TEMECULA VALLEY BANK
EXECUTIVE SUPPLEMENTAL COMPENSATION
AGREEMENT

Effective this 20th day of April, 2008, this SALARY CONTINUATION AGREEMENT
(“Agreement”) is adopted by and between TEMECULA VALLEY BANK (“Bank”), a bank
located in Temecula Valley, California, and organized under the laws of the
State of California, and DAVID BARTRAM (“Executive”), a member of a select group
of management and highly compensated employees of the Bank.  The purpose of this
Agreement is to further the growth and development of the Bank by providing
Executive with supplemental retirement income, and thereby encourage Executive’s
productive efforts on behalf of the Bank and the Bank’s shareholders, and to
align the interests of the Executive and those shareholders.

It is intended that the Agreement be "unfunded" for purposes of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and not be
construed to provide income to the participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the "Code"), particularly Section 409A of the
Code and guidance or regulations issued thereunder, prior to actual receipt of
benefits.

Article 1
Definitions and Construction

Where the following words and phrases appear in the Agreement, they shall have
the respective meanings set forth below, unless their context clearly indicates
to the contrary:

1.1  
“Accrued Liability Balance” shall mean the amount accrued by the Company to fund
the future benefit expense associated with this Agreement, as of the end of the
month preceding the Executive’s Separation from Service.  The Company shall
account for this benefit using Generally Accepted Accounting Principles,
regulatory accounting guidance of the Company’s primary federal regulator, and
other applicable accounting guidance, including APB 12 and FAS
106.  Accordingly, the Company shall establish a liability retirement account
for the Executive into which appropriate accruals shall be made using a discount
that is reasonable, which is consistent with guidance issued by the Company’s
primary federal regulator, and which may be adjusted thereafter at the Board’s
discretion to comply with regulatory guidance.  This Agreement is intended to be
a “non-account balance” plan, as that term is used under the Code.

 

1.2  
“Board” shall mean the Board of Directors of the Bank.

1.3  
“Change in Control” shall mean:  a change in ownership or control of the Company
as defined in Treasury Regulation §1.409A-3(i)(5) or any subsequently applicable
Treasury Regulation.

1.4  
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.

1.5  
“Disability” shall mean Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering employees of the
Bank.  Medical determination of Disability may be made by either the Social
Security Administration or by the provider of an accident or health plan
covering employees of the Bank.  Upon the request of the Plan Administrator, the
Executive must submit proof to the Plan Administrator of Social Security
Administration’s or the provider’s determination.

 
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1.6  
“Early Termination” shall mean that Executive’s employment with the Bank has
terminated, voluntarily or involuntarily, prior to Normal Retirement Age and
such termination is not due to death, Termination for Cause, Disability, or
Separation from Service following a Change in Control.

1.7  
“Effective Date” shall mean January 8, 2008.

1.8  
“Normal Retirement Age” shall mean the date on which the Executive attains age
65.

1.9  
“Plan Administrator” shall mean the plan administrator described in Article 6.

1.10  
“Plan Year” shall mean each twelve-month period commencing on January 1 and
ending on December 31 of each year.  The initial Plan Year shall commence on the
Effective Date of this Plan and end on the following December 31.

1.11  
“Separation from Service” shall mean the Executive has experienced a termination
of employment with the Bank.  For purposes of this Agreement, whether a
termination of employment or service has occurred is determined based on whether
the facts and circumstances indicate that the Bank and Executive reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services the Executive would perform after such date
(whether as an Executive or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide
services performed (whether as an Executive or an independent contractor) over
the immediately preceding thirty-six (36) month period (or the full period of
services to the Bank if the Executive has been providing services to the Bank
less than 36 months).  Facts and circumstances to be considered in making this
determination include, but are not limited to, whether the Executive continues
to be treated as an Executive for other purposes (such as continuation of salary
and participation in Executive benefit programs), whether similarly situated
service providers have been treated consistently, and whether the Executive is
permitted, and realistically available, to perform services for other service
recipients in the same line of business.  An Executive will be presumed not to
have separated from service where the level of bona fide services performed
continues at a level that is fifty percent (50%) or more of the average level of
service performed by the Executive during the immediately preceding thirty-six
(36) month period.

1.12  
 “Termination for Cause” has that meaning set forth in Article 5.

 
 
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1.13  
“Termination of Employment” shall mean that Executive’s employment with the Bank
has terminated.

Article 2
Distributions During Executive’s Lifetime

2.1  
Normal Retirement Benefit.  Upon Executive’s attainment of the Normal Retirement
Age, the Bank shall distribute to the Executive the benefit described in this
Section 2.1 in lieu of any other benefit under this Article.

        2.1.1 
Amount of Benefit.  The annual benefit under this Section 2.1 is One Hundred
Thousand Dollars ($100,000). The Board may, in its sole discretion, increase
this benefit from time to time.

        2.1.2 
Form and Timing of Benefit.  The Bank shall distribute the annual benefit to the
Executive in twelve (12) equal monthly installments, commencing on the first day
of the month following the Executive’s Normal Retirement Age.  The annual
benefit shall be distributed to the Executive for fifteen (15) years.

    2.2 
Early Termination Benefit.  Upon the Executive’s Early Termination, the Bank
shall distribute to the Executive the benefit described in this Section 2.2 in
lieu of any other benefit under this Article.  Notwithstanding anything to the
contrary in this Section 2.2, Executive shall not be entitled to a benefit under
this Section 2.2 if Executive terminates employment prior to the fulfillment of
five full Plan Years from the date of this Agreement.  For purposes of this
Section 2.2, if the first Plan Year is only a partial calendar year, the partial
calendar year shall be considered one full Plan Year.

        2.2.1 
Amount of Benefit.  The benefit under this Section 2.2 is the Accrued Liability
Balance, calculated as of the end of the Plan Year immediately preceding
Executive’s Separation from Service.

        2.2.2 
Form and Timing of Benefit.  The Bank shall distribute the annual benefit to the
Executive in a lump sum within 60 days following a Separation from Service.

    2.3 
Disability Benefit.  Upon Executive’s Separation from Service due to Disability,
the Bank shall distribute to the Executive the benefit described in this Section
2.3 in lieu of any other benefit under this Article.

        2.3.1 
Amount of Benefit.  The benefit under this Section 2.3 is the Accrued Liability
Balance, determined as of the end of the Plan Year immediately preceding
notification of Disability and subsequent Separation from Service.

        2.3.2 
Form and Timing of Benefit.  The Bank shall distribute the benefit to the
Executive in a lump sum within 60 days following Separation from Service.

    2.4 
Change in Control Benefit.  Upon a Change in Control followed by Executive’s
Termination of Employment, the Executive shall be entitled to the benefit
described in this Section 2.4 in lieu of any other benefit under this Article.

 
 
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        2.4.1 
Amount of Benefit.  The benefit under this Section 2.4 is the Accrued Liability
Balance, calculated as of the date of Termination of Employment.   

2.4.2 
Form and Timing of Benefit.  The Bank shall distribute the benefit to the
Executive in a lump sum within 60 days following Executive’s Separation from
Service.

    2.5 
Restriction on Timing of Distribution.  Notwithstanding any provision of this
Agreement to the contrary, distributions to Executive may not commence earlier
than six (6) months after the date of a Separation from Service if, pursuant to
Section 409A of the Code and regulations and guidance promulgated thereunder,
Executive is considered a “specified employee” under Section 416(i) of the
Code.  In the event a distribution is delayed pursuant to this Section 2.6, the
originally scheduled payment shall be delayed for 6 months, and shall commence
instead on the first day of the seventh month following the delay.  If payments
are scheduled to be made in installments, the first six months of installment
payments shall be delayed, aggregated, and paid instead on the first day of the
seventh month, after which all installment payments shall be made on their
regular schedule.  If payment is scheduled to be made in a lump sum, the lump
sum payment shall be delayed for six months and instead be made on the first day
of the seventh month.

    2.6 
Payments Upon Income Inclusion.  Should amounts deferred under this Agreement
become includable in the Executive’s income by reason of a failure of this
Agreement to comply with the requirements of Section 409A of the Code, the Bank
shall distribute to the Executive an amount necessary to cover the includable
amounts, as well as other amounts necessary to cover FICA, employment, and
income taxes, to the extent such distributions do not exceed the Executive’s
vested account balances.

Article 3
Distribution Upon Death

No death benefit shall be payable under this Agreement.

Article 4
Beneficiaries

 
Executive’s beneficiary(ies), if any, shall not have any rights under this
Agreement.

Article 5
General Limitations

5.1 
Termination for Cause.  Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this Agreement if
Executive’s service is terminated by the Board for:

 
(a)  
Gross negligence or gross neglect of duties to the Bank; or

(b)  
Conviction of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Bank; or

(c)  
Fraud, disloyalty, dishonesty or willful violation of any law or significant
Bank policy committed in connection with the Executive's employment and
resulting in a material adverse effect on the Bank.

 
 
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    5.2 
Suicide or Misstatement.  No benefits shall be distributed if the Executive
commits suicide within two years after the Effective Date of this Agreement, or
if an insurance company which issued a life insurance policy covering the
Executive and owned by the Bank denies coverage (i) for material misstatements
of fact made by the Executive on an application for such life insurance, or (ii)
for any other reason.

5.3 
Competition After Termination of Employment.  No benefits shall be payable if
the Executive, without the prior written consent of the Company, engages in,
becomes interested in, directly or indirectly, as a sole proprietor, as a
partner in a partnership, or as a substantial officer, principal, agent, trustee
or in any other capacity whatsoever, any enterprise conducted in the trading
area (a 50 mile radius) of the business of the Bank within 2 years after
Separation from Service, which enterprise is, or may be deemed to be,
competitive with any business carried on by the Company as of the date of
termination of the Executive’s employment or his retirement.

Article 6
Administration of Agreement

    6.1 
Plan Administrator Duties.  This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s)
as the Board shall appoint.  The Plan Administrator shall also have the
discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administra­tion of this Agreement and
(ii) decide or resolve any and all ques­tions including interpretations of this
Agreement, as may arise in connection with the Agreement.

    6.2 
Agents.  In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.

    6.3 
Binding Effect of Decisions.  The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement.

    6.4 
Indemnity of Plan Administrator.  The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.

    6.5 
Bank Information.  To enable the Plan Administrator to perform its functions,
the Bank shall supply full and timely information to the Plan Administrator on
all matters relating to the date and circum­stances of the retirement,
Disability, or Separation from Service of the Executive, and such other
pertinent information as the Plan Administrator may reasonably require.

    6.6 
Annual Statement. The Plan Administrator shall provide to the Executive, within
one hundred twenty (120) days after the end of each Plan Year, a statement
setting forth the benefits to be distributed under this Agreement.

 
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Article 7
Claims And Review Procedures

    7.1 
Claims Procedure.  An Executive who has not received benefits under the
Agreement that he or she believes should be distributed shall make a claim for
such benefits as follows:

        7.1.1 
Initiation – Written Claim.  The claimant initiates a claim by submitting to the
Plan Administrator a written claim for the benefits.

        7.1.2 
Timing of Plan Administrator Response.  The Plan Administrator shall respond to
such claimant within 90 days after receiving the claim.  If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional 90 days by notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period is required.  The notice of
extension must set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.

        7.1.3 
Notice of Decision.  If the Plan Administrator denies part or all of the claim,
the Plan Administrator shall notify the claimant in writing of such denial.  The
Plan Administrator shall write the notification in a manner calculated to be
understood by the claimant.  The notification shall set forth:

 
(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of the Agreement on which the denial is
based;

 
(c)
A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed;

 
(d)
An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures; and

 
(e)
A statement of the claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

    7.2 
Review Procedure.  If the Plan Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as follows:

        7.2.1 
Initiation – Written Request.  To initiate the review, the claimant, within 60
days after receiving the Plan Administrator’s notice of denial, must file with
the Plan Administrator a written request for review.

 
 
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        7.2.2 
Additional Submissions – Information Access.  The claimant shall then have the
opportunity to submit written comments, documents, records and other information
relating to the claim.  The Plan Administrator shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

        7.2.3 
Considerations on Review.  In considering the review, the Plan Administrator
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

        7.2.4 
Timing of Plan Administrator Response.  The Plan Administrator shall respond in
writing to such claimant within 60 days after receiving the request for
review.  If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional 60 days by notifying the claimant in writing,
prior to the end of the initial 60-day period, that an additional period is
required.  The notice of extension must set forth the special circumstances and
the date by which the Plan Administrator expects to render its decision.

        7.2.5 
Notice of Decision.  The Plan Administrator shall notify the claimant in writing
of its decision on review.  The Plan Administrator shall write the notification
in a manner calculated to be understood by the claimant.  The notification shall
set forth:

 
(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of the Agreement on which the denial is
based;

 
(c)
A statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits; and

 
(d)
A statement of the claimant’s right to bring a civil action under ERISA Section
502(a).

Article 8
Amendments and Termination

    8.1 
This Agreement may be amended or terminated only by a written agreement signed
by the Bank and the Executive. Provided, however, if the Board determines in
good faith that the Executive is no longer a member of a select group of
management or highly compensated employees, as that phrase applies to ERISA, for
reasons other than death, Disability or retirement, the Bank may terminate this
Agreement.  Additionally, the Bank may also amend this Agreement to conform to
written directives to the Bank from its banking regulators or to comply with
regulations and guidance promulgated under Section 409A of the Code.  Upon a
plan termination, no distributions will be made, except as permitted under the
terms of Article 2 of this Agreement.

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Article 9
Miscellaneous

    9.1 
Binding Effect.  This Agreement shall bind the Executive and the Bank.

    9.2 
No Guarantee of Employment.  This Agreement is not a contract for
employment.  It does not give the Executive the right to remain as an employee
of the Bank, nor does it interfere with the Bank's right to discharge the
Executive.  It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

    9.3 
Non-Transferability.  Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

    9.4 
Tax Withholding.  The Bank shall withhold any taxes that are required to be
withheld, under Section 409A of the Code and regulations thereunder, from the
benefits provided under this Agreement.  The Executive acknowledges that the
Bank’s sole liability regarding taxes is to forward any amounts withheld to the
appropriate taxing authority(ies).

    9.5 
Applicable Law.  The Agreement and all rights hereunder shall be governed by the
laws of the State of California, except to the extent preempted by the laws of
the United States of America.

    9.6 
Unfunded Arrangement.  The Executive is a general unsecured creditor of the Bank
for the distribution of benefits under this Agreement.  The benefits represent
the mere promise by the Bank to distribute such benefits.  The rights to
benefits are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors.  Any insurance on the Executive's life or other informal funding
asset is a general asset of the Bank to which the Executive has no preferred or
secured claim.

    9.7 
Reorganization. The Bank shall not merge or consolidate into or with another
bank, or reorganize, or sell substantially all of its assets to another bank,
firm, or person unless such succeeding or continuing bank, firm, or person
agrees to assume and discharge the obligations of the Bank under this
Agreement.  Upon the occurrence of such event, the term “Bank” as used in this
Agreement shall be deemed to refer to the successor or survivor bank.

    9.8 
Entire Agreement. This Agreement constitutes the entire agreement between the
Bank and the Executive as to the subject matter hereof.  No rights are granted
to the Executive by virtue of this Agreement other than those specifically set
forth herein.

    9.9 
Interpretation.  Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

 
 
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    9.10 
Alternative Action.  In the event it shall become impossible for the Bank or the
Plan Administrator to perform any act required by this Agreement, the Bank or
Plan Administrator may in its discretion perform such alternative act as most
nearly carries out the intent and purpose of this Agreement and is in the best
interests of the Bank.

    9.11 
Headings.  Article and section headings are for convenient reference only and
shall not control or affect the meaning or construction of any of its
provisions.

    9.12 
Validity.  In case any provision of this Agreement shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Agreement shall be construed and enforced as if such
illegal and invalid provision has never been inserted herein.

    9.13 
Notice.  Any notice or filing required or permitted to be given to the Bank or
Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

 
                                    Temecula Valley Bank
                                27710 Jefferson Avenue Ste A-100
                                    Temecula CA 92590

 
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

Any notice or filing required or permitted to be given to the Executive under
this Agreement shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Executive.

9.14  
Opportunity to Consult with Independent Advisors.  The Executive acknowledges
that he has been afforded the opportunity to consult with independent advisors
of his choosing including, without limitation, accountants or tax advisors and
counsel regarding both the benefits granted to him under the terms of this
Agreement and the (i) terms and conditions which may affect the Executive's
right to these benefits and (ii) personal tax effects of such benefits
including, without limitation, the effects of any federal or state taxes,
Section 280G of the Code, Section 409A of the Code and guidance or regulations
thereunder, and any other taxes, costs, expenses or liabilities whatsoever
related to such benefits, which in any of the foregoing instances the Executive
acknowledges and agrees shall be the sole responsibility of the Executive
notwithstanding any other term or provision of this Agreement.  The Executive
further acknowledges and agrees that the Bank shall have no liability whatsoever
related to any such personal tax effects or other personal costs, expenses, or
liabilities applicable to the Executive and further specifically waives any
right for himself or herself, and his or her heirs, beneficiaries, legal
representatives, agents, successor and assign to claim or assert liability on
the part of the Bank related to the matters described above in this Section
9.14.  The Executive further acknowledges that he has read, understands and
consents to all of the terms and conditions of this Agreement, and that he
enters into this Agreement with a full understanding of its terms and
conditions.

 
 
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9.15  
         Certain Accelerated Payments.  The Bank may make any accelerated
distribution permissible under Treasury Regulation 1.409A-3(j)(4) to the
Executive of deferred amounts, provided that such distribution(s) meets the
requirements of Section 1.409A-3(j)(4).

9.16  
Subsequent Changes to Time and Form of Payment.  The Bank may permit a
subsequent change to the time and form of benefit distributions.  Any such
change shall be considered made only when it becomes irrevocable under the terms
of the Agreement.  Any change will be considered irrevocable not later than
thirty (30) days following acceptance of the change by the Plan Administrator,
subject to the following rules:

(1)  
the subsequent deferral election may not take effect until at least twelve (12)
months after the date on which the election is made;

(2)  
the payment (except in the case of death, disability, or unforeseeable
emergency) upon which the subsequent deferral election is made is deferred for a
period of not less than five (5) years from the date such payment would
otherwise have been paid; and

(3)  
in the case of a payment made at a specified time, the election must be made not
less than twelve (12) months before the date the payment is scheduled to be
paid.

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank have signed this Agreement.

 

                                              EXECUTIVE:                   
             BANK:
 
                                                  TEMECULA VALLEY BANK
/s/ David
Bartram                                                                     By
/s/ Stephen H. Wacknitz
                                                                      DAVID
BARTRAM                                  Title President & Chief Executive
Officer

 
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