DESIGNATION
                             -----------------------

        To the Administrator of the Greater Bay Bancorp Employee Supplemental
Compensation Benefits Agreement:

        Pursuant to the Provisions of my Employee Supplemental Compensation
Benefits Agreement with Greater Bay Bancorp, permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the following
persons and entities as primary and secondary beneficiaries of any benefit under
said Agreement payable by reason of my death:

Primary Beneficiary:
-------------------

---------------------      ---------------------     --------------------------
Name                                Address                   Relationship

Secondary (Contingent) Beneficiary:
----------------------------------

---------------------      ---------------------     --------------------------
Name                                Address                   Relationship

THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.

        The Administrator shall pay all sums payable under the Agreement by
reason of my death to the Primary Beneficiary, if he or she survives me, and if
no Primary Beneficiary shall survive me, then to the Secondary Beneficiary, and
if no named beneficiary survives me, then the Administrator shall pay all
amounts in accordance with the terms of my Employee Supplemental Compensation
Benefits Agreement. In the event that a named beneficiary survives me and dies
prior to receiving the entire benefit payable under said Agreement, then and in
that event, the remaining unpaid benefit payable according to the terms of my
Employee Supplemental Compensation Benefits Agreement shall be payable to the
personal representatives of the estate of said beneficiary who survived me but
died prior to receiving the total benefit provided by my Employee Supplemental
Compensation Benefits Agreement.

Dated:                              , 1998
        ----------------------------          ---------------------------------
                                                     David L. Kalkbrenner

                                      -21-
<PAGE>

CONSENT OF THE EMPLOYEE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
------------------------------------

        I, ___________________ , being the spouse of David L. Kalkbrenner, after
being afforded the opportunity to consult with independent counsel of my
choosing, do hereby acknowledge that I have read, agree and consent to the
foregoing Beneficiary Designation which relates to the Employee Supplemental
Compensation Benefits Agreement entered into by my spouse effective as of
January 1, 1998. I understand that the above Beneficiary Designation may affect
certain rights which I may have in the benefits provided for under the terms of
the Employee Supplemental Compensation Benefits Agreement and in which I may
have a marital property interest.

Dated:                              , 1998
        ----------------------------

-----------------------------------
            (Signature)

-----------------------------------
       (Type/Print Name)

                                      -22-
<PAGE>

                                   SCHEDULE F
                                   ----------

                              DISTRIBUTION ELECTION
                              ---------------------

Pursuant to the Provisions of my Employee Supplemental Compensation Benefits
Agreement with Greater Bay Bancorp, I hereby elect to have any distribution of
the balance in my Benefit Account paid to me in installments as designated
below:

___     sixty (60) monthly installments with the amount of each installment
        determined as of each installment date by dividing the entire amount in
        my Benefit Account by the number of installments then remaining to be
        paid, with the final installment to be the entire remaining balance in
        the Benefit Account.

___     one hundred twenty (120) monthly installments with the amount of each
        installment determined as of each installment date by dividing the
        entire amount in my Benefit Account by the number of installments then
        remaining to be paid, with the final installment to be the entire
        remaining balance in the Benefit Account.

___     one hundred eighty (180) monthly installments with the amount of each
        installment determined as of each installment date by dividing the
        entire amount in my Benefit Account by the number of installments then
        remaining to be paid, with the final installment to be the entire
        remaining balance in the Benefit Account.

Dated:                              , 1998
        ----------------------------

Signed:
        ----------------------------------
                  David L. Kalkbrenner

                                      -23-<PAGE>

                                                                    EXHIBIT 10.3

              EMPLOYEE SUPPLEMENTAL COMPENSATION BENEFITS AGREEMENT
              -----------------------------------------------------

     This Employee Supplemental Compensation Benefits Agreement (the
"Agreement") is made and entered into effective as of January 1, 1998, by and
between Mid-Peninsula Bank, a California banking corporation (the "Employer"),
and Susan K. Black, an individual residing in the State of California (the
"Employee").

                                 R E C I T A L S
                                 ---------------

     WHEREAS, the Employee is an employee of the Employer, and, since September
1, 1987, has become eligible to participate in the Employee Supplemental
Compensation Benefits Plan represented by this Agreement (the "Plan");

     WHEREAS, the Employer desires to establish a compensation benefits program
as a fringe benefit for certain officers of the Employer in order to attract and
retain individuals with extensive and valuable experience in the banking
industry;

     WHEREAS, the Employee's experience and knowledge of the affairs of the
Employer and the banking industry are extensive and valuable;

     WHEREAS, it is deemed to be in the best interests of the Employer to
provide the Employee with certain benefits, on the terms and conditions set
forth herein, in order to reasonably induce the Employee to remain in the
Employer's employment and to compensate the Employee for valuable services
heretofore rendered to the Employer;

     WHEREAS, it is the intention of the parties that the Employer's obligations
under this Agreement shall be that of an unfunded and unsecured promise to
provide the benefits to the Employee set forth hereinafter and except for the
contributions, if any, to a secular trust to be established by the Employee as
grantor, the Employee and the Employee's beneficiaries shall be unsecured
general creditors with respect to any benefits provided under the terms of this
Agreement; and

     WHEREAS, the Employee and the Employer wish to specify in writing the terms
and conditions upon which this additional compensatory incentive will be
provided to the Employee, or to the Employee's spouse or the Employee's
designated beneficiaries, as the case may be.

     NOW, THEREFORE, in consideration of the services to be performed by the
Employee in the future, as well as the mutual promises and covenants contained
herein, the Employee and the Employer agree as follows:
<PAGE>

                                A G R E E M E N T
                                -----------------

     1. Terms and Definitions.
        ---------------------

        1.1. Administrator. The Employer shall be the "Administrator" and,
             -------------
solely for the purposes of ERISA, as defined in subparagraph 1.11 below, the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

        1.2. Applicable Percentage. The term "Applicable Percentage" shall mean
             ---------------------
that percentage listed on Schedule "A" attached hereto which is adjacent to the
number of calendar years which shall have elapsed from the date of the
Employee's commencement of employment with and providing personal services to
the Employer or, if later, the date on which the Employee became eligible to
participate in the Plan represented by this Agreement, and ending on the date
payments are to first begin under the terms of this Agreement. Notwithstanding
the foregoing or the percentages set forth on Schedule "A", but subject to all
other terms and conditions set forth herein, the "Applicable Percentage" shall
be:

             (a) provided payments have not yet begun with respect to the
Employee Benefits specified in Schedule "B", one hundred percent (100%) upon the
termination of the Employee's employment by the Employer if such termination is
in connection with a "Change in Control" as defined in subparagraph 1.4 below. A
termination shall be deemed to be in connection with a Change in Control if,
within two (2) years following the occurrence of a Change in Control: (i) the
Employee's employment with the Employer is terminated by the Employer other than
a Termination for Cause; or (ii) by reason of the Employer's actions any adverse
and material change occurs in the scope of the Employee's position,
responsibilities, duties, salary, benefits or location of employment; or (iii)
the Employer causes an event to occur which reasonably constitutes or results in
a demotion, a significant diminution of responsibilities or authority, or a
constructive termination (by forcing a resignation or otherwise) of the
Employee's employment;

             (b) provided payments have not yet begun with respect to the
Employee Benefits specified in Schedule "B", one hundred percent (100%) upon the
occurrence of (i) the Employee's death prior to the termination of the
Employee's employment by the Employer, or (ii) the Employee's Disability (as
defined in subparagraph 1.6 below) other than a Disability that occurs after the
termination of the Employee's employment by the Employer; and

             (c) notwithstanding subclauses (a) and (b) of this subparagraph
1.2, zero percent (0%) in the event the Employee takes any intentional action
which prevents the Employer from collecting the proceeds of any life insurance
policy which the Employer may happen to own at the time of the Employee's death
and of which the Employer is the designated beneficiary (the "Employer Cost
Recovery Policy"). Furthermore, notwithstanding the foregoing, or anything
contained in this Agreement to the contrary, in the event the Employee takes any
intentional action which prevents the Employer from collecting the proceeds of
any Employer Cost Recovery Policy, then: (1) the Employee, the Employee's
estate, designated beneficiary or Surviving Spouse shall no

                                      -2-
<PAGE>

longer be entitled to receive any of the amounts payable under the terms of this
Agreement, and (2) the Employer shall have the right to recover from Employee's
estate and/or Surviving Spouse all of the amounts paid to the Employee's estate
or Surviving Spouse, as the case may be (with respect to amounts paid prior to
the Employee's death or paid to the Employee's estate or Surviving Spouse) or
from the Employee's designated beneficiary (with respect to amounts paid to the
designated beneficiary) pursuant to the terms of this Agreement prior to and
after Employee's death.

        1.3. Beneficiary. The term "beneficiary" or "designated beneficiary"
             -----------
shall mean the person or persons whom the Employee shall designate in a valid
Beneficiary Designation, a copy of which is attached hereto as Schedule "E," to
receive the benefits provided hereunder. A Beneficiary Designation shall be
valid only if it is in the form attached hereto and made a part hereof and is
completed and signed by the Employee and received by the Administrator prior to
the Employee's death.

        1.4. Change in Control. The term "Change in Control" shall mean the
             -----------------
first to occur of any of the following events with respect to the Employer (with
the term "Employer" being defined for purposes of determining whether a "Change
in Control" has occurred to include any parent bank holding company which owns
100% of the Employer's outstanding voting capital stock):

             (a) Any "person" (as such term is used in sections 13 and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
becomes the beneficial owner (as that term is used in section 13(d) of the
Exchange Act), directly or indirectly, of twenty-five percent (25%) or more of
the Employer's capital stock entitled to vote in the election of directors,
other than a group of two or more persons not (i) acting in concert for the
purpose of acquiring, holding or disposing of such stock or (ii) otherwise
required to file any form or report with any governmental agency or regulatory
authority having jurisdiction over the Employer which requires the reporting of
any change in control;

             (b) During any period of not more than two (2) consecutive years,
not including any period prior to the adoption of the Plan represented by this
Agreement, individuals who, at the beginning of such period, constitute the
Board of Directors of the Employer, and any new director (other than a director
designated by a person who has entered into an agreement with the Employer to
effect a transaction described in clause (a), (c), (d) or (e) of this
subparagraph 1.4) whose appointment to the Board of Directors or nomination for
election to the Board of Directors was approved by a vote of at least
three-fourths (3/4ths) of the directors then still in office, either were
directors at the beginning of such period or whose appointment or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority thereof;

                                      -3-
<PAGE>

             (c) The effective date of any consolidation or merger of the
Employer (after all requisite shareholder, applicable regulatory and other
approvals and consents have been obtained), other than a consolidation or merger
of the Employer in which the holders of the voting capital stock of the Employer
immediately prior to the consolidation or merger hold more than fifty percent
(50%) of the voting capital stock of the surviving entity immediately after the
consolidation or merger;

             (d) The shareholders of the Employer approve any plan or proposal
for the liquidation or dissolution of the Employer; or

             (e) The shareholders of the Employer approve the sale or transfer
of substantially all of the Employer's assets to parties that are not within a
"controlled group of corporations" (as that term is defined in section 1563 of
the Code) in which the Employer is a member.

        1.5. The Code. The "Code" shall mean the Internal Revenue Code of 1986,
             --------
as amended (the "Code").

        1.6. Disability/Disabled. The term "Disability" or "Disabled" shall have
             -------------------
the same meaning given such terms in any policy of disability insurance
maintained by the Employer for the benefit of employees including the Employee.
In the absence of such a policy which extends coverage to the Employee in the
event of disability, the terms shall mean bodily injury or disease (mental or
physical) which wholly and continuously prevents the performance of the
Employee's duties to the Employer for at least ninety (90) days.

        1.7. Early Retirement Date. The term "Early Retirement Date" shall mean
             ---------------------
the Retirement, as defined below, of the Employee on a date which occurs prior
to the Employee attaining sixty-two (62) years of age, as defined below, but
after the Employee has attained fifty-nine and one-half (59.5) years of age.

        1.8. Effective Date. The term "Effective Date" shall mean the date first
             --------------
written above.

        1.9. Employee Benefits. Except as otherwise stated in this Agreement,
             -----------------
the term "Employee Benefits" shall mean the Index Employee Benefits, if any,
described in and determined in accordance with Schedule "B" and the supplemental
benefits described in and determined in accordance with Schedule "C", and
reduced or adjusted to the extent: (i) required under the other provisions of
this Agreement; (ii) required by reason of the lawful order of any regulatory
agency or body having jurisdiction over the Employer; or (iii) required in order
for the Employer to properly comply with any and all applicable state and
federal laws, including, but not limited to, income, employment and disability
income tax laws (e.g., FICA, FUTA, SDI).

                                      -4-
<PAGE>

        1.10. Employer. Except as otherwise set forth in this Agreement, the
              --------
term "Employer" shall mean Mid-Peninsula Bank; provided, however, that for
purposes of subparagraph 1.15 (definition of Termination for Cause) and
Paragraph 5 (including its subparagraphs, regarding termination of employment),
the term "Employer" shall mean Mid-Peninsula Bank and its subsidiaries and
affiliated entities.

        1.11. ERISA. The term "ERISA" shall mean the Employee Retirement Income
              -----
Security Act of 1974, as amended.

        1.12. Plan Year. The term "Plan Year" shall mean the Employer's fiscal
              ---------
year.

        1.13. Retirement. The term "Retirement" or "Retires" shall refer to the
              ----------
date which the Employee acknowledges in writing to the Employer to be the last
day the Employee will provide any significant personal services, whether as an
employee or independent consultant or contractor, to the Employer or to, for, or
on behalf of, any other business entity conducting, performing or making
available to any person or entity banking or other financial services of any
kind. For purposes of this Agreement, the phrase "significant personal services"
shall mean more than ten (10) hours of personal services rendered to one or more
individuals or entities in any thirty (30) day period for compensation excluding
services, if any, rendered by the Employee after Retirement pursuant to the
terms of a consulting agreement described in Schedule "C", if any.

        1.14. Surviving Spouse. The term "Surviving Spouse" shall mean the
              ----------------
person, if any, who shall be legally married to the Employee on the date of the
Employee's death.

        1.15. Termination for Cause. The term "Termination for Cause" shall mean
              ---------------------
termination of the employment of the Employee by reason of any of the following:

             (a) The Employee's deliberate violation of (i) any state or federal
banking or securities laws, or of the Bylaws, rules, policies or resolutions of
the Employer, or (ii) of the rules or regulations of the California Commissioner
of Financial Institutions, the Federal Deposit Insurance Corporation, the
Federal Reserve Board of Governors, the Office of the Comptroller of the
Currency or any other regulatory agency or governmental authority having
jurisdiction over the Employer, which has a material adverse effect upon the
Employer; or

             (b) The Employee's conviction of (i) any felony or (ii) a crime
involving moral turpitude or a fraudulent or dishonest act which, in each case,
has a material adverse effect on the Employer.

     2. Scope, Purpose and Effect.
        -------------------------

        2.1. Contract of Employment. Although this Agreement is intended to
             ----------------------
provide the Employee with an additional incentive to remain in the employ of the
Employer, this Agreement shall not be deemed to constitute a contract of
employment between the Employee and the Employer nor shall any provision of this
Agreement restrict or expand the right of the Employer to terminate

                                      -5-
<PAGE>

the Employee's employment. This Agreement shall have no impact or effect upon
any separate written Employment Agreement which the Employee may have with the
Employer, it being the parties' intention and agreement that unless this
Agreement is specifically referenced in said Employment Agreement (or any
modification thereto), this Agreement (and the Employer's obligations hereunder)
shall stand separate and apart from, and shall have no effect upon, or be
affected by, the terms and provisions of said Employment Agreement.

        2.2. Fringe Benefit. The benefits provided by this Agreement are granted
             --------------
by the Employer as a fringe benefit to the Employee and are not a part of any
salary reduction plan or any arrangement deferring a bonus or a salary increase.
The Employee has no option to take any current payments or bonus in lieu of the
benefits provided by this Agreement.

     3. Payments Upon Early Retirement or Retirement and After Retirement.
        -----------------------------------------------------------------

        3.1. Payments Upon Early Retirement. The Employee shall have the right
             ------------------------------
to Retire on a date which constitutes an Early Retirement Date as defined in
subparagraph 1.7 above. In the event the Employee elects to Retire on a date
which constitutes an Early Retirement Date, the Employee shall be entitled to be
paid the Applicable Percentage of the Employee Benefits specified in Schedule
"B", payable in substantially equal monthly installments on the first day of
each month, beginning with the month following the month in which the Early
Retirement Date occurs (or on such later date as may be mutually agreed upon by
the Employee and the Employer in advance of such Early Retirement Date) (i) for
the period designated in Schedule "F", in the case of the balance in the Benefit
Account and (ii) until the Employee's death, in the case of the Index Benefit
defined in Schedule "B".

                                      -6-
<PAGE>

                                     EXAMPLE

                         Payments Upon Early Retirement
<TABLE>
<CAPTION>
Assumptions:
-----------
<S>                                                                         <C>
Age at Early Retirement                                                     60

Normal Retirement Age                                                       62

Projected Benefit Account Value at Age 62                                   $100,000

Actual Benefit Account Value at Age 60                                      $20,000

Distribution Period Elected for Benefit Account (Schedule F)                10 yrs.

Projected Index Benefit at Age 62                                           $50,000

Projected Index Benefit at Age 60                                           $25,000

Applicable Percentage at Age 60                                             75%

                            First Year Benefit Calculation: Age 60

1)        Benefit Account  [($20,000 )10) x .75]                            $1,500

2)        Index Benefit  ($25,000 x .75)                                    $18,750
                                                                            -------
                   Total First Year Benefit                                 $20,250
                                                                            =======
</TABLE>

        3.2. Payments Upon Retirement. If the Employee shall remain in the
             ------------------------
continuous employment of the Employer until attaining sixty-two (62) years of
age, the Employee shall be entitled to be paid the Applicable Percentage of the
Employee Benefits specified in Schedule "B", payable in substantially equal
monthly installments on the first day of each month, beginning with the month
following the month in which the Employee Retires (or on such later date as may
be mutually agreed upon by the Employee and the Employer in advance of said
Retirement date) (i) for the period designated in Schedule "F", in the case of
the balance in the Benefit Account and (ii) until the Employee's death, in the
case of the Index Benefit defined in Schedule "B".

                                      -7-
<PAGE>

        3.3. Payments in the Event of Death After Retirement. The Employer
             -----------------------------------------------
agrees that if the Employee Retires, but shall die before receiving all of the
Employee Benefits, the Employer will make such payments to which the Employee
may be entitled, to the Employee's designated beneficiary in lump sum. If a
valid Beneficiary Designation is not in effect, then the remaining amounts due
to the Employee under the terms of this Agreement shall be paid to the
Employee's Surviving Spouse. If the Employee leaves no Surviving Spouse, the
remaining amounts due to the Employee under the terms of this Agreement shall be
paid to the duly qualified personal representative, executor or administrator of
the Employee's estate.

     4. Payments in the Event Death or Disability Occurs Prior to Retirement.
        --------------------------------------------------------------------

        4.1. Payments in the Event of Death Prior to Retirement. If the Employee
             --------------------------------------------------
dies while actively employed by the Employer at any time after the Effective
Date of this Agreement, but prior to Retirement, the Employer agrees to pay the
Employee Benefits to which the Employee is then entitled to the Employee's
designated beneficiary in lump sum. If a valid Beneficiary Designation is not in
effect, then the remaining amounts due to the Employee under the terms of this
Agreement shall be paid to the Employee's Surviving Spouse. If the Employee
leaves no Surviving Spouse, the remaining amounts due to the Employee under the
terms of this Agreement shall be paid to the duly qualified personal
representative, executor or administrator of the Employee's estate.

        4.2. Payments in the Event of Disability Prior to Retirement. In the
             -------------------------------------------------------
event the Employee becomes Disabled at any time after the Effective Date of this
Agreement but prior to Retirement, the Employee shall be entitled to be paid the
Applicable Percentage of the Employee Benefits specified in Schedule "B",
payable in substantially equal monthly installments on the first day of each
month, beginning with the month following the month in which the Employee
becomes Disabled (or on such later date as may be mutually agreed upon by the
Employee and the Employer not less than fifteen (15) days prior to such
commencement date) (i) for the period designated in Schedule "F", in the case of
the balance in the Benefit Account and (ii) until the Employee's death, in the
case of the Index Benefit defined in Schedule "B".

     5. Payments in the Event  Employment Is Terminated Prior to Retirement.
        -------------------------------------------------------------------
As  indicated in  subparagraph  2.1 above,  the  Employer  reserves the right to
terminate the  Employee's  employment,  with or without cause but subject to any
written  employment  agreement  which may then  exist,  at any time prior to the
Employee's Retirement. In the event that the employment of the Employee shall be
terminated,  other than by reason of death,  Disability or Retirement,  prior to
the Employee's  attaining sixty-two (62) years of age, then this Agreement shall
terminate on the date of such termination of employment; provided, however, that
the Employee  shall be entitled to the  following  benefits as may be applicable
depending upon the circumstances surrounding the Employee's termination:

        5.1. Termination Without Cause. If the Employee's employment is
             -------------------------
terminated by the Employer without cause, and such termination is not subject to
the provisions of subparagraph 5.4 below, the Employee shall be entitled to be
paid the Applicable Percentage of the Employee

                                      -8-
<PAGE>

Benefits specified in Schedule "B", payable in substantially equal monthly
installments on the first day of each month, beginning with the month following
the month in which the Employee attains sixty-two (62) years of age (or on such
later date as may be mutually agreed upon by the Employee and the Employer not
less than fifteen (15) days prior to such commencement date) (i) for the period
designated in Schedule "F", in the case of the balance in the Benefit Account
and (ii) until the Employee's death, in the case of the Index Benefit defined in
Schedule "B".

        5.2. Voluntary Termination by the Employee. If the Employee's employment
             -------------------------------------
is terminated by voluntary resignation, and such resignation is not subject to
the provisions of subparagraph 5.4 below, the Employee shall be entitled to be
paid the following benefits:

             (a) If the Applicable Percentage at the date of termination is one
hundred percent (100%), the Employee shall be paid (i) the Employee Benefits
specified in Schedule "B", payable in substantially equal monthly installments
on the first day of each month, beginning with the month following the month in
which the Employee attains sixty-two (62) years of age (or on such later date as
may be mutually agreed upon by the Employee and the Employer not less than
fifteen (15) days prior to such commencement date) (A) for the period designated
in Schedule "F", in the case of the balance in the Benefit Account and (B) until
the Employee's death, in the case of the Index Benefit defined in Schedule "B".

             (b) If the Applicable Percentage at the date of termination is less
than one hundred percent (100%), the Employee shall be paid the Applicable
Percentage of the Employee Benefits specified in Schedule "B", based on a ten
(10) year (120 month) payout of the Benefit Account balance at termination
notwithstanding the Employee's election of a different payout period under
Schedule "F", but not more than sixty percent (60%) of the Employee's base
salary (i.e., exclusive of any bonuses, incentive payments or other employee
benefits to which the Employee would otherwise be entitled) at the date of
termination. Such benefit shall be payable in substantially equal monthly
installments on the first day of each month, beginning with the month following
the month in which the Employee attains sixty-two (62) years of age (or on such
later date as may be mutually agreed upon by the Employee and the Employer not
less than fifteen (15) days prior to such commencement date) (A) for the period
of one hundred twenty (120) months, in the case of the balance in the Benefit
Account and (B) until the Employee's death, in the case of the Index Benefit
defined in Schedule "B" (subject to reduction upon application of the sixty
(60%) limitation described above).

        5.3. Termination for Cause. If the Employee suffers a "Termination for
             ---------------------
Cause", as defined in subparagraph 1.15 of this Agreement, the Employee shall
forfeit any and all rights and benefits the Employee may have under the terms of
this Agreement and shall have no right to be paid any of the amounts which would
otherwise be due or paid to the Employee by the Employer pursuant to the terms
of this Agreement.

                                      -9-
<PAGE>

        5.4. Termination by the Employer on Account of or After a Change in
             --------------------------------------------------------------
Control. In the event the Employee's employment with the Employer is terminated
-------
by the Employer "in connection with a Change in Control" as described in
subparagraph 1.2(a) and as defined in subparagraph 1.4 above, the Employee shall
be entitled to be paid the Applicable Percentage of the Employee Benefits
specified in Schedule "B", in substantially equal monthly installments on the
first day of each month, beginning with the month following the month in which
the Employee attains fifty-nine and one-half (59.5) years of age or any month
thereafter, as requested in writing by the Employee and delivered to the
Employer or its successor thirty (30) days prior to the commencement of
installment payments; provided, however, that in the event the Employee does not
request a commencement date as specified, such installments shall be paid on the
first day of each month, beginning with the month following the month in which
the Employee attains sixty-two (62) years of age. The installments shall be
payable (i) for the period designated in Schedule "F" in the case of the balance
in the Benefit Account and (ii) until the Employee's death in the case of the
Index Benefit defined in Schedule "B".

        5.5. Payments in the Event of Death Following Termination. If the
             ----------------------------------------------------
Employee shall die prior to receiving all of the applicable benefits described
in this Paragraph 5 to which the Employee is entitled, then the Employer will
make such payments to the Employee's designated beneficiary. If a valid
Beneficiary Designation is not in effect, then the remaining amounts due to the
Employee shall be paid to the Employee's Surviving Spouse. If the Employee
leaves no Surviving Spouse, the remaining amounts due to the Employee shall be
paid to the duly qualified personal representative, executor or administrator of
the Employee's estate.

     6.  Section  280G  Benefits  Adjustment.  If all or any  portion of the
         -----------------------------------
amounts payable to the Employee under this  Agreement,  either alone or together
with  other  payments  which  the  Employee  has the right to  receive  from the
Employer,  constitute "excess parachute  payments" within the meaning of Section
280G of the Internal  Revenue Code of 1986,  as amended (the  "Code"),  that are
subject to the excise tax  imposed by Section  4999 of the Code (or  similar tax
and/or assessment),  the Employer (and its successor) shall increase the amounts
payable  under this  Agreement  to the extent  necessary  to afford the Employee
substantially  the same economic  benefit  under this  Agreement as the Employee
would have  received had no such excise tax been imposed on the payments due the
Employee  under  this  Agreement.  The  determination  of the amount of any such
excise taxes shall be made initially by the independent accounting firm employed
by the Employer  immediately prior to the occurrence of the event constituting a
Change in Control.

     If, at a later date, it is determined (pursuant to final regulations or
published rulings of the Internal Revenue Service, final judgment of a court of
competent jurisdiction, or otherwise) that the amount of excise taxes payable to
the Employee is greater than the amount initially so determined, then the
Employer (or its successor) shall pay to the Employee an amount equal to the sum
of (i) such additional excise taxes, and (ii) any interest, fines and penalties
resulting from such underpayment, plus (iii) an amount necessary to reimburse
the Employee substantially for any income, excise or other taxes payable by the
Employee with respect to the amounts specified in (i) and (ii) above, and the
reimbursement provided by this clause (iii).

     7. Right To Determine Funding Methods. The Employer reserves the right to
        ----------------------------------
determine, in its sole and absolute discretion, whether, to what extent and by
what method, if any, to provide for the payment of the amounts which may be
payable to the Employee, the Employee's

                                      -10-
<PAGE>

spouse or the Employee's beneficiaries under the terms of this Agreement. In the
event that the Employer elects to fund this Agreement, in whole or in part,
through the use of life insurance or annuities, or both, the Employer shall
determine the ownership and beneficial interests of any such policy of life
insurance or annuity. The Employer further reserves the right, in its sole and
absolute discretion, to terminate any such policy, and any other device used to
fund its obligations under this Agreement, at any time, in whole or in part.
Consistent with Paragraph 9 below, neither the Employee, the Employee's spouse
nor the Employee's beneficiaries shall have any right, title or interest in or
to any funding source or amount utilized by the Employer pursuant to this
Agreement, and any such funding source or amount shall not constitute security
for the performance of the Employer's obligations pursuant to this Agreement. In
connection with the foregoing, the Employee agrees to execute such documents and
undergo such medical examinations or tests which the Employer may request and
which may be reasonably necessary to facilitate any funding for this Agreement
including, without limitation, the Employer's acquisition of any policy of
insurance or annuity. Furthermore, a refusal by the Employee to consent to,
participate in and undergo any such medical examinations or tests shall result
in the immediate termination of this Agreement and the immediate forfeiture by
the Employee, the Employee's spouse and the Employee's beneficiaries of any and
all rights to payment hereunder.

     8. Claims Procedure. The Employer shall, but only to the extent necessary
        ----------------
to comply with ERISA, be designated as the named fiduciary under this Agreement
and shall have authority to control and manage the operation and administration
of this Agreement. Consistent therewith, the Employer shall make all
determinations as to the rights to benefits under this Agreement. Any decision
by the Employer denying a claim by the Employee, the Employee's spouse, or the
Employee's beneficiary for benefits under this Agreement shall be stated in
writing and delivered or mailed, via registered or certified mail, to the
Employee, the Employee's spouse or the Employee's beneficiary, as the case may
be. Such decision shall set forth the specific reasons for the denial of a
claim. In addition, the Employer shall provide the Employee, the Employee's
spouse or the Employee's beneficiary with a reasonable opportunity for a full
and fair review of the decision denying such claim.

     9. Status Under Secular Trust and as an Unsecured General Creditor.
        ---------------------------------------------------------------

        (a) The Employee has established a secular trust, identified as the
Susan K. Black Secular Trust, a copy of which is attached hereto as Schedule "G"
(the "Trust"). The Employer shall make contributions to the Trust as specified
in Schedule "C" of this Agreement. The contributions shall be deposited into an
account which constitutes the Trust Fund as defined in the Trust.
Notwithstanding anything contained herein to the contrary, the Trust Fund shall
not be subject to the claims of the Employer's general creditors except as may
be expressly stated in the Trust. In the event of a conflict between the
provisions of the Trust and this Agreement, the provisions of the Trust shall
control.

        (b) Except as provided in subparagraph 9(a) above: (i) neither the
Employee, the Employee's spouse or the Employee's designated beneficiaries shall
have any legal or equitable rights, interests or claims in or to any specific
property or assets of the Employer as a result of this Agreement; (ii) none of
the Employer's assets shall be held in or under any trust for the benefit of the
Employee, the Employee's spouse or the Employee's designated beneficiaries or
held in any way as security for the fulfillment of the obligations of the
Employer under this Agreement; (iii) all of

                                      -11-
<PAGE>

the Employer's assets shall be and remain the general unpledged and unrestricted
assets of the Employer; (iv) the Employer's obligation under this Agreement
shall be that of an unfunded and unsecured promise by the Employer to pay money
in the future; and (v) the Employee, the Employee's spouse and the Employee's
designated beneficiaries shall be unsecured general creditors with respect to
any benefits which may be payable under the terms of this Agreement.

        (c) Notwithstanding subparagraphs 9(b)(i) through 9(b)(v) above, the
Employer and the Employee acknowledge and agree that, in the event of a Change
in Control and at the written request of the Employee, the Employer shall
establish, not later than the effective date of the Change in Control, a Rabbi
Trust or multiple Rabbi Trusts upon such terms and conditions as the Employer in
its sole discretion deems appropriate and in compliance with applicable
provisions of the Code in order to permit the Employer to make contributions
and/or transfer assets to the Rabbi Trust or Rabbi Trusts to discharge its
obligations pursuant to this Agreement. The principal of the Rabbi Trust or
Rabbi Trusts and any earnings thereon shall be held separate and apart from
other funds of the Employer to be used exclusively for discharge of the
Employer's obligations pursuant to this Agreement and shall continue to be
subject to the claims of the Employer's general creditors until paid to the
Employee or its beneficiaries in such manner and at such times as specified in
this Agreement.

     10. Discretion of Board to Accelerate Payout. Notwithstanding any of the
         ----------------------------------------
other provisions of this Agreement, the Board of Directors of the Employer may,
if determined in its sole and absolute discretion to be appropriate, accelerate
the payment of the amounts due under the terms of this Agreement, provided that
Employee (or the Employee's spouse or designated beneficiaries): (i) consents to
the revised payout terms determined appropriate by the Employer's Board of
Directors; and (ii) does not negotiate or in anyway influence the terms of
proposed altered/accelerated payout (said decision to be made solely by the
Employer's Board of Directors and offered to the Employee [or Employee's spouse
or designated beneficiaries] on a "take it or leave it basis").

                                      -12-
<PAGE>

     11. Miscellaneous.
         -------------

         11.1. Opportunity To Consult With Independent Advisors. The Employee
               ------------------------------------------------
acknowledges that the Employee has been afforded the opportunity to consult with
independent advisors of his or her choosing including, without limitation,
accountants or tax advisors and counsel regarding both the benefits granted to
the Employee under the terms of this Agreement and the (i) terms and conditions
which may affect the Employee's right to these benefits and (ii) personal tax
effects of such benefits including, without limitation, the effects of any
federal or state taxes, Section 280G of the Code, and any other taxes, costs,
expenses or liabilities whatsoever related to such benefits, which in any of the
foregoing instances the Employee acknowledges and agrees shall be the sole
responsibility of the Employee notwithstanding any other term or provision of
this Agreement. The Employee further acknowledges and agrees that the Employer
shall have no liability whatsoever related to any such personal tax effects or
other personal costs, expenses, or liabilities applicable to the Employee and
further specifically waives any right for the Employee and his or her heirs,
beneficiaries, legal representatives, agents, successors, and assigns to claim
or assert liability on the part of the Employer related to the matters described
above in this subparagraph 11.1. The Employee further acknowledges and agrees
that the Employee has read, understands and consents to all of the terms and
conditions of this Agreement, and that the Employee enters into this Agreement
with a full understanding of its terms and conditions.

         11.2. Arbitration of Disputes. All claims, disputes and other matters
               -----------------------
in question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
in San Francisco, California. In the event JAMS is unable or unwilling to
conduct the arbitration provided for under the terms of this Paragraph, or has
discontinued its business, the parties agree that a representative member,
selected by the mutual agreement of the parties, of the American Arbitration
Association ("AAA"), in San Francisco, California, shall conduct the binding
arbitration referred to in this Paragraph. Notice of the demand for arbitration
shall be filed in writing with the other party to this Agreement and with JAMS
(or AAA, if necessary). In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statute of limitations. The arbitration shall be subject to such rules of
procedure used or established by JAMS, or if there are none, the rules of
procedure used or established by AAA. Any award rendered by JAMS or AAA shall be
final and binding upon the parties, and as applicable, their respective heirs,
beneficiaries, legal representatives, agents, successors and assigns, and may be
entered in any court having jurisdiction thereof. The obligation of the parties
to arbitrate pursuant to this clause shall be specifically enforceable in
accordance with, and shall be conducted consistently with, the provisions of
Title 9 of Part 3 of the California Code of Civil Procedure. Any arbitration
hereunder shall be conducted in San Jose, California, unless otherwise agreed to
by the parties.

         11.3. Attorneys' Fees. In the event of any arbitration or litigation
               ---------------
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the
non-prevailing party reasonable expenses, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The

                                      -13-
<PAGE>

"prevailing party" means the party determined by the arbitrator(s) or court, as
the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.

         11.4. Notice. Any notice required or permitted of either the Employee
               ------
or the Employer under this Agreement shall be deemed to have been duly given, if
by personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

            If to the Employer:       Mid-Peninsula Bank
                                      2860 West Bayshore Road
                                      Palo Alto, California 94303
                                      Attention: Human Resources

            If to the Employee:       Susan K. Black
                                      [omitted]

         11.5. Assignment. Neither the Employee, the Employee's spouse, nor any
               ----------
other beneficiary under this Agreement shall have any power or right to
transfer, assign, anticipate, hypothecate, modify or otherwise encumber any part
or all of the amounts payable hereunder, nor, prior to payment in accordance
with the terms of this Agreement, shall any portion of such amounts be: (i)
subject to seizure by any creditor of any such beneficiary, by a proceeding at
law or in equity, for the payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Employee, the Employee's
spouse, or any designated beneficiary; or (ii) transferable by operation of law
in the event of bankruptcy, insolvency or otherwise. Any such attempted
assignment or transfer shall be void and unenforceable without the prior written
consent of the Employer. The Employer's consent, if any, to one or more
assignments or transfers shall not obligate the Employer to consent to or be
construed as the Employer's consent to any other or subsequent assignment or
transfer.

         11.6. Binding Effect/Merger or Reorganization. This Agreement shall be
               ---------------------------------------
binding upon and inure to the benefit of the Employee and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement. Upon
the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such surviving or successor firm, person, entity or
corporation.

                                      -14-
<PAGE>

         11.7. Non-waiver. The failure of either party to enforce at any time or
               ----------
for any period of time any one or more of the terms or conditions of this
Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.

         11.8. Partial Invalidity. If any term, provision, covenant, or
               ------------------
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall not
render any other term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.

         11.9. Entire Agreement. This Agreement, including the schedules and
               ----------------
exhibits attached hereto and incorporated herein by this reference, contains all
of the covenants and agreement, and supersedes any and all other agreements,
either oral or in writing, between the parties with respect to the subject
matter of this Agreement. Each party to this Agreement acknowledges that no
other representations, inducements, promises, or agreements, oral or otherwise,
have been made by any party, or anyone acting on behalf of any party, which are
not set forth herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding on either party.

         11.10. Modifications. Any modification of this Agreement shall be
                -------------
effective only if it is in writing and signed by each party or such party's
authorized representative.

         11.11. Paragraph Headings. The paragraph headings used in this
                ------------------
Agreement are included solely for the convenience of the parties and shall not
affect or be used in connection with the interpretation of this Agreement.

         11.12. No Strict Construction. The language used in this Agreement
                ----------------------
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

         11.13. Governing Law. The laws of the State of California, other than
                -------------
those laws denominated choice of law rules, and, where applicable, the rules and
regulations of the California Commissioner of Financial Institutions, the
Federal Deposit Insurance Corporation, the Federal Reserve Board of Governors
and the Office of the Comptroller of the Currency, shall govern the validity,
interpretation, construction and effect of this Agreement.

         11.14. Waiver of Prior Plan Benefit. To the extent that the Employee is
                ----------------------------
a participant in any other supplemental benefit plan provided by the Employer
which affords the Employee benefits in the event of the Employee's retirement or
death or a change in control of the Employer, it is an express condition
precedent to the effectiveness of this Agreement that the Employee execute and
deliver the Waiver of Prior Plan Benefit attached as Schedule "D" to this
Agreement.

                                      -15-
<PAGE>

         IN WITNESS WHEREOF, the Employer and the Employee have executed this
Agreement on the date first above-written in the City of Palo Alto, Santa Clara
County, California.

THE EMPLOYER                                                THE EMPLOYEE

Mid-Peninsula Bank,
a California banking corporation

By:  /s/ Shawn E. Saunders                                  /s/ Susan K. Black
     ---------------------                                  ------------------
       Shawn E. Saunders                                    Susan K. Black
       Chief Financial Officer

                                      -16-
<PAGE>

                                   SCHEDULE A
                                   ----------

                                            Applicable
             Calendar Year                  Percentage

               12/31/97                         70%
               12/31/98                         80%
               12/31/99                         90%
               12/31/00                        100%

<PAGE>

                                   SCHEDULE B
                                   ----------

                             INDEX EMPLOYEE BENEFITS
                             -----------------------

     1. Index Employee Benefits Determination. The Index Employee Benefits
        -------------------------------------
consist of (i) accruals to the Employee's Benefit Account (as described in
subparagraph (a) below) during the Employee's employment by the Employer and
(ii) the Index Benefit (as described in subparagraph (b) below) after the
Employee's employment by the Employer terminates. The Index Employee Benefits
shall be determined based upon the following:

        a. Benefit Account: A Benefit Account shall be established as a
           ---------------
liability reserve account on the books of the Employer for the benefit of the
Employee. Prior to the date on which the Employee becomes eligible to receive
payments under the Plan, such Benefit Account shall be increased (or decreased)
each Plan Year by an amount equal to the annual earnings (or loss) for that Plan
Year determined by the Index (described in subparagraph c below), less the
Opportunity Cost (described in subparagraph d below) for that Plan Year.

        b. Index Benefit: After the date on which the Employee becomes eligible
           -------------
to receive payments under the Plan, the Index Benefit for the Employee for any
Plan Year shall be determined by subtracting the Opportunity Cost for that Plan
Year from the annual earnings (if any) for that Plan year determined by the
Index.

        c. Index: The Index for any Plan Year shall be the aggregate annual
           -----
after-tax income from the life insurance contracts ----- described hereinafter
as defined by FASB Technical Bulletin 85-4. This Index shall be applied as if
such insurance contracts were purchased on the Effective Date.
<TABLE>
<S>                                                   <C>

                  Insurance Company:                  [omitted]
                  -----------------
                  Policy Number:                      [omitted]
                  -------------
                  Premiums Paid:                      $191,227
                  -------------

                  Insurance Company:                  [omitted]
                  -----------------
                  Policy Number:                      [omitted]
                  -------------
                  Premiums Paid:                      $390,000
                  -------------
</TABLE>

If such contracts of life insurance are actually purchased by the Employer, then
the actual policies as of the dates purchased shall be used in calculations to
determine the Index and Opportunity Cost. If such contracts of life insurance
are not purchased or are subsequently surrendered or lapsed, then the Employer
shall receive and use annual policy illustrations that assume the above
described policies were purchased from the above named insurance company(ies) on
the Effective Date to calculate the amount of the Index and Opportunity Cost.

<PAGE>

        d. Opportunity Cost: The Opportunity Cost for any Plan Year shall be
           ----------------
calculated by multiplying (a) the sum of (i) the total amount of premiums set
forth in the insurance policies described above, (ii) the amount of any Index
Benefits (described at subparagraph b above), and (iii) the amount of all
previous years after-tax Opportunity Costs; by (b) the average annualized
after-tax cost of funds calculated using a one-year U.S. Treasury Bill as
published in the Wall Street Journal. The applicable tax rate used to calculate
the Opportunity Cost shall be the Employer's marginal tax rate until the
Employee's Retirement, or other termination of service (including a Change in
Control). Thereafter, the Opportunity Cost shall be calculated with the
assumption of a marginal forty-two percent (42%) corporate tax rate each year
regardless of whether the actual marginal tax rate of the Employer is higher or
lower.

        2. Employee Benefits Payments. The Employee shall be entitled to payment
           --------------------------
of the Index Employee Benefits on the terms as specified in the Agreement.

                                     EXAMPLE
INDEX EMPLOYEE BENEFITS

<TABLE>
<CAPTION>
[n]              [A]                               [B]              [C]                          [D]
End of Year      Cash  Surrender  Value  of Life   Index            Opportunity Cost             Annual Benefit
-----------      --------------------------------  -----            ----------------             --------------
                 Insurance Policy                  [Annual  Policy  A0 = premium                 B-C
                 ----------------
                                                   Income]          A0+Cn-1x.05x
                                                   An-An-1          (1-42%)
<S>              <C>                               <C>              <C>                          <C>

      0          $1, 000,000                       --               --                           --

      1          $1,050,000                        $50,000          $29,000                      $21,000

      2          $1,102,500                        $52,500          $29,841                      $22,659

      3          $1,157,625                        $55,125          $30,706                      $24,419
</TABLE>

Assumptions:   Initial Insurance = $1,000,000
               Effective Tax Rate = 42%
               One Year US Treasury Yield = 5%

                                      -19-
<PAGE>

                                   SCHEDULE C
                                   ----------

                              SUPPLEMENTAL BENEFITS
                              ---------------------

     In addition to the Employee Benefits specified elsewhere in this Agreement,
the Employee shall be entitled to receive the following supplemental benefits
(the "Supplemental Benefits"):

     Secular Trust Defined Benefit. Provided that the Employee has not exercised
the Employee's withdrawal rights under the Trust, the Employer shall make
contributions to the Trust, pursuant to paragraph 9 of the Agreement, on a
pre-tax basis in the amounts shown in column (B) of the following table. Such
contributions shall be made from time to time in the discretion of the Employer
provided that the total amount shown in column (B) below has been contributed to
the Trust by the end of the Plan Year shown in column (A) below.

                 (A)                (B)

                 1998               $50,506

                 1999               $36,384

                 2000               $40,786

                 2001               $45,581

                 2002               $50,799

                 2003               $56,475

                 2004               $62,645

                 2005               $69,347

                 2006               $76,623

                 2007               $84,517

                 2008               $93,079

                 2009               $102,358

                 2010               $112,412

                 2011               $123,299

     The aggregate amount of the foregoing contributions shall be subject to
adjustment, from time to time, to ensure that the Trust is adequately funded to
afford the Employee with a projected defined benefit equal to the Applicable
Percentage of Forty Five Thousand Eight Hundred Forty-Six Dollars ($45,846) per
annum for twenty (20) years commencing the year in which the Employee attains
age sixty-two (62). In the event that the contributions made by the Employer to
the Trust as provided above are determined to be insufficient to fund the
foregoing Supplemental Benefits, the Employer

                                      -20-
<PAGE>

shall make such further contributions to the Trust as may be necessary to fund
fully such Supplemental Benefits. Such determination and adjusting
contributions, if required, may be made from time to time at the discretion of
the Employer, but in all events not later than the date on which the Employee
Retires or otherwise becomes eligible to begin receiving the Employee Benefits
specified in Schedule "B". Provided that the foregoing final adjusting
contribution, if required, has been made, the Employer shall have no obligation
to make further contributions to the Trust once the Employee Retires or
otherwise becomes eligible to begin receiving the Employee Benefits specified in
Schedule "B".

     Notwithstanding anything herein or in the Agreement to the contrary, the
obligation of the Employer to make the contributions to the Trust as specified
above shall terminate automatically upon the forfeiture or other termination of
the Employee's right to receive the Employee Benefits specified in Schedule "B",
as provided in this Agreement.

                                      -21-
<PAGE>

                                   SCHEDULE D
                                   ----------

                          WAIVER OF PRIOR PLAN BENEFITS
                          -----------------------------

     In consideration for the Employee Benefits made available to the Employee
by this Employee Supplemental Compensation Benefits Agreement (the "Agreement"),
the Employee acknowledges and agrees as follows:

        (a) The Employee is a party to that certain ___________________________
Agreement made with the Employer or its predecessor dated ____________, 19__
(the "Prior Plan Agreement");

        (b) This Agreement and the Employee Benefits hereunder are provided as a
substitute for the Prior Plan Agreement and the benefits provided thereunder;

        (c) The Prior Plan Agreement and the benefits thereunder are hereby
terminated effective as of the date of this Agreement;

        (d) The Employee hereby waives and relinquishes for himself or herself,
and his or her heirs, beneficiaries, legal representatives, agents, successors
and assigns, any and all right, entitlement and interest that the Employee has
or may have pursuant to the Prior Plan Agreement and the benefits thereunder;

        (e) The Employee accepts the Employee Benefits afforded by this
Agreement in full and complete substitution for the benefits otherwise provided
by the Prior Plan Agreement; and

        (f) Without limiting the scope and effect of subparagraph 11.1 of the
Agreement, the Employee (i) has had an opportunity to consult with advisors of
the Employee's own choice in determining to enter into this Agreement and this
Waiver, (ii) understands that the effect of this Waiver is to terminate, waive
and relinquish forever all rights, entitlements and interests that the Employee
has or may have under the Prior Plan Agreement and the benefits thereunder as a
condition to receiving the Employee Benefits under this Agreement; and (iii) the
Employee is entering into this Agreement and this Waiver voluntarily and with
full appreciation of the effect of doing so.

Dated:                              , 1998
        ----------------------------          -------------------------------
                                                     Susan K. Black

I consent to and agree to be bound by the foregoing Waiver:

------------------------------------------
Aris Angelopoulos, Spouse of Susan K. Black

                                      -22-
<PAGE>

                                  SCHEDULE E
                                  -----------

                            BENEFICIARY DESIGNATION
                            -----------------------

        To the Administrator of the Mid-Peninsula Bank Employee Supplemental
Compensation Benefits Agreement:

        Pursuant to the Provisions of my Employee Supplemental Compensation
Benefits Agreement with Mid-Peninsula Bank, permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the following
persons and entities as primary and secondary beneficiaries of any benefit under
said Agreement payable by reason of my death:

Primary Beneficiary:
-------------------

-------------------------       --------------------------      ----------------
Name                            Address                         Relationship

Secondary (Contingent) Beneficiary:
----------------------------------

-------------------------       --------------------------      ----------------
Name                            Address                         Relationship

THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.

     The Administrator shall pay all sums payable under the Agreement by reason
of my death to the Primary Beneficiary, if he or she survives me, and if no
Primary Beneficiary shall survive me, then to the Secondary Beneficiary, and if
no named beneficiary survives me, then the Administrator shall pay all amounts
in accordance with the terms of my Employee Supplemental Compensation Benefits
Agreement. In the event that a named beneficiary survives me and dies prior to
receiving the entire benefit payable under said Agreement, then and in that
event, the remaining unpaid benefit payable according to the terms of my
Employee Supplemental Compensation Benefits Agreement shall be payable to the
personal representatives of the estate of said beneficiary who survived me but
died prior to receiving the total benefit provided by my Employee Supplemental
Compensation Benefits Agreement.

Dated:                              , 1998
        ----------------------------         ----------------------------------
                                                     Susan K. Black

                                      -23-
<PAGE>

CONSENT OF THE EMPLOYEE'S SPOUSE
--------------------------------
TO THE ABOVE BENEFICIARY DESIGNATION:
------------------------------------

     I, Aris Angelopoulos, being the spouse of Susan K. Black, after being
afforded the opportunity to consult with independent counsel of my choosing, do
hereby acknowledge that I have read, agree and consent to the foregoing
Beneficiary Designation which relates to the Employee Supplemental Compensation
Benefits Agreement entered into by my spouse effective as of January 1, 1998. I
understand that the above Beneficiary Designation may affect certain rights
which I may have in the benefits provided for under the terms of the Employee
Supplemental Compensation Benefits Agreement and in which I may have a marital
property interest.

Dated:                              , 1998
        ----------------------------

-------------------------------------------
        Aris Angelopoulos

                                      -24-
<PAGE>

                                  SCHEDULE F
                                  ----------

                              DISTRIBUTION ELECTION
                              ---------------------

Pursuant to the Provisions of my Employee Supplemental Compensation Benefits
Agreement with Mid-Peninsula Bank, I hereby elect to have any distribution of
the balance in my Benefit Account paid to me in installments as designated
below:

    ----  sixty (60) monthly installments with the amount of each installment
          determined as of each installment date by dividing the entire amount
          in my Benefit Account by the number of installments then remaining to
          be paid, with the final installment to be the entire remaining balance
          in the Benefit Account.

    ----  one hundred twenty (120) monthly installments with the amount of each
          installment determined as of each installment date by dividing the
          entire amount in my Benefit Account by the number of installments then
          remaining to be paid, with the final installment to be the entire
          remaining balance in the Benefit Account.

    ----  one hundred eighty (180) monthly installments with the amount of each
          installment determined as of each installment date by dividing the
          entire amount in my Benefit Account by the number of installments then
          remaining to be paid, with the final installment to be the entire
          remaining balance in the Benefit Account.

Dated:                              , 1998
        ----------------------------

Signed:
       --------------------------------------
                  Susan K. Black

                                      -25-
<PAGE>

                                   SCHEDULE G
                                   ----------

                                  SECULAR TRUST
                                  -------------

[to be finalized]

                                      -26-

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