Document:

DIRECTOR SUPPLEMENTAL COMPENSATION AGREEMENT

     This Agreement is made and entered into effective as of _________,  1998 by
and between  Saratoga  National Bank, a national banking  association  chartered
under the  federal  laws of the  United  States of  America  with its  principal
offices  located in the City of Saratoga,  Santa Clara County,  California  (the
"Bank"),  and  __________________,  an  individual  residing  in  the  State  of
California (the "Director").

                                    RECITALS

     WHEREAS, the Director is a member of the Board of Directors of the Bank and
has served in such capacity since 1982;

     WHEREAS, the Bank desires to establish a compensation benefit for directors
who are not also  officers  or  employees  of the Bank in order to  attract  and
retain individuals with extensive and valuable experience as directors; and

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

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

                                    AGREEMENT

     1. Terms and Definitions.

          1.1. Administrator.  The Bank shall be the "Administrator" and, solely
for the purposes of ERISA as defined in subparagraph  1.9 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
Director's commencement of service to the Bank. 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: (i) provided
payments  have not yet begun  hereunder,  one  hundred  percent  (100%)upon  the
occurrence of a "Change in Control" as defined in subparagraph 1.4 below, or the
Director's  death, or Disability (as defined in subparagraph  1.6 below),  which
death or Disability occurs prior to the termination of the Director's service on
the Board of Directors of the Bank;  and (ii)  notwithstanding  subclause (i) of
this  subparagraph  1.2,  zero percent  (0%)in the event the Director  takes any
intentional  action which prevents the Bank from  collecting the proceeds of any
life  insurance  policy  which  the  Bank may  happen  to own at the time of the
Director's  death  and  of  which  the  Bank  is  the  designated   beneficiary.
Furthermore,  notwithstanding  the  foregoing,  or  anything  contained  in this
Agreement  to the  contrary,  in the event the  Director  takes any  intentional
action  which  prevents  the  Bank  from  collecting  the  proceeds  of any life
insurance  policy which the Bank may happen to own at the time of the Director's
death and of which the Bank is the  designated  beneficiary:  (1) the Director's
estate or designated  beneficiary  shall no longer be entitled to receive any of
the amounts  payable under the terms of this  Agreement,  and (2) the Bank shall
have the right to recover from the Director's  estate all of the amounts paid to
the  Director's  estate (with  respect to amounts  paid prior to the  Director's
death or paid to the Director's estate) or designated  beneficiary (with respect
to amounts  paid to the  designated  beneficiary)  pursuant to the terms of this
Agreement prior to and after Director's death.

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

          1.4.  Change in Control.  The term "Change in Control"  shall mean the
occurrence  of any of the  following  events with  respect to the Bank (with the
term "Bank"  being  defined for  purposes  of  determining  whether a "Change in
Control" has occurred to include any parent bank holding  company owning 100% of
the Bank's  outstanding  common stock): (i) a change in control of a nature that
would be required  to be  reported  in response to Item 6(e) of Schedule  14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the  "Exchange  Act"),  or in  response  to any  other  form or  report  to the
regulatory  agencies or governmental  authorities  having  jurisdiction over the
Bank or any stock  exchange on which the Bank's shares are listed which requires
the  reporting  of a change  in  control;  (ii)  any  merger,  consolidation  or
reorganization  of the Bank in which the Bank does not  survive;(iii)  any sale,
lease,  exchange,   mortgage,  pledge,  transfer  or  other  disposition(in  one
transaction  or a series of  transactions)  of any assets of the Bank  having an
aggregate  fair market  value of fifty  percent  (50%) of the total value of the
assets of the Bank, reflected in the most recent balance sheet of the Bank; (iv)
a transaction whereby any "person" (as such term is used in the Exchange Act) or
any individual, corporation,  partnership, trust or any other entity becomes the
beneficial owner, directly or indirectly, of securities of the Bank representing
twenty-five  percent  (25%) or more of the  combined  voting power of the Bank's
then outstanding  securities;  or (v) a situation where, in any one-year period,
individuals  who at the  beginning  of  such  period  constitute  the  Board  of
Directors  of the Bank  cease for any reason to  constitute  at least a majority
thereof,  unless the  election,  or the  nomination  for  election by the Bank's
shareholders,  of  each  new  director  is  approved  by  a  vote  of  at  least
three-quarters (3/4) of the directors then still in office who were directors at
the beginning of the period.

          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 Bank for the benefit of directors  including the Director.  In
the absence of such a policy which extends coverage to the Director in the event
of  disability,  the terms  shall  mean  bodily  injury or  disease  (mental  or
physical) which wholly and continuously  prevents the performance of duty for at
least three months.

          1.7. Director  Benefits.  The term "Director  Benefits" shall mean the
benefits  determined in accordance with Schedule "B", and reduced or adjusted to
the  extent:  (i)  required  under  the  other  provisions  of  this  Agreement,
including,  but not limited to,  Paragraphs 5, 6 and 7 hereof;  (ii) required by
reason of the lawful order of any regulatory agency or body having  jurisdiction
over the Bank; or (iii)  required in order for the Bank 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).

          1.8. Early  Retirement  Date. The term "Early  Retirement  Date" shall
mean the  Retirement,  as defined below,  of the Director on a date which occurs
prior to the  Director  attaining  sixty-two  (62)  years of age,  but after the
Director has attained fifty-five (55) years of age.

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

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

          1.11.  Plan Year.  The term "Plan Year"  shall mean the Bank's  fiscal
year.

          1.12.  Retirement.  The term  "Retirement" or "Retires" shall refer to
the date which the Director  acknowledges  in writing to the Bank to be the last
day of service as a member of the Board of Directors of the Bank.

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

          1.14.  Removal  for Cause.  The term  "Removal  for Cause  "shall mean
termination  of the service of the  Director  by reason of any of the  following
determined in good faith by the Bank's Board of Directors:

               (a)  The willful, intentional and material breach or the habitual
                    and  continued  neglect  by  the  Director  of  his  or  her
                    employment responsibilities and duties;

               (b)  The  continuous   mental  or  physical   incapacity  of  the
                    Director, subject to disability rights under this Agreement;

               (c)  The  Director's  willful and  intentional  violation  of any
                    federal banking or securities laws, or of the Bylaws, rules,
                    policies or resolutions of Bank, or the rules or regulations
                    of the Board of  Governors  of the Federal  Reserve  System,
                    Federal  Deposit  Insurance   Corporation,   Office  of  the
                    Comptroller of the Currency,  or other regulatory  agency or
                    governmental  authority having  jurisdiction  over the Bank,
                    which has a material adverse effect upon the Bank;

               (d)  The  written  determination  by a state or  federal  banking
                    agency or governmental  authority having  jurisdiction  over
                    the Bank that the Director (i) is of unsound  mind,  or (ii)
                    has committed a gross abuse of authority or discretion  with
                    reference to the Bank, or (iii) otherwise is not suitable to
                    continue to serve as a member of the Board of  Directors  of
                    the Bank;

               (e)  The Director's  conviction of (i) any felony or (ii) a crime
                    involving  moral  turpitude,  or the Director's  willful and
                    intentional commission of a fraudulent or dishonest act; or

               (f)  The Director's willful and intentional  disclosure,  without
                    authority,   of  any  secret  or  confidential   information
                    concerning  Bank or taking any action which the Bank's Board
                    of Directors determines,  in its sole discretion and subject
                    to good faith, fair dealing and reasonableness,  constitutes
                    unfair  competition  with or induces any  customer to breach
                    any contract with the Bank.

     2. Scope, Purpose and Effect.

          2.1.  Contract of  Employment.  Although this Agreement is intended to
provide the  Director  with an  additional  incentive  to continue to serve as a
member of the Board of Directors of the Bank, this Agreement shall not be deemed
to  constitute  a contract of  employment  between the Director and the Bank nor
shall any provision of this Agreement  restrict the right of the Bank to move or
cause the removal of the Director including,  without limitation,  by(i) refusal
to nominate the Director  for  election for any  successive  term of office as a
member of the Board of Directors of the Bank, or (ii) complying with an order or
other  directive  from a  court  of  competent  jurisdiction  or any  regulatory
authority  having  jurisdiction  over the Bank which  requires  the Bank to take
action to remove the Director.

          2.2.  Fringe  Benefit.  The benefits  provided by this  Agreement  are
granted by the Bank as a fringe  benefit to the  Director  and are not a part of
any  salary  reduction  plan or any  arrangement  deferring  a bonus or a salary
increase.  The Director  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 Director 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  Director  elects to Retire on a date
which constitutes an Early Retirement Date, the Director shall be entitled to be
paid the Applicable  Percentage of the Director Benefits, 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 upon such later
date as may be mutually  agreed upon by the  Director and the Bank in advance of
said Early  Retirement Date,  payable (i) for the period  designated in Schedule
"D" in the  case of the  balance  in the  Benefit  Account  and (ii)  until  the
Director's death in the case of the Index Benefit defined in Schedule "B".

          3.2. Payments Upon Retirement. If the Director remains a member of the
Board of Directors of the Bank until attaining  sixty-two (62) years of age, the
Director shall be entitled to be paid the Applicable  Percentage of the Director
Benefits,  in substantially equal monthly  installments on the first day of each
month,  beginning  with the month  following  the  month in which  the  Director
Retires or upon such later date as may be mutually  agreed upon by the  Director
and the Bank in  advance of said  Retirement  date,  payable  (i) for the period
designated in Schedule "D" in the case of the balance in the Benefit Account and
(ii)  until the  Director's  death in the case of the Index  Benefit  defined in
Schedule "B". At the Bank's sole and absolute discretion,  the Bank may increase
the  Director  Benefits  as  and  when  the  Bank  determines  the  same  to  be
appropriate.

          3.3. Payments in the Event of Death After Retirement.  The Bank agrees
that if the Director Retires, but shall die before receiving all of the Director
Benefits  Payments  specified  in  Schedule  "B",  the  Bank  agrees  to pay the
Applicable  Percentage  of the Director  Benefits to the  Director's  designated
beneficiary  in lump sum. If a valid  Beneficiary  Designation is not in effect,
then the remaining amounts due to the Director under the terms of this Agreement
shall be paid to the  Director's  Surviving  Spouse.  If the Director  leaves no
Surviving  Spouse,  the remaining amounts due to the Director under the terms of
this  Agreement  shall be paid to the duly  qualified  personal  representative,
executor or administrator of the Director'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
Director dies at any time after the Effective Date of this Agreement,  but prior
to Retirement,  the Bank agrees to pay the Applicable Percentage of the Director
Benefits  to the  Director's  designated  beneficiary  in lump  sum.  If a valid
Beneficiary  Designation is not in effect, then the remaining amounts due to the
Director  under  the  terms of this  Agreement  shall be paid to the  Director's
Surviving  Spouse.  If the Director  leaves no Surviving  Spouse,  the remaining
amounts due to the Director under the terms of this  Agreement  shall be paid to
the duly qualified  personal  representative,  executor or  administrator of the
Director's estate.

          4.2.  Payments in the Event of Disability Prior to Retirement.  In the
event the Director becomes Disabled at any time after the Effective Date of this
Agreement but prior to Retirement, the Director shall be entitled to be paid the
Applicable  Percentage of the Director Benefits,  in substantially equal monthly
installments on the first day of each month,  beginning with the month following
the month in which the  Director  becomes  Disabled,  payable (i) for the period
designated in Schedule "D" in the case of the balance in the Benefit Account and
(ii)  until the  Director's  death in the case of the Index  Benefit  defined in
Schedule "B".

     5.  Payments in the Event  Service Is Terminated  Prior to  Retirement.  As
indicated in  subparagraph  2.1 above,  the Bank reserves the right to remove or
cause  the  removal  of  the  Director  at any  time  prior  to  the  Director's
Retirement.  In the event  that the  Director  shall be  removed  and his or her
service as a member of the Board of Directors of the Bank terminated, other than
by reason of death, Disability or Retirement,  prior to the Director's attaining
sixty-two (62) years of age, then this Agreement  shall  terminate upon the date
of such termination of service;  provided,  however,  that the Director shall be
entitled to the  following  benefits  as may be  applicable  depending  upon the
circumstances surrounding the Director's termination of service:

          5.1.  Termination Without Cause. If the Director's service as a member
of the Board of Directors of the Bank is  terminated  for reasons  other than as
specified in paragraph  5.3 below,  and such  termination  is not subject to the
provisions of subparagraph  5.4 below, the Director shall be entitled to be paid
the  Applicable  Percentage of the Director  Benefits,  is  substantially  equal
monthly  installments  on the first day of each month,  beginning with the month
following the month in which the Director  attains  fifty-five (55) years of age
or any month  thereafter,  as requested in writing by the Director and delivered
to the Bank or its  successor  thirty  (30) days  prior to the  commencement  of
installment payments; provided, however, that in the event the Director 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 Director  attains  sixty-two  (62) years of age. The  installments  shall be
payable (i) for the period designated in Schedule "D" in the case of the balance
in the Benefit  Account and  (ii)until the  Director's  death in the case of the
Index Benefit defined in Schedule "B".

          5.2. Voluntary  Termination by the Director. If the Director's service
as a member of the Board of  Directors  of the Bank is  terminated  by voluntary
resignation   and  such   resignation  is  not  subject  to  the  provisions  of
subparagraph 5.4 below, the Director shall be entitled to be paid the Applicable
Percentage of the Director Benefits, in substantially equal monthly installments
on the first day of each month,  beginning with the month following the month in
which the Director attains fifty-five (55) years of age or any month thereafter,
as  requested  in  writing  by the  Director  and  delivered  to the Bank or its
successor  thirty (30) days prior to the  commencement of installment  payments;
provided,   however,  that  in  the  event  the  Director  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
Director attains sixty-two (62) years of age. The installments  shall be payable
(i) for the period  designated in Schedule "D" in the case of the balance in the
Benefit  Account  and (ii) until the  Director's  death in the case of the Index
Benefit defined in Schedule "B".

          5.3. Termination by Removal for Cause. The Director agrees that if the
Director's  service  as a  member  of the  Board  of  Directors  of the  Bank is
terminated  by "removal  for cause,"  (as defined in  subparagraph  1.14 of this
Agreement) and pursuant to subparagraph 1.14 (c), (d) or (e), the Director shall
forfeit any and all rights and benefits the Director 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  Director by the Bank  pursuant to the terms of
this  Agreement.  In the event  that the  Director's  service as a member of the
Board of Directors of the Bank is terminated by "removal for cause"  pursuant to
subparagraph  1.14(a), (b) or (f), the Director shall be entitled to be paid the
Applicable   Percentage  of  the  Director   Benefits,   as  defined  above,  in
substantially  equal  monthly  installments  on the  first  day of  each  month,
beginning  with the month  following  the month in which  the  Director  attains
fifty-five (55) years of age or any month thereafter, as requested in writing by
the Director and delivered to the Bank or its  successor  thirty (30) days prior
to the  commencement of installment  payments;  provided,  however,  that in the
event the  Director  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 Director attains  sixty-two (62) years of
age. The installments shall be payable (i) for the period designated in Schedule
"D" in the  case of the  balance  in the  Benefit  Account  and (ii)  until  the
Director's death in the case of the Index Benefit defined in Schedule "B".

          5.4.  Termination  on Account of or After a Change in Control.  In the
event:  (i) the Director's  service as a member of the Board of Directors of the
Bank is terminated in  conjunction  with, or by reason of, a "Change in Control"
(as defined in subparagraph 1.4 above);  or (ii) by reason of the Bank's actions
and without the Director's prior written consent, any change occurs in the scope
of  the  Director's  position,  responsibilities,  duties,  fees,  benefits,  or
location of meetings  (which in the event of relocation of more than thirty (30)
miles from the location of the Board or committee  meetings prior to a Change in
Control shall  constitute  such a change in location)  after a Change in Control
occurs, then the Director shall be entitled to be paid the Applicable Percentage
of the Director  Benefits,  as defined  above,  in  substantially  equal monthly
installments on the first day of each month,  beginning with the month following
the month in which the  Director  attains  fifty-five  (55)  years of age or any
month  thereafter,  as requested in writing by the Director and delivered to the
Bank or its successor  thirty (30) days prior to the commencement of installment
payments;  provided,  however, that in the event the Director 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
Director attains sixty-two (62) years of age. The installments  shall be payable
(i) for the period  designated in Schedule "D" in the case of the balance in the
Benefit  Account  and (ii) until the  Director'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
Director dies prior to receiving all of the Director Benefits  described in this
Paragraph  5 to which the  Director  is  entitled,  then the Bank will make such
payments  to the  Director's  designated  beneficiary  in lump  sum.  If a valid
Beneficiary  Designation is not in effect, then the remaining amounts due to the
Director  under  the  terms of this  Agreement  shall be paid to the  Director's
Surviving  Spouse.  If the Director  leaves no Surviving  Spouse,  the remaining
amounts due to the Director under the terms of this  Agreement  shall be paid to
the duly qualified  personal  representative,  executor or  administrator of the
Director's estate.

     6. Section 280G Adjustment.  The Director  acknowledges and agrees that the
parties have entered into this  Agreement  based upon certain  financial and tax
accounting  assumptions.  Accordingly,  with  full  knowledge  of the  potential
consequences the Director agrees that, notwithstanding anything contained herein
to the  contrary,  in the event that any  payment or benefit  received  or to be
received  by the  Director,  whether  payable  pursuant  to the  terms  of  this
Agreement or any other plan,  arrangement  or agreement  with the Bank (together
with the Director Benefits,  the "Total  Payments"),  will not be deductible (in
whole  or in  part)  as a  result  of  Code  Section  280G or  other  applicable
provisions of the Code,  the Total Payments shall be reduced until no portion of
the Total Payments is  nondeductible  as a result of Section 280 G or such other
applicable provisions of the Code. For purposes of this limitation:

               (a) No portion of the Total Payments, the receipt or enjoyment of
which the Director shall have effectively waived in writing prior to the date of
payment of any future Director Benefits payments, shall be taken into account;

               (b) No portion of the Total Payments shall be taken into account,
which in the opinion of the tax counsel  selected by the Bank and  acceptable to
the Director,  does not constitute a "parachute  payment"  within the meaning of
Section 280G of the Code;

               (c) Any  reduction  of the Total  Payments  shall be  applied  to
reduce  any  payment or  benefit  received  or to be  received  by the  Director
pursuant  to the terms of this  Agreement  and any other  plan,  arrangement  or
agreement with the Bank in the order  determined by mutual agreement of the Bank
and the Director;

               (d) Future payments shall be reduced only to the extent necessary
so that the Total  Payments  (other than those referred to in clauses (a) or (b)
above  in  their  entirety)  constitute  reasonable  compensation  for  services
actually rendered within the meaning of Section 280G of the Code, in the opinion
of tax counsel referred to in clause (b) above; and

               (e) The value of any non-cash  benefit or any deferred payment or
benefit  included  in the Total  Payments  shall be  determined  by  independent
auditors  selected by the Bank and acceptable to the Director in accordance with
the principles of Section 280G of the Code.

     7. Right To  Determine  Funding  Methods.  The Bank  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 maybe
payable to the Director,  the Director's spouse or the Director's  beneficiaries
under the terms of this  Agreement.  In the event  that the Bank  elects to fund
this  Agreement,  in whole  or in part,  through  the use of life  insurance  or
annuities,  or both,  the Bank shall  determine  the  ownership  and  beneficial
interests  of any such policy of life  insurance  or annuity.  The Bank  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
Director, the Director's spouse nor the Director's  beneficiaries shall have any
right,  title or interest in or to any funding source or amount  utilized by the
Bank pursuant to this Agreement, and any such funding source or amount shall not
constitute  security for the performance of the Bank's  obligations  pursuant to
this Agreement. In connection with the foregoing, the Director agrees to execute
such documents and undergo such medical examinations or tests which the Bank may
request and which may be reasonably necessary to facilitate any funding for this
Agreement including, without limitation, the Bank's acquisition of any policy of
insurance  or  annuity.  Furthermore,  a refusal by the  Director 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 Director, the Director's spouse and the Director's  beneficiaries of any and
all rights to payment hereunder.

     8. Claims  Procedure.  The Bank 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 Bank shall make all determinations as
to the rights to benefits under this Agreement. Any decision by the Bank denying
a claim by the Director,  the Director's  spouse, or the Director's  beneficiary
for benefits  under this  Agreement  shall be stated in writing and delivered or
mailed, via registered or certified mail, to the Director, the Director's spouse
or the Director's beneficiary, as the case may be. Such decision shall set forth
the  specific  reasons for the denial of a claim.  In  addition,  the Bank shall
provide the Director, the Director's spouse or the Director'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  Director,  the  Director's
spouse  or the  Director's  designated  beneficiaries  shall  have any  legal or
equitable  rights,  interests or claims in or to any specific property or assets
of the Bank as a result of this Agreement;  (ii) none of the Bank's assets shall
be held in or under any trust for the benefit of the  Director,  the  Director's
spouse or the Director's designated beneficiaries or held in any way as security
for the fulfillment of the  obligations of the Bank under this Agreement;  (iii)
all of the  Bank's  assets  shall  be  and  remain  the  general  unpledged  and
unrestricted assets of the Bank; (iv) the Bank's obligation under this Agreement
shall be that of an unfunded and  unsecured  promise by the Bank to pay money in
the future;  and (v) the  Director,  the  Director's  spouse and the  Director'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 Bank and the
Director  acknowledge and agree that, in the event of a Change in Control,  upon
request of the Director, or in the Bank's discretion if the Director does not so
request and the Bank nonetheless deems it appropriate, the Bank 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 Bank, in its sole  discretion,  deems  appropriate  and in  compliance  with
applicable  provisions  of the  Code,  in  order  to  permit  the  Bank  to make
contributions  and/or  transfer  assets to the Trustor  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
Bank to be used exclusively for discharge of the Bank's obligations  pursuant to
this  Agreement  and shall  continue  to be  subject to the claims of the Bank's
general creditors until paid to the Director 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 Bank 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
Director (or Director's spouse or designated  beneficiaries):(i) consents to the
revised  payout terms  determined  appropriate by the Bank'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 Bank's Board
of Directors  and offered to the Director [or  Director's  spouse or  designated
beneficiaries] on a "take it or leave it basis").

     11. Miscellaneous.

          11.1.  Opportunity To Consult With Independent Advisors.  The Director
acknowledges  that  he  has  been  afforded  the  opportunity  to  consult  with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement and the (i) terms and  conditions  which may affect the
Director'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 Director  acknowledges and agrees shall be the sole responsibility
of the Director  notwithstanding  any other term or provision of this Agreement.
The  Director  further  acknowledges  and  agrees  that the Bank  shall  have no
liability  whatsoever related to any such personal tax effects or other personal
costs,   expenses,  or  liabilities  applicable  to  the  Director  and  further
specifically  waives  any  right  for the  Director,  himself,  and  his  heirs,
beneficiaries,  legal representatives,  agents, successors, and assigns to claim
or assert  liability  on the part of the Bank  related to the matters  described
above in this  subparagraph  11.1. The Director further  acknowledges and agrees
that he has read, understands and consents to all of the terms and conditions of
this Agreement, and that he 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 Bank 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"),located  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"), located 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
thereare  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 Saratoga, 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 Director
or the Bank 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 Bank:           Saratoga National Bank
                                              12000 Saratoga-Sunnyvale Rd.
                                              Saratoga, California 95070
                                              Attn: Chairman of the Board
                    If to the Director:
                                              ______________________
                                              ______________________
                                              ______________________

          11.5. Assignment. Neither the Director, the Director'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  Director,  the
Director'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 Bank. The Bank's  consent,  if any, to one or more
assignments  or  transfers  shall  not  obligate  the Bank to  consent  to or be
construed  as the  Bank'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  Director  and the Bank and,  as
applicable,  their  respective  heirs,  beneficiaries,   legal  representatives,
agents,  successors  and  assigns.  Accordingly,  the Bank  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 Bank under this Agreement.  Upon the
occurrence  of such event,  the term "Bank" as used in this  Agreement  shall be
deemed  to  refer  to such  surviving  or  successor  firm,  person,  entity  or
corporation.

          11.7. Nonwaiver.  The failure of either party to enforce at anytime 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
supersedes any and all other agreements,  either oral or in writing, between the
parties with respect to the subject matter of this Agreement and contains all of
the  covenants and  agreements  between the parties with respect  thereto.  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 Board of Governors of the Federal  Reserve  System,  Federal
Deposit  Insurance  Corporation,  Office of the Comptroller of the Currency,  or
other regulatory agency or governmental authority having jurisdiction over Bank,
shall  govern  the  validity,  interpretation,  construction  and effect of this
Agreement.

     IN WITNESS WHEREOF,  the Bank and the Director have executed this Agreement
on the date first  above-written  in the City of Saratoga,  Santa Clara  County,
California.

THE BANK                                  THE DIRECTOR

SARATOGA NATIONAL BANK

By:____________________________           _____________________________
William D. Kron                           __________________
Chairman of the Board of Directors

                                   SCHEDULE A

CALENDAR YEAR                                        APPLICABLE PERCENTAGE

__________, 1982 to December 31, 1998. . . .                  80.00%

December 31, 1999. . . . . . . . . . . . . .                  90.00%

December 31, 2000. . . . . . . . . . . . . .                 100.00%

                                   SCHEDULE B

                                DIRECTOR BENEFITS

1.   Director Benefits Determination.

     The Director Benefits shall be determined based upon the following:

          a.   Benefit Account:

               Benefit  Account  shall be  established  as a  liability  reserve
               account on the books of the Bank for the benefit of the Director.
               Prior to the date on  which  the  Director  becomes  eligible  to
               receive payments under the Agreement,  such Benefit Account shall
               be increased (or  decreased)  each Plan Year  (including the Plan
               Year in which the Director  ceases to be employed by the Bank) 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 Director  becomes eligible to receive
               payments under the Agreement,  the Index Benefit for the Director
               for  any  Plan  Year  shall  be  determined  by  subtracting  the
               Opportunity  Cost for that Plan Year from the  earnings,  if any,
               established 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.

               Insurance Company(ies)/Policy Number(s):

               ___________________________
               ___________________________
               ___________________________

               If such contracts of life insurance are actually purchased by the
               Bank, 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 Bank 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 Bank's marginal tax
               rate until the  Director'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 Bank is
               higher or lower.

                                     EXAMPLE

                                 INDEX BENEFITS

   [n]          [A]
                              Index
  End of   Cash Surrender     [Annual   Opportunity     Annual      Cumulative
   Year     Value of Life     Policy       Cost         Benefit     Benefit
          Insurance Policy    Income]   A0 = premium     B-C          D+Dn-1
                              An-An-1   A0+Cn-1x.05x
                                          (1-42%)
   0        $1,000,000          --          --            --            --
   1        $1,050,000        $50,000     $29,000      $21,000       $21,000
   2        $1,102,500        $52,500     $29,841      $22,659       $43,659
   3        $1,157,625        $55,125     $30,706      $24,419       $68,078
   .
   .
   .

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

2.   Director Benefits Payments.

     The Director shall be entitled to payment of the  Applicable  Percentage of
     (i) the balance in the Benefit  Account in  installments  upon the terms as
     specified in the  Agreement,  and (ii) the Index Benefit for each Plan Year
     payable in installments until the Director's death.

                                   SCHEDULE C

                             BENEFICIARY DESIGNATION

     To the  Administrator of the Saratoga  National Bank Director  Supplemental
Compensation  Agreement:  Pursuant to the Provisions of my Director Supplemental
Compensation  Agreement with Saratoga National 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 not
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 Director Supplemental Compensation 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  Director
Supplemental   Compensation   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 Director Supplemental Compensation
Agreement.

Dated: ___________, 1998   __________________________
                           __________________

CONSENT OF THE DIRECTOR'S SPOUSE TO THE ABOVE BENEFICIARY DESIGNATION:

     I,  ______________,  being the spouse of  __________________,  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 Director Supplemental  Compensation
Agreement  entered  into by my  spouse  effective  as of  ___________,  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 Director
Supplemental  Compensation  Agreement and in which I may have a marital property
interest.

Dated: ___________, 1998

__________________________
__________________

                                   SCHEDULE D

                              DISTRIBUTION ELECTION

Pursuant to the provisions of my Director  Supplemental  Compensation  Agreement
with  Saratoga  National  Bank, I hereby elect to have any  distribution  of the
balance in my Benefit Account paid to me in installments as designated below:

               thirty-six  (36)  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.

               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: _______________________
        __________________LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT

Insurer/Policy Number: _______________________________

Bank: Saratoga National Bank

Insured: __________________

Relationship of Insured to Bank: Director

Date: June 18, 1999

The  respective  rights  and  duties  of the Bank and the  Insured  in the above
policy(ies) (individually and collectively referred to as the "Policy") shall be
as follows:

I.   DEFINITIONS

     Refer to the  Policy  provisions  for the  definition  of all terms in this
     Agreement.

II.  POLICY TITLE AND OWNERSHIP

     Title and ownership shall reside in the Bank for its use and for the use of
     the Insured all in accordance with this  Agreement.  The Bank alone may, to
     the extent of its  interest,  exercise  the right to borrow or withdraw the
     Policy cash values.  Where the Bank and the Insured (or beneficiary[ies] or
     assignee[s],  with the consent of the Insured)  mutually  agree to exercise
     the right to increase the coverage  under the subject split dollar  Policy,
     then, in such event, the rights, duties and benefits of the parties to such
     increased  coverage  shall  continue  to be  subject  to the  terms of this
     Agreement.

III. BENEFICIARY DESIGNATION RIGHTS

     The Insured (or  beneficiary[ies]  or assignee[s]) shall have the right and
     power to designate a  beneficiary  or  beneficiaries  to receive his or her
     share of the proceeds  payable upon the death of the Insured,  and to elect
     and change a payment option for such  beneficiary,  subject to any right or
     interest the Bank may have in such proceeds, as provided in this Agreement.

IV.  PREMIUM PAYMENT METHOD

     The Bank shall pay an amount  equal to the planned  premiums  and any other
     premium  payments  that might  become  necessary  to maintain the Policy in
     force.

V.   TAXABLE BENEFIT

     Annually the Insured will  receive a taxable  benefit  equal to the assumed
     cost of insurance as required by the Internal Revenue Service. The Bank (or
     its administrator)  will report to the Insured the amount of imputed income
     received each year on Form W-2 or its equivalent.

VI.  DIVISION OF DEATH PROCEEDS

     Subject to Paragraph VII herein,  the division of the death proceeds of the
     Policy is as follows:

     1.   The  Insured's   beneficiary(ies),   designated  in  accordance   with
          Paragraph  III, shall be entitled to an amount equal to eighty percent
          (80%) of the net at risk insurance portion of the proceeds. The net at
          risk  insurance  portion is the total  proceeds less the cash value of
          the Policy.

     2.   The Bank shall be entitled to the remainder of such proceeds.

     3.   The Bank and the Insured (or  beneficiary[ies]  or assignee[s])  shall
          share in any interest due on the death proceeds on a pro rata basis in
          the  ratio  that  the   proceeds   due  the  Bank  and  the   Insured,
          respectively,   bears  to  the  total  proceeds,  excluding  any  such
          interest.

VII. DIVISION OF CASH SURRENDER VALUE

     The Bank shall at all times be entitled to an amount  equal to the Policy's
     cash value,  as that term is defined in the Policy,  less any Policy  loans
     and unpaid interest or cash withdrawals previously incurred by the Bank and
     any  applicable  Policy  surrender  charges.   Such  cash  value  shall  be
     determined  as of the  date of  surrender  of the  Policy  or  death of the
     Insured as the case may be.

VIII.PREMIUM WAIVER

     If the Policy contains a premium waiver provision,  any such waived amounts
     shall be considered  for all purposes of this Agreement as having been paid
     by the Bank.

IX.  RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

     In the event the Policy  involves  an  endowment  or annuity  element,  the
     Bank's right and  interest in any  endowment  proceeds or annuity  benefits
     shall be determined  under the  provisions  of this  Agreement by regarding
     such endowment  proceeds or the commuted value of such annuity  benefits as
     the Policy's cash value. Such endowment  proceeds or annuity benefits shall
     be treated  like death  proceeds  for the  purposes of division  under this
     Agreement.

X.   TERMINATION OF AGREEMENT

     This Agreement shall  terminate at the option of the Bank following  thirty
     (30) days written  notice to the Insured  upon the  happening of any one of
     the following:

     1.   The  Insured's  right to receive  benefits  pursuant  to the terms and
          conditions  of  that  certain   Director   Supplemental   Compensation
          Agreement  effective as of ___________,  1998, shall terminate for any
          reason other than the Insured's death; or

     2.   The Insured shall be discharged from service with the Bank as a result
          of a removal  for cause  under  subparagraph  (c),  (d) or (e)  below.
          Notwithstanding  the foregoing,  this Agreement shall remain in effect
          in the event that the Insured is removed pursuant to subparagraph (a),
          (b) or (f) below.  The term "removal for cause" shall mean termination
          of the  service  of the  Insured  by  reason  of any of the  following
          determined in good faith by the Bank's Board of Directors:

          (a)  The willful,  intentional and material breach or the habitual and
               continued  neglect  by the  Insured  of  his  or  her  employment
               responsibilities and duties;

          (b)  The  continuous  mental or physical  incapacity  of the  Insured,
               subject to disability rights under this Agreement;

          (c)  The Insured's  willful and  intentional  violation of any federal
               banking or securities laws, or of the Bylaws,  rules, policies or
               resolutions  of Bank, or the rules or regulations of the Board of
               Governors  of  the  Federal  Reserve   System,   Federal  Deposit
               Insurance Corporation, Office of the Comptroller of the Currency,
               or other  regulatory  agency  or  governmental  authority  having
               jurisdiction  over the Bank,  which has a material adverse effect
               upon the Bank;

          (d)  The written determination by a state or federal banking agency or
               governmental authority having jurisdiction over the Bank that the
               Insured  (i) is of unsound  mind,  or (ii) has  committed a gross
               abuse of authority or discretion  with  reference to the Bank, or
               (iii)  otherwise is not suitable to continue to serve as a member
               of the Board of Directors of the Bank;

          (e)  The  Insured's  conviction  of (i)  any  felony  or  (ii) a crime
               involving  moral   turpitude,   or  the  Insured's   willful  and
               intentional commission of a fraudulent or dishonest act; or

          (f)  The  Insured's  willful  and  intentional   disclosure,   without
               authority,  of any secret or confidential  information concerning
               Bank or taking any action  which the  Bank's  Board of  Directors
               determines,  in its sole  discretion  and  subject to good faith,
               fair dealing and  reasonableness,  constitutes unfair competition
               with or induces  any  customer  to breach any  contract  with the
               Bank.

     Upon such  termination,  the Insured (or  beneficiary[ies]  or assignee[s])
     shall have a ninety  (90) day option to receive  from the Bank an  absolute
     assignment  of the Policy in  consideration  of a cash payment to the Bank,
     whereupon this Agreement  shall  terminate.  Such cash payment shall be the
     greater of:

     1.   The  Bank's  share of the cash value of the Policy on the date of such
          assignment, as defined in this Agreement.

     2.   The amount of the  premiums  which have been paid by the Bank prior to
          the date of such assignment.

     Should the Insured (or  beneficiary[ies]  or assignee[s])  fail to exercise
     this option within the prescribed  ninety (90) day period,  the Insured (or
     beneficiary[ies]  or  assignee[s])  agrees  that all of his or her  rights,
     interest  and claims in the Policy  shall  terminate  as of the date of the
     termination of this Agreement.

     Except as provided above,  this Agreement shall terminate upon distribution
     of the death benefit proceeds in accordance with Paragraph VI above.

XI.  INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

     The Insured may not,  without the prior written consent of the Bank,  which
     shall not be  unreasonably  withheld,  assign to any  individual,  trust or
     other  organization,  any right,  title or  interest  in the Policy nor any
     rights, options, privileges or duties created under this Agreement.

XII. AGREEMENT BINDING UPON THE PARTIES

     This  Agreement  shall be binding upon the Insured and the Bank,  and their
     respective heirs,  successors,  personal  representatives  and assigns,  as
     applicable.

XIII.NAMED FIDUCIARY AND PLAN ADMINISTRATOR

     The Bank is hereby  designated the "Named  Fiduciary" until  resignation or
     removal by its Board of Directors.  As Named  Fiduciary,  the Bank shall be
     responsible  for  the  management,  control,  and  administration  of  this
     Agreement as established herein. The Named Fiduciary may allocate to others
     certain aspects of the management and operations  responsibilities  of this
     Agreement,  including the  employment of advisors and the delegation of any
     ministerial duties to qualified individuals.

XIV. FUNDING POLICY

     The funding  policy for this  Agreement  shall be to maintain the Policy in
     force by paying, when due, all premiums required.

XV.  CLAIM PROCEDURES

     Claim forms or claim  information  as to the subject Policy can be obtained
     by contacting The Benefit  Marketing Group, Inc.  (770-952-1529).  When the
     Named  Fiduciary  has a claim  which may be  covered  under the  provisions
     described in the Policy, it should contact the office named above, and they
     will  either  complete  a  claim  form  and  forward  it to  an  authorized
     representative  of the Insurer or advise the named  Fiduciary  what further
     requirements  are necessary.  The Insurer will evaluate and make a decision
     as to payment.  If the claim is payable,  a benefit check will be issued to
     the Named Fiduciary.

     In the event that a claim is not  eligible  under the  Policy,  the Insurer
     will notify the Named Fiduciary of the denial pursuant to the  requirements
     under the terms of the Policy.  If the Named Fiduciary is dissatisfied with
     the denial of the claim and wishes to contest such claim denial,  it should
     contact the office  named  above and they will assist in making  inquiry to
     the Insurer.  All objections to the Insurer's  actions should be in writing
     and submitted to the office named above for transmittal to the Insurer.

XVI. GENDER

     Whenever  in this  Agreement  words  are used in the  masculine  or  neuter
     gender,  they shall be read and construed as in the masculine,  feminine or
     neuter gender, whenever they should so apply.

XVII.INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

     The Insurer shall not be deemed a party to this Agreement, but will respect
     the rights of the parties as set forth  herein upon  receiving  an executed
     copy of this Agreement. Payment or other performance in accordance with the
     Policy  provisions  shall  fully  discharge  the  Insurer  from any and all
     liability.

     IN WITNESS  WHEREOF,  the Insured  and a duly  authorized  Bank  officer or
director have signed this Agreement at Saratoga, California as of the date first
above written.

SARATOGA NATIONAL BANK                     INSURED

__________________________                 ________________________________
Richard L. Mount                           __________________
President and Chief
Executive Officer
                          BENEFICIARY DESIGNATION FORM

Primary Designation:

         Name                                        Relationship

__________________________                  ________________________________
__________________________                  ________________________________
__________________________                  ________________________________

Contingent Designation:

__________________________                  ________________________________
__________________________                  ________________________________
__________________________                  ________________________________
___________________________                 _____________, 1999

__________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]