Document:

EXECUTIVE 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 "Employer"), and Richard L. Mount, an individual residing in the
State of California (the "Executive").

                                    RECITALS

     WHEREAS,  the  Executive  has  been  an  employee  of  the  Employer  since
_____________,  1982,  and is  currently  serving  as its  President  and  Chief
Executive Officer;

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

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

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

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

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

                                    AGREEMENT

1.   Terms and Definitions.

     1.1.  Administrator.  The Employer shall be the "Administrator" and, solely
for the purposes of ERISA as defined in subparagraph  1.9 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
Executive's  commencement  of  service  to  the  Employer.  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  Executive's   death,   or  Disability  (as  defined  in  subparagraph   1.6
below),which  death  or  Disability  occurs  prior  to  the  termination  of the
Executive's employment by the Employer;  and (ii) notwithstanding  subclause (i)
of this subparagraph 1.2, zero percent (0%) in the event the Executive takes any
intentional  action which prevents the Employer from  collecting the proceeds of
any life  insurance  policy  which the Employer may happen to own at the time of
the Executive's  death and of which the Employer is the designated  beneficiary.
Furthermore,  notwithstanding  the  foregoing,  or  anything  contained  in this
Agreement to the  contrary,  in the event the  Executive  takes any  intentional
action  which  prevents the Employer  from  collecting  the proceeds of any life
insurance  policy  which  the  Employer  may  happen  to own at the  time of the
Executive's death and of which the Employer is the designated  beneficiary:  (1)
the Executive'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 Employer shall have the right to recover from the Executive's  estate all of
the amounts paid to the  Executive's  estate (with respect to amounts paid prior
to the  Executive's  death  or paid to the  Executive'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 Executive's death.

     1.3. Beneficiary.  The term "beneficiary" or "designated beneficiary" shall
mean the  person  or  persons  whom the  Executive  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  a part  hereof,
completed and signed by the Executive and received by the Administrator prior to
the Executive'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 Employer (with the
term "Employer"  being defined for purposes of determining  whether a "Change in
Control" has occurred to include any parent bank holding  company owning 100% of
the Employer'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
Employer or any stock exchange on which the  Employer's  shares are listed which
requires the reporting of a change in control; (ii) any merger, consolidation or
reorganization of the Employer in which the Employer 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 Employer having an
aggregate  fair  market  value of fifty  percent  (50%)of the total value of the
assets  of the  Employer,  reflected  in the most  recent  balance  sheet of the
Employer;  (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  Employer  representing  twenty-five  percent(25%)  or more of the  combined
voting power of the Employer'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  Employer  cease  for any  reason to
constitute at least a majority thereof,  unless the election,  or the nomination
for election by the Employer'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 Employer for the benefit of employees including the Executive.
In the absence of such a policy which  extends  coverage to the Executive 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. Early Retirement Date. The term "Early Retirement Date" shall mean the
Retirement,  as defined below,  of the Executive on a date which occurs prior to
the Executive attaining  sixty-two(62) years of age, but after the Executive has
attained fifty-five (55) years of age.

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

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

     1.10.  Executive  Benefits.  The term  "Executive  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  Employer;  or (iii)  required  in order for the  Employer  to properly
comply with any and all applicable  state and federal laws,  including,  but not
limited to, income, employment and disability income tax laws (e.g., FICA, FUTA,
SDI).

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

     1.12.  Retirement.  The term  "Retirement"  or "Retires" shall refer to the
date which the Executive  acknowledges in writing to Employer to be the last day
the Executive  will provide any  significant  personal  services,  whether as an
employee or independent  consultant or contractor,  to Employer. For purposes of
this Agreement,  the phrase "significant personal services" shall mean more than
ten (10) hours of  personal  services  rendered  to one or more  individuals  or
entities in any thirty (30) day period.

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

     1.14.  Termination for Cause.  The term  "Termination for Cause" shall mean
termination of the employment of the Executive by reason of any of the following
determined in good faith by the Employer's Board of Directors:

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

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

          (c)  The Executive's willful and intentional  violation of any federal
               banking or securities laws, or of the Bylaws,  rules, policies or
               resolutions of Employer, 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  Employer,  which has a  material  adverse
               effect upon the Employer;

          (d)  The written determination by a state or federal banking agency or
               governmental authority having jurisdiction over the Employer that
               Executive  is not suitable to act in the capacity for which he or
               she is employed by Employer;

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

          (f)  The  Executive's  willful  and  intentional  disclosure,  without
               authority,  of any secret or confidential  information concerning
               Employer  or taking  any  action  which the  Employer'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 Employer.

2.   Scope, Purpose and Effect.

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

     2.2. Fringe Benefit. The benefits provided by this Agreement are granted by
the  Employer  as a fringe  benefit to the  Executive  and are not a part of any
salary reduction plan or any arrangement deferring a bonus or a salary increase.
The Executive 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 Executive 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 Executive  elects to Retire on a date
which  constitutes an Early  Retirement Date, the Executive shall be entitled to
be paid the Applicable  Percentage of the Executive  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  Executive and the Employer 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 Executive's death in the case of the Index Benefit defined in Schedule "B".

     3.2.  Payments Upon Retirement.  If the Executive remains in the employment
of the Employer until attaining  sixty-two (62)years of age, the Executive shall
be entitled to be paid the Applicable  Percentage of the Executive Benefits,  in
substantially  equal  monthly  installments  on the  first  day of  each  month,
beginning with the month  following the month in which the Executive  Retires or
upon such later date as may be  mutually  agreed upon by the  Executive  and the
Employer  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  Executive's  death in the case of the Index  Benefit  defined in
Schedule "B". At the Employer's sole and absolute  discretion,  the Employer may
increase the Executive Benefits as and when the Employer  determines the same to
be appropriate.

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

     4.2. Payments in the Event of Disability Prior to Retirement.  In the event
the  Executive  becomes  Disabled at any time after the  Effective  Date of this
Agreement but prior to  Retirement,  the Executive  shall be entitled to be paid
the Applicable  Percentage of the Executive  Benefits,  in  substantially  equal
monthly  installments  on the first day of each month,  beginning with the month
following the month in which the Executive 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  Executive's  death in the case of the Index  Benefit
defined in Schedule "B".

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

     5.1. Termination Without Cause. If the Executive's employment is terminated
by the  Employer  without  cause,  and such  termination  is not  subject to the
provisions of subparagraph 5.4 below, the Executive shall be entitled to be paid
the Applicable  Percentage of the Executive  Benefits,  in  substantially  equal
monthly  installments  on the first day of each month,  beginning with the month
following the month in which the Executive attains  fifty-five (55) years of age
or any month thereafter,  as requested in writing by the Executive and delivered
to the Employer or its successor  thirty (30) days prior to the  commencement of
installment  payments;  provided,  however, that in the event the Executive 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 Executive 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 Executive's  death in the case
of the Index Benefit defined in Schedule "B".

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

     5.3.  Termination for Cause.  The Executive  agrees that if the Executive's
employment   with  the  Employer  is  terminated  "for  cause"  (as  defined  in
subparagraph 1.14 of this Agreement) and pursuant to subparagraph  1.14(c),  (d)
or (e),  the  Executive  shall  forfeit  any and all  rights  and  benefits  the
Executive 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 Executive
by the Employer  pursuant to the terms of this Agreement.  In the event that the
Executive's  employment  with the Employer is terminated "for cause" pursuant to
subparagraph 1.14(a), (b) or (f), the Executive shall be entitled to be paid the
Applicable  Percentage of the Executive Benefits, in substantially equal monthly
installments on the first day of each month,  beginning with the month following
the month in which the  Executive  attains  fifty-five  (55) years of age or any
month thereafter,  as requested in writing by the Executive and delivered to the
Employer  or its  successor  thirty  (30)  days  prior  to the  commencement  of
installment  payments;  provided,  however, that in the event the Executive 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 Executive 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 Executive's  death in the case
of the Index Benefit defined in Schedule "B".

     5.4.  Termination  by the  Employer  on  Account  of or After a  Change  in
Control.  In the event:  (i) the  Executive's  employment  with the  Employer is
terminated  by the Employer in  conjunction  with, or by reason of, a "Change in
Control"  (as  defined  in  subparagraph  1.4  above);  or (ii) by reason of the
Employer's actions and without the Executive's prior written consent, any change
occurs  in the  scope of the  Executive's  position,  responsibilities,  duties,
salary, benefits, or location of employment (which in the event of relocation of
more than thirty (30) miles from the location of the Executive's office prior to
a Change in Control shall  constitute  such a change in location) after a Change
in  Control  occurs;  or (iii)  the  Employer  causes  an  event to occur  which
reasonably  constitutes  or results in a demotion,  a significant  diminution of
responsibilities  or  authority,  or a  constructive  termination  (by forcing a
resignation  or  otherwise)  of the  Executive's  employment  after a Change  in
Control  occurs;  or (iv)  the  Executive's  employment  with  the  Employer  is
terminated  within  twelve (12) months after a Change in Control  occurs and the
Executive  notified  the  Employer of his  intention  to  terminate in a writing
delivered to the Employer  within six (6)months after the occurrence of a Change
in Control,  then the  Executive  shall be  entitled  to be paid the  Applicable
Percentage of the Executive  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 Executive attains  fifty-five (55) years of age
or any month thereafter,  as requested in writing by the Executive and delivered
to the Employer or its successor  thirty (30) days prior to the  commencement of
installment  payments;  provided,  however, that in the event the Executive 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 Executive 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 Executive'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 Executive
dies  prior  to  receiving  all of the  Executive  Benefits  described  in  this
Paragraph 5 to which the Executive is entitled, then the Employer will make such
payments  to the  Executive's  designated  beneficiary  in lump sum.  If a valid
Beneficiary  Designation is not in effect, then the remaining amounts due to the
Executive  under the terms of this  Agreement  shall be paid to the  Executive's
Surviving  Spouse.  If the Executive leaves no Surviving  Spouse,  the remaining
amounts due to the Executive  under the terms of this Agreement shall be paid to
the duly qualified  personal  representative,  executor or  administrator of the
Executive's estate.

     6. Section 280G Adjustment. If all or any portion of the amounts payable to
the Employee under this Agreement,  either alone or together with other payments
which  the  Employee  has the right to  receive  from the  Employer,  constitute
"excess  parachute  payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended(the "Code"), that are subject to the excise tax
imposed by Section  4999 of the Code (or  similar  tax and/or  assessment),  the
Employee  shall  be  responsible  for the  payment  of such  excise  tax and the
Employer (and its successor)  shall be responsible for any loss of deductibility
related  thereto.  If, at a later  date,  it is  determined  (pursuant  to final
regulations or published rulings of the Internal Revenue Service, final judgment
of a court of competent  jurisdiction,  or otherwise)  that the amount of excise
taxes  payable  by  the  Employee  is  greater  than  the  amount  initially  so
determined,  then the  Employee  shall  pay an  amount  equal to the sum of such
additional  excise taxes and any interest,  fines and penalties  resulting  from
such under  payment.  The  determination  of the amount of any such excise taxes
shall  be made by the  independent  accounting  firm  employed  by the  Employer
immediately  prior to the change in control,  subject to the mutual agreement of
the Employer and Employee.

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

     8. Claims  Procedure.  The Employer shall, but only to the extent necessary
to comply with ERISA,  be designated as the named fiduciary under this Agreement
and shall have authority to control and manage the operation and  administration
of  this  Agreement.   Consistent   therewith,   the  Employer  shall  make  all
determinations  as to the rights to benefits under this Agreement.  Any decision
by the Employer denying a claim by the Executive, the Executive's spouse, or the
Executive's  beneficiary  for benefits under this  Agreement  shall be stated in
writing and  delivered  or mailed,  via  registered  or certified  mail,  to the
Executive,  the Executive's spouse or the Executive's  beneficiary,  as the case
may be. Such decision  shall set forth the specific  reasons for the denial of a
claim.  In addition,  the Employer shall provide the Executive,  the Executive's
spouse or the Executive'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 Executive,  the  Executive's
spouse  or the  Executive's  designated  beneficiaries  shall  have any legal or
equitable  rights,  interests or claims in or to any specific property or assets
of the  Employer  as a result of this  Agreement;  (ii)  none of the  Employer's
assets shall be held in or under any trust for the benefit of the Executive, the
Executive's  spouse or the Executive's  designated  beneficiaries or held in any
way as security for the  fulfillment  of the  obligations  of the Employer under
this  Agreement;  (iii) all of the  Employer's  assets  shall be and  remain the
general unpledged and unrestricted  assets of the Employer;  (iv) the Employer's
obligation  under this  Agreement  shall be that of an  unfunded  and  unsecured
promise by the Employer to pay money in the future;  and (v) the Executive,  the
Executive's  spouse  and  the  Executive's  designated  beneficiaries  shall  be
unsecured  general  creditors  with respect to any benefits which may be payable
under the terms of this Agreement. Notwithstanding subparagraphs (i) through (v)
above,  the Employer and the Executive  acknowledge and agree that, in the event
of a Change in Control,  upon  request of the  Executive,  or in the  Employer's
discretion  if the  Executive  does not so request and the Employer  nonetheless
deems it appropriate, the Employer shall establish, not later than the effective
date of the Change in  Control,  a Rabbi  Trust or  multiple  Rabbi  Trusts (the
"Trust" or "Trusts") upon such terms and conditions as the Employer, in its sole
discretion,  deems  appropriate and in compliance with applicable  provisions of
the Code, in order to permit the Employer to make contributions  and/or transfer
assets to the Trust or Trusts to  discharge  its  obligations  pursuant  to this
Agreement.  The principal of the Trust or Trusts and any earnings  thereon shall
be  held  separate  and  apart  from  other  funds  of the  Employer  to be used
exclusively  for  discharge  of the  Employer's  obligations  pursuant  to  this
Agreement  and shall  continue  to be subject  to the  claims of the  Employer's
general  creditors  until paid to the  Executive  or its  beneficiaries  in such
manner and at such times as specified in this Agreement.

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

11.  Miscellaneous.

     11.1.  Opportunity  To Consult With  Independent  Advisors.  The  Executive
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
Executive'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 Executive acknowledges and agrees shall be the sole responsibility
of the Executive  notwithstanding any other term or provision of this Agreement.
The Executive  further  acknowledges  and agrees that the Employer shall have no
liability  whatsoever related to any such personal tax effects or other personal
costs,  expenses,  or  liabilities  applicable  to  the  Executive  and  further
specifically  waives  any  right  for the  Executive,  himself,  and his  heirs,
beneficiaries,  legal representatives,  agents, successors, and assigns to claim
or assert liability on the part of the Employer related to the matters described
above in this subparagraph  11.1. The Executive 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 Employer in its sole and absolute  discretion,  shall be resolved by binding
arbitration before a representative member,  selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services,  Inc. ("JAMS"),
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 there are none, the rules
of procedure used or established by AAA. Any award rendered by JAMS or AAA shall
be final and binding  upon the  parties,  and as  applicable,  their  respective
heirs, beneficiaries, legal representatives, agents, successors and assigns, and
may be entered in any court having jurisdiction  thereof.  The obligation of the
parties to arbitrate  pursuant to this clause shall be specifically  enforceable
in accordance with, and shall be conducted  consistently with, the provisions of
Title 9 of Part 3 of the California  Code of Civil  Procedure.  Any  arbitration
hereunder shall be conducted in 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 Executive or
the Employer under this Agreement shall be deemed to have been duly given, if by
personal  delivery,  upon  the date  received  by the  party  or its  authorized
representative;  if  by  facsimile,  upon  transmission  to a  telephone  number
previously  provided  by the  party  to whom the  facsimile  is  transmitted  as
reflected  in the  records  of the party  transmitting  the  facsimile  and upon
reasonable  confirmation of such transmission;  and if by mail, on the third day
after  mailing via U.S.  first  class mail,  registered  or  certified,  postage
prepaid and return receipt requested,  and addressed to the party at the address
given  below for the  receipt  of  notices,  or such  changed  address as may be
requested in writing by a party.

            If to the Employer:       Saratoga National Bank
                                      12000 Saratoga-Sunnyvale Rd.
                                      Saratoga, California 95070

                                      Attn: Chairman of the Board

            If to the Executive:      Richard L. Mount

                                      ------------------------------
                                      ------------------------------

     11.5.  Assignment.  Neither the Executive,  the Executive'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  Executive,  the  Executive's
spouse, or any designated beneficiary;  or (ii) transferable by operation of law
in the  event  of  bankruptcy,  insolvency  or  otherwise.  Any  such  attempted
assignment or transfer shall be void and unenforceable without the prior written
consent  of the  Employer.  The  Employer's  consent,  if  any,  to one or  more
assignments  or  transfers  shall not  obligate the Employer to consent to or be
construed as the  Employer's  consent to any other or  subsequent  assignment or
transfer.

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

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

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

     11.9.  Entire  Agreement.  This  Agreement  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
Employer, shall govern the validity, interpretation,  construction and effect of
this Agreement.

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

THE EMPLOYER                        THE EXECUTIVE

SARATOGA NATIONAL BANK

By:______________________________   _____________________________
V. Ronald Mancuso                   Richard L. Mount
Compensation Committee Chairman

                                   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

                               EXECUTIVE BENEFITS

1.   Executive Benefits Determination.

     The Executive Benefits shall be determined based upon the following:

     a.   Benefit Account:

          A Benefit Account shall be established as a liability  reserve account
          on the books of the Employer for the benefit of the  Executive.  Prior
          to the  date on  which  the  Executive  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
          Executive ceases to be employed by the Employer) 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  Executive  becomes  eligible  to  receive
          payments under the Agreement,  the Index Benefit for the Executive 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):

          Canada Life Assurance/US2651090

          Southland Life Insurance/0600080553

          Transamerica Life/50335062

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

     d.   Opportunity Cost:

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

                                              EXAMPLE INDEX BENEFITS

  [n]       [A]            [B]            [C]           [D]
End of  Cash Surrender     Index       Opportunity     Annual    Cumulative
 Year   Value of Life     [Annual         Cost         Benefit    Benefit
                           Policy      A0=premium        B-C       D+Dn-1
                           Income      A0+Cn-1x.05x
                          An-An-1        (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.   Executive Benefits Payments.

     The Executive 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 Executive's death.

                                   SCHEDULE C

                             BENEFICIARY DESIGNATION

     To the Administrator of the Saratoga  National Bank Executive  Supplemental
Compensation Agreement:  Pursuant to the Provisions of my Executive 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 no
Primary Beneficiary shall survive me, then to the Secondary Beneficiary,  and if
no named beneficiary  survives me, then the Administrator  shall pay all amounts
in  accordance  with  the  terms  of  my  Executive  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
Executive  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  Executive   Supplemental
Compensation Agreement.

Dated: ___________, 1998   __________________________
                           Richard L. Mount

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

     I,  Patricia  A. Mount,  being the spouse of Richard L. Mount,  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 Executive 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  Executive
Supplemental  Compensation  Agreement and in which I may have a marital property
interest.

Dated: ___________, 1998   ______________________________
                           Patricia A. Mount

                                   SCHEDULE D

                              DISTRIBUTION ELECTION

Pursuant to the Provisions of my Executive  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:   _______________________
          Richard L. MountLIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT

Insurer/Policy Number:     Canada Life Assurance/US2651090
                           Southland Life Insurance/0600080553
                           Transamerica Life/50335062

Bank:             Saratoga National Bank

Insured:          Richard L. Mount

Relationship of Insured to Bank:    President and Chief Executive Officer

Date: _____________, 1998

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 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  Executive   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 termination 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 terminated  pursuant to  subparagraph
          a),  (b) or (f) below.  The term  "termination  for cause"  shall mean
          termination  of the  employment 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 is not  suitable to act in the  capacity  for which he or
               she is employed by 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
               the 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

-----------------------------        ----------------------------
William D. Kron                      Richard L. Mount
Chairman of the Board
of Directors

BENEFICIARY DESIGNATION FORM

Primary Designation:

Name                                 Relationship

-----------------------------        ----------------------------

-----------------------------        ----------------------------

-----------------------------        ----------------------------

Contingent Designation:

-----------------------------        ----------------------------

-----------------------------        ----------------------------

-----------------------------        ----------------------------

                                              , 1998
-----------------------------        ---------
Richard L. Mount

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