Document:

(Exhibit 10.4)

                              EMPLOYMENT AGREEMENT

      Pacific State Bank, A State Banking Association, having its principal
place of business at 6 South El Dorado Street in Stockton, California,
hereinafter referred to as "Employer" and Steven A. Rosso, President and Chief
Executive Officer, hereinafter referred to as the "Employee", in consideration
of the mutual promises made herein, agree as follows:

                          Article 1. Term of Employment

      1.01  Employer hereby employs Employee and Employee hereby accepts
            employment with Employer from the acceptance and execution date of
            this agreement to September 1, 2005.

                                    Renewal

      1.02  This agreement shall be renegotiated for succeeding terms. Either
            party must give notice to the other at least 90 days prior to the
            expiration of any term of his intention not to renegotiate.

                           "Employment Term" Defined

      1.03  As used herein, the phrase "employment term" refers to the entire
            period of employment of Employee by Employer hereunder, whether for
            the periods provided above, or whether terminated earlier as
            hereinafter provided or extended by mutual agreement between
            Employer and Employee.

                  Article 2. Duties and Obligation of Employee

      2.01  Employee shall serve as the President/Chief Executive Officer of the
            Pacific State Bank. In his capacity as President/CEO he shall report
            to the Board of Directors in assuming responsibility for developing
            and implementing overall long-range objective, plans and policies,
            Strategic Planning, acquisitions, marketing and other major
            functions of the Bank subject to approval of the board of directors.
            May serve as the principal representative of the Bank with the
            press, major customers, community and industry associations, other
            businesses and regulatory agencies. Serve as voting member of Bank's
            Loan Committee (Mr. Rosso is the Vice-Chairman of the Loan
            Committee), Executive Committee and a member of all other board
            committees (except Audit).

            Perform such duties as may, from time to time, be reasonably
            requested of him by the Board of Directors of Employee, including
            but not limited to

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            the hiring and firing of all employees of the Employer. Subject at
            all times to the policies set by Employee's Board of Directors.

                        Devotion to Employer's Business

      2.02  (a) Employee shall devote his full time, ability, and attention to
            the business of Employer during the term of this contract.

            (b)   Employee shall not engage in any other business duties or
                  pursuits whatsoever, or directly or indirectly render any
                  services of a business, commercial, or professional nature to
                  any other person or organization, whether for compensation or
                  otherwise, without the prior written consent of Employer's
                  Board of Directors. However, the expenditure of reasonable
                  amounts of time for educational, charitable, or professional
                  activities shall not be deemed a breach of this agreement if
                  those activities do not interfere with the service required
                  under this agreement.

            (c)   This agreement shall not be interpreted to prohibit Employee
                  from making passive personal investments or conduction private
                  business affairs if those activities do not interfere with the
                  services required under this agreement. However, Employee
                  shall not directly or indirectly acquire, hold, or retain any
                  major interest in any business competing with or similar in
                  nature to the business of Employer, which would be considered
                  in direct conflict with Employer.

                             Competitive Activities

      2.03  During the term of this contract Employee shall not, directly or
            indirectly, either as an employee, employer, consultant, agent,
            principal, partner, stockholder, corporate officer, director, or in
            any other individual or representative capacity, engage or
            participate in any business that is in competition in any manner
            whatsoever with the business of Employer.

            Should Employee leave, by dismissal or voluntarily, the employ of
            Pacific State Bank, and subsequently engage in any competitive
            activity with the Bank, Employee shall immediately resign from the
            Bank's Board of Directors.

                       Uniqueness of Employee's Services

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      2.04  Employee hereby represents and agrees that the services to be
            performed under the terms of this contract are of a special, unique,
            unusual, extraordinary, and intellectual character that gives them a
            peculiar value, the loss of which cannot be reasonably or adequately
            compensated in damages in an action at law. Employee therefore
            expressly agrees that Employer, in addition to any other rights or
            remedies that Employer may possess, shall be entitled to injunctive
            and other equitable relief to prevent or remedy a breach of this
            contract by Employee.

                  Indemnification for Negligence of Misconduct

      2.05  Employee shall indemnify and hold Employer harmless from all
            liability for loss, damage, or injury to persons or property
            resulting from the negligence or misconduct of Employee.

                           Disclosure of Information

      2.06  Employee shall not either before or after termination of this
            Agreement, disclose to anyone any information relating to Employer
            or any financial information, trade and business secrets of know-how
            germane to the business and operation of Employer. Employee
            recognizes and acknowledges that any financial information
            concerning any of Employer's customers, as it may exist from time to
            time, is strictly confidential and is a valuable, special and unique
            asset of Employer's business. Employee shall not, either before or
            after termination of this Agreement, disclose to anyone said
            financial information or any part thereof, for any reason or purpose
            whatsoever.

                                  Surety Bond

      2.07  The Employee agrees that he will furnish all information and take
            any other steps necessary to enable the Employer to obtain or
            maintain a fidelity bond conditional on the rendering of a true
            account by the Employee of all moneys, goods, or other property
            which may come into custody, charge, or possession of the Employee
            during the term of his employment. The Surety Company issuing the
            bond and the amount of the bond must be acceptable to the Employer.
            All premiums on the bond are to be paid by the Employer. If Employee
            cannot qualify for a surety bond at any time during the term of this
            Agreement, Employer shall have the option to terminate this
            Agreement immediately.

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                            Article 3. Compensation

      3.01  (a) As compensation for the services to be performed hereunder,
            Employee shall receive a salary at the current rate of $129,000.00
            per annum, payable not less than once a month, during the employment
            term in monthly amounts of $10,750.00. Use of a company automobile,
            Country Club membership, service clubs, and other private clubs at
            the expense of the Bank. The Employee shall have the right to
            participate in all employment benefits and retirement plans. The
            Employer will note the following additional compensation terms and
            benefits.

                  (b)   Employee shall receive such annual adjustments in salary
                        as may be determined by Employer's Board of Directors in
                        its sole discretion.

                  (c)   Club dues and other sundry benefits paid by the Bank
                        such as educational costs, mileage and expenses incurred
                        on behalf of Pacific State Bank.

                  (d)   The Employer will also make annual deferred compensation
                        payment in the minimum amount of $5,000.00 to the
                        Equitable Split Dollar Plan (No. 48220273) for the
                        benefit of said Employee. In addition all cash value of
                        the plan is vested to the Employee 100% upon termination
                        of employment.

                     Salary Continuation during Disability

      3.02  If Employee for any reason becomes temporarily or permanently
            disabled so that he is unable to perform the duties prescribed
            herein, Employer agrees to pay Employee the difference between the
            amounts paid by State Disability Insurance of Workmen's Compensation
            benefits and the rate of compensation as defined in paragraph
            3.02(a), for a period according to the following formula:

            (a)   The Employee is to utilize all accrued sick leave and vacation
                  prior to salary continuation formula begins.

            (b)   The Employer will continue salary for a maximum of six (6)
                  months or Employee's qualification for long-term disability
                  benefits under Employer's paid insurance program, whichever
                  first occurs.

            (c)   For purposes of this section "temporarily" shall be defined as
                  follows: the inability of Employee to perform any work, for
                  Employer or anyone else, in any capacity". When the Employee
                  is disabled the Employee cannot work for anyone else without
                  permission of the Board.

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                                   Exclusion

      3.03  Employer shall have no obligation to make payments for a disability
            resulting from the deliberate, intentional actions of Employee, such
            as, but not limited to, attempted suicide and chemical dependency of
            Employee.

                       Article 4. Incentive Compensation

                 Management Incentive Plan (annually approved)

            Employer agrees to evaluate the performance of the President/CEO
            with regard to additional compensation for superior performance.
            Employer shall consider the overall performance including growth and
            profitability of the Bank in determining whether the President/CEO
            and the Management Team are entitled to receive added compensation.
            The basis of granting such added compensation will be to reward the
            President/CEO and the Management Team for outstanding work and to
            provide an incentive for continued performance. However, Employer
            shall not be required to grant added compensation to the
            President/CEO and the Management Team. In the event that the Board
            of Directors establishes a fund for the purpose of the payment of
            additional compensation as contemplated, the President/CEO shall be
            solely responsible for the distribution of such funds to the Senior
            Management Team, subject to ratification by the Board of Directors.
            The President/CEO shall not be entitled to receive more than fifty
            percent (50%) of the fund.

                  In the event of a change in the control of the Bank in which
            the Bank is not the surviving corporation, the Agreement shall
            terminate and he shall receive immediate vesting of all of
            Employee's Stock Options. The Employee will also, be entitled to one
            years' salary commencing on the closing date of the sale or control
            transfer date. This clause only comes into effect if employee does
            not assume the position of President and CEO of the new or
            reorganized enmity.

      4.01  (a) As soon as practical (annually), the Board of Pacific State Bank
            will establish the amount of total profit available for incentive
            compensation. These decisions will be predicated upon the preceding
            years' profit performance of the Bank. Profit performance is defined
            as actual pre-tax profits. (See attached Addendum)

            (b)   In the event of a change in the control of the Bank the
                  Employer will grant to the employee 5% of the total sale value
                  at close of the transaction above the book value of the Bank.
                  The payment will be in cash or stock of the acquiring enmity.
                  The assets to be received in the transaction will create a
                  pool benefiting the three current senior personnel management;

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                  with the address "Employee" receiving at a minimum of 60% of
                  the "Management" pool.

                               Plan Stock Option

      4.02  (a) Employer adopted a Stock Option Plan in 1987, which was amended
            in 1993. Employee has been awarded and not yet exercised options as
            follows (Dates & Prices vary):

                29,000 Shares         Management Options Available @ a number
                                      of variable prices.

                1,910 Shares          Director options available @ $4/$5 per
                                      share.

                              Article 5. Benefits

      5.01  Employee shall be entitled to those Employee benefits to be enjoyed
            by the general employee benefit package adopted by Employer, for all
            Employees of Employer.

      5.02  To the extent the general Employee benefit package is different,
            Employee shall have the following benefits:

                                Annual Vacation

      5.03  Employee shall be entitled to five (5) weeks vacation time each year
            without loss of compensation. Employee may be absent from his
            employment for vacation as long as such leave is reasonable and does
            not jeopardize his responsibilities and duties as President/CEO. The
            length of vacation should not exceed two (2) weeks without the
            approval of the Board of Directors. Employee must take at least two
            (2) consecutive weeks of vacation as required by the superintendent
            of Banks. In the event that Employee is unable for any reason to
            take the total amount of vacation time authorized herein during any
            year, he may not accrue that time and add it to vacation time for
            the following year. Vacation will be granted annually.

                        Medical, Life Insurance Coverage

      5.04  Employer shall provide to Employee and his dependents at a nominal
            cost to Employee the standard insurance coverage, or other Bank paid
            insurance program.

                                Annual Physical

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      5.05  An annual physical must be taken. Employee shall follow the
            recommendations of physicians regarding Employees health. The
            results of these tests shall be made available to the personnel
            committee of the Board of Directors.

                          Article 6. Business Expenses

      6.01  (a)   It is understood and agreed by the parties that the services
                  required for Employer will require Employer will require
                  Employee to incur entertainment hereby agrees to and shall pay
                  the Employee in such amounts and at such times as Employee
                  shall request to meet such expenses.

            (b)   Employee shall, however, furnish to Employer adequate records
                  and other documentary evidence required by Federal State
                  statutes and regulations for the substantiation of each such
                  expenditure as an income tax deduction or other records as may
                  be required by the Board of Directors.

            (c)   Employee is entitled to service club and other club
                  memberships at the discretion of both the Employer and
                  Employee.

   Article 7. Termination at the Will of Employer or the Regulatory Agencies

      7.01  One of the primary needs of the Employer is to maintain flexibility
            in its upper management. Employer shall therefore have the right, at
            Employer's sole discretion, to terminate the employment of Employee
            at the will of Employer.

            In the event of such termination Employee shall be entitled to
            severance pay as herein set forth, the severance pay shall be one
            full year of Employee's current annual salary. All health and
            welfare benefits are to be continued during the one-year period. As
            well, as the deferred compensation is to be paid/distributed to the
            Employee within six (6) months of termination date.

                             Termination for Cause

      7.02  (a) Statutory Grounds for Termination. This Agreement shall
            terminate immediately upon the occurrence of any one of the
            following events, which are described in Sections 2920, 2921, 2924
            and 2925 of the California Labor Code.

      (1)   The occurrence of circumstances that make it impossible or
            impractical for the business of the Employer to be continued.

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      (2)   The death of the Employee.

      (3)   The loss by Employee of legal capacity.

      (4)   The loss by the Employer of legal capacity to contract.

      (5)   The willful breach of duty by the Employee in the course of his
            employment, unless waived by the Employer.

      (6)   The habitual neglect by the Employee of his employment duties unless
            waived by the Employer.

      (7)   The continued incapacity on the part of the Employee under this
            Agreement, unless waived by the Employer.

      (8)   The unsatisfactory performance of duty by Employee as determined
            solely by the Board of Directors of Employer, subject to good faith,
            fair dealing and reasonableness by Employer and not as a result of
            arbitrary or capricious acts by Employer.

      A.    Effect of Termination for Cause on Compensation. In the event of the
            termination of this Agreement prior to the completion of the term of
            employment specified herein and for one of the causes enumerated in
            this paragraph, no severance pay is due or payable to Employee,
            except for salary to date of termination. This should exclude the
            event of death or incapability.

                         Article 8. General Provisions

                                    Notices

      8.01  Any notices to be given hereunder by either party to the other shall
            be in writing and may be transmitted by personal delivery or mail,
            registered or certified, postage prepaid with return receipt
            requested. Mailed notices shall be addressed to the parties at the
            addresses listed as follows:

            Employer: Principal place of business or Headquarters--6 S. El
            Dorado Street

            Employee: Principal place of business as shown in Employee's
            Personnel Records--1889 W. March Lane; but each party may change
            that address by written notice in accordance with this section.
            Notices delivered personally shall be deemed communicated as of the
            date of actual receipt; mailed notices shall be communicated as of
            the date of mailing.

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                                  Arbitration

      8.02  (a) Any controversy between Employer and Employee involving the
            construction or application of any of the terms, provision, or
            conditions of this agreement shall on the written request of either
            party served on the other be submitted to arbitration. Arbitration
            shall comply with and be governed by the provisions of the
            California Arbitration Act.

            (b)   Employer and Employee shall each appoint one person to hear
                  and determine the dispute. If the two persons so appointed are
                  unable to agree, then those persons shall select a third
                  impartial arbitrator whose decision shall be final and
                  conclusive upon both parties.

            (c)   The cost of arbitration shall be borne by the losing party or
                  in such proportions as the arbitrators decide.

                           Attorney's Fees and Costs

      8.03  If any action at law or in equity is necessary to enforce or
            interpret the terms of this agreement, the prevailing party shall be
            entitled to reasonable attorney's fees, costs, and necessary
            expenses in addition to any other relief to which that party may be
            entitled. This provision shall be construed as applicable to the
            entire contract.

                                Entire Agreement

      8.04  This agreement supersedes any and all other agreements, either oral
            or in writing, between the parties hereto with respect to the
            employment of Employee by Employer and contains all of the covenants
            and agreements between the parties wit respect to that employment in
            any manner whatsoever. Each party to this agreement acknowledges
            that no other representation, inducements, promises, or agreements,
            orally or otherwise, have been made by any party, or anyone acting
            on behalf of any party, which are not embodied herein, and that
            other agreement, statement, or promise not contained in this
            agreement shall be valued or binding on either party.

                                  Modification

      8.05  Any modification of this agreement will be effective only if it is
            in writing and signed by the party to be changed.

                                Effect of Waiver

      8.06  The failure of either party to insist on strict compliance with any
            of the terms, covenants, or conditions of this agreement by the
            other party shall not be deemed a waiver of that term, covenant, or
            condition, not shall any

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            waiver or relinquishment of any right or power at any one time or
            times be deemed a waiver or relinquishment of that right or power
            for all or any other times.

                              Partially Invalidity

      8.07  If any provision in this agreement is held by a court of competent
            jurisdiction to be invalid, void, or unenforceable, the remaining
            provisions shall nevertheless continue in full force without being
            impaired or invalidated in any way.

                            Law Governing Agreement

      8.08  This agreement shall be governed by a construed in accordance with
            the laws of the State of California.

                           Sums Due Deceased Employee

      8.09  If Employee dies prior to the expiration of the term of his
            employment, any sums not limited to salary, deferred compensation or
            401K benefits that may be due him from Employer under this agreement
            as of the date of death shall be paid to Employee's executors,
            administrators, heirs, personal representative, successors and
            assigns.

                        Validity of Employment Agreement

      8.10  This Employment Agreement dated 10/26/99 supercedes/replaces the May
            12, 1995 Employment Agreement.

Executed on, 1999 at Stockton, California

                                         PACIFIC STATE BANK

                                           By: /s/ Steven A. Rosso
                                               Steven A. Rosso
                                               President/Chief Executor Officer

                                           By: /s/ Steven J. Kikuchi
                                               Steven J. Kikuchi
                                               Secretary

                                           By: /s/ Harold Hand
                                               Harold Hand
                                               Chairman of the Board

                                                                              10Exhibit 10.5

                               PACIFIC STATE BANK

                             1987 STOCK OPTION PLAN
                          (as amended November 17, 1988
                              and January 19, 1989)

                                      INDEX

ARTICLE                                                               COMMENCING
  NO.                          DESCRIPTION                              ON PAGE

   1.               PURPOSE                                                2
   2.               ADMINISTRATION                                         2
   3.               PARTICIPANTS                                           4
   4.               THE SHARES                                             4
   5.               GRANT, TERMS AND CONDITIONS OF OPTIONS                 5
   6.               ADJUSTMENT OF, AND CHANGES IN, THE SHARES             10
   7.               LISTING OR QUALIFICATION OF SHARES                    13
   8.               BINDING EFFECT OF CONDITIONS                          13
   9.               AMENDMENT AND TERMINATION OF THE PLAN                 14
  10.               EFFECTIVENESS OF THE PLAN                             14
  11.               PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW
                      COMPLIANCE AND NOTICE OF SALE                       15
  12.               INDEMNIFICATION                                       15
<PAGE>

                               PACIFIC STATE BANK

                             1987 STOCK OPTION PLAN

                          (as amended November 17, 1988

                              and January 19, 1989)

      1. PURPOSE.

            The purpose of this 1987 Stock Option Plan (hereinafter the "Plan")
of Pacific State Bank and its affiliates (hereinafter collectively referred to
as the "Bank"), is to secure for the Bank and its stockholders the benefits of
the incentive inherent in the ownership of common stock (hereinafter the "Common
Stock") of the Bank by those key full-time employees, officers and directors of
the Bank who will share responsibility with management of the Bank for its
future growth and success.

            The word "affiliate," as used in the Plan, means any bank or
corporation in an unbroken chain of banks or corporations beginning or ending
with the Bank, if at the time of the granting of an option, each such bank or
corporation other than the last in that chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other banks or corporations in the chain.

      2. ADMINISTRATION.

            The following provisions shall govern the administration of the
Plan:

            (a) The Plan shall be administered by the Board of Directors or a
committee of the Board of Directors appointed forthis purpose by the Board of
Directors (hereinafter the "Committee") composed of not less than three (3)
directors. The Board of Directors may, from time to time, remove members from or
add members to the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by the Board of Directors. The Board of Directors shall
designate a Chairman and Vice-Chairman of the Committee from among the Committee
members. Acts of the Committee (i) at a meeting, held at a time and place and in
accordance with rules adopted by the Committee, at which a quorum of the
Committee is present and acting, or (ii) reduced to and approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.

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<PAGE>

            (b) The Bank shall effect the grant of options under the Plan by
execution of instruments in writing in a form approved by the Superintendent of
Banks of the State of California and by the Board of Directors or, if appointed,
the Committee. Subject to the express terms and conditions of the Plan and the
terms of any option outstanding under the Plan, the Board of Directors or, if
appointed, the Committee, shall have full power to construe the Plan and the
terms of any option granted under the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan or such options and to make all other
determinations necessary or advisable for the Plan's administration, including,
without limitation, the power to (i) determine which persons meet the
requirements of Section 3 hereof for selection as participants in the Plan; (ii)
determine to whom of the eligible persons, if any, options shall be granted
under the Plan; (iii) establish the terms and conditions required or permitted
to be included in every option agreement or any amendments thereto, including
whether options to be granted thereunder shall be incentive stock options
(hereinafter the "Incentive Stock Options"), as defined in Section 422A of the
Internal Revenue Code of 1986, as amended (hereinafter the "Code"), or
nonstatutory stock options (hereinafter the "Nonstatutory Stock Options"); (iv)
specify the number of shares to be covered by each option; (v) in the event a
particular option is to be an Incentive Stock Option, determine and incorporate
such terms and provisions, as well as amendments thereto, as shall be required
in the judgment of the Board of Directors or the Committee, so as to provide for
or conform such option to any change in any law, regulation, ruling or
interpretation applicable thereto; and (vi) make all other determinations deemed
necessary or advisable for administering the Plan. The Board of Directors' or
the Committee's determination on the foregoing matters shall be conclusive.

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<PAGE>

            (c) At the time of the grant of an option, the Board of Directors
or, if appointed, the Committee shall cause to be delivered to the participant a
copy of the participant's stock option agreement and either a copy of the Plan
or a disclosure statement that summarizes the provisions of the Plan and the
stock option agreement.

      3. PARTICIPANTS.

            Participants in the Plan (hereinafter the "Participants") shall be
those key, full-time salaried employees and key, full-time salaried officers of
the Bank to whom options may be granted from time to time by the Board of
Directors or the Committee. Directors shall be eligible to participate in the
Plan, subject to the specific limitations provided in Section 5(h) hereof.

      4. THE SHARES.

            The shares of stock subject to options authorized to be granted
under the Plan (hereinafter the "Shares") shall consist of thirty percent (30%)
of the issued and outstanding shares of the Bank's no par value Common Stock, or
the number and kind of shares of stock or other securities which shall be
substituted for such shares or to which such shares shall be adjusted as
provided in Section 6 of the Plan. The Shares subject to the Plan may be set
aside out of the authorized but unissued shares of Common Stock of the Bank not
reserved for any other purpose or out of shares of Common Stock subject to an
option which, for any reason, terminates unexercised as to the Shares.

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<PAGE>

      5. GRANT, TERMS AND CONDITIONS OF OPTIONS.

            Options may be granted at any time prior to the termination of the
Plan to key, full-time salaried officers and other key, full-time salaried
employees of the Bank who, in the judgment of the Board of Directors or the
Committee, contribute to the successful conduct of the Bank's operation through
their judgment, interest, ability and special efforts; provided, however, that:
(i) an eligible officer or employee shall not participate in the granting of his
or her own option; (ii) the aggregate fair market value (determined as of the
date the option is granted) of the stock with respect to which Incentive Stock
Options are exercisable for the first time by any optionee during any calendar
year (under all stock option plans of the Bank) shall not exceed $100,000; (iii)
except in the case of termination by death or disability, as set forth in
Section 5(c) below, the granted option must be exercised by optionee no later
than three (3) months after any termination of employment with the Bank and said
employment must have been continuous since the granting of the option; and (iv)
the total number of shares subject to options granted to any one optionee, at
any one time, shall not exceed ten percent (10%) of the then issued and
outstanding shares of Common Stock of the Bank. In addition, options granted
pursuant to the Plan shall be subject to the following terms and conditions:

            (a) Option Price. The purchase price under each option shall be not
less than one hundred percent (100%) of the fair market value of the Shares
subject thereto on the date the option is granted, as such value is determined
by the Board of Directors or the Committee. The fair market value of such stock
shall be determined in accordance with any reasonable valuation method,
including the valuation methods described in Treasury Regulation Section
20.2031-2. If, however, an employee owns stock of the Bank possessing more than
10 percent (10%) of the total combined voting power of all classes of stock of
the Bank, the option price of any Incentive Stock Option granted to such
optionee shall be not less than 110 percent (110%) of such fair market value at
the time such option is granted.

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<PAGE>

            (b) Duration and Exercise of Options. Each option shall vest in such
manner and at such time up to but not exceeding ten (10) years from the date the
option is granted as the Board of Directors or the Committee shall determine in
its sole discretion; provided also, however, that the Board of Directors or the
Committee may, in its sole discretion, accelerate the time of exercise of any
option; provided further, that if an Incentive Stock Option is granted to any
employee owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Bank, such option by its
terms is not exercisable after the expiration of five (5) years from the date
such option is granted. The termination of the Plan shall not alter the maximum
duration, the vesting provisions, or any other term or condition of any option
granted prior to the termination of the Plan.

            To the extent the right to purchase Shares has vested under a
Participant's stock option agreement, options may be exercised from time to time
by delivering payment therefor in cash, certified check, official bank check, or
the equivalent thereof acceptable to the Bank, together with written notice to
the Secretary of the Bank, identifying the option or part thereof being
exercised and specifying the number of Shares for which payment is being
tendered. The Bank shall deliver to the optionee, which delivery shall be not
less than fifteen (15) days and not more than thirty (30) days after the giving
of such notice, without transfer or issue tax to the optionee (or other person
entitled to exercise the option), at the principal office of the Bank, or such
other place as shall be mutually acceptable, a certificate or certificates for
such Shares dated the date the options were validly exercised; provided,
however, that the time of such delivery may be postponed by the Bank for such
period as may be required for it with reasonable diligence to comply with any
requirements of law. If an option covers both Incentive and Nonstatutory Stock
Options, separate stock certificates will be issued, one or more for Incentive
Stock Options and one or more for the Nonstatutory Stock Options.

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<PAGE>

            (c) Termination of Employment or Officer Status. Upon the
termination of an optionee's status as an employee or officer of the Bank, his
or her rights to exercise an option then held shall be only as follows:

            DEATH OR DISABILITY: If an optionee's employment or status as an
officer is terminated by death or disability, such optionee or such optionee's
qualified representative (in the event of the optionee's mental disability) or
the optionee's estate (in the event of optionee's death) shall have the right
for a period of twelve (12) months following the date of such death or
disability to exercise the option to the extent the optionee was entitled to
exercise such option on the date of the optionee's death or disability; provided
the actual date of exercise is in no event after the expiration of the term of
the option. An optionee's "estate" shall mean the optionee's legal
representative or any person who acquires the right to exercise an option by
reason of the optionee's death.

            CAUSE: If an employee or officer is determined by the Board of
Directors to have committed an act of embezzlement, fraud, dishonesty, breach of
fiduciary duty to the Bank, or to have deliberately disregarded the rules of the
Bank which resulted in loss, damage or injury to the Bank, or if an optionee
makes any unauthorized disclosure of any of the secrets or confidential
information of the Bank, induces any client or customer of the Bank to break any
contract with the Bank or induces any principal for whom the Bank acts as agent
to terminate such agency relations, or engages in any conduct which constitutes
unfair competition with the Bank, or if an optionee is removed from any office
of the Bank by the Federal Deposit Insurance Corporation or any other bank
regulatory agency, or if an optionee is removed from the Board of Directors
pursuant to Section 302 or Section 304 of the California Corporations Code,
neither the optionee nor the optionee's estate shall be entitled to exercise any
option with respect to any Shares whatsoever after termination of employment or
officer status, whether or not after termination of employment or officer status
the optionee may receive payment from the Bank for vacation pay, for services
rendered prior to termination, for services for the day on which termination
occurred, for salary in lieu of notice, or for other benefits. In making such
determination, the Board of Directors shall act fairly and shall give the
optionee an opportunity to appear and be heard at a hearing before the full
Board of Directors and present evidence on the optionee's behalf. For the
purpose of this paragraph, termination of employment or officer status shall be
deemed to occur when the Bank dispatches notice or advice to the optionee that
the optionee's employment or status as an officer is terminated, and not at the
time of optionee's receipt thereof.

                                       7
<PAGE>

            OTHER REASONS: If an optionee's employment or status as an officer
is terminated for any reason other than those mentioned above under "Death or
Disability" and "Cause", the optionee may, within three (3) months following
such termination, exercise the option to the extent such option was exercisable
by the optionee on the date of termination of the optionee's employment or
status as an officer; provided the date of exercise is in no event after the
expiration of the term of the option.

            (d) Transferability of Option. Each option shall be transferrable
only by will or the laws of descent and distribution and shall be exercisable
during the optionee's lifetime only by the optionee.

            (e) Other Terms and Conditions. Options may also contain such other
provisions, which shall not be inconsistent with any of the foregoing terms, as
the Board of Directors or the Committee shall deem appropriate. No option,
however, nor anything contained in the Plan, shall confer upon any optionee any
right to continue in the employ or in the status as an officer of the Bank, nor
limit in any way the right of the Bank to terminate an optionee's employment or
status as an officer at any time.

            (f) Use of Proceeds from Stock. Proceeds from the sale of Shares
pursuant to the exercise of options granted under the Plan shall constitute
general funds of the Bank.

                                       8
<PAGE>

            (g) Rights as a Shareholder. The optionee shall have no rights as a
shareholder with respect to any Shares until the date of issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such issuance, except
as provided in Section 6 hereof.

            (h) Directors' Options. Notwithstanding anything to the contrary in
other provisions of the Plan, each director of the Bank, including directors who
are not full-time salaried employees or officers of the Bank, shall be eligible
to participate in the Plan. Options granted to directors of the Bank are subject
to the following additional terms and conditions: (i) The maximum number of
Shares that may be issued and sold under the Plan to directors of the Bank shall
not exceed fifteen percent (15%) of the issued and outstanding shares of the
Bank's no par value Common Stock, or the number and kind of shares of stock or
other securities which shall be substituted for such shares or to which such
shares shall be adjusted as provided in Section 6 of the Plan; (ii) All grants
to directors shall be Nonstatutory Stock Options; (iii) Options granted to
directors shall not be exercisable until the first anniversary of the date of
the option grant and shall be exercisable as to twenty percent (20%) of the
Shares subject to the option on each of the first five anniversary dates after
the date of grant; (iv) Options granted to directors under the Plan shall expire
five (5) years from the date of grant; and (v) A director's rights to exercise
an option shall be affected by the termination of such individual's status as a
director in the same manner and at the same times as the termination of
employment by an officer or employee of the Bank, as provided for in Section
5(c) above. Any reference to the termination of employment or officer status in
Section 5(c) specifically includes the termination of director status.

                                       9
<PAGE>

      6. ADJUSTMENT OF, AND CHANGES IN, THE SHARES.

            In the event the shares of Common Stock of the Bank, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Bank or of another corporation
(whether by reason of reorganization, merger, consolidation, recapitalization,
reclassification, split--up, combination of shares, or otherwise), or if the
number of shares of Common Stock of the Bank shall be increased through the
payment of a stock dividend, the Board of Directors shall substitute for or add
to each share of Common Stock of the Bank theretofore appropriated or thereafter
subject or which may become subject to an option under the Plan, the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock of the Bank shall be so changed, or for which each share shall be
exchanged, or to which each such share shall be entitled, as the case may be. In
addition, the Board of Directors shall make appropriate adjustment in the number
and kind of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that any optionee's proportionate interest
in the Bank by reason of his or her rights under unexercised portions of such
options shall be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price to the unexercised portion of the option and with a corresponding
adjustment in the option price per share.

                                       10
<PAGE>

            In the event of a sale, dissolution or liquidation of the Bank or a
merger or consolidation in which the Bank is not the surviving or resulting
corporation, the Board of Directors shall have the power to cause the
termination of every option outstanding hereunder; except that the surviving or
resulting corporation may, in its absolute and uncontrolled discretion, tender
an option or options to purchase its shares on its terms and conditions, both as
to the number of shares and otherwise; provided, however, that in all events the
optionee shall have the right immediately prior to such sale, dissolution,
liquidation, merger or consolidation in which the Bank is not the surviving or
resulting corporation to notification thereof as soon as practicable and,
thereafter, to exercise the optionee's option and purchase Shares subject
thereto to the extent of any unexercised portion of the option, regardless of
the vesting provisions of Section 5(b) hereof. This right of exercise shall be
conditioned upon the execution of a final plan of dissolution or liquidation or
a definitive agreement of merger or consolidation.

            In the event of an offer by any person or entity to all shareholders
of the Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 6 hereof), any
optionee under this Plan shall have the right upon the commencement of such
offer to exercise the option and purchase shares subject thereto to the extent
of any unexercised or unvested portion of such option.

            No right to purchase fractional shares shall result from any
adjustment in options pursuant to this Section 6. In case of any such
adjustment, the shares subject to the option shall be rounded down to the
nearest whole share. Notice of any adjustment shall be given by the Bank to each
holder of an option which was in fact so adjusted and such adjustment (whether
or not such notice is given) shall be effective and binding for all purposes of
the Plan.

                                       11
<PAGE>

            To the extent the foregoing adjustments relate to stock or
securities of the Bank, such adjustments shall be made by the Board of Directors
or the Committee, whose determination in that respect shall be final, binding
and conclusive.

            Except as expressly provided in this Section 6, an optionee shall
have no rights by reason of any of the following events: (1) subdivision or
consolidation of shares of stock of any class issued by the Bank; (2) payment by
the Bank of any stock dividend; (3) any other increase or decrease in the number
of shares of stock of any class; (4) any dissolution, liquidation, merger,
consolidation, spin--off or acquisition of assets or stock of another
corporation by the Bank. Any issue by the Bank of shares of stock of any class,
or securities convertible into shares of any class, shall not affect the number
or price of shares of Common Stock subject to the option, and no adjustment by
reason thereof shall be made.

            The grant of an option pursuant to the Plan shall not affect in any
way the right or power of the Bank to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

                                       12
<PAGE>

      7. LISTING OR QUALIFICATION OF SHARES.

            All options granted under the Plan are subject to the requirement
that if at any time the Board of Directors or the Committee shall determine in
its discretion that the listing or qualification of the Shares subject thereto
on any securities exchange or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the issuance of the Shares under the option,
the option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained, free of
any condition not acceptable to the Board of Directors or the Committee.

      8. BINDING EFFECT OF CONDITIONS.

            The conditions and stipulations herein contained, or in any option
granted pursuant to the Plan shall be, and constitute, a covenant running with
all of the Shares acquired by the optionee pursuant to this Plan, directly or
indirectly, whether the same have been issued or not, and those Shares owned by
the op--tionee shall not be sold, assigned or transferred by any person save and
except in accordance with the terms and conditions herein provided. In addition,
the optionee shall agree to use the optionee's best efforts to cause the
officers of the Bank to refuse to record on the books of the Bank any assignment
or transfer made or attempted to be made, except as provided in the Plan, and to
cause said officers to refuse to cancel old certificates or to issue or deliver
new certificates therefor where the purchaser or assignee has acquired
certificates or the Shares represented thereby, except strictly in accordance
with the provisions of the Plan.

                                       13
<PAGE>

      9. AMENDMENT AND TERMINATION OF THE PLAN.

            The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of Directors
shall not, without the approval of the shareholders of the Bank and the approval
of the Superintendent of Banks, State of California, (i) increase the maximum
number of shares for which options may be granted under the Plan; (ii) change
the computation as to minimum option prices set forth in Section 5(a) hereof;
(iii) extend the maximum period during which options may be granted or
exercised; or (iv) amend the requirements as to the class of employees or
officers eligible to receive options. Except as provided in Section 6, no
termination, modification or amendment of the Plan may, without the consent of
any employee or officer to whom such option was previously granted under the
Plan, adversely effect the rights of such employee or officer under such option.
Unless the Plan shall have been terminated by action of the Board of Directors
prior thereto, the Plan shall terminate ten (10) years after the earlier of the
adoption of the Plan by the Board of Directors or approval of the Plan by the
shareholders of the Bank.

      10. EFFECTIVENESS OF THE PLAN.

            The Plan shall become effective only upon approval by the Board of
Directors and the receipt of an appropriate Permit from the State Banking
Department. The exercise of any options granted pursuant to the Plan shall be
conditioned upon the approval of the Plan within 12 months before or after the
date such Plan is adopted by the holders of a majority of the outstanding shares
of Common Stock of the Bank.

                                       14
<PAGE>

      11. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE AND NOTICE OF
SALE.

            No optionee shall be entitled to the privileges of stock ownership
as to any Shares not actually issued and delivered to the optionee. No Shares
shall be purchased upon the exercise of any option unless and until all of the
then applicable requirements of any (i) regulatory agencies having jurisdiction
and (ii) any exchanges upon which the Common Stock of the Bank may be listed
shall have been fully complied with. The Bank shall diligently endeavor to
comply with all applicable securities laws before any options are granted under
the Plan and before any Shares are issued pursuant to the exercise of such
options. The optionee shall give the Bank notice of any sale or other
disposition of any such Shares not more than five (5) days after such sale or
disposition.

      12. INDEMNIFICATION.

            To the extent permitted by applicable law in effect from time to
time, no member of the Board of Directors or the Committee shall be liable for
any action or omission of any other member of the Board of Directors or
Committee nor for any act or omission on the member's own part, excepting only
the member's own willful misconduct or gross negligence. The Bank shall pay
expenses incurred by, and satisfy a judgment or fine rendered or levied against,
a present or former director or member of the Committee in any action against
such person (whether or not the Bank is joined as a party defendant) to impose
liability or a penalty on such person for an act alleged to have been committed
by such person while a director or member of the Committee arising with respect
to the Plan or administration thereof or out of membership on the Committee or
by the Bank, or all or any combination of the preceding; provided, the director
or Committee member was acting in good faith, within what such director or
Committee member reasonably believed to have been within the scope of his or her
employment or authority and for a purpose which he or she reasonably believed to
be in the best interests of the Bank or its shareholders. Payments authorized
hereunder include amounts paid and expenses incurred in settling any such action
or threatened action. This section does not apply to any action instituted or
maintained in the right of the Bank by a shareholder or holder of a voting trust
certificate representing shares of the Bank. The provisions of this section
shall apply to the estate, executor, administrator, heirs, legatees or devisees
of a director or Committee member, and the term "person" as used in this section
shall include the estate, executor, administrator, heirs, legatees, or devisees
of such person.

                                       15

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