Document:

MONTEREY BAY BANCORP, INC.
                           CHANGE IN CONTROL AGREEMENT

     This  AGREEMENT  is made  effective  as of March 8,  1995,  by and  between
Monterey Bay Bancorp,  Inc. (the  "Holding  Company"),  a corporation  organized
under the laws of the State of Delaware,  with its office at 36 Brennan  Street,
Watsonville,  California,  and  Carlene  F.  Anderson  ("Executive").  The  term
"Association"  refers to Watsonville  Federal Savings and Loan Association,  the
wholly-owned subsidiary of the Holding Company or any successor thereto.

     WHEREAS,  the  Holding  Company  recognizes  the  substantial  contribution
Executive  has made to the Holding  Company  and wishes to protect his  position
therewith for the period provided in this Agreement; and

     WHEREAS, Executive has agreed to serve in the employ of the Holding Company
or an affiliate thereof:

     NOW, THEREFORE,  in consideration of the contribution and  responsibilities
of Executive,  and upon the other terms and conditions hereinafter provided, the
parties hereto agree as follows:

1. TERM OF AGREEMENT.

     The term of this Agreement shall be deemed to have commenced as of the date
first above  written and shall  continue for a period of  twenty-four  (24) full
calendar  months  thereafter.  Commencing  on the  date  of  execution  of  this
Agreement,  the term of this  Agreement  shall be extended  for one day each day
until such time as the board of directors of the Holding  Company (the  "Board")
or Executive  elects not to extend the term of the  Agreement by giving  written
notice to the other party in  accordance  with Section 4 of this  Agreement,  in
which case the term of this Agreement shall be fixed and shall end on the second
anniversary of the date of such written notice.

2. CHANGE IN CONTROL

     (a) Upon the  occurrence of a Change in Control of the Holding  Company (as
herein  defined)  followed at any time during the term of this  Agreement by the
termination  of  Executive's  employment,  other than for  Cause,  as defined in
Section 2(c) hereof the provisions of Section 3 shall apply. Upon the occurrence
of a Change in Control,  Executive  shall have the right to elect to voluntarily
terminate his employment at any time during the term of this Agreement.

#27942 February 8, 1995

<PAGE>

     (b)  For  purposes  of  this  Agreement,  a  "Change  in  Control"  of  the
Association  or Holding  Company shall mean an event of a nature that: (i) would
be required  to be  reported  in response to Item 1(a) of the Current  Report on
Form 8-K,  as in effect on the date  hereof;  pursuant to Section 13 or 15(d) Qf
the Securities  Exchange Act of 1934 (the "Exchange  Act"); or (ii) results in a
Change in Control of the  Association or the Holding  Company within the meaning
of the Home Owners' Loan Act of 1933 and the Rules and  Regulations  promulgated
by the Office of Thrift Supervision  ("OTS")(or its predecessor  agency),  as in
effect on the date hereof (1'rovided,  that in applying the definition of change
in control as set forth under the rules and  regulations  of the OTS,  the Board
shall substitute its judgment for that of the OTS); or (iii) without  limitation
such a Change in Control  shall be deemed to have  occurred  at such time as (A)
any  "person"  (as the term is used in Sections  13(d) and 14(d) of the Exchange
Act) is or becomes  the  "beneficial  owner" (as defined in Rule 13d-3 under the
Exchange Act),  directly or indirectly,  of securities of the Association or the
Holding Company  representing  20% or more of the  Association's  or the Holding
Company's  outstanding  securities  except for any securities of the Association
purchased  by the  Holding  Company  m  connection  with the  conversion  of the
Association  to the stock  form and any  securities  purchased  by any  employee
benefit plan of the Association, or ('3) individuals who constitute the Board on
the date hereof (the  "Incumbent  Board")  cease for any reason to constitute at
least  a  majority  thereof;  provided  that  any  person  becoming  a  director
subsequent to the date hereof whose  election was approved by a vote of at least
three-quarters  of the  directors  comprising  the  Incumbent  Board,  or  whose
nomination for election by the Holding  Company's  stockholders  was approved by
the same Nominating  Committee  serving under an Incumbent Board,  shall be, for
purposes  of this  clause  ('3),  considered  as  though he were a member of the
Incumbent Board, or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Association or the Holding Company or
similar  transaction  occurs in which the  Association or Holding Company is not
the resulting entity, or (D) a proxy statement is distributed soliciting proxies
from  stockholders  of the Holding  Company,  by someone  other than the current
management of the Holding  Company,  seeking  stockholder  approval of a plan of
reorganization,  merger or  consolidation  of the Holding Company or Association
with one or more corporations as a result of which the outstanding shares of the
class of securities  then subject to such plan or transaction  are exchanged for
or converted into cash or property or securities  not issued by the  Association
or the Holding Company shall be  distributed,  or (E) a tender offer is made for
20% or more of the voting  securities of the Association or Holding Company then
outstanding.

     (c)  Executive  shall not have the right to  receive  termination  benefits
pursuant to Section 3 hereof upon Termination for Cause.  The term  "Termination
for Cause" shall mean termination because of the Executive's intentional failure
to perform stated duties, personal dishonesty,  incompetence,  willful violation
of any law, rule, regulation (other than traffic violations or similar offenses)
or final cease and desist order, or any material  breach of this Agreement.  For
purposes of this  Section,  no act, or the failure to act, on  Executive's  part
shall be  "willful"  unless done,  or omitted to be done,  not in good faith and
without  reasonable  belief that the action or omission was in the best interest
of  the  Holding  Company  or its  affiliates.  Notwithstanding  the  foregoing,
Executive shall not be deemed to have been Terminated for Cause unless and until
there shall have been delivered to him a copy of a

#27942 February 8, 1995
                                        2

<PAGE>

of the Board at a meeting of the Board called and held for that  purpose  (after
reasonable  notice  to  Executive  and an  opportunity  for him,  together  with
counsel,  to be heard before the Board),  finding that in the good faith opinion
of the Board,  Executive was guilty of conduct justifying  Termination for Cause
and specifying the particulars  thereof in detail.  Executive shall not have the
right to receive compensation or other benefits for any period after Termination
for Cause.  Any stock options and related  limited  rights  granted to Executive
under any stock option plan, or any unvested  awards granted to Executive  under
any restricted  stock benefit plan of the Holding  Company or its  subsidiaries,
shall  become  null and void  effective  upon  Executive's  receipt of Notice of
Termination  For Cause pursuant to Section 3 hereof and shall not be exercisable
by or  delivered to Executive at any time  subsequent  to such  Termination  for
Cause.

3. TERMINATION BENEFITS.

     (a) Upon the occurrence of a Change in Control, followed at any time during
the term of this  Agreement  by the  voluntary  or  involuntary  termination  of
Executive's  employment,  other  than for  Termination  for Cause,  the  Holding
Company shall be obligated to pay  Executive,  or in the event of his subsequent
death, his beneficiary or  beneficiaries,  or his estate,  as the case may be, a
sum equal to two (2) times Executive's  average annual  compensation for the two
preceding taxable years, such annual  compensation shall include any bonuses and
any other  compensation  paid or to be paid to Executive  in any such year,  the
amount of benefits paid or accrued to Executive pursuant to any employee benefit
plan  maintained by the  Association or Holding Company in any such year and the
amount of any contributions  made or to be made on behalf of Executive  pursuant
to any  employee  benefit  plan  maintained  by the  Association  or the Holding
Company in any such year. At the election of Executive  which  election is to be
made prior to a Change in  Control,  such  payment may be made in a lump sum. In
the event  that no  election  is made,  payment to  Executive  will be made on a
monthly basis in approximately  equal installments  during the remaining term of
this Agreement.

     (b) Upon the  occurrence of a Change in Control of the  Association  or the
Holding  Company  followed  at any time  during  the term of this  Agreement  by
Executive's  teriLination  of employment,  other than for Termination for Cause,
the Holding  Company shall cause to be continued  life,  medical and  disability
coverage  substantially  identical to the coverage maintained by the Association
for Executive prior to his severance,  except to the extent such coverage may be
changed in its  application  to all  Association  employees.  Such  coverage and
payments shall cease upon  expiration of twenty-four  (24) full calendar  months
following the Date of Termination.

     (c) Notwithstanding the preceding provisions of this Section 3, in the
event that:

          (i)  the  aggregate  payments  or  benefits  to be made or afforded to
               Executive,  which are deemed to be parachute  payments as defined
               in Section 280G of the Internal  Revenue Code of 1936, as amended
               (the  "Code"  or  any  successor   thereof;   (the  t1Termination
               Benefits") would be deemed to

#27942 February 8.1995
                                        3

<PAGE>
               include an "excess  parachute  payment  under Section 280G of the
               Code; and

          (ii) if such  Termination  Benefits  were  reduced  to an amount  (the
               "Non-Triggering  Amount"),  the  value of which is one  dollar (~
               1.00)  less than an amount  equal to three (3) times  Executive's
               "base amount," as determined in accordance with said Section 280G
               and the Non-Triggering Amount would be greater than the aggregate
               value of the  Termination  Benefits  (excluding  such  reduction)
               minus the  amount  of tax  required  to be paid by the  Executive
               thereon by Section 4999 of the Code,

     then the  Termination  Benefits  shall  be  reduced  to the  Non-Triggering
Amount.  The allocation of the reduction  required  hereby among the Termination
Benefits shall be determined by the Executive.

4. NOTICE OF TERMINATION.

     (a) Any purported termination by the Holding Company, or by Executive shall
be communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement,  a "Notice of Termination"  shall mean a written notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in detail the facts and  circumstances  claimed to provide a
basis  for  termination  of  Executive's   employment  under  the  provision  so
indicated.

     (b) "Date of  Termination"  shall mean the date  specified in the Notice of
Termination (which, in the case of Termination for Cause, shall not be less than
thirty (30) days from the date such Notice of Termination is given).

     (c) If; within thirty (30) days after any Notice of  Termination  is given,
the party  receiving such Notice of Termination  notifies the other party that a
dispute exists concerning the termination,  the Date of Termination shall be the
date on which the  dispute  is  finally  determined,  either  by mutual  written
agreement  of  the  parties,  by a  binding  arbitration  award,  or by a  final
judgment,  order or decree of a court of  competent  jurisdiction  (the time for
appeal  therefrom  having  expired  and no appeal  having  been  perfected)  and
provided  further that the Date of Termination  shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  the Holding  Company  will
continue to pay Executive his full compensation in effect when the notice giving
rise to the dispute was given (including,  but not limited to his current annual
salary) and  continue  him as a  participant  in all  compensation,  benefit and
insurance  plans in which he was  participating  when the notice of dispute  was
given,  until the dispute is finally resolved in accordance with this Agreement.
Amounts paid wider this  Section  4(c) are in addition to all other  amounts due
under this Agreement and shall not be offset against or reduce any other amounts
due under this Agreement.

#27942 February 8, 1995
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<PAGE>

5. SOURCE OF PAYMENTS.

     It is  intended by the parties  hereto that all  payments  provided in this
Agreement  shall be paid in cash or check from the general  funds of the Holding
Company.  Further,  the Holding Company guarantees such payment and provision of
all amounts and  benefits due  hereunder  to  Executive  and, if such amount and
benefits  due  from the  Association  are not  timely  paid or  provided  by the
Association, such amounts and benefits shall be paid and provided by the Holding
Company.

6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior  agreement  between the Holding  Company and Executive,
except that this Agreement  shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided.  No provision of
this  Agreement  shall be  interpreted  to mean that  Executive  is  subject  to
receiving fewer benefits than those  available to him without  reference to this
Agreement.

     Nothing in this Agreement shall confer upon Executive the right to continue
in the employ of the Holding  Company or shall impose on the Holding Company any
obligation to employ or retain Executive in its employ for any period.

7. NO ATTACHMENT.

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of;
Executive, the Holding Company and their respective successors and assigns.

8. MODIFICATION AND WAIVER.

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such  term  or  condition  for  the  future  or as to any act  other  than  that
specifically waived.

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                                        5

<PAGE>

9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT.

     In the event  Executive is suspended  and/or  temporarily  prohibited  from
participating in the conduct of the Association's  affairs by a notice described
in Section 9(b) of the  Change-in-Control  Agreement  between  Executive and the
Association dated March 8 1995 (the "Association  Agreement") during the term of
this Agreement and a Change in Control,  as defined  herein,  occurs the Holding
Company  will assume its  obligation  to pay and  Executive  will be entitled to
receive all of the  termination  benefits  provided  for under  Section 3 of the
Association  Agreement  upon the  notification  of the  Holding  Company  of the
Association's receipt of a dismissal of charges in the Notice.

10. EFFECT OF ACTION UNDER ASSOCIATION AGREEMENT

     Notwithstanding  any provision  herein to the contrary,  to the extent that
payments and benefits are paid to or received by Executive under the Association
Agreement  between  Executive and  Association,  the amount of such payments and
benefits  paid by the  Association  will  be  subtracted  from  any  amount  due
simultaneously to Executive under similar provisions of this Agreement.

11. SEVERABILITY

     If; for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

12. HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

13. GOVERNING LAW.

     The  validity,   interpretation,   performance,  and  enforcement  of  this
Agreement shall be governed by the laws of the State of Delaware.

14. ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the  location of the Holding  Company,  in  accordance  with the
rules of the American  Arbitration  Association then in effect.  Judgment may be
entered on the arbitrator's  award in any court having  jurisdiction;  provided,
however,  that Executive  shall be entitled to seek specific  performance of his
right to be paid

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                                        6

<PAGE>

until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

15. PAYMENT OF LEGAL FEES.

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
dispute or question of  interpretation  relating to this Agreement shall be paid
or  reimbursed by the Holding  Company if Executive is successful  pursuant to a
legal judgment, arbitration or settlement.

16. INDEMNIFICATION.

     The Holding Company shall provide Executive (including his heirs, executors
and  administrators)  with coverage  under a standard  directors'  and officers'
liability insurance policy at its expense,  or in lieu thereof;  shall indemnify
Executive (and his heirs,  executors and  administrators)  to the fullest extent
permitted  under  Delaware  law  and  as  provided  in  the  Holding   Company's
certificate of  incorporation  against all expenses and  liabilities  reasonably
incurred  by him in  connection  with  or  arising  out of any  action,  suit or
proceeding  in which he may be  involved by reason of his having been a director
or officer of the Holding Company  (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include,  but not be limited to,  judgments,  court costs and
attorneys' fees and the cost of reasonable settlements.

17. SUCCESSOR TO THE HOLDING COMPANY.

     The Holding Company shall require any successor or assignee, whether direct
or  indirect,  by  purchase,  merger,  consolidation  or  otherwise,  to  all or
substantially  all the  business  or assets of the  Association  or the  Holding
Company,  expressly  and  unconditionally  to assume  and agree to  perform  the
Holding Company's  obligations  under this Agreement,  in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.

#27942/February 8 1995
                                        7

<PAGE>
                                   SIGNATURES

     IN WITNESS WHEREOF, Monterey Bay Bancorp, Inc. has caused this Agreement to
be  executed  by its duly  authorized  officer,  and  Executive  has signed this
Agreement, on the8th day of March, 1995.

ATTEST:

                                        MONTEREY BAY BANCORP, INC.

/s/ Carlene Anderson                    By: /s/ Marshall G. Delk
Secretary                                   President and Chief Operating
                                            Officer

WITNESS:

/s/ Kimberly Segura                         /s/ Carlene Anderson
                                            Executive

SealMONTEREY BAY BANCORP, INC.
                           CHANGE IN CONTROL AGREEMENT

         This AGREEMENT is made effective as of January 15, 1999, by and between
Monterey Bay Bancorp,  Inc. (the  "Holding  Company"),  a corporation  organized
under  the laws of the State of  Delaware,  with its  office at 567 Auto  Center
Drive,  Watsonville,   California,  and  Susan  Davis  ("Executive").  The  term
"Association"  refers to Monterey Bay Bank, the  wholly-owned  subsidiary of the
Holding Company or any successor thereto.

         WHEREAS,  the Holding Company  recognizes the substantial  contribution
Executive  has made to the Holding  Company  and wishes to protect his  position
therewith for the period provided in this Agreement; and

         WHEREAS,  Executive  has agreed to serve in the  employ of the  Holding
Company or an affiliate thereof.

         NOW,   THEREFORE,    in   consideration   of   the   contribution   and
responsibilities  of  Executive,   and  upon  the  other  terms  and  conditions
hereinafter provided, the parties hereto agree as follows:

1.       TERM OF AGREEMENT.

         The term of this Agreement  shall be deemed to have commenced as of the
date first above  written and shall  continue for a period of  twenty-four  (24)
full  calendar  months  thereafter.  Commencing on the date of execution of this
Agreement,  the term of this  Agreement  shall be extended  for one day each day
until such time as the board of directors of the Holding  Company (the  "Board")
or Executive  elects not to extend the term of the  Agreement by giving  written
notice to the other party in  accordance  with Section 4 of this  Agreement,  in
which case the term of this Agreement shall be fixed and shall end on the second
anniversary of the date of such written notice.

2.       CHANGE IN CONTROL.

         (a) Upon the  occurrence of a Change in Control of the Holding  Company
(as herein  defined)  followed at any time during the term of this  Agreement by
the termination of Executive's  employment,  other than for Cause, as defined in
Section  2(c)  hereof,  the  provisions  of  Section  3 shall  apply.  Upon  the
occurrence  of a Change in Control,  Executive  shall have the right to elect to
voluntarily  terminate  his  employment  at any  time  during  the  term of this
Agreement.

<PAGE>

         (b) For  purposes  of this  Agreement,  a "Change  in  Control"  of the
Association  or Holding  Company shall mean an event of a nature that: (i) would
be required  to be  reported  in response to Item 1(a) of the Current  Report on
Form 8-K,  as in effect on the date  hereof,  pursuant to Section 13 or 15(d) of
the Securities  Exchange Act of 1934 (the "Exchange  Act"); or (ii) results in a
Change in Control of the  Association or the Holding  Company within the meaning
of the Home Owners' Loan Act of 1933 and the Rules and  Regulations  promulgated
by the Office of Thrift Supervision  ("OTS") (or its predecessor  agency), as in
effect on the date hereof  (provided,  that in applying the definition of change
in control as set forth under the rules and  regulations  of the OTS,  the Board
shall substitute its judgment for that of the OTS); or (iii) without  limitation
such a Change in Control  shall be deemed to have  occurred  at such time as (A)
any  "person"  (as the term is used in Sections  13(d) and 14(d) of the Exchange
Act) is or becomes  the  "beneficial  owner" (as defined in Rule 13d-3 under the
Exchange Act),  directly or indirectly,  of securities of the Association or the
Holding Company  representing  20% or more of the  Association's  or the Holding
Company's  outstanding  securities  except for any securities of the Association
purchased  by the  Holding  Company in  connection  with the  conversion  of the
Association  to the stock  form and any  securities  purchased  by any  employee
benefit plan of the Association,  or (B) individuals who constitute the Board on
the date hereof (the  "Incumbent  Board")  cease for any reason to constitute at
least  a  majority  thereof,  provided  that  any  person  becoming  a  director
subsequent to the date hereof whose  election was approved by a vote of at least
three-quarters  of the  directors  comprising  the  Incumbent  Board,  or  whose
nomination for election by the Holding  Company's  stockholders  was approved by
the same Nominating  Committee  serving under an Incumbent Board,  shall be, for
purposes  of this  clause  (B),  considered  as  though  he were a member of the
Incumbent Board, or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Association or the Holding Company or
similar  transaction  occurs in which the  Association or Holding Company is not
the resulting entity, or (D) a proxy statement is distributed soliciting proxies
from  stockholders  of the Holding  Company,  by someone  other than the current
management of the Holding  Company,  seeking  stockholder  approval of a plan of
reorganization,  merger or  consolidation  of the Holding Company or Association
with one or more corporations as a result of which the outstanding shares of the
class of securities  then subject to such plan or transaction  are exchanged for
or converted into cash or property or securities  not issued by the  Association
or the Holding Company shall be  distributed,  or (E) a tender offer is made for
20% or more of the voting  securities of the Association or Holding Company then
outstanding.

         (c) Executive shall not have the right to receive termination  benefits
pursuant to Section 3 hereof upon Termination for Cause.  The term  "Termination
for Cause" shall mean termination because of the Executive's intentional failure
to perform stated duties, personal dishonesty,  incompetence,  willful violation
of any law, rule, regulation (other than traffic violations or similar offenses)
or final cease and desist order, or any material  breach of this Agreement.  For
purposes of this  Section,  no act, or the failure to act, on  Executive's  part
shall be  "willful"  unless done,  or omitted to be done,  not in good faith and
without  reasonable  belief that the action or omission was in the best interest
of  the  Holding  Company  or its  affiliates.  Notwithstanding  the  foregoing,
Executive shall not be deemed to have been Terminated for Cause unless and until
there shall have been  delivered to him a copy of a  resolution  duly adopted

                                                                               2

<PAGE>

by the  affirmative  vote of not less than  three-fourths  of the members of the
Board at a  meeting  of the  Board  called  and held  for  that  purpose  (after
reasonable  notice  to  Executive  and an  opportunity  for him,  together  with
counsel,  to be heard before the Board),  finding that in the good faith opinion
of the Board,  Executive was guilty of conduct justifying  Termination for Cause
and specifying the particulars  thereof in detail.  Executive shall not have the
right to receive compensation or other benefits for any period after Termination
for Cause.  Any stock options and related  limited  rights  granted to Executive
under any stock option plan, or any unvested  awards granted to Executive  under
any restricted  stock benefit plan of the Holding  Company or its  subsidiaries,
shall  become  null and void  effective  upon  Executive's  receipt of Notice of
Termination  For Cause pursuant to Section 8 hereof and shall not be exercisable
by or  delivered to Executive at any time  subsequent  to such  Termination  for
Cause.

3.       TERMINATION BENEFITS.

         (a) Upon the  occurrence  of a Change in Control,  followed at any time
during the term of this Agreement by the voluntary or involuntary termination of
Executive's  employment,  other  than for  Termination  for Cause,  the  Holding
Company shall be obligated to pay  Executive,  or in the event of his subsequent
death, his beneficiary or  beneficiaries,  or his estate,  as the case may be, a
sum equal to two (2) times Executive's  average annual  compensation for the two
preceding taxable years, such annual  compensation shall include any bonuses and
any other  compensation  paid or to be paid to Executive  in any such year,  the
amount of benefits paid or accrued to Executive pursuant to any employee benefit
plan  maintained by the  Association or Holding Company in any such year and the
amount of any contributions  made or to be made on behalf of Executive  pursuant
to any  employee  benefit  plan  maintained  by the  Association  or the Holding
Company in any such year. At the election of Executive  which  election is to be
made prior to a Change in  Control,  such  payment may be made in a lump sum. In
the event  that no  election  is made,  payment to  Executive  will be made on a
monthly basis in approximately  equal installments  during the remaining term of
this Agreement.

         (b) Upon the  occurrence of a Change in Control of the  Association  or
the Holding  Company  followed at any time during the term of this  Agreement by
Executive's termination of employment, other than for Termination for Cause, the
Holding  Company  shall  cause to be  continued  life,  medical  and  disability
coverage  substantially  identical to the coverage maintained by the Association
for Executive prior to his severance,  except to the extent such coverage may be
changed in its  application  to all  Association  employees.  Such  coverage and
payments shall cease upon  expiration of twenty-four  (24 ) full calendar months
following the Date of Termination.

         (c) Notwithstanding the preceding  provisions of this Section 3, in the
event that:

                  (i)      the  aggregate  payments  or  benefits  to be made or
                           afforded  to  Executive,   which  are  deemed  to  be
                           parachute  payments as defined in Section 280G of the
                           Internal  Revenue  Code  of  1986,  as  amended  (the
                           "Code") or any successor  thereof,  (the "Termination
                           Benefits")  would be deemed  to

                                                                               3

<PAGE>

                           include an "excess  parachute  payment" under Section
                           280G of the Code; and

                  (ii)     if  such  Termination  Benefits  were  reduced  to an
                           amount (the  "Non-Triggering  Amount"),  the value of
                           which is one dollar ($1.00) less than an amount equal
                           to three  (3) times  Executive's  "base  amount,"  as
                           determined in  accordance  with said Section 280G and
                           the  Non-Triggering  Amount would be greater than the
                           aggregate   value   of   the   Termination   Benefits
                           (excluding  such  reduction)  minus the amount of tax
                           required  to be  paid  by the  Executive  thereon  by
                           Section 4999 of the Code,

         then the  Termination  Benefits shall be reduced to the  Non-Triggering
Amount.  The allocation of the reduction  required  hereby among the Termination
Benefits shall be determined by the Executive.

4.       NOTICE OF TERMINATION.

         (a) Any purported  termination by the Holding Company,  or by Executive
shall be  communicated  by Notice of Termination to the other party hereto.  For
purposes  of this  Agreement,  a "Notice  of  Termination"  shall mean a written
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

         (b) "Date of  Termination"  shall mean the date specified in the Notice
of Termination  (which, in the case of Termination for Cause,  shall not be less
than thirty (30) days from the date such Notice of Termination is given).

         (c) If,  within  thirty  (30) days after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute exists concerning the termination,  the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual written
agreement  of  the  parties,  by a  binding  arbitration  award,  or by a  final
judgment,  order or decree of a court of  competent  jurisdiction  (the time for
appeal  therefrom  having  expired  and no appeal  having  been  perfected)  and
provided  further that the Date of Termination  shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  the Holding  Company  will
continue to pay Executive his full compensation in effect when the notice giving
rise to the dispute was given (including,  but not limited to his current annual
salary) and  continue  him as a  participant  in all  compensation,  benefit and
insurance  plans in which he was  participating  when the notice of dispute  was
given,  until the dispute is finally resolved in accordance with this Agreement.
Amounts paid under this  Section  4(c) are in addition to all other  amounts due
under this Agreement and shall not be offset against or reduce any other amounts
due under this Agreement.

                                                                               4

<PAGE>

5.       SOURCE OF PAYMENTS.

         It is intended by the parties hereto that all payments provided in this
Agreement  shall be paid in cash or check from the general  funds of the Holding
Company.  Further,  the Holding Company guarantees such payment and provision of
all amounts and  benefits due  hereunder  to  Executive  and, if such amount and
benefits  due  from the  Association  are not  timely  paid or  provided  by the
Association, such amounts and benefits shall be paid and provided by the Holding
Company.

6.       EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

         This Agreement  contains the entire  understanding  between the parties
hereto and  supersedes  any prior  agreement  between  the  Holding  Company and
Executive,  except that this Agreement shall not affect or operate to reduce any
benefit or compensation  inuring to Executive of a kind elsewhere  provided.  No
provision  of this  Agreement  shall be  interpreted  to mean that  Executive is
subject  to  receiving  fewer  benefits  than  those  available  to him  without
reference to this Agreement.

         Nothing in this  Agreement  shall  confer upon  Executive  the right to
continue  in the employ of the  Holding  Company or shall  impose on the Holding
Company  any  obligation  to employ or retain  Executive  in its  employ for any
period.

7.       NO ATTACHMENT.

         (a) Except as required by law, no right to receive  payments under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

         (b) This Agreement  shall be binding upon, and inure to the benefit of,
Executive, the Holding Company and their respective successors and assigns.

                                                                               5

<PAGE>

8.       MODIFICATION AND WAIVER.

         (a)  This  Agreement  may  not be  modified  or  amended  except  by an
instrument in writing signed by the parties hereto.

         (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such  term  or  condition  for  the  future  or as to any act  other  than  that
specifically waived.

9.       REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT.

         In the event Executive is suspended and/or temporarily  prohibited from
participating in the conduct of the Association's  affairs by a notice described
in Section 9(b) of the  Change-in-Control  Agreement  between  Executive and the
Association  dated January 15 , 1999 (the  "Association  Agreement")  during the
term of this Agreement and a Change in Control,  as defined  herein,  occurs the
Holding Company will assume its obligation to pay and Executive will be entitled
to receive all of the termination  benefits  provided for under Section 3 of the
Association  Agreement  upon the  notification  of the  Holding  Company  of the
Association's receipt of a dismissal of charges in the Notice.

10.      EFFECT OF ACTION UNDER ASSOCIATION AGREEMENT.

         Notwithstanding  any provision  herein to the  contrary,  to the extent
that  payments  and  benefits  are paid to or  received by  Executive  under the
Association  Agreement  between  Executive and  Association,  the amount of such
payments and benefits paid by the Association will be subtracted from any amount
due simultaneously to Executive under similar provisions of this Agreement.

11.      SEVERABILITY.

         If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

                                                                               6

<PAGE>

12.      HEADINGS FOR REFERENCE ONLY.

         The headings of sections and paragraphs  herein are included solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

13.      GOVERNING LAW.

         The validity,  interpretation,  performance,  and  enforcement  of this
Agreement shall be governed by the laws of the State of Delaware.

14.      ARBITRATION.

         Any dispute or  controversy  arising under or in  connection  with this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the  location of the Holding  Company,  in  accordance  with the
rules of the American  Arbitration  Association then in effect.  Judgment may be
entered on the arbitrator's  award in any court having  jurisdiction;  provided,
however,  that Executive  shall be entitled to seek specific  performance of his
right to be paid  until  the Date of  Termination  during  the  pendency  of any
dispute or controversy arising under or in connection with this Agreement.

15.      PAYMENT OF LEGAL FEES.

         All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of  interpretation  relating to this Agreement shall be paid
or  reimbursed by the Holding  Company if Executive is successful  pursuant to a
legal judgment, arbitration or settlement.

16.      INDEMNIFICATION.

         The Holding  Company  shall  provide  Executive  (including  his heirs,
executors and  administrators)  with coverage  under a standard  directors'  and
officers' liability  insurance policy at its expense, or in lieu thereof,  shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent  permitted  under  Delaware law and as provided in the Holding  Company's
certificate of  incorporation  against all expenses and  liabilities  reasonably
incurred  by him in  connection  with  or  arising  out of any  action,  suit or
proceeding  in which he may be  involved by reason of his having been a director
or officer of the Holding Company  (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include,  but not be limited to,  judgments,  court costs and
attorneys' fees and the cost of reasonable settlements.

                                                                               7

<PAGE>

17.      SUCCESSOR TO THE HOLDING COMPANY.

         The Holding  Company shall  require any successor or assignee,  whether
direct or indirect, by purchase,  merger,  consolidation or otherwise, to all or
substantially  all the  business  or assets of the  Association  or the  Holding
Company,  expressly  and  unconditionally  to assume  and agree to  perform  the
Holding Company's  obligations  under this Agreement,  in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.

                                                                               8

<PAGE>

                                   SIGNATURES

         IN  WITNESS  WHEREOF,  Monterey  Bay  Bancorp,  Inc.  has  caused  this
Agreement  to be executed by its duly  authorized  officer,  and  Executive  has
signed this Agreement, on the 12th day of July, 1999.

ATTEST:                                 MONTEREY BAY BANCORP, INC.

/s/ Margaret A. Green                   By:      /s/ Marshall G. Delk
Secretary                                        Marshall G. Delk
                                                 President and Chief Operating
WITNESS:                                         Officer

/s/ Cynthia Girard                      /s/ Susan Davis
                                        Executive

Seal

                                                                               9

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