CUPERTINO NATIONAL BANK & TRUST

 

                                                                   EXHIBIT 10.26

                        CUPERTINO NATIONAL BANK & TRUST
                           EMPLOYMENT, SEVERANCE AND
                         RETIREMENT BENEFITS AGREEMENT

          THIS EMPLOYMENT, SEVERANCE AND RETIREMENT BENEFITS AGREEMENT (the
"Agreement") is made and entered on this 31st day of July, 1995 and is effective
as of April 14, 1995, by and between CUPERTINO NATIONAL BANCORP (the
"Corporation"), its wholly owned subsidiary CUPERTINO NATIONAL BANK & TRUST (the
"Bank") and DAVID HOOD ("Employee").

     The Corporation, Bank and Employee agree as follows:

1.   DEFINITIONS
     -----------

     1.1    "Agreement" means only the agreement contained in this document and
as modified in writing pursuant to section 10.5 herein.

     1.2    "Anniversary Date" means the date one (1) year from the Effective
Date.

     1.3    "Bank" means Cupertino National Bank & Trust, and any successor to
its business or assets which executes and delivers the Agreement as provided by
section 10.2 herein or which becomes bound by this Agreement by operation of
law.

     1.4    "Board" means the Board of Directors of the Bank.

     1.5    "Cause" means (1) Employee's acts of personal dishonesty;
willful misconduct; breach of fiduciary duty or violation of banking law
involving an intent to obtain personal or family profit; willful violation of
any law, rule, or regulation which results in action against or restrictions
imposed on the Bank by regulatory authorities; habitual abuse of substances (as
corroborated by a physician) or extended unexcused absence from work; or (2)
Employee's continued failure to substantially perform Employee's duties (which
failure may be determined by the Board by reference to the quality of the
Company's financial condition or operating performance) with the Bank (other
than any failure resulting from Disability) after a written demand for
substantial performance is given to Employee by the Board which demand
specifically identifies the manner in which the Board believes that Employee has
not substantially performed Employee's duties. The definition of "Cause" as set
forth in subsection (1) hereof is sometimes referred to separately herein as
"Personal Conduct/Cause," and the definition of "Cause" as set forth in
subsection (2) is sometimes referred to separately herein as
"Performance/Cause." The term "Cause," standing alone, shall mean either
Personal Conduct/Cause or Performance/Cause or both. For purposes of the
definition of Personal Conduct/Cause, an act, or failure to act, on the
Employee's part shall be

considered "willful" only if done, or omitted to be done, by him without
reasonable belief that such act, or failure to act, is in the best interests of
the Employer.

     1.6    "Change in Control" means a change in the Board of Directors, or the
Corporation or the Bank following:

            1.6.1  The acquisition, directly or indirectly, of more than 25% of
the outstanding shares of any class of voting securities of the Corporation or
the Bank by any Person; or

            1.6.2  A merger, consolidated or sale of all or substantially all of
the assets of the Corporation or the Bank, such that the individuals
constituting the Corporation Board or the Board of the Bank immediately prior to
such period shall cease to constitute a majority of such Board, unless the
election of each director who was not a director prior thereto was approved by
vote of at least two-thirds of the directors then in office who were directors
prior to such period.

            1.6.3  Notwithstanding the foregoing, any change in the Board
of either the Corporation or the Bank which occurs within the twenty-four (24)
month period following the Effective Date as a result of a merger with South
Valley Bancorporation, shall NOT constitute a Change in Control for purposes of
this Agreement.

     1.7    "Control" means the possession, direct or indirect, by any Person or
"group" (as defined in section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) of the power to direct or cause the direction of the management
policies of the Corporation or the Bank, whether through ownership of voting
securities, by contract, or otherwise, and in any case means the ability to
determine the election of a majority of the directors of the Corporation or the
Bank.

     1.8    "Corporation" means Cupertino National Bancorp and any successor to
its business or assets which executes and delivers the agreement as provided by
section 10.2 herein, or which becomes bound by this Agreement by operation of
law.

     1.9    "Corporation Board" means the Board of Directors of Cupertino
National Bancorp.

     1.10   "Disability" means physical or mental illness resulting in absence
on a full-time basis from Employee's duties with Employer for one-hundred eighty
(180) consecutive calendar days. Disability shall be deemed to have occurred
only after the following procedure has been satisfied: If within thirty (30)
days after written notice of proposed Termination for Disability is given to
Employee by Employer, Employee has

not returned to the full-time performance of Employee's duties, Employer may
terminate Employee by giving written notice of Termination for Disability. Such
notice may be given by Employer following Employee's absence from Employee's
duties by reason of physical or mental disability for one-hundred fifty (150)
consecutive calendar days.

     1.11   "Effective Date" means April 14, 1995.

     1.12   "Employee" means DAVID HOOD.

     1.13   "Employer" means the Corporation, the Bank or one of their
subsidiaries which is Employee's employer on the date of a Change in Control. If
Employee has more than one such employer on the date of a Change in Control, it
means the employer who makes payment of Employee's monthly salary, and if two or
more employers do so, each shall be deemed to be Employer for the purposes of
this Agreement on a pro rata basis as to the amount of Employee's working time
devoted to each, as a percentage of Employee's salary. "Employer" shall include
any successor to the business or assets of an Employer and which executes the
agreement provided by section 10.2 or which becomes bound by this Agreement by
operation of law.

     1.14   "Person" means an individual, a corporation, a partnership, an
association, a joint stock company, a trust, any unincorporated organization or
a government or political subdivision thereof.

     1.15   "Resignation for Good Reason" or "Resign for Good Reason" means the
cessation of Employee's employment upon written notice given by Employee to
Employer as provided in section 5.4.1 herein.

     1.16   "Retirement" or "Retire" means voluntary termination by Employee of
his/her employment with Employer other than for reason of death, Disability or
Resignation for Good Reason, as those terms are defined herein.

     1.17   "Salary" shall mean regular annual base cash compensation exclusive
of incentive or bonus compensation or noncash compensation benefits.

     1.18   "Retirement Age" for purposes of this Agreement is sixty-two (62)
years of age.

     1.19   "Termination" or "Terminated" means cessation of Employee's
employment upon written notice (with or without Cause) given to Employee, by
Employer or the Board, or their successors.

2.   POSITION AND DUTIES
     -------------------

     2.1    Employee shall be employed by the Bank as its Executive Vice
President and Senior Loan Officer reporting to the Executive Management
Committee, of which Employee will be a member, effective April 14, 1995 ("the
Commencement Date"). As Executive Vice President and Senior Loan Officer,
Employee agrees to devote his full business time, energy and skill to his duties
at the Bank. These duties shall include, but not be limited to, any duties
consistent with his position which may be assigned to Employee from time to time
by the Bank's President.

     2.2    CODE OF PERSONAL AND BUSINESS CONDUCT. Employee agrees to abide by
            -------------------------------------
the terms and conditions of the Bank's standard employee Code of Personal &
Business Conduct executed by Employee and attached here as Exhibit A.

3.   TERM
     ----

     3.1    The term of this Agreement shall commence as of the Effective Date
and shall continue until the Termination, Retirement, Resignation for Good
Reason (as defined in section 5.4.1) or death of Employee, whichever occurs
first. This Agreement and all of its terms and conditions may be terminated upon
written agreement by the parties. Notwithstanding the foregoing, nothing
contained herein shall imply the existence of a contract or assurance of
employment between Employee and Employer, nor shall this Agreement alter
Employer's personnel policies and practices, including the right to terminate
Employee at any time with or without cause.

     3.2    Notwithstanding the right of Bank to terminate Employee, any such
Termination shall be governed by section 5 below.

4.   COMPENSATION
     ------------

     4.1    SALARY.  Employee shall be paid a monthly salary of $10,000.00
            ------
($120,000.00 on an annual basis), subject to applicable withholding, in
accordance with the Bank's normal payroll procedures.

     4.2    BENEFITS.  Employee shall have the right, on the same basis as other
            -------- 
members of senior management of the Bank, to participate in and to receive
benefits under any of the Bank's employee benefits plans, including medical,
dental, life and disability group insurance plans as well as the Bank's 401(k)
Plan and Employee Stock Purchase Plan.

     4.3  VACATION.  Employee shall accrue vacation at a rate of 2.083 days per
          --------
month, the equivalent of five (5) weeks over a one (1) year period.

     4.4  STOCK OPTIONS.  Upon joining the Bank, Employee will receive an
          -------------
initial grant of options to acquire 15,000 shares of Corporation common stock.
The shares will vest under the provisions of the Bank's 1995 Stock Option Plan.

     4.5  PERFORMANCE BONUS.  Employee will be eligible for a performance bonus
          -----------------
up to 75% of base salary based upon goals, which will be set annually by the
Board.

     4.6  CAR ALLOWANCE.  $500.00 per month.
          -------------

     4.7  DEFERRED COMPENSATION.  The Bank will provide Retirement compensation
          ---------------------
benefits as provided in paragraph 6 set forth below.

     4.8  In the event that Employee's acceptance of employment with the Bank at
this time causes Employee to lose stock option rights with University National
Bank and Trust ("University") that he would have had if he remained employed by
University through the consummation of the "second stage" of University's plan
merger into Comerica Bank, then the Bank will reimburse Employee for the fair
market value of such stock option rights less the exercise price of the stock
calculated as of the closing date of University's "first stage" merger with
Interim Comerica on or about April 3, 1995, in a total amount not to exceed
$175,000. Such reimbursement for lost stock option rights shall be paid to
employee in two equal installments, the first on February 28, 1996 and the
second on February 28, 1997, provided that no such payment shall be due or made
unless Employee is an officer or employee of the Bank at such time payment is to
be made. If Employee receives compensation for the loss of his stock option
rights subsequent to the Bank's payment to employee, he will be required to
reimburse the Bank the payment amount.

     4.9  COMPENSATION FREEZE.  Subject to the terms and conditions herein, and
          -------------------
for a period for three (3) years from the Effective Date, Employee's total
annual Salary and standard employee benefits from Employer set forth above shall
remain the same; provided, however, that Employee's Salary shall be increased
annually to allow for a cost of living increase, such increase to be determined
based on the U.S. Department of Labor Bureau of Labor Statistics Consumer Price
Index for All Urban Consumers in the San Francisco, Oakland and Bay Area. In
addition, it is within the complete discretion of the Employer to increase such
amount of total compensation at any time and for any reason, including a
promotion of Employee to a new position or title; however, other than the cost-
of-living increase to Salary as provided for herein, nothing in this Agreement
shall

suggest or imply that the Board is under any duty or obligation to increase
Employee's Salary or other compensation or standard employee benefits at any
time during the three (3) year period following the Effective Date. Employee's
current salary, his current participation in incentive compensation programs of
the Employer and a description of current standard employee benefits are set
forth above.

5.   TERMINATION OF EMPLOYMENT
     -------------------------

     5.1    The provisions of this section 5 shall govern the benefits, if any,
which Employee shall receive upon Termination of his Employment.

     5.2    BENEFITS UPON VOLUNTARY TERMINATION.  In the event that Employee
            -----------------------------------
voluntarily resigns from his employment with the Bank, or in the event that his
employment terminates as a result of his death or disability, Employee shall be
entitled to no compensation or benefits from the Bank other than those earned
under paragraph 4 above through the date of his termination.

     5.3    BENEFITS UPON OTHER TERMINATION.  Employee agrees that his
            -------------------------------
employment may be terminated by the Bank at any time, with or without cause. In
the event of the termination of Employee's employment by the Bank for the
reasons set forth below, he shall be entitled to the following:

            5.3.1  TERMINATION FOR PERSONAL CONDUCT/CAUSE.  The payments
                   --------------------------------------
set forth in section 5.3.2 hereof shall not apply if at any time Employee is
terminated upon a good faith finding of Personal Conduct/Cause by the Board;
provided, however, that Employee shall be given written notice of the Board's
finding of conduct by Employee amounting to Personal Conduct/Cause for such
Termination. Such notice shall be accompanied by a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the members of
the Board adopted at a duly-noticed meeting of the Board, and finding in good
faith that Employee engaged in conduct amounting to Personal Conduct/Cause and
specifying the particulars thereof.

            5.3.2  If the Employee is Terminated for Performance/Cause or
other than by reason of death, Retirement, Disability or Personal Conduct/Cause,
as set forth herein, or if Employee Resigns for Good Reason, as defined in
section 5.4.1 below, the Bank shall pay to Employee twelve (12) months' Salary
("Severance Payment") at a rate equivalent to the then-current Salary of
Employee.

            5.3.3  The Bank shall have the option of paying Severance
Payments in a lump-sum payment, or by salary continuation payments made under
the Bank's normal

employee compensation schedule. If the Bank chooses the lump-sum payment option,
such payment shall be made not later than the tenth (10th) day following the
date of cessation of employment, Termination or Resignation for Good Reason.

            5.3.4  Although a payment triggering such section is not intended
hereby, amounts otherwise due under this section will be reduced if, and to the
extent that, such reduction will increase the net amount Employee will receive
under this Agreement after taking into account the imposition of the excise tax
under section 4999 of the Internal Revenue Code, if applicable.

     5.4    If a Change in Control occurs during the Term of this Agreement,
Employee may thereafter be entitled to a payment set forth in section 5.3.2 in
accordance with the terms hereof, subject to the following limitations:

            5.4.1  RESIGNATION FOR GOOD REASON. The payments set forth in
                   ---------------------------
section 5.3.2 hereof shall apply if, after a Change of Control but within one
year thereafter, Employee Resigns for Good Reason, upon the happening of one or
more of the following events (unless such event or occurrence is applied
generally to all officers and employees of Employer and any parent or successor
of any of them), any of which will constitute Good Reason for Employee's
Resignation:

            5.4.1.1  Without Employee's express written consent, Employee's
assignment to any duties substantially inconsistent with Employee's position,
duties, responsibilities and status with Employer immediately prior to a Change
in Control, or any removal of Employee from any such position to a position
substantially inferior to such prior position;

            5.4.1.2  A reduction by Employer of Employee's Salary or of any
bonus compensation formula applicable to Employee as in effect prior to a Change
in Control;

            5.4.1.3  A failure by Employer to maintain any of the employee
benefits to which Employee was entitled prior to a Change in Control at a level
substantially similar to or greater than that in effect prior to a Change in
Control, through the continuation of the same or substantially similar plans,
programs and policies;

            5.4.1.4  The failure by Employer to provide Employee with the same
number of paid vacation days and leave to which Employee would be entitled as
salaried employee of Employer, or any parent or successor of Employer;

                 5.4.1.5  Employer requiring Employee to travel on employer's
business to an extent substantially greater than Employee's present business
travel obligations; or the relocation of Employee's office at least sixty (60)
miles from its current location, without Employee's consent; and

                 5.4.1.6  The failure of the Bank to obtain the assumption of
this Agreement by any successor of Employer as contemplated in section 10.2
below.

          5.4.2  The events described above are the only events which shall
constitute Good Reason.

6.   CERTAIN RETIREMENT BENEFITS
     ---------------------------

     6.1  Subject to the special terms and conditions contained below, upon
cessation of Employee's employment with Employer, if the Employee has reached
the Retirement Age, or as soon thereafter as Employee reaches the Retirement
Age, the Bank hereby agrees that the Employee and Employee's spouse shall become
the joint owners (with right of survival) with the Bank of the annual increase
of the cash surrender value of the policy thereafter arising; however, the
Employee's (and Employee's spouse's) right to draw against such increase (such
draw to reduce eventual death benefits) shall never exceed $55,000 per 12-month
period (the "Retirement Draw Benefit"). The shared right to ownership of this
increase shall continue for the lifetime of the Employee and the lifetime of the
Employee's surviving spouse, but in no event longer than 40 years.

          6.1.1  The Retirement Draw Benefit will be made available by means of
a split-dollar insurance policy which is to be purchased by the Bank within
thirty (30) days of the date of this Agreement, and for which the premium
payment split between the Bank and Employee and the payment terms are outlined
in Exhibit B to this Agreement.

          6.1.2  Subject to the provisions of sections 6.1.3 and 6.1.4 herein,
Employee's right to the Retirement Draw Benefit shall not fully vest unless he
has been employed by Employer for seven (7) years from the Effective Date.  If
Employee's employment with Employer ends any time before a date one (1) year
from the date of this Agreement (the "Anniversary Date"), Employee will not have
any right to, or interest in, the Retirement Draw Benefit.  If Employee's
employment ends at any time after the Anniversary Date, but prior to the seven
(7) year date of full vesting, Employee's right to one-seventh (1/7) of the
Retirement Draw Benefit--i.e., the right to draw $7,857, or one-seventh of
$55,000, per 12-month period--will vest on the Anniversary Date, and Employee's
right to the Retirement Draw Benefit will continue to proportionately vest
thereafter on a monthly basis, on the first date of each month following the
Anniversary Date, until employment ends.

          6.1.3  Subject to the provisions of section 6.1.2 herein, if prior to
a Change in Control and during the Term hereof, Employee is Terminated for any
reason other than Disability, the vesting of Employee's right to the Retirement
Draw Benefit will cease as of the date of termination.  If prior to a Change of
Control and during the Term hereof, Employee is Terminated by reason of
Disability, the vesting of Employee's right to the Retirement Draw Benefit will
cease as of the date of termination unless the Board in its sole and absolute
discretion approves additional vesting.

          6.1.4  Notwithstanding the provisions of section 6.1.2 herein, if
after a Change in Control and during the Term hereof, Employee is Terminated, or
Resigns for Good Reason, as provided in section 5.4.1 herein, Employee's right
to the Retirement Draw Benefit shall immediately vest in full, and such benefit
shall become available to Employee when Employee reaches Retirement Age.

7.   FEDERAL INCOME TAX WITHHOLDING
     ------------------------------

     7.1  The Bank shall withhold from any compensation or benefits payable
under this Agreement all federal, state, city or other taxes or deductions as
shall be required pursuant to any law, governmental regulation or ruling.

8.   ARBITRATION
     -----------

     8.1  Any controversy between the parties hereto, including the
construction, application or breach of any of the terms, covenants or conditions
of this Agreement, and all claims relating to or arising from Employee's
employment or Termination, including all statutory claims (including but not
limited to all statutes dealing with employment discrimination), shall on a
timely written request of one party served upon the other, be submitted to
arbitration and be governed by the California Arbitration Act as set forth in
the California Code of Civil Procedure (presently sections 1280 et seq.). The
                                                                -- ---        
parties agree that any written request for arbitration must be made within one
year after the initiating party first learned or should have learned in the
exercise of reasonable diligence of the essential facts upon which the claim is
based, or first suffered any harm, or first learned or should have learned in
the exercise of reasonable diligence of the breach of this Agreement, whichever
is earlier.  Any claim not raised within such time limitation shall be waived
and forever barred.  The arbitration shall take place in Santa Clara County,
California.

     8.2  The parties may agree upon one arbitrator, but in the event they
cannot agree, there shall be three (3), one named in writing by each of the
parties within ten (10) days after demand for arbitration is given, and a third
chosen by the two so appointed;

provided further that if the two appointed cannot agree on the choice, then
application shall be made to a presiding judge of the Santa Clara County
Superior Court for the purpose of designating a third arbitrator. The applying
party (who may suggest in such application the names of a suitable third
arbitrator) shall provide the other party at least 48 hours prior notice of the
application so that such other party may have the opportunity to submit one or
more names of persons suitable to serve as the designated third arbitrator. The
presiding judge shall have discretion to designate the third arbitrator from
among the names suggested by either party or from among any other persons such
judge deems appropriate. The cost of such arbitration, including reasonable
attorneys' fees, shall be borne by the losing party or in such proportions as
the arbitrator(s) shall decide. Arbitration shall be the exclusive remedy of the
parties and the award of the arbitrator(s) shall be final and binding upon the
parties.

9.   GENERAL PROVISIONS
     ------------------

     9.1  NONASSIGNABILITY.  Neither this Agreement nor any right or interest
          ----------------
hereunder shall be assignable by Employee, provided, however, that nothing in
this section 10 shall preclude (i) Employee from designating a beneficiary to
receive any benefits payable hereunder upon Employee's death, or (ii) Employee's
executors, administrators, or other legal representatives of Employee's estate
from assigning any rights hereunder to the person or persons entitled thereto.

     9.2  ASSUMPTION.  The Bank shall require any successor in interest (whether
          ----------
direct or indirect or as a result of purchase, merger, consolidation, Change in
Control or otherwise) to all or substantially all of the business and/or assets
of the Corporation or the Bank to expressly assume and agree to perform the
obligations under this Agreement.

     9.3  NO ATTACHMENT.  Except as required or permitted 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 of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect. The payments due
Employee under section 5 herein shall not be deemed earned until the conditions
set forth in section 5 occur, if ever.

     9.4  BINDING AGREEMENT.  This Agreement contains the entire understanding
          -----------------
among the parties regarding Employee's relationship with Bank and Corporation
and supersedes any prior employment agreements. This Agreement shall be binding
upon, and inure to the benefit of, Employee, the Bank and the Corporation, and
their respective heirs, successors and assigns. Each party acknowledges that no
representations, inducements, promises, or agreements have been made by any
party, or anyone acting on

behalf of any party, which are not embodied herein and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or binding
on either party except as provided herein.

     9.5  AMENDMENT OR AUGMENTATION OF AGREEMENT.  This Agreement may not be
          --------------------------------------
modified or amended except by an instrument in writing signed by the parties
hereto. Unless expressly agreed to in writing by the parties hereto, no
additional rights or compensation, even if given or accepted, shall be deemed to
modify or otherwise affect the express terms and conditions of this Agreement.

     9.6  WAIVER.  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 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.

     9.7  CONDITION OF THE BANK AND THE CORPORATION.  Notwithstanding anything
          -----------------------------------------
in this Agreement, no payment shall be made under section 5 without regulatory
approval if any of the following events or circumstances exist: (i) the Bank is
insolvent or a conservator or receiver has been appointed for it; (ii) the
Comptroller of the Currency or other appropriate federal banking agency has made
a determination that the Bank or the Corporation is in a "troubled condition" as
defined by applicable regulations of such federal banking agency; (iii) the Bank
or the Corporation is assigned a composite rating of 4 or 5 by the appropriate
federal banking agency or is informed in writing by the OCC that it is rated a 4
or 5 under the Uniform Financial Institution's Rating System of the Federal
Financial Institution's Examination Council; or (iv) the OCC has initiated a
proceeding against the Bank to terminate or suspend deposit insurance for the
Bank.

     9.8  SEVERABILITY.  If, for any reason, any provision of this Agreement is
          ------------
held invalid, such invalidity shall not affect any other provision of this
Agreement not held invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held invalid, and the rest of such
provision together with all other provisions of this Agreement shall, to the
full extent consistent with law, continue in full force and effect. (If this
Agreement is held totally invalid or cannot be enforced, then to the full extent
permitted by law any prior employment agreement, whether oral or written,
express or implied, between the Bank and/or its affiliates, (or any successor
thereof) and Employee shall be deemed reinstated as if this Agreement had not
been executed.)

     9.9  NOTICES.  All notices, requests, demands and other communications
          -------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or if mailed by United States certified or registered mail,
prepaid, to the parties or their permitted assignees at the following addresses
(or at such other address as shall be given in writing by either party to the
other):

          To:  Cupertino National Bank & Trust
               20230 Stevens Creek Boulevard
               Cupertino, CA 95014-2244
               Attention:  Chairman of the Board

          To:  Employee at the last known address contained in the personnel
               records of the Bank

     9.10 HEADINGS.  The headings of 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.

     9.11 GOVERNING LAW.  This Agreement has been executed and delivered in the
          -------------                                                        
State of California, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of said State.

     9.12 ADVICE OF COUNSEL.  Employee has been encouraged to consult with legal
          -----------------                                                     
counsel of Employee's choosing concerning the terms of this Agreement prior to
executing this Agreement.  Any failure by Employee to consult with competent
counsel prior to executing this Agreement shall not be a basis for rescinding or
otherwise avoiding the binding effect of this Agreement.  The parties
acknowledge that they are entering into this Agreement freely and voluntarily,
with full understanding of the terms of the Agreement.  Interpretation of the
terms of this Agreement shall not be construed

for or against either party on the basis of the identity of the party who
drafted the provision in question.

CORPORATION:                                BANK:

CUPERTINO NATIONAL BANCORP                  CUPERTINO NATIONAL BANK & TRUST

By:  /s/ Alex D. Lindiay                    By:  /s/ Sam C. Smith            
     -------------------------------             ----------------------------
     _______________________________             ____________________________
Its: Vice Chairman                          Its: EVP & CEO                   
     -------------------------------             ----------------------------
     _______________________________             ____________________________

EMPLOYEE:

  /s/ David R. Hood
- ---------------------------------------
DAVID R. HOOD

                                   EXHIBIT A

As of the Effective Date, April 14, 1995, Employee's:

     1.   Annual Salary was $120,000;

     2.   Participation in incentive compensation was (describe basis/formula):
          Subjective based on performance of Bank and individual; and

     3.   Standard employee benefits were comprised of: 401(K), ESPP, medical 
          insurance, life insurance, automobile allowance, stock options,
          capital club members, plus any benefits added for EMC members or all
          employees.

                                   EXHIBIT B

Policy Premium: $554,911

Employee's Share of Premium: $218,386

     The Employee's share of the premium shall be payable pursuant to a 
promissory note in the form attached hereto as Attachment 1 (the "Premium 
Payment Note"), which note shall be paid annually by offsetting against 
Employee's incentive or bonus compensation at the following rates:

================================================================================
     IF BONUS COMPENSATION IS                     PAYMENT/OFFSET IS
- --------------------------------------------------------------------------------
          0 to $20,000                                   0
- --------------------------------------------------------------------------------
       $20,001 to $40,000                             $5,000
- --------------------------------------------------------------------------------
       $40,001 to $60,000                             $8,000
- --------------------------------------------------------------------------------
       $60,001 to $80,000                            $12,000
- --------------------------------------------------------------------------------
      greater than $80,000                           $16,000
================================================================================

     The balance, if any, of the Premium Payment Note at Employee's death shall 
be paid out of the policy's death benefit proceeds; provided, that if the death 
benefit proceeds are less than such balance, the unpaid amount shall be paid by 
the Bank and shall not be an obligation of Employee or Employee's estate.

     Employee shall not be required to pay interest on the unpaid balance of the
Premium Payment Note until Employee reaches Retirement Age; in consideration 
therefor, Employee waives all rights to any increases in the cash surrender 
value of the policy which arise on or before Employee reaches Retirement Age.

                                 ATTACHMENT 1

                                PROMISSORY NOTE

$218,386                                                   Cupertino, California
                                                                  April 14, 1995

          1.   Obligation. David Hood, an individual ("Maker") who is currently 
               ----------
an executive employee of Cupertino National Bank & Trust (the "Bank"), for value
received, hereby promises to pay to the Bank at 20230 Stevens Creek Boulevard, 
Cupertino, California 95014, the principal amount of two hundred eighteen 
thousand three hundred eight-six dollars ($218,386). This Note is delivered by 
Maker in payment of Marker's share of a life insurance premium for life 
insurance being purchased by the Bank (the "Life Insurance") pursuant to that 
certain Severance and Retirement Benefits Agreement between Maker and Bank dated
April 14, 1995 (the "Benefits Agreement"). The terms of the Benefits Agreement 
are incorporated herein by this reference. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Benefits Agreement.

          2.   Interest Rate. This Note shall bear simple interest from and 
               -------------
after the date Maker reaches Retirement Age at an annual interest rate of eight 
percent (8%). In the event this Note is not paid pursuant to the terms of 
Section 3 below, any late payments shall bear interest until fully paid at an 
annual rate of five (5) points above the Bank's prime rate--which shall be 
defined as the then prevailing rate charged by the Bank for commercial borrowers
of highest credit quality.

          3.   Payment Schedule. Maker agrees to make payments on this Note 
               ----------------
annually out of incentive or bonus compensation, if any, earned by Maker under 
any Bank plan for such compensation, and hereby authorizes Bank to obtain such 
payments from Maker annually by deducting from incentive or bonus compensation 
(at such time as such compensation would otherwise be paid to Maker) in 
accordance with the following schedule:

================================================================================
     IF BONUS COMPENSATION IS                     PAYMENT APPLIED TO NOTE IS
- --------------------------------------------------------------------------------
          0 to $20,000                                        0
- --------------------------------------------------------------------------------
       $20,001 to $40,000                                  $5,000
- --------------------------------------------------------------------------------
       $40,001 to $60,000                                  $8,000
- --------------------------------------------------------------------------------
       $60,001 to $80,000                                 $12,000
- --------------------------------------------------------------------------------
     greater than $80,000                                 $16,000
================================================================================

          If Maker ceases to be employed by Bank before Retirement Age, such 
that incentive or bonus compensation is no longer earned by Maker under any Bank
plan, Maker shall have no obligation to make further payments on this Note until
the death benefit provision is implemented.

          Maker further agrees that the balance of this Note, if any, unpaid at 
Maker's death shall be due and payable upon such death, and Maker hereby 
authorizes Bank to obtain from Maker the payoff of such unpaid balance by 
applying the death benefit proceeds from under the Life Insurance. To the extent
such death benefit proceeds are insufficient to pay in full the unpaid balance 
of this Note, any remaining balance after application of the entire death 
benefit proceeds shall be deemed extinguished and no longer an obligation of 
Maker or Maker's estate.

          All payments received shall be applied first to interest, if any, then
accrued, and then to principal.

          4.   Prepayments; Application. This Note may be prepaid in whole or in
               ------------------------
part any time without penalty or premium.

          5.   Events of Default. There shall be an "Event of Default" under 
               -----------------
this Note if Maker shall fail to make a payment to Bank when due and such 
default shall continue for thirty (30) days after Bank provides written notice 
to Maker of such default.

          6.   Remedies. If an event of Default shall occur, any indebtedness of
               --------
Maker under this Note shall, at Bank's option and without notice, become 
immediately due and payable without presentment, demand, protest or notice of 
dishonor, all of which are hereby expressly waived by Maker; and Holder shall 
have all of the rights, powers and remedies available under this Note, all of 
which rights, powers and remedies may be exercised at any time by Bank and from 
time to time after the occurrence of an Event of Default. All of the rights, 
powers and remedies of Bank in connection with this Note are cumulative and not 
exclusive and shall be in addition to any other rights, powers or remedies 
provided by law or equity.

          7.   Costs of Collection. If this Note is not paid when due, whether 
               -------------------
at maturity or by acceleration, Maker promises to pay all costs incurred by the 
Bank collecting the amounts due hereunder, including reasonable attorneys' fees.

          8.   Waiver. Presentment, demand, protest, notices of protest, 
               ------
dishonor and non-payment of this Note and all notices of every kind are hereby 
waived, except notices required by this Note. No single or partial exercise of 
or forbearance from exercising any power hereunder or under any guaranty 
pertaining to this Note shall preclude other or further exercises thereof or the
exercise of any other power.

          9.   Special Principal/Interest Reduction. Maker and Holder agree that
               ------------------------------------
is Maker ceases to be employed by Bank on or before November 1, 2001, under 
circumstances where Maker is not, under the terms of the Benefits Agreement, 
fully vested with respect to the Retirement Draw Benefit, there shall be at the 
time of Maker's

                                      -2-

cessation of employment a one-time reduction of principal and interest (if any) 
owed by Maker hereunder to reflect the unvested portion of the Retirement Draw 
Benefit which will be foregone by Maker as a result of ceasing employment before
full vesting. By way of example only, if Maker ceases employment when he 
is vested with respect to one-seventh of the Retirement Draw Benefit and 
unvested with respect to six-sevenths, there shall be a one-time reduction of 
six-sevenths of the principal of this Note; all other terms and conditions shall
remain in effect with respect to payment of the balance.

          10.  Form of Payment; Governing Law. Principal is payable in lawful 
               ------------------------------
money of the United States to the Bank. This Note has been executed and 
delivered by Maker in the State of California and shall be governed by and 
construed in accordance with the laws of the State of California.

          11.  Authority. The undersigned individuals signing this Note 
               ---------
represent and warrant that the undersigned individuals are duly authorized and 
empowered to execute and deliver this Note on behalf of Maker and Bank.

          12.  Notice. For purposes of giving notices under this Note, all 
               ------
notices shall be in writing and shall be deemed to have been duly given on the 
date of delivery, if personally delivered to the party to whom notice is to be 
given, or on the second (2nd) day after mailing, if mailed to the party to whom 
notice is to be given by first-class mail, postage prepaid and properly 
addressed as follows:

               TO MAKER:      David R. Hood

                              _____________________________

                              _____________________________

               TO BANK:       Cupertino National Bank & Trust
                              20230 Stevens Creek Blvd.
                              Cupertino, CA 95014
                              Attn: Chairman of the Board

               Any party named above may change its address for purposes of this
Section 12 by giving written notice of the new address to the Maker, and Bank, 
in the manner set forth above.

                                      -3-

          13.  Successors and Assigns. This Note shall be binding upon and inure
               ----------------------
to the benefit of Maker, Bank and their respective successors and permitted 
assigns.

          IN WITNESS WHEREOF, the undersigned have executed this Note as of the 
date first appearing hereinabove.

                                   MAKER:

                                   ________________________________
                                   David R. Hood

                                   BANK

                                   CUPERTINO NATIONAL BANK & TRUST
                                   a national banking association

                                   By:  _______________________________
                                        C. Donald Allen, Chairman, CEO

                                      -4- 

Basic Info X:

Name: CUPERTINO NATIONAL BANK & TRUST
Type: trust
Date: March 5, 1997
Company: GREATER BAY BANCORP
State: California

Other info:

Date:

  • 31st day of July , 1995
  • April 3 , 1995
  • February 28 , 1996
  • February 28 , 1997
  • April 14 , 1995 1
  • November 1 , 2001

Organization:

  • Board of Directors of the Bank
  • Board of the Bank
  • South Valley Bancorporation
  • Board of Directors of Cupertino National Bancorp
  • Termination for Disability
  • Executive Management Committee
  • Code of Personal & Business Conduct
  • University National Bank
  • U.S. Department of Labor Bureau of Labor Statistics Consumer Price Index for All Urban Consumers
  • Salary of Employee
  • Employer of Employee
  • Change of Control
  • Santa Clara County Superior Court
  • Uniform Financial Institution
  • Federal Financial Institution
  • Cupertino National Bank & Trust 20230 Stevens Creek Boulevard Cupertino
  • CUPERTINO NATIONAL BANCORP CUPERTINO NATIONAL BANK & TRUST
  • Bank at 20230 Stevens Creek Boulevard
  • Retirement Draw Benefit
  • the State of California
  • Cupertino National Bank & Trust 20230 Stevens Creek Blvd
  • David R. Hood BANK CUPERTINO NATIONAL BANK & TRUST

Location:

  • San Francisco
  • Oakland
  • Bay Area
  • Santa Clara County
  • United States
  • State of California
  • Cupertino

Money:

  • $ 10,000.00
  • $ 120,000.00
  • $ 500.00
  • $ 175,000
  • $ 7,857
  • $ 55,000
  • $ 554,911
  • eight-six dollars
  • $ 218,386
  • $ 20,000 0
  • $ 20,001
  • $ 40,000 $ 5,000
  • $ 40,001
  • $ 60,000 $ 8,000
  • $ 60,001
  • $ 80,000 $ 12,000
  • $ 80,000 $ 16,000

Person:

  • Alex D. Lindiay
  • Sam C. Smith
  • David Hood
  • David R. Hood
  • C. Donald Allen

Percent:

  • 25 %
  • 75 %
  • eight percent
  • 8 %