SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                               SierraWest Bancorp
- -------------------------------------------------------------------------------
              (Exact name of registrant specified in its charter)

 California                                               68-0091859
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

              10181 Truckee-Tahoe Airport Road, Truckee, CA 96161
                    (Address of Principal Executive Offices)

             SierraWest Bancorp 1996 Stock Option Plan, as Amended
                            (Full Title of the Plan)

       David Broadley, Executive Vice President & Chief Financial Officer
              10181 Truckee-Tahoe Airport Road, Truckee, CA 96161
                     (Name and Address of Agent for Service)

                                 (916) 582-3000
          (Telephone Number, including Area Code, of Agent for Service)

                         CALCULATION OF REGISTRATION FEE
================================================================================

                                 Proposed         Proposed
Title of                         maximum          maximum
securities      Amount           offering         aggregate        Amount of
to be           to be            price            offering         registration
registered      registered (a)   per share (b)    price            fee
Common Stock    450,000 shares   $15.00           $6,750,000       $2,327.59
(No par value)

================================================================================

(a) The number of shares being registered is the number of shares issuable under
    the  SierraWest  Bancorp 1996 Stock Option  Plan,  as Amended (the  "Plan").
    Because of certain events specified in the Plan, an indeterminate  number of
    shares may additionally become subject to issuance under the Plan.

(b) Estimated  pursuant to Rule 457(h)  solely for the purpose of computing  the
    registration fee, utilizing $ 15.00 as the average of the high and low price
    of SierraWest Bancorp's common stock as of September 25, 1996.


<PAGE>


                                    PART II

Item 3.           Incorporation of Documents by Reference

SierraWest  Bancorp (the  "Registrant")  hereby  incorporates  by reference  the
documents  listed below.  All  documents  subsequently  filed by the  Registrant
pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Securities  Exchange Act
of 1934 prior to the filing of a  post-effective  amendment which indicates that
all securities  offered have been sold or which  deregisters all securities then
remaining unsold,  shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing such documents.

(a) The Registrant's last annual report filed on Form 10-K for December 31, 1995
    filed by the Registrant  pursuant to Section 13 of the  Securities  Exchange
    Act of 1934.

(b) The Registrant's quarterly reports filed on Form 10-Q for the quarters ended
    March 31, 1996 and June 30, 1996.

(c) The Registrant's current reports filed on Form 8-K, dated January 2, January
    3 and April 9, 1996.

(d) The  description  of the  Registrant's  common  stock  is  contained  in its
    Registration  Statement  filed under the Securities  Act of 1933,  Form S-2,
    dated January 12, 1994. Form 8-A, filed January 3, 1996,  registered  rights
    attaching to the Registrant's stock.

Any  statement  contained  herein or in any document  incorporated  by reference
herein  shall be  deemed to be  modified  or  superseded  for  purposes  of this
Registration  Statement to the extent that another statement contained herein or
in any  other  subsequently  filed  document,  which  also  is  incorporated  by
reference  herein,  modifies or  supersedes  such  statement.  Any  statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4.           Description of Securities

Not applicable.

Item 5.           Interests of Named Experts and Counsel

None of the named experts or counsel of Registrant has significant  interests in
Registrant.

Item 6.           Indemnification of Directors and Officers

The  Articles  of  Incorporation  and  bylaws  of  the  Registrant  provide  for
indemnification  of agents  including  directors,  officers and employees to the
maximum  extent  allowed  by  California  law  including  the  use of  indemnity
agreements.  The Articles of Incorporation of the Registrant further provide for
the  elimination  of directors'  liability  for monetary  damages to the maximum
extent  allowed by  California  law.  The  indemnification  laws of the State of
California generally allow  indemnification,  in matters not involving the right
of the corporation,  to an agent of the corporation if such person acted in good
faith, in a manner such person  reasonably  believed to be in the best interests
of the corporation and in the case of a criminal matter, had no reasonable cause
to believe the conduct of such person was unlawful. California law, with respect
to matters involving the right of a corporation,  allows  indemnification  of an
agent of the  corporation,  if such person acted in good faith, in a manner such
person  believed  to be in  the  best  interests  of  the  corporation  and  its
shareholders;  provided that there shall be no indemnification  for: (i) amounts
paid in settlements  without court approval for a pending action;  (ii) expenses
occurred in defending a pending action which is settled or otherwise disposed of
without  court  approval;  (iii)  matters in which such  person  shall have been
adjudged to be liable to the corporation  unless the court  determines that such
person is entitled to be  indemnified;  or (iv) other  matters  specified in the
California Corporations Code.

In addition,  the Registrant has the power to purchase and maintain insurance on
behalf of any agent of the Registrant  against any liability asserted against or
incurred by the agent in such  capacity or arising out of the agent's  status as
such whether or not the  Registrant  would have the power to indemnify the agent
against such  liability  under the  applicable  provisions  of the  Registrant's
Bylaws.


                                                               -1-

<PAGE>





Item 7.           Exemption from Registration Claimed

Not Applicable.


Item 8.           Exhibits

  5.1    Opinion re: Legality
23.1     Consent of Deloitte & Touche LLP
99.1     SierraWest Bancorp 1996 Stock Option Plan, as Amended, and Agreements

Item 9.           Undertakings

The undersigned Registrant hereby undertakes:

(1)      To file,  during any period in which  offers or sales are being made, a
         post-effective amendment to this Registration Statement:

         (i)      To include any prospectus required by Section 10(a) (3) of the
                  Securities Act of 1933;

         (ii)     To reflect in the prospectus any facts or events arising after
                  the effective date of the Registration  Statement (or the most
                  recent post-effective  amendment thereof) which,  individually
                  or in the  aggregate,  represent a  fundamental  change in the
                  information set forth in the Registration Statement;

         (iii)    To include any material  information  with respect to the plan
                  of distribution  not previously  disclosed in the Registration
                  Statement or any material  change to such  information  in the
                  Registration Statement; provided, however, that paragraphs (1)
                  (i) and (1) (ii) do not apply if the Registration Statement is
                  on Form S-3 or Form  S-8 and the  information  required  to be
                  included in a post-effective  amendment by those paragraphs is
                  contained in periodic reports filed by the Registrant pursuant
                  to Section 13 or Section 15(d) of the Securities  Exchange Act
                  of 1934 that are incorporated by reference in the Registration
                  Statement.

(2)      That, for the purpose of determining any liability under the Securities
         Act of 1933, each such post-effective amendment shall be deemed to be a
         new registration  statement relating to the securities offered therein,
         and the offering of such  securities at that time shall be deemed to be
         the initial bona fide offering thereof.

(3)      To remove from registration by means of a post-effective  amendment any
         of  the  securities   being  registered  which  remain  unsold  at  the
         termination of the offering.

The undersigned  Registrant  hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the  Registrant's
annual  report  pursuant  to Section  13(a) or Section  15(d) of the  Securities
Exchange Act of 1934 (and, where applicable,  each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the  Registration  Statement shall be
deemed to be a new  Registration  Statement  relating to the securities  offered
therein,  and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933 may be permitted to  directors,  officers  and  controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the Registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.



                                                               -2-

<PAGE>





                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  Act of 1933,  the  Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the city of Truckee, California, on September 26, 1996.

                                                         SIERRAWEST BANCORP




                                                         /s/ William T. Fike
                                                         William T. Fike
                                                         President & CEO



                                                        -3-

<PAGE>



Pursuant to the  requirements of the Securities Act of 1933,  this  registration
statement has been signed by the following  persons in the capacities and on the
date indicated.



                          Director, Principal                 
/s/ William T. Fike,      Executive Officer         September 26, 1996
- -----------------------------------------------------------------------
William T. Fike                                              



/s/ Jerrold T. Henley,    Chairman                  September 26, 1996
- -----------------------------------------------------------------------
Jerrold T. Henley



/s/ David W. Clark,       Director                  September 26, 1996
- ------------------------------------------------------------------------
David W. Clark



/s/ Ralph J. Coppola,     Director                  September 26, 1996
- ------------------------------------------------------------------------
Ralph J. Coppola



/s/ Richard S. Gaston,     Director                 September 26, 1996
- ------------------------------------------------------------------------
Richard S. Gaston



/s/ John J. Johnson,       Director                 September 26, 1996
- ------------------------------------------------------------------------
John J. Johnson



/s/ Ronald A. Johnnson,    Director                 September 26, 1996
- ------------------------------------------------------------------------
Ronald A. Johnson



/s/ A. Morgan Jones,       Director                 September 26, 1996
- ------------------------------------------------------------------------
A. Morgan Jones



/s/ Jack V. Leonesio,      Director                 September 26, 1996
- -------------------------------------------------------------------------
Jack V. Leonesio



                           Director
- -------------------------------------------------------------------------
William W. McClintock



/s/ Thomas M. Watson,      Director                 September 26, 1996
- ------------------------------------------------------------------------
Thomas M. Watson
                           
                           Principal Financial
                           Officer, Principal
/s/ David C. Broadley      Acocunting Officer       September 26, 1996
- ------------------------------------------------------------------------
David C. Broadley          








                                                        -4-

<PAGE>

                                  EXHIBIT 5.1



GARY STEVEN FINDLEY*                                                   TELEPHONE
THOMAS Q. KWAN                                                    (714) 630-7136
LAURA DEAN-RICHARDSON                                                 TELECOPIER
                                                                  (714) 630-7910
*A PROFESSIONAL CORPORATION                                       (714) 630-2279


             G A R Y S T E V E N F I N D L E Y & A S S O C I A T E S

                           A PROFESSIONAL CORPORATION
                                ATTORNEYS AT LAW

                            1470 NORTH HUNDLEY STREET
                            ANAHEIM, CALIFORNIA 92806

                                                    
                                                 September 25, 1996



SierraWest Bancorp
10181 Truckee-Tahoe Airport Road
Truckee, CA 96161

RE:      Registration Statement on Form S-8

Gentlemen:

At your request, we have examined the form of Registration Statement to be filed
with the Securities and Exchange  Commission in connection with the registration
under the Securities Act of 1933, as amended,  for the offer and sale,  pursuant
to the  SierraWest  Bancorp 1996 Stock Option Plan, as amended of 450,000 shares
of your common stock, no par value (the "Common  Stock")  issuable upon exercise
of stock  options to be granted under the  SierraWest  Bancorp 1996 Stock Option
Plan,  as amended.  We are  familiar  with the  actions  taken or to be taken in
connection with the authorization, issuance and sale of the Common Stock.

It is our  opinion  that,  subject  to said  proceedings  being  duly  taken and
completed  as now  contemplated  before the issuance of the Common  Stock,  said
Common Stock,  will,  upon the issuance and sale thereof in accordance  with the
SierraWest  Bancorp  1996 Stock  Option  Plan  referred  to in the  Registration
Statement, be legally and validly issued and fully paid and nonassessable.

We  consent  to the use of  this  opinion  as an  exhibit  to said  Registration
Statement.


         Respectfully submitted,

         GARY STEVEN FINDLEY & ASSOCIATES

By: /s/ Gary Findley

         Gary Steven Findley
         Attorney at Law




                                                            -5-

<PAGE>


                                  EXHIBIT 23.1



                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation bt reference in this  Registration  Statement of
SierraWest  Bancorp on Form S-8 of our report dated January 31, 1996,  appearing
in the Annual  Report on Form 10-K of Sierra  Tahoe  Bancorp  for the year ended
December 31, 1995.



/s/ Deloitte & Touche, LLP

Sacramento, California
September 26, 1996




















                                                            -6-

<PAGE>

                                  EXHIBIT 99.1


                               SIERRAWEST BANCORP
                       1996 STOCK OPTION PLAN, AS AMENDED

1.       Purpose
         The  purpose of the  SierraWest  Bancorp  1996 Stock  Option  Plan (the
"Plan") is to provide  SierraWest Bancorp (the "Bancorp") and those corporations
which are or may become a parent or  subsidiary  corporation  of the  Bancorp an
additional means of attracting and retaining  eligible officers and employees by
offering them an opportunity to participate in the Bancorp's future  performance
through awards of stock options.

2.       Definitions
"Affiliate"  means any corporation that directly,  or indirectly  through one or
more  intermediaries,  controls or is controlled  by, or is under common control
with Bancorp,  where "control"  (including the terms  "controlled by" and "under
common control with") means the possession,  direct or indirect, of the power to
cause the direction of the management and policies of the  corporation,  whether
through the ownership of voting securities, by contract or otherwise.

"Bancorp" means SierraWest Bancorp, a California corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means a committee of the Bancorp's board of directors  consisting of
two or more persons each of whom shall be a Disinterested  Person and an Outside
Director.

"Disinterested  Person" means a director who (i) is not currently an officer (as
defined in 17 CFR  240.16a-1(f))  of Bancorp  or a parent or  subsidiary  of the
Bancorp,  or  otherwise  currently  employed  by  the  Bancorp  or a  parent  or
subsidiary of the Bancorp, (ii) does not receive  compensation,  either directly
or  indirectly,  from  Bancorp or a parent or  subsidiary  of the  Bancorp,  for
services  rendered as a consultant or in any capacity  other than as a director,
except for an amount that does not exceed the dollar amount for which disclosure
would be required pursuant to 17 CFR 229.404(a) (Item 404(a) of Regulation S-K),
(iii) does not possess an interest in any other transaction for which disclosure
would be required pursuant to 17 CFR 229.404(a) (Item 404(a) of Regulation S-K),
and (iv) is not engaged in a business relationship for which disclosure would be
required pursuant to 17 CFR 229.404(b) (Item 404(b) of Regulation S-K).

"Fair  Market  Value"  means,  as of any date,  the value of a share of  Bancorp
common stock determined as follows:


                                                            -7-

<PAGE>



         (a)      if such  Bancorp  common  stock is then  quoted on the  Nasdaq
                  National  Market,  its  closing  price on the Nasdaq  National
                  Market  on  the  last   trading  day  prior  to  the  date  of
                  determination as reported in The Wall Street Journal;

         (b)      if such Bancorp  common stock is then  publicly  traded and is
                  listed on a national securities exchange, its closing price on
                  the last trading day prior to the date of determination on the
                  principal  national  securities  exchange on which the Bancorp
                  common  stock is listed or  admitted to trading as reported in
                  The Wall Street Journal;

         (c)      if such  Bancorp  common  stock is publicly  traded but is not
                  quoted on the Nasdaq National Market nor listed or admitted to
                  trading on a national securities exchange,  the average of the
                  closing bid and asked  prices on the last trading day prior to
                  the date of  determination  as  reported  in The  Wall  Street
                  Journal; or

         (d)      if none of the foregoing is applicable, by the Committee in
                  good faith.

"Outside  Director" means any director who is not: (a) a current employee of the
Bancorp or any subsidiary of the Bancorp;  (b) a former  employee of the Bancorp
or any  Parent,  Subsidiary  or  Affiliate  of  the  Bancorp  who  is  receiving
compensation  for prior  services  (other than  benefits  under a  tax-qualified
pension  plan);  (c) a current or former  officer of the  Bancorp or any Parent,
Subsidiary or Affiliate of the Bancorp; or (d) currently receiving  compensation
for  personal  services  in any  capacity,  other than as a  director,  from the
Bancorp  or any  Parent,  Subsidiary  or  Affiliate  of the  Bancorp;  provided,
however,  that at such time as the term "Outside  Director",  as used in Section
162(m) of the Code is defined in regulations promulgated under Section 162(m) of
the  Code,   "Outside  Director"  will  have  the  meaning  set  forth  in  such
regulations,  as amended  from time to time and as  interpreted  by the Internal
Revenue Service.

"Parent" means any corporation  (other than the Bancorp) in an unbroken chain of
corporations  ending with the Bancorp if, at the time of the granting of a stock
option under this Plan,  each of such  corporations  other than the Bancorp owns
stock  possessing 50% or more of the total combined  voting power of all classes
of stock in one of the other corporations in such chain.

"Subsidiary" means any corporation (other than the Bancorp) in an unbroken chain
of  corporations  beginning  with the Bancorp if, at the time of granting of the
stock  option  under this  Plan,  each of the  corporations  other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.


3.       Administration

                                                            -8-

<PAGE>



         This Plan shall be administered by the Committee appointed by the Board
of  Directors of the Bancorp.  Any action of the  Committee  with respect to the
administration  of the Plan shall be taken  pursuant to a majority  vote, or the
unanimous written consent, of its members.  Subject to the express provisions of
the Plan,  the Committee  shall have the authority to construe and interpret the
Plan, define the terms used herein, prescribe,  amend and rescind, the rules and
regulations  relating  to  administration  of  the  Plan,  and  make  all  other
determinations necessary or advisable for administration of the Plan.

         All decisions, determinations,  interpretations or other actions by the
Committee  shall be final,  conclusive  and binding on all  persons,  optionees,
grantees, and any successors-in-interest to such parties.

4.       Incentive Stock Options
         All options  granted  which are  designated  at the time of grant as an
"incentive stock option" shall be deemed an incentive stock option.

         (a)      Incentive  stock options  granted under this Plan are intended
                  to be qualified under Section 422 of the Code.

         (b)      Officers, who are employees and employees of the Bancorp or of
                  a Parent or Subsidiary of the Bancorp, shall be eligible for
                  selection to participate in grants of incentive stock options.
                  Subject to the express provisions of the Plan, the Committee 
                  shall (i) select from the eligible class of employees and 
                  determine the individuals to whom incentive stock options 
                  shall be granted, (ii) determine the terms and provisions of 
                  the respective incentive stock option agreements (which need 
                  not be identical), (iii) the times at which such incentive 
                  stock options shall be granted, and (iv) the number of shares
                  of Bancorp common stock acquirable by such incentive stock 
                  options subject to the limitation described in subsection 4(f)
                  below.  An individual who has been granted an incentive stock
                  option hereunder may, if he or she is otherwise eligible, be 
                  granted additional incentive stock options if the Committee
                  shall so determine.

         (c)      Except as described in  subsection  4(e) below,  the Committee
                  shall not grant an incentive  stock option to purchase  shares
                  of the Bancorp's  common stock to any  individual  who, at the
                  time of the grant,  owns stock possessing more than 10% of the
                  total  combined  voting power or value of all classes of stock
                  of the Bancorp or a subsidiary  corporation.  The  attribution
                  rules  of  Section  424(d)  of the  Code  shall  apply  in the
                  determination of ownership of stock for these purposes.

         (d)      The aggregate fair market value (determined as of the time the
                  incentive  stock  option is granted) of stock with  respect to
                  which  incentive  stock options are  exercisable for the first
                  time by an  individual  during any  calendar  year  (under all
                  plans of the Bancorp and its subsidiary corporations,  if any)
                  shall not exceed  $100,000,  plus any greater amount as may be
                  permitted under subsequent amendments to the Code.


                                                            -9-

<PAGE>



         (e)      The purchase price of stock subject to each incentive stock
                  option shall be determined by the Committee, but shall not be
                  less than one hundred percent (100%) of the fair market value
                  of such stock at the time such option is granted, except, in 
                  the case of optionees who at the time of the grant own more 
                  than ten percent (10%) of the total combined voting power of 
                  all classes of stock of the Bancorp or a subsidiary 
                  corporation (as defined in Section 422 of the Code), in which
                  case the option price of the stock shall not be less than one
                  hundred ten percent (110%) of the fair market value of such
                  stock at the time such option is granted and the term of such
                  option shall be for no more than five (5) years.

         (f)      No person will be eligible to receive more than 75,000  shares
                  in any calendar  year under this Plan pursuant to the grant of
                  stock options  (inclusive of incentive and nonqualified  stock
                  options),  except for new employees of the Bancorp or a Parent
                  or  Subsidiary of the Bancorp who shall be eligible to receive
                  up to a maximum  of  100,000  shares in the  calendar  year in
                  which their employment commenced.

         (g)      Notwithstanding  any other  provision in this Plan, no term of
                  this  Plan  relating  to  incentive   stock  options  will  be
                  interpreted,  amended or altered,  nor will any  discretion or
                  authority  granted  under  this  Plan be  exercised,  so as to
                  disqualify this Plan under Section 422 of the Code or, without
                  the  consent  of the  optionee  affected,  to  disqualify  any
                  incentive stock option under Section 422 of the Code.

5.       Nonqualified Stock Options
         (a)      All options  granted  which are (i) in excess of the aggregate
                  fair  market  value  limitations  set  forth in  Section  4(d)
                  hereof,   (ii)   designated  at  the  time  of  the  grant  as
                  "nonqualified",  or  (iii)  intended  to  be  incentive  stock
                  options but do not meet the  requirements  of incentive  stock
                  options,   shall  be  deemed   nonqualified   stock   options.
                  Nonqualified  stock  options  granted  hereunder  shall  be so
                  designated in the nonqualified  stock option agreement entered
                  into between the Bancorp and the optionee.

         (b)      Officers who are employees (including such officers who are 
                  also directors) and employees of the Bancorp or of a Parent or
                  Subsidiary of the Bancorp shall be eligible for selection to 
                  participate in the nonqualified stock option portion of the 
                  Plan.   Subject to the express provisions of the Plan, the 
                  Committee shall (i) select from the eligible class of 
                  employees and determine the individuals to whom nonqualified
                  stock options shall be granted, (ii) determine the 
                  discretionary terms and provisions of the respective 
                  nonqualified stock option agreements (which need not be 
                  identical), (iii) determine the times at which such 
                  nonqualified stock options shall be granted, and (iv) 
                  determine the number of shares of Bancorp common stock 
                  acquirable by such nonqualified stock options subject to the
                  limitation described in subsection 5(d) below.  An individual
                  who has been granted a nonqualified stock option hereunder 
                  may, if he or she is otherwise eligible under the Plan, be 
                  granted additional nonqualified stock options if the Committee
                  shall so determine.


                                                           -10-

<PAGE>



         (c)      The purchase price of stock subject to each nonqualified stock
                  option shall be  determined  by the Committee and shall not be
                  less than one hundred  percent (100%) of the fair market value
                  of such stock at the time such option is granted.

         (d)      No person will be eligible to receive more than 75,000  shares
                  in any calendar  year under this Plan pursuant to the grant of
                  stock options  (inclusive of incentive and nonqualified  stock
                  options),  except for new employees of the Bancorp or a Parent
                  or  Subsidiary of the Bancorp who shall be eligible to receive
                  up to a maximum  of  100,000  shares in the  calendar  year in
                  which their employment commenced.

6.       Stock Subject to the Plan
         Subject to adjustments as provided in Section 13, hereof,  the stock to
be  offered  under  the Plan  shall be shares of the  Bancorp's  authorized  but
unissued common stock  (hereinafter  called "stock") and the aggregate amount of
stock to be delivered upon exercise of all options  granted under the Plan shall
not exceed  450,000  shares.  If any option  shall be canceled,  surrendered  or
expire for any reason  without  having been  exercised in full,  the  underlying
shares subject thereto shall again be available for purposes of the Plan.

7.       Continuation of Employment
         Nothing  contained  in the  Plan  (or in any  option  agreement)  shall
obligate  the  Bancorp or a Parent or  Subsidiary  of the  Bancorp to employ any
optionee for any period or interfere in any way with the right of the Bancorp or
of a Parent or Subsidiary of the Bancorp to reduce the optionee's compensation.

8.       Exercise of Options
         No option  shall be  exercisable  until all  necessary  regulatory  and
shareholder  approvals  are  obtained.  Except  as  otherwise  provided  in this
section,  options shall be exercisable in such  installments,  which need not be
equal, and upon such  contingencies as the Committee shall determine;  provided,
however,  that if an optionee shall not in any given installment period purchase
all of the shares which the optionee is entitled to purchase in such installment
period,  the  optionee's  right to  purchase  any shares not  purchased  in such
installment  period shall  continue  until  expiration  or  termination  of such
option. Fractional share interests shall be disregarded, except that they may be
accumulated.  Not less than ten (10)  shares  may be  purchased  at any one time
unless the number of shares  purchased  is the total  number of shares  which is
exercisable at such time.  Options may be exercised by written notice  delivered
to the Bancorp  stating the number of shares with respect to which the option is
being exercised,  together with the full purchase price for such shares. Payment
of the option price in full,  for the number of shares to be delivered,  must be
made in cash, or subject to applicable law, with the Bancorp's stock  previously
acquired by the  optionee  and held by the optionee for a period of at least six
months. The equivalent dollar value of shares used to effect a purchase shall be
the Fair Market  Value of the shares on the date of  exercise.  If the option is
being  exercised  by any person  other than the  optionee,  said notice shall be
accompanied by proof,  satisfactory to counsel for the Bancorp,  of the right of
such  person  to  exercise  the  option.   Optionees  will  have  no  rights  as
shareholders  with respect to stock of the Bancorp subject to their stock option
agreements  until  the  date of  issuance  of the  stock  certificate  to  them.
Notwithstanding

                                                           -11-

<PAGE>



the foregoing,  the options shall vest at the rate of at least 20% per year over
a five year period from the date the option is granted.

9.       Nontransferability of Options
         Each option shall,  by its terms,  be  nontransferable  by the optionee
other  than by will or the  laws of  descent  and  distribution,  and  shall  be
exercisable during his or her lifetime only by the optionee.

10.      Cessation of Employment
         Except as provided in Sections 11 and 21 hereof,  if an optionee ceases
to be an employee of the  Bancorp or a Parent or  Subsidiary  of the Bancorp for
any reason other than his or her disability  (as defined in Section  22(e)(3) of
the Code) or death,  such optionee's  option shall expire three (3) months after
the date of termination of such employment. During the period after cessation of
employment,  such option shall be exercisable only as to those installments,  if
any,  which have  accrued  and/or  vested as of the date on which such  optionee
ceased  to be an  employee  of the  Bancorp  or a Parent  or  Subsidiary  of the
Bancorp.

11.      Termination of Employment for Cause
         If  the  stock  option  agreement  so  provides  and  if an  optionee's
employment by the Bancorp or a Parent or Subsidiary of the Bancorp is terminated
for cause, the optionee's  option shall expire thirty (30) days from the date of
such  termination.  Termination for cause shall include,  but not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties or
conviction  of a  crime  involving  moral  turpitude,  and,  in any  event,  the
determination  of the Company's board of directors with respect thereto shall be
final and conclusive.



12.      Disability or Death of Optionee
         If any optionee  dies while  serving as an employee of the Bancorp or a
Parent or Subsidiary of the Bancorp,  the option shall expire one (1) year after
the date of such  death,  except as  provided  in Section 21 hereof.  After such
death but before such  expiration,  the persons to whom such  optionee's  rights
under  the  option  shall  have  passed  by will or by the laws of  descent  and
distribution or the executor or  administrator  of optionee's  estate shall have
the right to exercise such option to the extent that  installments,  if any, had
accrued  and/or  vested  as of the date on which  the  optionee  ceased to be an
employee of the Bancorp or a Parent or Subsidiary of the Bancorp.

         If the  optionee  shall  terminate  his or her  employment  because  of
disability  (as defined in Section  22(e)(3)  of the Code),  such  optionee  may
exercise his or her option to the extent that such option was vested at the date
of  termination,  at any time  within  one (1) year of the date of  termination,
except as provided in Section 21 hereof.

                                                           -12-

<PAGE>




         If any  optionee  dies or becomes  disabled  during the three (3) month
period  referred to in Section 10 hereof,  the option  shall expire one (1) year
after the date of such termination, except as provided in Section 21 hereof.

13.      Adjustment Upon Changes in Capitalization
         If the  outstanding  shares of the stock of the Bancorp are  increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities  of the Bancorp  through  reorganization,  merger,  recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
without   consideration  to  the  Bancorp,   an  appropriate  and  proportionate
adjustment  shall be made in the number  and kind of shares as to which  options
may be granted. A corresponding adjustment changing the number or kind of shares
and the exercise price per share  allocated to  unexercised  options or portions
thereof,  which shall have been granted prior to any such change shall  likewise
be made. Any such adjustment,  however,  in an outstanding  option shall be made
without change in the total price  applicable to the unexercised  portion of the
option, but with a corresponding  adjustment in the price for each share subject
to the  option.  Any  adjustment  under  this  Section  13  shall be made by the
Committee,  whose  determination as to what  adjustments  shall be made, and the
extent  thereof,  shall be final and conclusive.  No fractional  shares of stock
shall  be  issued  or made  available  under  the  Plan on  account  of any such
adjustment,  and fractional  share-interests  shall be disregarded,  except that
they may be accumulated.

14.      Terminating Events
         A  Terminating  Event  shall  be  defined  as any one of the  following
events: (i) a dissolution or liquidation of the Bancorp;  (ii) a reorganization,
merger or consolidation of the Bancorp with one or more corporations, the result
of which the (A) Bancorp is not the surviving  corporation  (other than a merger
or consolidation with a wholly-owned subsidiary of Bancorp, a reincorporation of
the Bancorp in a different jurisdiction,  or other transaction in which there is
no  substantial  change in the  shareholders  of the  Bancorp or their  relative
shareholdings and the options granted under this Plan are assumed,  converted or
replaced by the successor corporation,  which assumption shall be binding on all
optionees), or (B) the Bancorp is the surviving corporation and the shareholders
of the Bancorp at the time  immediately  prior to such merger will own less than
50% of the voting equity  interests of the  surviving  entity after such merger;
(iii) a sale of substantially  all the assets of the Bancorp;  or (iv) a sale of
the equity securities of the Bancorp representing more than 50% of the aggregate
voting power of all outstanding  equity  securities of the Bancorp to any person
or entity,  or any group of persons and/or  entities  acting in concert.  Upon a
Terminating  Event (i) the Bancorp  shall  deliver to each optionee no less than
thirty (30) days prior to the  Terminating  Event,  written  notification of the
Terminating  Event and such optionee's  right to exercise all options whether or
not vested under the Plan or  applicable  stock option  agreement,  and (ii) all
outstanding  options  granted  pursuant  to the Plan shall  completely  vest and
become immediately  exercisable as to all shares granted pursuant to such option
immediately  prior to such  Terminating  Event.  This right of exercise shall be
conditional  upon  execution of a final plan of  dissolution or liquidation or a
definitive  agreement of  consolidation  or merger.  Upon the  occurrence of the
Terminating  Event  all  outstanding  options  and  the  Plan  shall  terminate;
provided,  however,  that  any  outstanding  options  not  exercised  as of  the
occurrence of the Terminating  Event shall not terminate if there is a successor
corporation  which  assumes such  outstanding  options or  substitutes  for such
options,  new  options  covering  the stock of the  successor  corporation  with
appropriate adjustments as to the number and kind of shares and prices.

                                                           -13-

<PAGE>




15.      Amendment and Termination
         The Committee may at any time suspend,  amend or terminate the Plan and
may,  with the consent of the optionee make such  modification  of the terms and
conditions of the option as it shall deem  advisable;  provided that,  except as
permitted  under the  provisions  of Sections 13 and 14 hereof,  no amendment or
modification which would:

         (a)      increase the maximum number of shares which may be purchased
                  pursuant to options granted under the Plan either in the 
                  aggregate or by an individual;

         (b)      change the minimum option price;

         (c)      increase  the maximum  term of options  provided  for herein;
     
         (d)      change the persons  eligible to receive options  pursuant to 
                  this Plan; or 

         (e)      make any  amendment to the Plan that would materially increase
                  benefits to participants or cause the Plan to be no longer
                  exempt pursuant to Rule 16b-3 promulgated under the Securities
                  Exchange Act of 1934;

may  be  adopted  without  the  Bancorp  having  first  obtained  any  necessary
regulatory and shareholder approvals required by law.

         No option may be granted during any suspension or after  termination of
the Plan. Amendment,  suspension or termination of the Plan shall not (except as
otherwise  provided in Section 13  hereof),without  the consent of the optionee,
alter or impair any rights or obligations under any option theretofore granted.

16.      Time of Granting Options
         The time an  option is  granted  sometimes  referred  to as the date of
grant,  shall be the day of the action of the  Committee  described  in Sections
4(b) and 5(b) hereof; provided,  however, that if appropriate resolutions of the
Committee  indicate that an option is granted as of and on some future date, the
time  such  option  is  granted  shall be such  future  date.  If  action by the
Committee is taken by unanimous  written  consent of its members,  the action of
the Committee shall be deemed to be at the time the last Committee  member signs
the consent.

17.      Privileges of Stock Ownership;
         Securities Law Compliance; Notice of Sale
         No optionee shall be entitled to the  privileges of stock  ownership as
to any shares of stock not actually  issued.  No shares shall be purchased  upon
the exercise of any option unless and until the

                                                           -14-

<PAGE>



Bancorp has fully  complied with all applicable  requirements  of any regulatory
agency having jurisdiction over the Bancorp, and all applicable  requirements of
any exchange upon which stock of the Bancorp may be listed.  The optionee  shall
give the Bancorp  notice of any sale or  disposition of any such shares not more
than five (5) days after such sale or disposition.

18.      Effective Date of the Plan
         The Plan  shall be  deemed  adopted  by the board of  directors  of the
Company  as of April 25,  1996 and shall be  effective  immediately  subject  to
approval by the shareholders of the Bancorp within twelve months of the date the
Plan is adopted, by the vote of a majority of the outstanding shares represented
and voting at a duly held meeting of  shareholders at which a quorum is present,
or by the written  consent vote of the holders of a majority of the  outstanding
shares of the Bancorp stock.  No option under the Plan shall be exercised  prior
to the shareholders' approval of the Plan.

19.      Termination
         Unless  previously  terminated  as  provided  herein,  this Plan  shall
terminate at the close of business on the date ten years from the date this Plan
is adopted by the Board of Directors of the Bancorp or, if earlier,  the date of
stockholder approval. No options shall be granted under the Plan thereafter, but
such termination shall not affect any option theretofore granted.


20.      Option Agreement
         Each option  shall be evidenced  by a written  stock  option  agreement
executed  by the  Bancorp  and  the  optionee  and  shall  contain  each  of the
provisions and agreements herein specifically  required to be contained therein,
and  such  other  terms  and  conditions  as are  deemed  desirable  and are not
inconsistent  with the Plan. Each incentive stock option agreement shall contain
such terms and  provisions  as the  Committee  may  determine to be necessary in
order to qualify such option as an incentive  stock option within the meaning of
Section 422 of the Code.

21.      Option Period
         Each option and all rights and obligations  thereunder  shall expire on
such date as the Committee may determine, but not later than ten (10) years from
the date such option is granted,  and shall be subject to earlier termination as
provided elsewhere in the Plan.

22.      Exculpation and Indemnification
         To the extent  permitted by applicable law in effect from time to time,
no member of the Board of directors or Committee  shall be liable for any act or
omission of any other member of the Board of directors or Committee  nor for any
act or  omission  on the  member's  own part,  except the  member's  own willful
misconduct  or gross  negligence.  The Bancorp and its  subsidiary  corporations
shall pay  expenses  incurred  by, and  satisfy a judgment  or fine  rendered or
levied against, a present or former member of the

                                                           -15-

<PAGE>



Board of directors or Committee in any action  brought by a third party  against
such  person  (whether  or not the  Bancorp is joined as a party  defendant)  to
impose a  liability  or  penalty on such  person  while a member of the Board of
directors  or  Committee  arising  with  respect  to the Plan or  administration
thereof or out of membership  on the Board of directors or Committee,  or all or
any combination of the preceding; provided, the Board of directors determines in
good faith that such member of the Board of directors or Committee was acting in
good  faith,  within  what such member of the Board of  directors  or  Committee
reasonably  believed to be the scope of his or her employment or authority,  and
for a purpose which he or she reasonably believed to be in the best interests of
the Bancorp or its shareholders.  Payments authorized  hereunder include amounts
paid and  expenses  incurred in settling any such action or  threatened  action.
This Section 22 does not apply to any action  instituted  or  maintained  in the
right of the Bancorp by a  shareholder  or holder of a voting trust  certificate
representing shares of the Bancorp or any subsidiary  corporation  thereof.  The
provisions   of  this   Section  22  shall  apply  to  the   estate,   executor,
administrator, heirs, legatees or devisees of a member of the Board of directors
or Committee, and the term "person" as used in this Section 22 shall include the
estate, executor, administrator, heirs, legatees or devisees of such person.

23.      Agreement and Representations of Optionee
         Unless  the shares of stock  covered  by the Plan have been  registered
with the Securities  Exchange  Commission,  each optionee shall, by accepting an
option, represent and agree, for himself and his transferees by will or the laws
of descent and distribution,  that all stock will be acquired for investment and
not for resale or distribution.  Upon such exercise of any portion of an option,
the person  entitled to exercise  the same shall,  upon  request of the Bancorp,
furnish  evidence  satisfactory  to the Bancorp  (including a written and signed
representation) to the effect that the stock is being acquired in good faith for
investment and not for resale or distribution.  Furthermore, the Bancorp, at its
sole discretion, may take all reasonable steps, including affixing the following
legend  (and/or  such  other  legend or legends as  counsel  shall  require)  on
certificates embodying the shares:

         The shares  represented by this  certificate  have not been  registered
         under  the  Securities  Act of  1933  and  may  not be  sold,  pledged,
         hypothecated  or  otherwise  transferred  or  offered  for  sale in the
         absence of an  effective  registration  statement  with respect to them
         under the  Securities  Act of 1933 or a written  opinion of counsel for
         the  optionee  which  opinion  shall be  acceptable  to counsel for the
         Bancorp that registration is not required.

to assure itself against any sale or distribution by the optionee which does not
comply with the Plan or any federal or state securities laws.

         The  Bancorp  agrees to remove any legend  affixed to the  certificates
embodying the shares pursuant to this Section 23 when all of the restrictions on
the transfer of the shares, whether imposed by the Plan or federal or state law,
have terminated.

24.      Information to Employees

                                                           -16-

<PAGE>



         The Bancorp shall provide each  optionee with  financial  statements of
the Bancorp prior to such  optionee's  exercise of his or her option and to each
optionee annually during the period such option has an option outstanding.










NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF SIERRA TAHOE
BANCORP'S  COMMON STOCK SHALL BE ISSUED  PURSUANT HERETO UNLESS THE SIERRA TAHOE
BANCORP  1996  STOCK  OPTION  PLAN  SHALL  HAVE  FIRST  BEEN   APPROVED  BY  THE
SHAREHOLDERS OF SIERRA TAHOE BANCORP.

                                                   SIERRA TAHOE BANCORP

                                             INCENTIVE STOCK OPTION AGREEMENT


         This Incentive  Stock Option  Agreement (the  "Agreement")  is made and
entered into as of the _____________ day of ____________,  ____________,  by and
between Sierra Tahoe Bancorp,  a California  corporation  (the  "Bancorp"),  and
__________("Optionee");
         WHEREAS,  pursuant to the Sierra  Tahoe  Bancorp 1996 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Stock Option Committee has
authorized granting to Optionee an incentive stock option to purchase all or any
part of __________  authorized but unissued shares of the Bancorp's common stock
for cash at the price of ___________  per share,  such option to be for the term
and upon the terms and conditions hereinafter stated;
         NOW, THEREFORE, it is hereby agreed:

Name of document
                                                           -17-

<PAGE>



         1.  Grant of  Option.  Pursuant  to said  action  of the  Stock  Option
Committee,  the Bancorp  hereby grants to Optionee the option to purchase,  upon
and subject to the terms and  conditions  of the Plan which is  incorporated  in
full  herein by this  reference,  all or any part of  ___________  shares of the
Bancorp's common stock (hereinafter  called "stock") at the price of ___________
per share,  which price is not less than one hundred  percent (100%) of the fair
market value of the stock (or not less than 110% of the fair market value of the
stock for  Optionee-shareholders  who own  securities  possessing  more than ten
percent (10%) of the total combined voting power of all classes of securities of
the  Bancorp) as of the date of action of the Stock  Option  Committee  granting
this option.
         2. Exercisability.  This option shall be exercisable as to ____________
shares on or after 12 months, an additional  ____________  shares on or after 24
months, an additional  ____________  shares on or after 36 months, an additional
_____________  shares  on or after 48  months,  and an  additional  ____________
shares on or after 60 months.  This option shall remain exercisable as to all of
such shares until _____________ (but not later than ten (10) years from the date
this option is granted) unless this option has expired or terminated  earlier in
accordance  with the provisions  hereof.  Shares as to which this option becomes
exercisable  pursuant to the  foregoing  provision  may be purchased at any time
prior to expiration of this option.
         3. Exercise of Option.  This option may be exercised by written  notice
delivered to the Bancorp stating the number of shares with respect to which this
option  is being  exercised,  together  with  cash or  qualifying  shares of the
Bancorp's  stock,  as  applicable,  in the amount of the purchase  price of such
shares.  Not less than ten (10) shares may be  purchased  at any one time unless
the number  purchased  is the total  number  which may be  purchased  under this
option and in no event may the option be exercised  with  respect to  fractional
shares. Upon exercise, Optionee shall make appropriate arrangements and shall be
responsible for the withholding of any federal and state taxes then due.
         4.  Cessation of Employment.  Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be an employee of the Bancorp or a subsidiary
corporation for any reason other than Optionee's death or disability,  [as

                                      -18-

<PAGE>


defined in Section 22(e)(3) of the Internal Revenue Code of 1986,  as amended 
from time to time (the  "Code")],  this option shall expire three (3) months 
thereafter. During the three (3) month period this option shall be  exercisable
only as to those  installments,  if any, which had accrued as of the date when
Optionee ceased to be an employee of the Bancorp or the subsidiary corporation.
         5.  Termination of Employment for Cause. If Optionee's  employment with
the Bancorp or a subsidiary  corporation  is terminated  for cause,  this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance  in the  performance  of duties or conviction  of a crime  involving
moral turpitude,  and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
         6.  Nontransferability;  Death or Disability  of Optionee.  This option
shall  not be  transferable  except  by  will  or by the  laws  of  descent  and
distribution  and  shall  be  exercisable  during  Optionee's  lifetime  only by
Optionee.  If Optionee  dies while an  employee  of the Bancorp or a  subsidiary
corporation,  or during the three (3) month  period  referred to in  Paragraph 4
hereof, this option shall expire one (1) year after the date of Optionee's death
or on the day  specified  in  Paragraph 2 hereof,  whichever  is earlier.  After
Optionee's  death but before such  expiration,  the  persons to whom  Optionee's
rights under this option shall have passed by will or by the applicable  laws of
descent and distribution or the executor or  administrator of Optionee's  estate
shall  have the  right to  exercise  this  option as to those  shares  for which
installments  had  accrued  under  Paragraph  2  hereof  as of the date on which
Optionee ceased to be an employee of the Bancorp or a subsidiary corporation.
         If Optionee terminates his or her employment because of disability, (as
defined in Section  22(e)(3) of the Code),  Optionee may exercise this option to
the extent he or she is  entitled  to do so at the date of  termination,  at any
time within one (1) year of the date of  termination,  or before the  expiration
date specified in Paragraph 2 hereof, whichever is earlier.

                                                           -19-

<PAGE>



         7.  Employment.  This Agreement shall not obligate the Bancorp or a 
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
         8.  Privileges of Stock  Ownership.  Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock  certificates  to Optionee.  Except as provided in the
Plan,  no  adjustment  will be made for  dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
         9.  Modification and Termination.  The rights of Optionee are subject
to modification and termination upon the occurrence of certain events as 
provided in Sections 13 and 14 of the Plan.
         10. Notification of Sale. Optionee agrees that Optionee,  or any person
acquiring shares upon exercise of this option,  will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
         11.  Representations of Optionee.  No shares issuable upon the exercise
of this option  shall be issued and  delivered  unless and until the Bancorp has
complied with all applicable  requirements  of California and federal law and of
the  Securities  and  Exchange  Commission  and  the  California  Department  of
Corporations  pertaining  to the  issuance  and  sale  of such  shares,  and all
applicable listing  requirements of the securities  exchanges,  if any, on which
shares of the  Bancorp of the same  class are then  listed.  Optionee  agrees to
ascertain  that such  requirements  shall have been complied with at the time of
any exercise of this option. In addition,  if the Optionee is an "affiliate" for
purposes of the Securities Act of 1933, there may be additional  restrictions on
the resale of stock,  and  Optionee  therefore  agrees to  ascertain  what those
restrictions are and to abide by the  restrictions and other applicable  federal
and state securities laws.
         Furthermore,  the  Bancorp  may,  if it deems  appropriate,  issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any  certificate  representing  such shares the legends
which the Bancorp deems appropriate.

                                                           -20-

<PAGE>



         Optionee  represents  that  the  Bancorp,   its  directors,   officers,
employees  and agents have not and will not  provide tax advice with  respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax  consequences  of the option,  including  the  application  and
effect of federal, state, local and other tax laws.
         12. Notices.  Any notice to the Bancorp  provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial  Officer at
its main  office and any notice to Optionee  shall be  addressed  to  Optionee's
address on file with the Bancorp or a subsidiary  corporation,  or to such other
address as either may  designate  to the other in writing.  Any notice  shall be
deemed to be duly given if and when enclosed in a properly  sealed  envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal  Service.  In lieu of giving  notice by mail as  aforesaid,  any  written
notice  under this  Agreement  may be given to  Optionee  in person,  and to the
Bancorp by personal delivery to its President or Chief Financial Officer.
         13.  Incentive Stock Option.  This Agreement is intended to be an 
incentive stock option agreement as defined in Section 422 of the Code.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OPTIONEE                                          SIERRA TAHOE BANCORP

By_______________________                         By_________________________
                                                        William T. Fike



                                                   By_________________________
                                                         Robert C. Silver







                                                           -21-

<PAGE>


























NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF SIERRA TAHOE
BANCORP'S  COMMON STOCK SHALL BE ISSUED  PURSUANT HERETO UNLESS THE SIERRA TAHOE
BANCORP  1996  STOCK  OPTION  PLAN  SHALL  HAVE  FIRST  BEEN   APPROVED  BY  THE
SHAREHOLDERS OF SIERRA TAHOE BANCORP.



                                                   SIERRA TAHOE BANCORP

                       NONQUALIFIED STOCK OPTION AGREEMENT



         This Nonqualified  Stock Option Agreement (the "Agreement") is made and
entered into as of the ______________ day of ____________,  ____________, by and
between Sierra Tahoe Bancorp,  a California  corporation  (the  "Bancorp"),  and
__________, ("Optionee");
         WHEREAS,  pursuant to the Sierra  Tahoe  Bancorp 1996 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Stock Option Committee has
authorized  granting to Optionee a nonqualified  stock option to purchase all or
any part of ____________  authorized but unissued shares of the Bancorp's common
stock for cash at the price of ___________ per share , such option to be for the
term and upon the terms and conditions hereinafter stated;
         NOW, THEREFORE, it is hereby agreed:

Name of Document
                                                           -22-

<PAGE>



         1.  Grant of  Option.  Pursuant  to said  action  of the  Stock  Option
Committee,  the Bancorp  hereby grants to Optionee the option to purchase,  upon
and subject to the terms and  conditions  of the Plan which is  incorporated  in
full  herein by this  reference,  all or any part of  ___________  shares of the
Bancorp's common stock (hereinafter called "stock") at the price of ____________
per share,  which price is not less than one hundred  percent (100%) of the fair
market value of the stock (or not less than 110% of the fair market value of the
stock for  Optionee-shareholders  who own  securities  possessing  more than ten
percent (10%) of the total combined voting power of all classes of securities of
the  Bancorp) as of the date of action of the Stock  Option  Committee  granting
this option.


         2. Exercisability.  This option shall be exercisable ____________. This
option shall remain exercisable as to all of such shares until ____________ (but
not later than ten (10) years from the date this option is granted)  unless this
option has  expired or  terminated  earlier in  accordance  with the  provisions
hereof.  Shares as to which this  option  becomes  exercisable  pursuant  to the
foregoing  provision  may be purchased at any time prior to  expiration  of this
option.
         3. Exercise of Option.  This option may be exercised by written  notice
delivered to the Bancorp stating the number of shares with respect to which this
option  is being  exercised,  together  with  cash or  qualifying  shares of the
Bancorp's  stock,  as  applicable,  in the amount of the purchase  price of such
shares.  Not less than ten (10) shares may be  purchased  at any one time unless
the number  purchased  is the total  number  which may be  purchased  under this
option and in no event may the option be exercised  with  respect to  fractional
shares. Upon exercise, Optionee shall make appropriate arrangements and shall be
responsible for the withholding of any federal and state taxes then due.
         4.  Cessation of Employment.  Except as provided in Paragraphs 2 and 5
 hereof, if Optionee shall cease to be an employee of the Bancorp or a 
subsidiary corporation for any reason other than Optionee's death or disability,
[as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as

                                                           -23-

<PAGE>



amended  from time to time (the  "Code")]  this option  shall  expire  three (3)
months  thereafter.  During  the three (3) month  period  this  option  shall be
exercisable only as to those  installments,  if any, which had accrued as of the
date when  Optionee  ceased to be an employee  of the Bancorp or the  subsidiary
corporation.
         5.  Termination of Employment for Cause. If Optionee's  employment with
the Bancorp or a subsidiary  corporation  is terminated  for cause,  this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance  in the  performance  of duties or conviction  of a crime  involving
moral turpitude,  and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.

         6.  Nontransferability;  Death or Disability  of Optionee.  This option
shall  not be  transferable  except  by  will  or by the  laws  of  descent  and
distribution  and  shall  be  exercisable  during  Optionee's  lifetime  only by
Optionee.  If  Optionee  dies while  serving as an  employee of the Bancorp or a
subsidiary  corporation,  or during the three (3) month  period  referred  to in
Paragraph  4 hereof,  this  option  shall  expire one (1) year after the date of
Optionee's  death or on the day  specified in  Paragraph 2 hereof,  whichever is
earlier. After Optionee's death but before such expiration,  the persons to whom
Optionee's  rights  under  this  option  shall  have  passed  by  will or by the
applicable laws of descent and  distribution or the executor or administrator of
Optionee's  estate  shall  have the right to  exercise  this  option as to those
shares for which  installments  had accrued  under  Paragraph 2 hereof as of the
date on which  Optionee  ceased to be an employee of the Bancorp or a subsidiary
corporation.
         If Optionee terminates his or her employment because of disability, (as
defined in Section  22(e)(3) of the Code),  Optionee may exercise this option to
the extent he or she is  entitled  to do so at the date of  termination,  at any
time within one (1) year of the date of  termination,  or before the  expiration
date specified in Paragraph 2 hereof, whichever is earlier.

                                                           -24-

<PAGE>



         7.  Employment.  This Agreement shall not obligate the Bancorp or a 
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
         8.  Privileges of Stock  Ownership.  Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock  certificates  to Optionee.  Except as provided in the
Plan,  no  adjustment  will be made for  dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
         9.  Modification and Termination.  The rights of Optionee are subject
to modification and termination upon the occurrence of certain events as 
provided in Sections 13 and 14 of the Plan.
         10. Notification of Sale. Optionee agrees that Optionee,  or any person
acquiring shares upon exercise of this option,  will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
         11.  Representations of Optionee.  No shares issuable upon the exercise
of this option  shall be issued and  delivered  unless and until the Bancorp has
complied with all applicable  requirements  of California and federal law and of
the  Securities  and  Exchange  Commission  and  the  California  Department  of
Corporations  pertaining  to the  issuance  and  sale  of such  shares,  and all
applicable listing  requirements of the securities  exchanges,  if any, on which
shares of the  Bancorp of the same  class are then  listed.  Optionee  agrees to
ascertain  that such  requirements  shall have been complied with at the time of
any exercise of this option. In addition,  if the Optionee is an "affiliate" for
purposes of the Securities Act of 1933, there may be additional  restrictions on
the resale of stock,  and  Optionee  therefore  agrees to  ascertain  what those
restrictions are and to abide by the  restrictions and other applicable  federal
and state securities laws.
         Furthermore,  the  Bancorp  may,  if it deems  appropriate,  issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any  certificate  representing  such shares the legends
which the Bancorp deems appropriate.

                                                           -25-

<PAGE>


         Optionee  represents  that  the  Bancorp,   its  directors,   officers,
employees  and agents have not and will not  provide tax advice with  respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax  consequences  of the option,  including  the  application  and
effect of federal, state, local and other tax laws.
         12. Notices.  Any notice to the Bancorp  provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial  Officer at
its main  office and any notice to Optionee  shall be  addressed  to  Optionee's
address on file with the Bancorp or a subsidiary  corporation,  or to such other
address as either may  designate  to the other in writing.  Any notice  shall be
deemed to be duly given if and when enclosed in a properly  sealed  envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal  Service.  In lieu of giving  notice by mail as  aforesaid,  any  written
notice  under this  Agreement  may be given to  Optionee  in person,  and to the
Bancorp by personal delivery to its President or Chief Financial Officer.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OPTIONEE                                    SIERRA TAHOE BANCORP


By__________________________                By______________________________


                                            By______________________________


                                      -26-
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SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                               SierraWest Bancorp
- -------------------------------------------------------------------------------
              (Exact name of registrant specified in its charter)

 California                                               68-0091859
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

              10181 Truckee-Tahoe Airport Road, Truckee, CA 96161
                    (Address of Principal Executive Offices)

             SierraWest Bancorp 1996 Stock Option Plan, as Amended
                            (Full Title of the Plan)

       David Broadley, Executive Vice President & Chief Financial Officer
              10181 Truckee-Tahoe Airport Road, Truckee, CA 96161
                     (Name and Address of Agent for Service)

                                 (916) 582-3000
          (Telephone Number, including Area Code, of Agent for Service)

                         CALCULATION OF REGISTRATION FEE
================================================================================

                                 Proposed         Proposed
Title of                         maximum          maximum
securities      Amount           offering         aggregate        Amount of
to be           to be            price            offering         registration
registered      registered (a)   per share (b)    price            fee
Common Stock    450,000 shares   $15.00           $6,750,000       $2,327.59
(No par value)

================================================================================

(a) The number of shares being registered is the number of shares issuable under
    the  SierraWest  Bancorp 1996 Stock Option  Plan,  as Amended (the  "Plan").
    Because of certain events specified in the Plan, an indeterminate  number of
    shares may additionally become subject to issuance under the Plan.

(b) Estimated  pursuant to Rule 457(h)  solely for the purpose of computing  the
    registration fee, utilizing $ 15.00 as the average of the high and low price
    of SierraWest Bancorp's common stock as of September 25, 1996.
PART II

Item 3.           Incorporation of Documents by Reference

SierraWest  Bancorp (the  "Registrant")  hereby  incorporates  by reference  the
documents  listed below.  All  documents  subsequently  filed by the  Registrant
pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Securities  Exchange Act
of 1934 prior to the filing of a  post-effective  amendment which indicates that
all securities  offered have been sold or which  deregisters all securities then
remaining unsold,  shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing such documents.

(a) The Registrant's last annual report filed on Form 10-K for December 31, 1995
    filed by the Registrant  pursuant to Section 13 of the  Securities  Exchange
    Act of 1934.

(b) The Registrant's quarterly reports filed on Form 10-Q for the quarters ended
    March 31, 1996 and June 30, 1996.

(c) The Registrant's current reports filed on Form 8-K, dated January 2, January
    3 and April 9, 1996.

(d) The  description  of the  Registrant's  common  stock  is  contained  in its
    Registration  Statement  filed under the Securities  Act of 1933,  Form S-2,
    dated January 12, 1994. Form 8-A, filed January 3, 1996,  registered  rights
    attaching to the Registrant's stock.

Any  statement  contained  herein or in any document  incorporated  by reference
herein  shall be  deemed to be  modified  or  superseded  for  purposes  of this
Registration  Statement to the extent that another statement contained herein or
in any  other  subsequently  filed  document,  which  also  is  incorporated  by
reference  herein,  modifies or  supersedes  such  statement.  Any  statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4.           Description of Securities

Not applicable.

Item 5.           Interests of Named Experts and Counsel

None of the named experts or counsel of Registrant has significant  interests in
Registrant.

Item 6.           Indemnification of Directors and Officers

The  Articles  of  Incorporation  and  bylaws  of  the  Registrant  provide  for
indemnification  of agents  including  directors,  officers and employees to the
maximum  extent  allowed  by  California  law  including  the  use of  indemnity
agreements.  The Articles of Incorporation of the Registrant further provide for
the  elimination  of directors'  liability  for monetary  damages to the maximum
extent  allowed by  California  law.  The  indemnification  laws of the State of
California generally allow  indemnification,  in matters not involving the right
of the corporation,  to an agent of the corporation if such person acted in good
faith, in a manner such person  reasonably  believed to be in the best interests
of the corporation and in the case of a criminal matter, had no reasonable cause
to believe the conduct of such person was unlawful. California law, with respect
to matters involving the right of a corporation,  allows  indemnification  of an
agent of the  corporation,  if such person acted in good faith, in a manner such
person  believed  to be in  the  best  interests  of  the  corporation  and  its
shareholders;  provided that there shall be no indemnification  for: (i) amounts
paid in settlements  without court approval for a pending action;  (ii) expenses
occurred in defending a pending action which is settled or otherwise disposed of
without  court  approval;  (iii)  matters in which such  person  shall have been
adjudged to be liable to the corporation  unless the court  determines that such
person is entitled to be  indemnified;  or (iv) other  matters  specified in the
California Corporations Code.

In addition,  the Registrant has the power to purchase and maintain insurance on
behalf of any agent of the Registrant  against any liability asserted against or
incurred by the agent in such  capacity or arising out of the agent's  status as
such whether or not the  Registrant  would have the power to indemnify the agent
against such  liability  under the  applicable  provisions  of the  Registrant's
Bylaws.

                                                               -1-
Item 7.           Exemption from Registration Claimed

Not Applicable.

Item 8.           Exhibits

  5.1    Opinion re: Legality
23.1     Consent of Deloitte & Touche LLP
99.1     SierraWest Bancorp 1996 Stock Option Plan, as Amended, and Agreements

Item 9.           Undertakings

The undersigned Registrant hereby undertakes:

(1)      To file,  during any period in which  offers or sales are being made, a
         post-effective amendment to this Registration Statement:

         (i)      To include any prospectus required by Section 10(a) (3) of the
                  Securities Act of 1933;

         (ii)     To reflect in the prospectus any facts or events arising after
                  the effective date of the Registration  Statement (or the most
                  recent post-effective  amendment thereof) which,  individually
                  or in the  aggregate,  represent a  fundamental  change in the
                  information set forth in the Registration Statement;

         (iii)    To include any material  information  with respect to the plan
                  of distribution  not previously  disclosed in the Registration
                  Statement or any material  change to such  information  in the
                  Registration Statement; provided, however, that paragraphs (1)
                  (i) and (1) (ii) do not apply if the Registration Statement is
                  on Form S-3 or Form  S-8 and the  information  required  to be
                  included in a post-effective  amendment by those paragraphs is
                  contained in periodic reports filed by the Registrant pursuant
                  to Section 13 or Section 15(d) of the Securities  Exchange Act
                  of 1934 that are incorporated by reference in the Registration
                  Statement.

(2)      That, for the purpose of determining any liability under the Securities
         Act of 1933, each such post-effective amendment shall be deemed to be a
         new registration  statement relating to the securities offered therein,
         and the offering of such  securities at that time shall be deemed to be
         the initial bona fide offering thereof.

(3)      To remove from registration by means of a post-effective  amendment any
         of  the  securities   being  registered  which  remain  unsold  at  the
         termination of the offering.

The undersigned  Registrant  hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the  Registrant's
annual  report  pursuant  to Section  13(a) or Section  15(d) of the  Securities
Exchange Act of 1934 (and, where applicable,  each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the  Registration  Statement shall be
deemed to be a new  Registration  Statement  relating to the securities  offered
therein,  and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933 may be permitted to  directors,  officers  and  controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the Registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                                               -2-
SIGNATURES

Pursuant to the  requirements  of the  Securities  Act of 1933,  the  Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the city of Truckee, California, on September 26, 1996.

                                                         SIERRAWEST BANCORP

                                                         /s/ William T. Fike
                                                         William T. Fike
                                                         President & CEO

                                                        -3-
Pursuant to the  requirements of the Securities Act of 1933,  this  registration
statement has been signed by the following  persons in the capacities and on the
date indicated.

                          Director, Principal                 
/s/ William T. Fike,      Executive Officer         September 26, 1996
- -----------------------------------------------------------------------
William T. Fike                                              

/s/ Jerrold T. Henley,    Chairman                  September 26, 1996
- -----------------------------------------------------------------------
Jerrold T. Henley

/s/ David W. Clark,       Director                  September 26, 1996
- ------------------------------------------------------------------------
David W. Clark

/s/ Ralph J. Coppola,     Director                  September 26, 1996
- ------------------------------------------------------------------------
Ralph J. Coppola

/s/ Richard S. Gaston,     Director                 September 26, 1996
- ------------------------------------------------------------------------
Richard S. Gaston

/s/ John J. Johnson,       Director                 September 26, 1996
- ------------------------------------------------------------------------
John J. Johnson

/s/ Ronald A. Johnnson,    Director                 September 26, 1996
- ------------------------------------------------------------------------
Ronald A. Johnson

/s/ A. Morgan Jones,       Director                 September 26, 1996
- ------------------------------------------------------------------------
A. Morgan Jones

/s/ Jack V. Leonesio,      Director                 September 26, 1996
- -------------------------------------------------------------------------
Jack V. Leonesio

                           Director
- -------------------------------------------------------------------------
William W. McClintock

/s/ Thomas M. Watson,      Director                 September 26, 1996
- ------------------------------------------------------------------------
Thomas M. Watson
                           
                           Principal Financial
                           Officer, Principal
/s/ David C. Broadley      Acocunting Officer       September 26, 1996
- ------------------------------------------------------------------------
David C. Broadley          

                                                        -4-
EXHIBIT 5.1

GARY STEVEN FINDLEY*                                                   TELEPHONE
THOMAS Q. KWAN                                                    (714) 630-7136
LAURA DEAN-RICHARDSON                                                 TELECOPIER
                                                                  (714) 630-7910
*A PROFESSIONAL CORPORATION                                       (714) 630-2279

             G A R Y S T E V E N F I N D L E Y & A S S O C I A T E S

                           A PROFESSIONAL CORPORATION
                                ATTORNEYS AT LAW

                            1470 NORTH HUNDLEY STREET
                            ANAHEIM, CALIFORNIA 92806

                                                    
                                                 September 25, 1996

SierraWest Bancorp
10181 Truckee-Tahoe Airport Road
Truckee, CA 96161

RE:      Registration Statement on Form S-8

Gentlemen:

At your request, we have examined the form of Registration Statement to be filed
with the Securities and Exchange  Commission in connection with the registration
under the Securities Act of 1933, as amended,  for the offer and sale,  pursuant
to the  SierraWest  Bancorp 1996 Stock Option Plan, as amended of 450,000 shares
of your common stock, no par value (the "Common  Stock")  issuable upon exercise
of stock  options to be granted under the  SierraWest  Bancorp 1996 Stock Option
Plan,  as amended.  We are  familiar  with the  actions  taken or to be taken in
connection with the authorization, issuance and sale of the Common Stock.

It is our  opinion  that,  subject  to said  proceedings  being  duly  taken and
completed  as now  contemplated  before the issuance of the Common  Stock,  said
Common Stock,  will,  upon the issuance and sale thereof in accordance  with the
SierraWest  Bancorp  1996 Stock  Option  Plan  referred  to in the  Registration
Statement, be legally and validly issued and fully paid and nonassessable.

We  consent  to the use of  this  opinion  as an  exhibit  to said  Registration
Statement.

         Respectfully submitted,

         GARY STEVEN FINDLEY & ASSOCIATES

By: /s/ Gary Findley

         Gary Steven Findley
         Attorney at Law

                                                            -5-
EXHIBIT 23.1

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation bt reference in this  Registration  Statement of
SierraWest  Bancorp on Form S-8 of our report dated January 31, 1996,  appearing
in the Annual  Report on Form 10-K of Sierra  Tahoe  Bancorp  for the year ended
December 31, 1995.

/s/ Deloitte & Touche, LLP

Sacramento, California
September 26, 1996

                                                            -6-
EXHIBIT 99.1

                               SIERRAWEST BANCORP
                       1996 STOCK OPTION PLAN, AS AMENDED

1.       Purpose
         The  purpose of the  SierraWest  Bancorp  1996 Stock  Option  Plan (the
"Plan") is to provide  SierraWest Bancorp (the "Bancorp") and those corporations
which are or may become a parent or  subsidiary  corporation  of the  Bancorp an
additional means of attracting and retaining  eligible officers and employees by
offering them an opportunity to participate in the Bancorp's future  performance
through awards of stock options.

2.       Definitions
"Affiliate"  means any corporation that directly,  or indirectly  through one or
more  intermediaries,  controls or is controlled  by, or is under common control
with Bancorp,  where "control"  (including the terms  "controlled by" and "under
common control with") means the possession,  direct or indirect, of the power to
cause the direction of the management and policies of the  corporation,  whether
through the ownership of voting securities, by contract or otherwise.

"Bancorp" means SierraWest Bancorp, a California corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means a committee of the Bancorp's board of directors  consisting of
two or more persons each of whom shall be a Disinterested  Person and an Outside
Director.

"Disinterested  Person" means a director who (i) is not currently an officer (as
defined in 17 CFR  240.16a-1(f))  of Bancorp  or a parent or  subsidiary  of the
Bancorp,  or  otherwise  currently  employed  by  the  Bancorp  or a  parent  or
subsidiary of the Bancorp, (ii) does not receive  compensation,  either directly
or  indirectly,  from  Bancorp or a parent or  subsidiary  of the  Bancorp,  for
services  rendered as a consultant or in any capacity  other than as a director,
except for an amount that does not exceed the dollar amount for which disclosure
would be required pursuant to 17 CFR 229.404(a) (Item 404(a) of Regulation S-K),
(iii) does not possess an interest in any other transaction for which disclosure
would be required pursuant to 17 CFR 229.404(a) (Item 404(a) of Regulation S-K),
and (iv) is not engaged in a business relationship for which disclosure would be
required pursuant to 17 CFR 229.404(b) (Item 404(b) of Regulation S-K).

"Fair  Market  Value"  means,  as of any date,  the value of a share of  Bancorp
common stock determined as follows:

                                                            -7-
(a)      if such  Bancorp  common  stock is then  quoted on the  Nasdaq
                  National  Market,  its  closing  price on the Nasdaq  National
                  Market  on  the  last   trading  day  prior  to  the  date  of
                  determination as reported in The Wall Street Journal;

         (b)      if such Bancorp  common stock is then  publicly  traded and is
                  listed on a national securities exchange, its closing price on
                  the last trading day prior to the date of determination on the
                  principal  national  securities  exchange on which the Bancorp
                  common  stock is listed or  admitted to trading as reported in
                  The Wall Street Journal;

         (c)      if such  Bancorp  common  stock is publicly  traded but is not
                  quoted on the Nasdaq National Market nor listed or admitted to
                  trading on a national securities exchange,  the average of the
                  closing bid and asked  prices on the last trading day prior to
                  the date of  determination  as  reported  in The  Wall  Street
                  Journal; or

         (d)      if none of the foregoing is applicable, by the Committee in
                  good faith.

"Outside  Director" means any director who is not: (a) a current employee of the
Bancorp or any subsidiary of the Bancorp;  (b) a former  employee of the Bancorp
or any  Parent,  Subsidiary  or  Affiliate  of  the  Bancorp  who  is  receiving
compensation  for prior  services  (other than  benefits  under a  tax-qualified
pension  plan);  (c) a current or former  officer of the  Bancorp or any Parent,
Subsidiary or Affiliate of the Bancorp; or (d) currently receiving  compensation
for  personal  services  in any  capacity,  other than as a  director,  from the
Bancorp  or any  Parent,  Subsidiary  or  Affiliate  of the  Bancorp;  provided,
however,  that at such time as the term "Outside  Director",  as used in Section
162(m) of the Code is defined in regulations promulgated under Section 162(m) of
the  Code,   "Outside  Director"  will  have  the  meaning  set  forth  in  such
regulations,  as amended  from time to time and as  interpreted  by the Internal
Revenue Service.

"Parent" means any corporation  (other than the Bancorp) in an unbroken chain of
corporations  ending with the Bancorp if, at the time of the granting of a stock
option under this Plan,  each of such  corporations  other than the Bancorp owns
stock  possessing 50% or more of the total combined  voting power of all classes
of stock in one of the other corporations in such chain.

"Subsidiary" means any corporation (other than the Bancorp) in an unbroken chain
of  corporations  beginning  with the Bancorp if, at the time of granting of the
stock  option  under this  Plan,  each of the  corporations  other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.

3.       Administration

                                                            -8-
This Plan shall be administered by the Committee appointed by the Board
of  Directors of the Bancorp.  Any action of the  Committee  with respect to the
administration  of the Plan shall be taken  pursuant to a majority  vote, or the
unanimous written consent, of its members.  Subject to the express provisions of
the Plan,  the Committee  shall have the authority to construe and interpret the
Plan, define the terms used herein, prescribe,  amend and rescind, the rules and
regulations  relating  to  administration  of  the  Plan,  and  make  all  other
determinations necessary or advisable for administration of the Plan.

         All decisions, determinations,  interpretations or other actions by the
Committee  shall be final,  conclusive  and binding on all  persons,  optionees,
grantees, and any successors-in-interest to such parties.

4.       Incentive Stock Options
         All options  granted  which are  designated  at the time of grant as an
"incentive stock option" shall be deemed an incentive stock option.

         (a)      Incentive  stock options  granted under this Plan are intended
                  to be qualified under Section 422 of the Code.

         (b)      Officers, who are employees and employees of the Bancorp or of
                  a Parent or Subsidiary of the Bancorp, shall be eligible for
                  selection to participate in grants of incentive stock options.
                  Subject to the express provisions of the Plan, the Committee 
                  shall (i) select from the eligible class of employees and 
                  determine the individuals to whom incentive stock options 
                  shall be granted, (ii) determine the terms and provisions of 
                  the respective incentive stock option agreements (which need 
                  not be identical), (iii) the times at which such incentive 
                  stock options shall be granted, and (iv) the number of shares
                  of Bancorp common stock acquirable by such incentive stock 
                  options subject to the limitation described in subsection 4(f)
                  below.  An individual who has been granted an incentive stock
                  option hereunder may, if he or she is otherwise eligible, be 
                  granted additional incentive stock options if the Committee
                  shall so determine.

         (c)      Except as described in  subsection  4(e) below,  the Committee
                  shall not grant an incentive  stock option to purchase  shares
                  of the Bancorp's  common stock to any  individual  who, at the
                  time of the grant,  owns stock possessing more than 10% of the
                  total  combined  voting power or value of all classes of stock
                  of the Bancorp or a subsidiary  corporation.  The  attribution
                  rules  of  Section  424(d)  of the  Code  shall  apply  in the
                  determination of ownership of stock for these purposes.

         (d)      The aggregate fair market value (determined as of the time the
                  incentive  stock  option is granted) of stock with  respect to
                  which  incentive  stock options are  exercisable for the first
                  time by an  individual  during any  calendar  year  (under all
                  plans of the Bancorp and its subsidiary corporations,  if any)
                  shall not exceed  $100,000,  plus any greater amount as may be
                  permitted under subsequent amendments to the Code.

                                                            -9-
(e)      The purchase price of stock subject to each incentive stock
                  option shall be determined by the Committee, but shall not be
                  less than one hundred percent (100%) of the fair market value
                  of such stock at the time such option is granted, except, in 
                  the case of optionees who at the time of the grant own more 
                  than ten percent (10%) of the total combined voting power of 
                  all classes of stock of the Bancorp or a subsidiary 
                  corporation (as defined in Section 422 of the Code), in which
                  case the option price of the stock shall not be less than one
                  hundred ten percent (110%) of the fair market value of such
                  stock at the time such option is granted and the term of such
                  option shall be for no more than five (5) years.

         (f)      No person will be eligible to receive more than 75,000  shares
                  in any calendar  year under this Plan pursuant to the grant of
                  stock options  (inclusive of incentive and nonqualified  stock
                  options),  except for new employees of the Bancorp or a Parent
                  or  Subsidiary of the Bancorp who shall be eligible to receive
                  up to a maximum  of  100,000  shares in the  calendar  year in
                  which their employment commenced.

         (g)      Notwithstanding  any other  provision in this Plan, no term of
                  this  Plan  relating  to  incentive   stock  options  will  be
                  interpreted,  amended or altered,  nor will any  discretion or
                  authority  granted  under  this  Plan be  exercised,  so as to
                  disqualify this Plan under Section 422 of the Code or, without
                  the  consent  of the  optionee  affected,  to  disqualify  any
                  incentive stock option under Section 422 of the Code.

5.       Nonqualified Stock Options
         (a)      All options  granted  which are (i) in excess of the aggregate
                  fair  market  value  limitations  set  forth in  Section  4(d)
                  hereof,   (ii)   designated  at  the  time  of  the  grant  as
                  "nonqualified",  or  (iii)  intended  to  be  incentive  stock
                  options but do not meet the  requirements  of incentive  stock
                  options,   shall  be  deemed   nonqualified   stock   options.
                  Nonqualified  stock  options  granted  hereunder  shall  be so
                  designated in the nonqualified  stock option agreement entered
                  into between the Bancorp and the optionee.

         (b)      Officers who are employees (including such officers who are 
                  also directors) and employees of the Bancorp or of a Parent or
                  Subsidiary of the Bancorp shall be eligible for selection to 
                  participate in the nonqualified stock option portion of the 
                  Plan.   Subject to the express provisions of the Plan, the 
                  Committee shall (i) select from the eligible class of 
                  employees and determine the individuals to whom nonqualified
                  stock options shall be granted, (ii) determine the 
                  discretionary terms and provisions of the respective 
                  nonqualified stock option agreements (which need not be 
                  identical), (iii) determine the times at which such 
                  nonqualified stock options shall be granted, and (iv) 
                  determine the number of shares of Bancorp common stock 
                  acquirable by such nonqualified stock options subject to the
                  limitation described in subsection 5(d) below.  An individual
                  who has been granted a nonqualified stock option hereunder 
                  may, if he or she is otherwise eligible under the Plan, be 
                  granted additional nonqualified stock options if the Committee
                  shall so determine.

                                                           -10-
(c)      The purchase price of stock subject to each nonqualified stock
                  option shall be  determined  by the Committee and shall not be
                  less than one hundred  percent (100%) of the fair market value
                  of such stock at the time such option is granted.

         (d)      No person will be eligible to receive more than 75,000  shares
                  in any calendar  year under this Plan pursuant to the grant of
                  stock options  (inclusive of incentive and nonqualified  stock
                  options),  except for new employees of the Bancorp or a Parent
                  or  Subsidiary of the Bancorp who shall be eligible to receive
                  up to a maximum  of  100,000  shares in the  calendar  year in
                  which their employment commenced.

6.       Stock Subject to the Plan
         Subject to adjustments as provided in Section 13, hereof,  the stock to
be  offered  under  the Plan  shall be shares of the  Bancorp's  authorized  but
unissued common stock  (hereinafter  called "stock") and the aggregate amount of
stock to be delivered upon exercise of all options  granted under the Plan shall
not exceed  450,000  shares.  If any option  shall be canceled,  surrendered  or
expire for any reason  without  having been  exercised in full,  the  underlying
shares subject thereto shall again be available for purposes of the Plan.

7.       Continuation of Employment
         Nothing  contained  in the  Plan  (or in any  option  agreement)  shall
obligate  the  Bancorp or a Parent or  Subsidiary  of the  Bancorp to employ any
optionee for any period or interfere in any way with the right of the Bancorp or
of a Parent or Subsidiary of the Bancorp to reduce the optionee's compensation.

8.       Exercise of Options
         No option  shall be  exercisable  until all  necessary  regulatory  and
shareholder  approvals  are  obtained.  Except  as  otherwise  provided  in this
section,  options shall be exercisable in such  installments,  which need not be
equal, and upon such  contingencies as the Committee shall determine;  provided,
however,  that if an optionee shall not in any given installment period purchase
all of the shares which the optionee is entitled to purchase in such installment
period,  the  optionee's  right to  purchase  any shares not  purchased  in such
installment  period shall  continue  until  expiration  or  termination  of such
option. Fractional share interests shall be disregarded, except that they may be
accumulated.  Not less than ten (10)  shares  may be  purchased  at any one time
unless the number of shares  purchased  is the total  number of shares  which is
exercisable at such time.  Options may be exercised by written notice  delivered
to the Bancorp  stating the number of shares with respect to which the option is
being exercised,  together with the full purchase price for such shares. Payment
of the option price in full,  for the number of shares to be delivered,  must be
made in cash, or subject to applicable law, with the Bancorp's stock  previously
acquired by the  optionee  and held by the optionee for a period of at least six
months. The equivalent dollar value of shares used to effect a purchase shall be
the Fair Market  Value of the shares on the date of  exercise.  If the option is
being  exercised  by any person  other than the  optionee,  said notice shall be
accompanied by proof,  satisfactory to counsel for the Bancorp,  of the right of
such  person  to  exercise  the  option.   Optionees  will  have  no  rights  as
shareholders  with respect to stock of the Bancorp subject to their stock option
agreements  until  the  date of  issuance  of the  stock  certificate  to  them.
Notwithstanding

                                                           -11-
the foregoing,  the options shall vest at the rate of at least 20% per year over
a five year period from the date the option is granted.

9.       Nontransferability of Options
         Each option shall,  by its terms,  be  nontransferable  by the optionee
other  than by will or the  laws of  descent  and  distribution,  and  shall  be
exercisable during his or her lifetime only by the optionee.

10.      Cessation of Employment
         Except as provided in Sections 11 and 21 hereof,  if an optionee ceases
to be an employee of the  Bancorp or a Parent or  Subsidiary  of the Bancorp for
any reason other than his or her disability  (as defined in Section  22(e)(3) of
the Code) or death,  such optionee's  option shall expire three (3) months after
the date of termination of such employment. During the period after cessation of
employment,  such option shall be exercisable only as to those installments,  if
any,  which have  accrued  and/or  vested as of the date on which such  optionee
ceased  to be an  employee  of the  Bancorp  or a Parent  or  Subsidiary  of the
Bancorp.

11.      Termination of Employment for Cause
         If  the  stock  option  agreement  so  provides  and  if an  optionee's
employment by the Bancorp or a Parent or Subsidiary of the Bancorp is terminated
for cause, the optionee's  option shall expire thirty (30) days from the date of
such  termination.  Termination for cause shall include,  but not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties or
conviction  of a  crime  involving  moral  turpitude,  and,  in any  event,  the
determination  of the Company's board of directors with respect thereto shall be
final and conclusive.

12.      Disability or Death of Optionee
         If any optionee  dies while  serving as an employee of the Bancorp or a
Parent or Subsidiary of the Bancorp,  the option shall expire one (1) year after
the date of such  death,  except as  provided  in Section 21 hereof.  After such
death but before such  expiration,  the persons to whom such  optionee's  rights
under  the  option  shall  have  passed  by will or by the laws of  descent  and
distribution or the executor or  administrator  of optionee's  estate shall have
the right to exercise such option to the extent that  installments,  if any, had
accrued  and/or  vested  as of the date on which  the  optionee  ceased to be an
employee of the Bancorp or a Parent or Subsidiary of the Bancorp.

         If the  optionee  shall  terminate  his or her  employment  because  of
disability  (as defined in Section  22(e)(3)  of the Code),  such  optionee  may
exercise his or her option to the extent that such option was vested at the date
of  termination,  at any time  within  one (1) year of the date of  termination,
except as provided in Section 21 hereof.

                                                           -12-
If any  optionee  dies or becomes  disabled  during the three (3) month
period  referred to in Section 10 hereof,  the option  shall expire one (1) year
after the date of such termination, except as provided in Section 21 hereof.

13.      Adjustment Upon Changes in Capitalization
         If the  outstanding  shares of the stock of the Bancorp are  increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities  of the Bancorp  through  reorganization,  merger,  recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
without   consideration  to  the  Bancorp,   an  appropriate  and  proportionate
adjustment  shall be made in the number  and kind of shares as to which  options
may be granted. A corresponding adjustment changing the number or kind of shares
and the exercise price per share  allocated to  unexercised  options or portions
thereof,  which shall have been granted prior to any such change shall  likewise
be made. Any such adjustment,  however,  in an outstanding  option shall be made
without change in the total price  applicable to the unexercised  portion of the
option, but with a corresponding  adjustment in the price for each share subject
to the  option.  Any  adjustment  under  this  Section  13  shall be made by the
Committee,  whose  determination as to what  adjustments  shall be made, and the
extent  thereof,  shall be final and conclusive.  No fractional  shares of stock
shall  be  issued  or made  available  under  the  Plan on  account  of any such
adjustment,  and fractional  share-interests  shall be disregarded,  except that
they may be accumulated.

14.      Terminating Events
         A  Terminating  Event  shall  be  defined  as any one of the  following
events: (i) a dissolution or liquidation of the Bancorp;  (ii) a reorganization,
merger or consolidation of the Bancorp with one or more corporations, the result
of which the (A) Bancorp is not the surviving  corporation  (other than a merger
or consolidation with a wholly-owned subsidiary of Bancorp, a reincorporation of
the Bancorp in a different jurisdiction,  or other transaction in which there is
no  substantial  change in the  shareholders  of the  Bancorp or their  relative
shareholdings and the options granted under this Plan are assumed,  converted or
replaced by the successor corporation,  which assumption shall be binding on all
optionees), or (B) the Bancorp is the surviving corporation and the shareholders
of the Bancorp at the time  immediately  prior to such merger will own less than
50% of the voting equity  interests of the  surviving  entity after such merger;
(iii) a sale of substantially  all the assets of the Bancorp;  or (iv) a sale of
the equity securities of the Bancorp representing more than 50% of the aggregate
voting power of all outstanding  equity  securities of the Bancorp to any person
or entity,  or any group of persons and/or  entities  acting in concert.  Upon a
Terminating  Event (i) the Bancorp  shall  deliver to each optionee no less than
thirty (30) days prior to the  Terminating  Event,  written  notification of the
Terminating  Event and such optionee's  right to exercise all options whether or
not vested under the Plan or  applicable  stock option  agreement,  and (ii) all
outstanding  options  granted  pursuant  to the Plan shall  completely  vest and
become immediately  exercisable as to all shares granted pursuant to such option
immediately  prior to such  Terminating  Event.  This right of exercise shall be
conditional  upon  execution of a final plan of  dissolution or liquidation or a
definitive  agreement of  consolidation  or merger.  Upon the  occurrence of the
Terminating  Event  all  outstanding  options  and  the  Plan  shall  terminate;
provided,  however,  that  any  outstanding  options  not  exercised  as of  the
occurrence of the Terminating  Event shall not terminate if there is a successor
corporation  which  assumes such  outstanding  options or  substitutes  for such
options,  new  options  covering  the stock of the  successor  corporation  with
appropriate adjustments as to the number and kind of shares and prices.

                                                           -13-
15.      Amendment and Termination
         The Committee may at any time suspend,  amend or terminate the Plan and
may,  with the consent of the optionee make such  modification  of the terms and
conditions of the option as it shall deem  advisable;  provided that,  except as
permitted  under the  provisions  of Sections 13 and 14 hereof,  no amendment or
modification which would:

         (a)      increase the maximum number of shares which may be purchased
                  pursuant to options granted under the Plan either in the 
                  aggregate or by an individual;

         (b)      change the minimum option price;

         (c)      increase  the maximum  term of options  provided  for herein;
     
         (d)      change the persons  eligible to receive options  pursuant to 
                  this Plan; or 

         (e)      make any  amendment to the Plan that would materially increase
                  benefits to participants or cause the Plan to be no longer
                  exempt pursuant to Rule 16b-3 promulgated under the Securities
                  Exchange Act of 1934;

may  be  adopted  without  the  Bancorp  having  first  obtained  any  necessary
regulatory and shareholder approvals required by law.

         No option may be granted during any suspension or after  termination of
the Plan. Amendment,  suspension or termination of the Plan shall not (except as
otherwise  provided in Section 13  hereof),without  the consent of the optionee,
alter or impair any rights or obligations under any option theretofore granted.

16.      Time of Granting Options
         The time an  option is  granted  sometimes  referred  to as the date of
grant,  shall be the day of the action of the  Committee  described  in Sections
4(b) and 5(b) hereof; provided,  however, that if appropriate resolutions of the
Committee  indicate that an option is granted as of and on some future date, the
time  such  option  is  granted  shall be such  future  date.  If  action by the
Committee is taken by unanimous  written  consent of its members,  the action of
the Committee shall be deemed to be at the time the last Committee  member signs
the consent.

17.      Privileges of Stock Ownership;
         Securities Law Compliance; Notice of Sale
         No optionee shall be entitled to the  privileges of stock  ownership as
to any shares of stock not actually  issued.  No shares shall be purchased  upon
the exercise of any option unless and until the

                                                           -14-
Bancorp has fully  complied with all applicable  requirements  of any regulatory
agency having jurisdiction over the Bancorp, and all applicable  requirements of
any exchange upon which stock of the Bancorp may be listed.  The optionee  shall
give the Bancorp  notice of any sale or  disposition of any such shares not more
than five (5) days after such sale or disposition.

18.      Effective Date of the Plan
         The Plan  shall be  deemed  adopted  by the board of  directors  of the
Company  as of April 25,  1996 and shall be  effective  immediately  subject  to
approval by the shareholders of the Bancorp within twelve months of the date the
Plan is adopted, by the vote of a majority of the outstanding shares represented
and voting at a duly held meeting of  shareholders at which a quorum is present,
or by the written  consent vote of the holders of a majority of the  outstanding
shares of the Bancorp stock.  No option under the Plan shall be exercised  prior
to the shareholders' approval of the Plan.

19.      Termination
         Unless  previously  terminated  as  provided  herein,  this Plan  shall
terminate at the close of business on the date ten years from the date this Plan
is adopted by the Board of Directors of the Bancorp or, if earlier,  the date of
stockholder approval. No options shall be granted under the Plan thereafter, but
such termination shall not affect any option theretofore granted.

20.      Option Agreement
         Each option  shall be evidenced  by a written  stock  option  agreement
executed  by the  Bancorp  and  the  optionee  and  shall  contain  each  of the
provisions and agreements herein specifically  required to be contained therein,
and  such  other  terms  and  conditions  as are  deemed  desirable  and are not
inconsistent  with the Plan. Each incentive stock option agreement shall contain
such terms and  provisions  as the  Committee  may  determine to be necessary in
order to qualify such option as an incentive  stock option within the meaning of
Section 422 of the Code.

21.      Option Period
         Each option and all rights and obligations  thereunder  shall expire on
such date as the Committee may determine, but not later than ten (10) years from
the date such option is granted,  and shall be subject to earlier termination as
provided elsewhere in the Plan.

22.      Exculpation and Indemnification
         To the extent  permitted by applicable law in effect from time to time,
no member of the Board of directors or Committee  shall be liable for any act or
omission of any other member of the Board of directors or Committee  nor for any
act or  omission  on the  member's  own part,  except the  member's  own willful
misconduct  or gross  negligence.  The Bancorp and its  subsidiary  corporations
shall pay  expenses  incurred  by, and  satisfy a judgment  or fine  rendered or
levied against, a present or former member of the

                                                           -15-
Board of directors or Committee in any action  brought by a third party  against
such  person  (whether  or not the  Bancorp is joined as a party  defendant)  to
impose a  liability  or  penalty on such  person  while a member of the Board of
directors  or  Committee  arising  with  respect  to the Plan or  administration
thereof or out of membership  on the Board of directors or Committee,  or all or
any combination of the preceding; provided, the Board of directors determines in
good faith that such member of the Board of directors or Committee was acting in
good  faith,  within  what such member of the Board of  directors  or  Committee
reasonably  believed to be the scope of his or her employment or authority,  and
for a purpose which he or she reasonably believed to be in the best interests of
the Bancorp or its shareholders.  Payments authorized  hereunder include amounts
paid and  expenses  incurred in settling any such action or  threatened  action.
This Section 22 does not apply to any action  instituted  or  maintained  in the
right of the Bancorp by a  shareholder  or holder of a voting trust  certificate
representing shares of the Bancorp or any subsidiary  corporation  thereof.  The
provisions   of  this   Section  22  shall  apply  to  the   estate,   executor,
administrator, heirs, legatees or devisees of a member of the Board of directors
or Committee, and the term "person" as used in this Section 22 shall include the
estate, executor, administrator, heirs, legatees or devisees of such person.

23.      Agreement and Representations of Optionee
         Unless  the shares of stock  covered  by the Plan have been  registered
with the Securities  Exchange  Commission,  each optionee shall, by accepting an
option, represent and agree, for himself and his transferees by will or the laws
of descent and distribution,  that all stock will be acquired for investment and
not for resale or distribution.  Upon such exercise of any portion of an option,
the person  entitled to exercise  the same shall,  upon  request of the Bancorp,
furnish  evidence  satisfactory  to the Bancorp  (including a written and signed
representation) to the effect that the stock is being acquired in good faith for
investment and not for resale or distribution.  Furthermore, the Bancorp, at its
sole discretion, may take all reasonable steps, including affixing the following
legend  (and/or  such  other  legend or legends as  counsel  shall  require)  on
certificates embodying the shares:

         The shares  represented by this  certificate  have not been  registered
         under  the  Securities  Act of  1933  and  may  not be  sold,  pledged,
         hypothecated  or  otherwise  transferred  or  offered  for  sale in the
         absence of an  effective  registration  statement  with respect to them
         under the  Securities  Act of 1933 or a written  opinion of counsel for
         the  optionee  which  opinion  shall be  acceptable  to counsel for the
         Bancorp that registration is not required.

to assure itself against any sale or distribution by the optionee which does not
comply with the Plan or any federal or state securities laws.

         The  Bancorp  agrees to remove any legend  affixed to the  certificates
embodying the shares pursuant to this Section 23 when all of the restrictions on
the transfer of the shares, whether imposed by the Plan or federal or state law,
have terminated.

24.      Information to Employees

                                                           -16-
The Bancorp shall provide each  optionee with  financial  statements of
the Bancorp prior to such  optionee's  exercise of his or her option and to each
optionee annually during the period such option has an option outstanding.

NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF SIERRA TAHOE
BANCORP'S  COMMON STOCK SHALL BE ISSUED  PURSUANT HERETO UNLESS THE SIERRA TAHOE
BANCORP  1996  STOCK  OPTION  PLAN  SHALL  HAVE  FIRST  BEEN   APPROVED  BY  THE
SHAREHOLDERS OF SIERRA TAHOE BANCORP.

                                                   SIERRA TAHOE BANCORP

                                             INCENTIVE STOCK OPTION AGREEMENT

         This Incentive  Stock Option  Agreement (the  "Agreement")  is made and
entered into as of the _____________ day of ____________,  ____________,  by and
between Sierra Tahoe Bancorp,  a California  corporation  (the  "Bancorp"),  and
__________("Optionee");
         WHEREAS,  pursuant to the Sierra  Tahoe  Bancorp 1996 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Stock Option Committee has
authorized granting to Optionee an incentive stock option to purchase all or any
part of __________  authorized but unissued shares of the Bancorp's common stock
for cash at the price of ___________  per share,  such option to be for the term
and upon the terms and conditions hereinafter stated;
         NOW, THEREFORE, it is hereby agreed:

Name of document
                                                           -17-
1.  Grant of  Option.  Pursuant  to said  action  of the  Stock  Option
Committee,  the Bancorp  hereby grants to Optionee the option to purchase,  upon
and subject to the terms and  conditions  of the Plan which is  incorporated  in
full  herein by this  reference,  all or any part of  ___________  shares of the
Bancorp's common stock (hereinafter  called "stock") at the price of ___________
per share,  which price is not less than one hundred  percent (100%) of the fair
market value of the stock (or not less than 110% of the fair market value of the
stock for  Optionee-shareholders  who own  securities  possessing  more than ten
percent (10%) of the total combined voting power of all classes of securities of
the  Bancorp) as of the date of action of the Stock  Option  Committee  granting
this option.
         2. Exercisability.  This option shall be exercisable as to ____________
shares on or after 12 months, an additional  ____________  shares on or after 24
months, an additional  ____________  shares on or after 36 months, an additional
_____________  shares  on or after 48  months,  and an  additional  ____________
shares on or after 60 months.  This option shall remain exercisable as to all of
such shares until _____________ (but not later than ten (10) years from the date
this option is granted) unless this option has expired or terminated  earlier in
accordance  with the provisions  hereof.  Shares as to which this option becomes
exercisable  pursuant to the  foregoing  provision  may be purchased at any time
prior to expiration of this option.
         3. Exercise of Option.  This option may be exercised by written  notice
delivered to the Bancorp stating the number of shares with respect to which this
option  is being  exercised,  together  with  cash or  qualifying  shares of the
Bancorp's  stock,  as  applicable,  in the amount of the purchase  price of such
shares.  Not less than ten (10) shares may be  purchased  at any one time unless
the number  purchased  is the total  number  which may be  purchased  under this
option and in no event may the option be exercised  with  respect to  fractional
shares. Upon exercise, Optionee shall make appropriate arrangements and shall be
responsible for the withholding of any federal and state taxes then due.
         4.  Cessation of Employment.  Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be an employee of the Bancorp or a subsidiary
corporation for any reason other than Optionee's death or disability,  [as

                                      -18-
defined in Section 22(e)(3) of the Internal Revenue Code of 1986,  as amended 
from time to time (the  "Code")],  this option shall expire three (3) months 
thereafter. During the three (3) month period this option shall be  exercisable
only as to those  installments,  if any, which had accrued as of the date when
Optionee ceased to be an employee of the Bancorp or the subsidiary corporation.
         5.  Termination of Employment for Cause. If Optionee's  employment with
the Bancorp or a subsidiary  corporation  is terminated  for cause,  this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance  in the  performance  of duties or conviction  of a crime  involving
moral turpitude,  and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
         6.  Nontransferability;  Death or Disability  of Optionee.  This option
shall  not be  transferable  except  by  will  or by the  laws  of  descent  and
distribution  and  shall  be  exercisable  during  Optionee's  lifetime  only by
Optionee.  If Optionee  dies while an  employee  of the Bancorp or a  subsidiary
corporation,  or during the three (3) month  period  referred to in  Paragraph 4
hereof, this option shall expire one (1) year after the date of Optionee's death
or on the day  specified  in  Paragraph 2 hereof,  whichever  is earlier.  After
Optionee's  death but before such  expiration,  the  persons to whom  Optionee's
rights under this option shall have passed by will or by the applicable  laws of
descent and distribution or the executor or  administrator of Optionee's  estate
shall  have the  right to  exercise  this  option as to those  shares  for which
installments  had  accrued  under  Paragraph  2  hereof  as of the date on which
Optionee ceased to be an employee of the Bancorp or a subsidiary corporation.
         If Optionee terminates his or her employment because of disability, (as
defined in Section  22(e)(3) of the Code),  Optionee may exercise this option to
the extent he or she is  entitled  to do so at the date of  termination,  at any
time within one (1) year of the date of  termination,  or before the  expiration
date specified in Paragraph 2 hereof, whichever is earlier.

                                                           -19-
7.  Employment.  This Agreement shall not obligate the Bancorp or a 
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
         8.  Privileges of Stock  Ownership.  Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock  certificates  to Optionee.  Except as provided in the
Plan,  no  adjustment  will be made for  dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
         9.  Modification and Termination.  The rights of Optionee are subject
to modification and termination upon the occurrence of certain events as 
provided in Sections 13 and 14 of the Plan.
         10. Notification of Sale. Optionee agrees that Optionee,  or any person
acquiring shares upon exercise of this option,  will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
         11.  Representations of Optionee.  No shares issuable upon the exercise
of this option  shall be issued and  delivered  unless and until the Bancorp has
complied with all applicable  requirements  of California and federal law and of
the  Securities  and  Exchange  Commission  and  the  California  Department  of
Corporations  pertaining  to the  issuance  and  sale  of such  shares,  and all
applicable listing  requirements of the securities  exchanges,  if any, on which
shares of the  Bancorp of the same  class are then  listed.  Optionee  agrees to
ascertain  that such  requirements  shall have been complied with at the time of
any exercise of this option. In addition,  if the Optionee is an "affiliate" for
purposes of the Securities Act of 1933, there may be additional  restrictions on
the resale of stock,  and  Optionee  therefore  agrees to  ascertain  what those
restrictions are and to abide by the  restrictions and other applicable  federal
and state securities laws.
         Furthermore,  the  Bancorp  may,  if it deems  appropriate,  issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any  certificate  representing  such shares the legends
which the Bancorp deems appropriate.

                                                           -20-
Optionee  represents  that  the  Bancorp,   its  directors,   officers,
employees  and agents have not and will not  provide tax advice with  respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax  consequences  of the option,  including  the  application  and
effect of federal, state, local and other tax laws.
         12. Notices.  Any notice to the Bancorp  provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial  Officer at
its main  office and any notice to Optionee  shall be  addressed  to  Optionee's
address on file with the Bancorp or a subsidiary  corporation,  or to such other
address as either may  designate  to the other in writing.  Any notice  shall be
deemed to be duly given if and when enclosed in a properly  sealed  envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal  Service.  In lieu of giving  notice by mail as  aforesaid,  any  written
notice  under this  Agreement  may be given to  Optionee  in person,  and to the
Bancorp by personal delivery to its President or Chief Financial Officer.
         13.  Incentive Stock Option.  This Agreement is intended to be an 
incentive stock option agreement as defined in Section 422 of the Code.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OPTIONEE                                          SIERRA TAHOE BANCORP

By_______________________                         By_________________________
                                                        William T. Fike

                                                   By_________________________
                                                         Robert C. Silver

                                                           -21-
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF SIERRA TAHOE
BANCORP'S  COMMON STOCK SHALL BE ISSUED  PURSUANT HERETO UNLESS THE SIERRA TAHOE
BANCORP  1996  STOCK  OPTION  PLAN  SHALL  HAVE  FIRST  BEEN   APPROVED  BY  THE
SHAREHOLDERS OF SIERRA TAHOE BANCORP.

                                                   SIERRA TAHOE BANCORP

                       NONQUALIFIED STOCK OPTION AGREEMENT

         This Nonqualified  Stock Option Agreement (the "Agreement") is made and
entered into as of the ______________ day of ____________,  ____________, by and
between Sierra Tahoe Bancorp,  a California  corporation  (the  "Bancorp"),  and
__________, ("Optionee");
         WHEREAS,  pursuant to the Sierra  Tahoe  Bancorp 1996 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Stock Option Committee has
authorized  granting to Optionee a nonqualified  stock option to purchase all or
any part of ____________  authorized but unissued shares of the Bancorp's common
stock for cash at the price of ___________ per share , such option to be for the
term and upon the terms and conditions hereinafter stated;
         NOW, THEREFORE, it is hereby agreed:

Name of Document
                                                           -22-
1.  Grant of  Option.  Pursuant  to said  action  of the  Stock  Option
Committee,  the Bancorp  hereby grants to Optionee the option to purchase,  upon
and subject to the terms and  conditions  of the Plan which is  incorporated  in
full  herein by this  reference,  all or any part of  ___________  shares of the
Bancorp's common stock (hereinafter called "stock") at the price of ____________
per share,  which price is not less than one hundred  percent (100%) of the fair
market value of the stock (or not less than 110% of the fair market value of the
stock for  Optionee-shareholders  who own  securities  possessing  more than ten
percent (10%) of the total combined voting power of all classes of securities of
the  Bancorp) as of the date of action of the Stock  Option  Committee  granting
this option.

         2. Exercisability.  This option shall be exercisable ____________. This
option shall remain exercisable as to all of such shares until ____________ (but
not later than ten (10) years from the date this option is granted)  unless this
option has  expired or  terminated  earlier in  accordance  with the  provisions
hereof.  Shares as to which this  option  becomes  exercisable  pursuant  to the
foregoing  provision  may be purchased at any time prior to  expiration  of this
option.
         3. Exercise of Option.  This option may be exercised by written  notice
delivered to the Bancorp stating the number of shares with respect to which this
option  is being  exercised,  together  with  cash or  qualifying  shares of the
Bancorp's  stock,  as  applicable,  in the amount of the purchase  price of such
shares.  Not less than ten (10) shares may be  purchased  at any one time unless
the number  purchased  is the total  number  which may be  purchased  under this
option and in no event may the option be exercised  with  respect to  fractional
shares. Upon exercise, Optionee shall make appropriate arrangements and shall be
responsible for the withholding of any federal and state taxes then due.
         4.  Cessation of Employment.  Except as provided in Paragraphs 2 and 5
 hereof, if Optionee shall cease to be an employee of the Bancorp or a 
subsidiary corporation for any reason other than Optionee's death or disability,
[as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as

                                                           -23-
amended  from time to time (the  "Code")]  this option  shall  expire  three (3)
months  thereafter.  During  the three (3) month  period  this  option  shall be
exercisable only as to those  installments,  if any, which had accrued as of the
date when  Optionee  ceased to be an employee  of the Bancorp or the  subsidiary
corporation.
         5.  Termination of Employment for Cause. If Optionee's  employment with
the Bancorp or a subsidiary  corporation  is terminated  for cause,  this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance  in the  performance  of duties or conviction  of a crime  involving
moral turpitude,  and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.

         6.  Nontransferability;  Death or Disability  of Optionee.  This option
shall  not be  transferable  except  by  will  or by the  laws  of  descent  and
distribution  and  shall  be  exercisable  during  Optionee's  lifetime  only by
Optionee.  If  Optionee  dies while  serving as an  employee of the Bancorp or a
subsidiary  corporation,  or during the three (3) month  period  referred  to in
Paragraph  4 hereof,  this  option  shall  expire one (1) year after the date of
Optionee's  death or on the day  specified in  Paragraph 2 hereof,  whichever is
earlier. After Optionee's death but before such expiration,  the persons to whom
Optionee's  rights  under  this  option  shall  have  passed  by  will or by the
applicable laws of descent and  distribution or the executor or administrator of
Optionee's  estate  shall  have the right to  exercise  this  option as to those
shares for which  installments  had accrued  under  Paragraph 2 hereof as of the
date on which  Optionee  ceased to be an employee of the Bancorp or a subsidiary
corporation.
         If Optionee terminates his or her employment because of disability, (as
defined in Section  22(e)(3) of the Code),  Optionee may exercise this option to
the extent he or she is  entitled  to do so at the date of  termination,  at any
time within one (1) year of the date of  termination,  or before the  expiration
date specified in Paragraph 2 hereof, whichever is earlier.

                                                           -24-
7.  Employment.  This Agreement shall not obligate the Bancorp or a 
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
         8.  Privileges of Stock  Ownership.  Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock  certificates  to Optionee.  Except as provided in the
Plan,  no  adjustment  will be made for  dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
         9.  Modification and Termination.  The rights of Optionee are subject
to modification and termination upon the occurrence of certain events as 
provided in Sections 13 and 14 of the Plan.
         10. Notification of Sale. Optionee agrees that Optionee,  or any person
acquiring shares upon exercise of this option,  will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
         11.  Representations of Optionee.  No shares issuable upon the exercise
of this option  shall be issued and  delivered  unless and until the Bancorp has
complied with all applicable  requirements  of California and federal law and of
the  Securities  and  Exchange  Commission  and  the  California  Department  of
Corporations  pertaining  to the  issuance  and  sale  of such  shares,  and all
applicable listing  requirements of the securities  exchanges,  if any, on which
shares of the  Bancorp of the same  class are then  listed.  Optionee  agrees to
ascertain  that such  requirements  shall have been complied with at the time of
any exercise of this option. In addition,  if the Optionee is an "affiliate" for
purposes of the Securities Act of 1933, there may be additional  restrictions on
the resale of stock,  and  Optionee  therefore  agrees to  ascertain  what those
restrictions are and to abide by the  restrictions and other applicable  federal
and state securities laws.
         Furthermore,  the  Bancorp  may,  if it deems  appropriate,  issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any  certificate  representing  such shares the legends
which the Bancorp deems appropriate.

                                                           -25-
Optionee  represents  that  the  Bancorp,   its  directors,   officers,
employees  and agents have not and will not  provide tax advice with  respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax  consequences  of the option,  including  the  application  and
effect of federal, state, local and other tax laws.
         12. Notices.  Any notice to the Bancorp  provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial  Officer at
its main  office and any notice to Optionee  shall be  addressed  to  Optionee's
address on file with the Bancorp or a subsidiary  corporation,  or to such other
address as either may  designate  to the other in writing.  Any notice  shall be
deemed to be duly given if and when enclosed in a properly  sealed  envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal  Service.  In lieu of giving  notice by mail as  aforesaid,  any  written
notice  under this  Agreement  may be given to  Optionee  in person,  and to the
Bancorp by personal delivery to its President or Chief Financial Officer.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OPTIONEE                                    SIERRA TAHOE BANCORP

By__________________________                By______________________________

                                            By______________________________

                                      -26-