EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this
4th day of  November 2011 (the “Effective Date”), by and between 1st Century
Bancshares, Inc., a Delaware corporation (the “Bancshares”) and Alan Rothenberg
(the “Executive”).

WHEREAS, the parties hereto wish to enter into an employment agreement to employ
Executive as Chairman of the Board and Chief Executive Officer of Bancshares and
to set forth certain additional agreements between Executive and Bancshares.

NOW, THEREFORE, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:

1.

Term.  Bancshares will employ Executive, and Executive will serve Bancshares,
under the terms of this Agreement for an initial term of three (3) years (the
"Initial Term"), commencing on the Effective Date.  At the end of the Initial
Term, the term shall be automatically extended without further action of the
parties for additional one year periods (each an “Extended Term”) unless, sixty
(60) days before the expiration of the Initial Term, or any Extended Term, a
party provides notice in writing to the other party that the term shall not be
further extended.  As used herein, “Term” shall include the Initial Term and any
Extended Term, but the Term of Employment shall end upon any termination of
Executive’s employment with the Company as herein provided..  The period of time
between the Effective Date and the termination of Executive's employment
hereunder shall be referred to herein as the "Employment Period."

2.

Position; Authority and Duties.

(a)

Positions and Reporting.  Executive shall serve as Chairman of the Board of
Directors (the “Board”) and Chief Executive Officer of Bancshares.  During the
Employment Period, Executive shall report directly to the Board.

(b)

Authority and Duties.  During the Employment Period, Executive shall devote
substantial time, ability and attention to the business and affairs of
Bancshares and its subsidiaries. Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are reasonably associated with Executive’s position as Chairman and Chief
Executive Officer of Bancshares consistent with this Agreement and the Bylaws of
Bancshares.  Executive shall have general supervision of all property of
Bancshares and all of its departments and business units and shall have full
authority over all officers and employees of Bancshares. In addition, Executive
shall serve in such positions and shall exercise such authority, perform such
duties and functions and discharge such responsibilities in Executive’s role as
an employee and/or officer of any subsidiary of Bancshares as shall be assigned
to Executive from time-to-time by the Board and/or the board of directors of
such subsidiary without any additional compensation owing to Executive in
connection therewith.

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3.

Compensation and Benefits.

(a)

Salary.  During the Employment Period, Bancshares shall pay to Executive, as
compensation for the performance of his duties and obligations under this
Agreement, a base salary at the rate of $24,375.00 per month, payable in arrears
semi-monthly in accordance with the normal payroll practices of Bancshares (the
“Base Salary”).  Such Base Salary shall be subject to review within sixty (60)
days after each calendar year during the Employment Period, for possible
increases by the Board, in its sole discretion, based on factors including, but
not limited to, increases in the regional cost of living index, market
conditions and performance of Executive and Bancshares, shall in no event be
decreased from the levels set forth above or from its then-existing level during
the Employment Period.

(b)

Bonus.

(i)

Annual Bonus.  An annual bonus, if any, shall be determined by the Board in its
sole discretion as it deems appropriate.  The annual bonus, if any, shall be
paid in the form of a lump-sum cash payment at such time as other executive
bonuses are paid, but in no event later than sixty (60) days after the Company’s
fiscal year end.  The Board retains the discretion, but shall have no
obligation, to determine whether a pro-rata bonus is appropriate if Executive is
terminated or leaves the employ of Bancshares prior to the annual determination
of bonuses.

(c)

Other Benefits.  During the Employment Period, Executive shall receive such life
insurance, disability insurance and health, dental and vision and other
insurance benefits, holiday, vacation, 401(k) plan participation, and other
benefits which Bancshares extends, as a matter of policy, to all of its
executive employees, except as otherwise provided herein, and shall be entitled
to participate in all deferred compensation and other incentive plans of
Bancshares, on the same basis as other executive employees of Bancshares.
 Without limiting the generality of the foregoing, Executive shall be entitled
to twenty-five (25) days of vacation per year during the Employment Period,
which shall be scheduled in Executive’s discretion, subject to and taking into
account applicable banking laws and regulations and business needs.  

(d)

Business Expenses.  During the Employment Period, Bancshares shall promptly
reimburse Executive for all documented reasonable business expenses in
accordance with Bancshares’s expense reimbursement policy.

(e)

Ongoing Equity Grants.  

(i)

Bancshares may, but is in no way obligated to, grant from time to time to
Executive shares of restricted stock, pursuant to a Notice of Grant and
Restricted Stock Agreement, under and subject to the terms and conditions of the
1st Century Bancshares, Inc. Amended 2005 Equity Incentive Plan, or such other
plan that at such time Bancshares is actively granting to its executives shares
of restricted stock (“the Plan”).  The number of shares to be granted, if any,
shall be determined in the sole and absolute discretion of the Board or a
committee thereof and shall vest in accordance with the terms and conditions of
the Plan and the Notice of Grant and Restricted Stock Agreement. The vesting of
shares shall be subject to Executive’s continued employment with Bancshares on
the relevant vesting dates, unless

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Executive is terminated without Cause (as defined in Section 4(a) of this
Agreement) or Executive terminates his employment for Good Reason (as defined in
Section 4(b) of this Agreement) pursuant to Section 5(a) hereof.   

(ii)

In the event of any termination of employment for any reason, Executive hereby
grants to Bancshares the right and option, for a period of thirty (30) days
after the effective date of such termination, to purchase any shares of
restricted stock owned by him on the effective date of such termination that
have been released from or are not otherwise subject to any restriction on
resale under the Plan at a price equal to 100% of the volume weighted average
closing price of Bancshares’ common stock for the twenty (20) trading days
immediately prior to the effective date of termination of employment as reported
on any quotation service or exchange on which Bancshares’ common stock is then
quoted or traded.  This provision is limited to subsequent grants of restricted
stock pursuant to this Agreement, and it does not include shares acquired by
Executive using personal funds, upon the exercise of stock options under the
Plan otherwise than pursuant to this Agreement, or otherwise.  

4.

Termination of Employment.

(a)

Termination for Cause.  The Board may terminate Executive’s employment hereunder
for Cause or without Cause.  For purposes of this Agreement termination for
“Cause” shall mean termination because (i) Executive: (A) committed a
significant act of dishonesty, deceit or breach of fiduciary duty in the
performance of his duties as an employee of Bancshares or any of its
subsidiaries; (B) grossly neglected or willfully failed in any way to perform
substantially the duties of such employment after a written demand for
performance is given to Executive by the Board, which demand specifically
identifies the manner in which the Board believes Executive has failed to
perform his duties; (C) has committed a material breach of any provision of this
Agreement; (D) willfully acted or failed to act in any other way that materially
and adversely affects Bancshares or any of its subsidiaries; (E) is removed
and/or permanently prohibited from participating in the conduct of Bancshares or
any of its subsidiaries affairs by an order issued under Section 8(e)(3) or
8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or
(g)(1)); or (F) the Executive’s violation of any applicable statutes,
regulations or rules of any appropriate Federal banking agency and/or state bank
supervisor, as defined in the FDI Act Section 3, 12 U.S.C. 1813, which violation
materially and  adversely affects Bancshares or its subsidiaries; or
(ii) Bancshares or any of its subsidiaries has received a final cease-and-desist
order that requires in substance that Bancshares or any of its subsidiaries
retain a qualified chief executive officer acceptable to bank regulators with
the experience, skill and other qualifications required to ensure compliance
with such order and Bancshares or any of its subsidiaries regulators have
determined that Executive does not meet these qualifications.  

Termination under this Paragraph shall not prejudice any remedy that Bancshares
may have at law, in equity, or under this Agreement.

(b)

Termination for Good Reason.  Executive shall have the right at any time to
terminate his employment with Bancshares for any reason.  For purposes of this
Agreement, and subject to Bancshares’s opportunity to cure as provided in
Section 4(c) hereof, Executive

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41304602.5

shall have “Good Reason” to terminate his employment hereunder if such
termination shall be the result of:

(i)

a material diminution during the Employment Period in Executive’s authority,
duties or responsibilities as set forth in Section 2 hereof, unless such events
follow any of the circumstances described in Section 4(a) regarding termination
for Cause;

(ii)

a material diminution in Executive’s Salary;

(iii)

a material breach by Bancshares of any material terms of this Agreement; or

(iv)

the relocation of Executive’s principal place of employment to any location more
than 50 miles from Bancshares’s headquarters at the Effective Date.

(c)

Notice and Opportunity to Cure.  Notwithstanding the foregoing, it shall be a
condition precedent to Bancshares’ right to terminate Executive’s employment for
Cause, and Executive’s right to terminate his employment for Good Reason that
(1) the party seeking the termination shall first have given the other party
written notice stating with specificity the reason for the termination
(“Breach”) no later than ninety (90) days following the initial existence of the
condition giving rise to the Breach, and (2) if such Breach is susceptible of
cure or remedy, a period of thirty (30) days from and after the giving of such
notice to cure the Breach.  With respect to terminations because of a willful
violation of any law, rule or regulation or issuance of a final cease-and-desist
order, or because of Executive’s personal dishonesty or breach of fiduciary duty
involving personal profit, Bancshares will not be required to provide a cure
period.  

(d)

Termination Upon Death or Permanent Disability.  The Employment Period shall
automatically be terminated by the death of Executive.  The Employment Period
may be terminated by Bancshares if Executive shall be subject to a “permanent
disability” as such term is defined in the disability insurance provided by
Bancshares, or if such insurance is not provided by Bancshares, the term shall
mean that Executive has been unable to perform his duties under this Agreement
for a period of at least ninety (90) consecutive days or one-hundred twenty
(120) days in any one-hundred eighty (180) day period, and it is not reasonable
to believe that he would ever be able to resume his duties on a full time basis.
 

(e)

Termination Upon a Change in Control.  In the event this Agreement or
Executive’s employment is terminated without Cause by Bancshares or for Good
Reason by Executive within twelve (12) months after the occurrence of a Change
in Control, (as defined below), Executive shall be entitled to the separation
pay as described in Paragraph 5(a) below.

(f)

Definition of Change in Control.  A "Change in Control" shall be deemed to have
taken place if:

(i)

there shall be consummated any consolidation or merger of Bancshares in which
Bancshares is not the continuing or surviving corporation or pursuant to which
shares of Bancshares' capital stock are converted into cash, securities or other
property

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(other than a consolidation or merger of Bancshares in which the holders of
Bancshares's voting stock immediately prior to the consolidation or merger
shall, upon consummation of the consolidation or merger, own at least 50% of the
voting stock) or any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of Bancshares; or

(ii)

any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall, after
the date hereof, become the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of securities of
Bancshares representing 25% or more of the voting power of all of the then
outstanding securities of Bancshares having the right under ordinary
circumstances to vote in an election of the Board (including, without
limitation, any securities of Bancshares that any such person has the right to
acquire pursuant to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise, shall be deemed beneficially owned by such
person); or

(iii)

individuals who as of the Effective Date constitute the entire Board and any new
directors whose election by Bancshares' shareholders, or whose nomination for
election by the Board, shall have been approved by a vote of at least a majority
of the directors then in office who either were directors at the date hereof or
whose election or nomination for election shall have been so approved shall
cease for any reason to constitute a majority of the members of the Board.

5.

Consequences of Termination.  The following are the separation pay and benefits
to which Executive is entitled upon termination of employment by Bancshares
without Cause or by Executive with Good Reason or due to death or permanent
disability in all positions with Bancshares and any of its subsidiaries, and
such payments and benefits shall be the exclusive payments and benefits to which
Executive is entitled upon such termination.  Except in the case of termination
of employment due to death, the post-termination payments and benefits shall
only be provided if Executive first enters into the Release Agreement
substantially in the form attached hereto as Appendix A within thirty (30) days
following Executive’s termination of employment.

(a)

Termination Without Cause or for Good Reason. In the event Bancshares terminates
Executive’s employment hereunder without Cause (other than upon death or
permanent disability) or Executive terminates his employment for Good Reason,
Executive shall become immediately vested in any of the remaining unvested
shares of restricted stock and/or options granted to him under any existing or
future award agreements.  In addition:

(i)

Executive will be entitled to separation pay in a lump sum amount, payable on
the thirty fifth (35th) day following  Executive’s termination of employment
equal to:

(A)

200% of the highest amount of Executive’s annual Base Salary and the highest
annual bonus paid to Executive within the three-year period preceding the
termination plus a prorated bonus for the number of months worked for the year
of termination.

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41304602.5

(ii)

Continuation for 12 months (the “Separation Period”) of coverage under the group
medical care, disability and life insurance benefit plans or arrangements in
which Executive is participating at the time of termination, with Bancshares
continuing to pay its share of premiums and associated costs as if Executive
continued in the employ of Bancshares; provided, however, that Bancshares’
obligation to provide such coverage shall be terminated if Executive obtains
comparable substitute coverage from another employer at any time during the
Separation Period; provided, further, that in the event final regulations are
issued by the U.S. Treasury Department, which prohibit the discriminatory
payment of medical coverage, Executive shall receive a lump sum cash payment
equal to any remaining payments that Executive would otherwise be entitled to
under this Section, “grossed up” for all applicable federal, state, local and
payroll taxes at the highest marginal tax rate in effect on the Executive’s
termination date.  Executive shall advise Bancshares immediately if such
comparable substitute coverage is obtained from another employer.  Executive
shall be entitled, at the expiration of the Separation Period, to elect
continued coverage under Bancshares’ medical benefit plans pursuant to the terms
of the Consolidated Omnibus Budget Reconciliation Act.

(b)

Termination Upon Disability.  In the event of termination of Executive’s
employment hereunder by Bancshares on account of permanent disability, Executive
shall be entitled to the following separation pay and benefits:

(i)

Separation payments in the form of continuation of Executive’s Base Salary as in
effect immediately prior to such termination for the Separation Period in equal
installments on Bancshares’ regularly schedule payroll dates following the first
date of disability; and

(ii)

The same benefits as provided in Section 5(a)(ii) above, to be provided during
the Employment Period while Executive is suffering from a permanent disability
and for a period of six (6) months following the effective date of termination
of employment by reason of permanent disability.

(iii)

Executive shall become immediately vested in any of the remaining unvested
shares of restricted stock and/or options granted to him under any existing or
future award agreements,

(c)

Termination Upon Death.  In the event of termination of Executive’s employment
hereunder on account of Executive’s death, Bancshares shall pay to Executive’s
beneficiary or beneficiaries or his estate, as the case may be, the accrued Base
Salary and accrued and unused paid time off (PTO) earned through the date of
death.  Such payment shall be made no later than sixty (60) days after the date
of death.  In addition, Executive’s beneficiary(ies) or his estate shall be
entitled to the payment of benefits pursuant to any life insurance policy of
Executive, as provided for in Section 3(c) above.  Executive’s beneficiary or
estate shall not be required to remit to Bancshares any payments received
pursuant to any life insurance policy purchased pursuant to Section 3(c) above.
 Executive shall become immediately vested in any of the remaining unvested
shares of restricted stock and/or options granted to him under any existing or
future award agreements.

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41304602.5

(d)

Accrued Rights.  Notwithstanding the foregoing provisions of this Section 5, in
the event of termination of Executive’s employment hereunder for any reason,
Executive shall be entitled to (i) payment of any unpaid portion of his Base
Salary through the effective date of termination,  (ii) payment of any
un-reimbursed reasonable business expenses incurred pursuant to Section 3(d)
above, and (iii) payment of any accrued but unpaid benefits solely in accordance
with the terms of any employee benefit plan or program of Bancshares
(remuneration under any other bonus plan is not guaranteed).  

(e)

Termination for Cause.  In the event the employment of Executive is terminated
by Bancshares for Cause, Bancshares shall provide Executive only Base Salary and
PTO earned and un-reimbursed business expenses incurred through the date of
termination.  No separation payment or benefit shall be provided in such
instance.

(f)

Nonassignability.  Neither Executive nor any other person or entity shall have
any power or right to transfer, assign, anticipate, hypothecate, mortgage,
commute, modify, or otherwise encumber in advance any of the rights or benefits
of Executive under this Section 5.  The terms of this Section 5(f) shall not
affect the interpretation of any provision of this Agreement.

(g)

Regulatory Restrictions.  The parties understand and agree that at the time any
payment would otherwise be made or benefit provided under Sections 5 or 18,
depending on the facts and circumstances existing at such time, the satisfaction
of such obligations by Bancshares may be deemed by a regulatory authority to be
illegal, an unsafe and unsound practice, or for some other reason not properly
due or payable by Bancshares.  Among other things, the regulations at 12 C.F.R.
Part 30, Appendix A and at 12 C.F.R. Part 359 promulgated pursuant to
Sections 18(k) and 39(a) of the Federal Deposit Insurance Act, respectively, or
similar regulations or regulatory action following similar principles may apply
at such time.  The parties understand, acknowledge and agree that,
notwithstanding any other provision of this Agreement, Bancshares shall not be
obligated to make any payment or provide any benefit, and any such obligation of
Bancshares to do so under Sections 5 or 18 shall be extinguished if an
appropriate regulatory authority disapproves or does not acquiesce, if required,
and the regulatory authority’s disapproval or non-acquiescence is documented in
a writing from the regulatory authority, a copy of which is actually provided by
the regulatory authority or Bancshares to Executive.

(h)

Conditions to Separation Benefits.  Bancshares shall have the right to seek
repayment of the separation payments and benefits or to terminate payments or
benefits provided by this Section 5 in the event that Executive fails to honor,
in accordance with their terms, the provisions of Sections 6 or 9 hereof.  

(i)

Suspension and Removal Orders.  If Executive is suspended and/or temporarily
prohibited from participating in the conduct of Bancshares’ or any of its
subsidiaries’ affairs by notice served under Section 8(e)(3) or 8(g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)) or
successor provisions, Bancshares’s obligations under this Agreement shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
 If the charges in the notice are dismissed, Bancshares may in its discretion:
(i) pay Executive all or part of the compensation withheld while its obligations
under

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41304602.5

this Agreement were suspended; and (ii) reinstate (in whole or in part) any of
its obligations which were suspended.  If Executive is removed and/or
permanently prohibited from participating in the conduct of Bancshares’ or any
of its subsidiaries’ affairs by an order issued under Section 8(e)(3) or 8(g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or (g)(1)),
all obligations of Bancshares under this Agreement shall terminate as of the
effective date of the order, but vested rights of the parties shall not be
affected.

(j)

Termination by Default.  If Bancshares is in default (as defined in
Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1813(x)(1)), all obligations under this Agreement shall terminate as of
the date of default, but vested rights of the parties shall not be affected.

(k)

Supervisory Assistance or Merger.  All obligations under this Agreement shall be
terminated, except to the extent that it is determined that continuation of the
Agreement is necessary for the continued operation of 1st Century Bank, N.A.
(the “Bank”) (or any bank subsidiary of Bancshares):  (i) by the Comptroller of
the Currency (the “Comptroller”) or his or her designee, at the time that the
Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in
Section 11 of the Federal Deposit Insurance Act (12 U.S.C. Section 1821); or
(ii) by the Comptroller or his or her designee, at the time that the Comptroller
or his or her designee approves a supervisory merger to resolve problems related
to the operation of the Bank or when the Bank is in an unsafe or unsound
condition.  All rights of the parties that have already vested, however, shall
not be affected by such action.

6.

Confidentiality.  Executive agrees that he will not at any time during the
Employment Period or at any time thereafter for any reason, in any fashion, form
or manner, either directly or indirectly, divulge, disclose or communicate to
any person, firm, corporation or other business entity, in any manner
whatsoever, any confidential information or trade secrets concerning the
business of Bancshares and any of its subsidiaries, including, without limiting
the generality of the foregoing, the techniques, methods or systems of its
operation or management, any information regarding its financial matters, or any
other material information concerning the business of Bancshares and any of its
subsidiaries (including customer lists), any of its customers, governmental
relations, customer contacts, underwriting methodology, loan program
configuration and qualification strategies, marketing strategies and proposals,
its manner of operation, its plans or other material data, or any other
information concerning the business of Bancshares, its subsidiaries or
affiliates, and Bancshares’ good will (the “Business”).  The provisions of this
Section 6 shall not apply to (i) information disclosed in the performance of
Executive’s duties to Bancshares and any of its subsidiaries based on his good
faith belief that such a disclosure is in the best interests of Bancshares or
any of its subsidiaries, as applicable; (ii) information that is, at the time of
the disclosure, public knowledge; (iii) information disseminated by Bancshares
or any of its subsidiaries to third parties in the ordinary course of business;
(iv) information lawfully received by Executive from a third party who, based
upon inquiry by Executive, is not bound by a confidential relationship to
Bancshares and any of its subsidiaries or otherwise improperly received the
information; or (v) information disclosed under a requirement of law or as
directed by applicable legal authority having jurisdiction over Executive.

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41304602.5

Executive agrees that all manuals, documents, files, reports, studies or other
materials used and/or developed by Executive for Bancshares and any of its
subsidiaries during the Term of this Agreement are solely the property of
Bancshares, and that Executive has no right, title or interest therein.  Upon
termination of Executive’s employment, Executive or Executive’s representative
shall promptly deliver possession of all such materials (including any copies
thereof) to Bancshares.

7.

Keyman Life Insurance. Bancshares shall have the right to obtain and hold a
“keyman” life insurance policy on the life of Executive with Bancshares as
beneficiary of the policy.  Executive agrees to provide any information required
for the issuance of such policy and submit himself to any physical examination
required for such policy.

8.

Unsecured General Creditor.  Neither Executive nor any other person or entity
shall have any legal right or equitable rights, interests or claims in or to any
property or assets of Bancshares and any of its subsidiaries under the
provisions of this Agreement.  No assets of Bancshares and any of its
subsidiaries shall be held under any trust for the benefit of Executive or any
other person or entity or held in any way as security for the fulfilling of the
obligations of Bancshares under this Agreement.  All of Bancshares’ and any of
its subsidiaries’  assets shall be and remain the general, unpledged,
unrestricted assets of Bancshares and any of its subsidiaries, as applicable.
Bancshares’ obligations under this Agreement are unfunded and unsecured
promises, and to the extent such promises involve the payment of money, they are
promises to pay money in the future.  Executive and any person or entity
claiming through him shall be unsecured general creditors with respect to any
rights or benefits hereunder.

9.

Business Protection Covenants.

(a)

Covenant Not to Compete.  Executive agrees that he will not, during the
Employment Period, voluntarily or involuntarily, directly or indirectly,
(i) engage in any banking or financial products or service business, loan
origination or deposit-taking business or any other business competitive with
that of Bancshares, its subsidiaries or affiliates (“Competitive Business”),
(ii) directly or indirectly own any interest in (other than less than 3% of any
publicly traded company or mutual fund), manage, operate, control, be employed
by, or provide management or consulting services in any capacity to any firm,
corporation, or other entity (other than Bancshares or its subsidiaries or
affiliates) engaged in any Competitive Business, or (iii) directly or indirectly
solicit or otherwise intentionally cause any employee, officer, or member of the
Board or any of its subsidiaries or affiliates to engage in any action
prohibited under (i) or (ii) of this Section 9(a).

(b)

Inducing Employees To Leave Bancshares; Employment of Employees.  Any attempt on
the part of Executive to induce others to leave Bancshares’ employ, or the
employ of any of its subsidiaries or affiliates, or any effort by Executive to
interfere with Bancshares’ and any of its subsidiaries relationship with its
other employees would be harmful and damaging to Bancshares.  Executive agrees
that during the Employment Period and for a period of twelve (12) months
thereafter, Executive will not in any way, directly or indirectly: (i) induce or
attempt to induce any employee of Bancshares or any of its subsidiaries of
affiliates to quit employment with Bancshares or the relevant subsidiary or
affiliate; (ii) otherwise interfere with or disrupt the relationships between
Bancshares and its subsidiaries and affiliates

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41304602.5

and their respective employees; (iii) solicit, entice, or hire away any employee
of Bancshares or any of its subsidiaries or affiliates; or (iv) hire or engage
any employee of Bancshares or any subsidiary or affiliate, or any former
employee of Bancshares or any subsidiary or affiliate whose employment with
Bancshares or the relevant subsidiary or affiliate ceased less than one (1) year
before the date of such hiring or engagement.

(c)

Nonsolicitation of Business.  For a period of twelve (12) months from the date
of termination of employment, Executive will not utilize the confidential
proprietary or trade secret information to divert or attempt to divert from
Bancshares or any of its subsidiaries or affiliates, any business Bancshares or
a subsidiary or affiliate had enjoyed or solicited from its customers,
borrowers, depositors or investors during the twelve (12) months prior to
termination of his employment.

(d)

Bancshares’ Ownership of Intellectual Property.  To the extent that Executive
has intellectual property rights of any kind in any pre-existing works which are
subsequently incorporated in any work or work product produced in rendering
services to Bancshares and any of its subsidiaries, Executive hereby grants
Bancshares a royalty-free, irrevocable, world-wide, perpetual non-exclusive
license (with the right to sublicense), to make, have made, copy, modify, use,
sell, license, disclose, publish or otherwise disseminate or transfer such
subject matter.  Similarly, Executive agrees that all inventions, discoveries,
improvements, trade secrets, original works of authorship, developments,
formulae, techniques, processes, and know-how, whether or not patentable, and
whether or not reduced to practice, that are conceived, developed or reduced to
practice during Executive’s employment with Bancshares, either alone or jointly
with others, if on Bancshares’ time, using Bancshares’ or any of its
subsidiaries facilities, or relating to Bancshares shall be owned exclusively by
Bancshares, and Executive hereby assigns to Bancshares all of Executive’s right,
title and interest throughout the world in all such intellectual property.
 Executive agrees that Bancshares shall be the sole owner of all domestic and
foreign patents or other rights pertaining thereto, and further agrees to
execute all documents that Bancshares reasonably determines to be necessary or
convenient for use in applying for, prosecuting, perfecting, or enforcing
patents or other intellectual property rights, including the execution of any
assignments, patent applications, or other documents that Bancshares may
reasonably request.  This provision is intended to apply to the extent permitted
by applicable law and is expressly limited by Section 2870 of the California
Labor Code, which is set forth in its entirety in Exhibit A to this Agreement.
 By signing this Agreement, Executive acknowledges that this paragraph shall
constitute written notice of the provisions of Section 2870.

(e)

Bancshares’ Ownership of Copyrights.  Executive agrees that all original works
of authorship not otherwise within the scope of Paragraph (d) above that are
conceived or developed during Executive’s employment with Bancshares and any of
its subsidiaries, either alone or jointly with others, if on Bancshares’ and any
of its subsidiaries time, using Bancshares or any of its subsidiaries
facilities, or relating to Bancshares, are “works for hire” to the greatest
extent permitted by law and shall be owned exclusively by Bancshares, and
Executive hereby assigns to Bancshares all of Executive’s right, title, and
interest in all such original works of authorship.  Executive agrees that
Bancshares shall be the sole owner of all rights pertaining thereto, and further
agrees to execute all documents that Bancshares reasonably determines to be

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necessary or convenient for establishing in Bancshares’ name the copyright to
any such original works of authorship.

10.

No Breach of Prior Agreement.  Executive represents that his performance of all
the terms of this Agreement and his duties as an executive of Bancshares will
not breach any agreement with any former employer or other party.  Executive
represents that he will not bring with him to Bancshares or use in the
performance of his duties for Bancshares any documents or materials of a former
employer that are not generally available to the public or have not been legally
transferred to Bancshares.

11.

Resignations.  Executive agrees that upon termination of employment, for any
reason, he will submit his resignations from all offices and directorships with
Bancshares and all of its subsidiaries.

12.

Other Agreements.  The parties further agree that to the extent of any
inconsistency between this Agreement and any employee manual or policy of
Bancshares, that the terms of this Agreement shall supersede the terms of such
employee manual or policy.

13.

Notice.  For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
personally delivered or (unless otherwise specified) mailed by United States
certified or registered mail, return receipt requested, postage prepaid, or sent
by facsimile, provided that the facsimile cover sheet contains a notation of the
date and time of transmission, and shall be deemed received:  (i) if personally
delivered, upon the date of delivery to the address of the person to receive
such notice, (ii) if mailed in accordance with the provisions of this
Section 13, two (2) business days after the date placed in the United States
mail, (iii) if mailed other than in accordance with the provisions of this
Section 13 or mailed from outside the United States, upon the date of delivery
to the address of the person to receive such notice, or (iv) if given by
facsimile, when sent.  Notices shall be addressed as follows:

If to Bancshares:

1st Century Bancshares, Inc.
1875 Century Park East
Suite 1400
Los Angeles, CA  90067
Attn:  Chairman of the Board and President/COO

With a copy to:

Manatt, Phelps & Phillips, LLP
11355 West Olympic Avenue
Los Angeles, CA 90064
Attn: Gordon M. Bava, Esq.

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If to Executive, to:

Alan Rothenberg

9466 Rembert Lane

Beverly Hills, CA 90210

or to such other respective addresses as the parties hereto shall designate to
the other by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.

14.

Arbitration.  Any dispute or controversy arising under or in connection with
this Agreement, the inception or termination of Executive’s employment, or any
alleged discrimination or tort claim related to such employment, including
issues raised regarding the Agreement’s formation, interpretation or breach,
shall be settled exclusively by binding arbitration in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (“AAA”). Without limiting the foregoing, the following
potential claims by Executive would be subject to arbitration under the
Arbitration Agreement:  claims for wages or other compensation due; claims for
breach of any contract or covenant (express or implied) under which Executive
believes he would be entitled to compensation or benefits; tort claims related
to such employment; claims for discrimination and harassment (including, but not
limited to, race, sex, religion, national origin, age, marital status or medical
condition, disability, sexual orientation, or any other characteristic protected
by federal, state or local law); claims for benefits (except where an employee
benefit or pension plan specifies that its claims procedure shall culminate in
an arbitration or other procedure different from this one); and claims for
violation of any public policy, federal, state or other governmental law,
statute, regulation or ordinance.  The arbitration will be conducted in Los
Angeles County.  The arbitration shall provide for written discovery and
depositions adequate to give the parties access to documents and witnesses that
are essential to the dispute.  The arbitrator shall have no authority to add to
or to modify this Agreement, shall apply all applicable law, and shall have no
lesser and no greater remedial authority than would a court of law resolving the
same claim or controversy.  The arbitrator shall issue a written decision that
includes the essential findings and conclusions upon which the decision is
based, which shall be signed and dated.  Executive and Bancshares shall each
bear his or its own costs and attorneys’ fees incurred in conducting the
arbitration and, except in such disputes where Executive asserts a claim
otherwise under a state or federal statute prohibiting discrimination in
employment (a “Statutory Claim”), or unless required otherwise by applicable
law, shall split equally the fees and administrative costs charged by the
arbitrator and AAA.  For such disputes that do not involve Statutory Claims, if
Executive is determined to be the prevailing party, the arbitrator shall have
the discretion to order Bancshares to reimburse Executive for his portion of the
arbitrator's fees and administrative costs of AAA charged to the parties as a
result of the arbitration, as well as his reasonable attorney’s fees and costs.
 In disputes where Executive asserts a Statutory Claim against Bancshares or
where otherwise required by law, Executive shall be required to pay only the AAA
filing fee to the extent such filing fee does not exceed the fee to file a
complaint in state or federal court.  Bancshares shall pay the balance of the
arbitrator’s fees and administrative costs.  If any party prevails on a
Statutory Claim that affords the prevailing party attorneys’ fees, the
arbitrator may award attorneys’ fees to the prevailing party, consistent with
applicable law.  Judgment may be entered on the arbitrator’s award in any court
having jurisdiction.

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15.

Waiver of Breach.  Any waiver of any breach of this Agreement shall not be
construed to be a continuing waiver or consent to any subsequent breach on the
part either of Executive or of Bancshares.  No delay or omission in the exercise
of any power, remedy, or right herein provided or otherwise available to any
party shall impair or affect the right of such party thereafter to exercise the
same.  Any extension of time or other indulgence granted to a party hereunder
shall not otherwise alter or affect any power, remedy or right of any other
party, or the obligations of the party to whom such extension or indulgence is
granted except as specifically waived.

16.

Non-Assignment; Successors.  Neither party hereto may assign his or its rights
or delegate his or its duties under this Agreement without the prior written
consent of the other party; provided, however, that: (i) this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of
Bancshares upon any sale of all or substantially all of Bancshares’s assets, or
upon any merger, consolidation or reorganization of Bancshares with or into any
other corporation, all as though such successors and assigns of Bancshares and
their respective successors and assigns were Bancshares; and (ii) this Agreement
shall inure to the benefit of and be binding upon the heirs, assigns or
designees of Executive to the extent of any payments due to them hereunder.  As
used in this Agreement, the term “Bancshares” shall be deemed to refer to any
such successor or assign of Bancshares referred to in the preceding sentence.

17.

Withholding of Taxes. All payments required to be made by Bancshares to
Executive under this Agreement shall be subject to the withholding and deduction
of such amounts, if any, relating to tax, and other payroll deductions as
Bancshares may reasonably determine it should withhold and/or deduct pursuant to
any applicable law or regulation (including, but not limited to, Executive’s
portion of social security payments and income tax withholding) now in effect or
which may become effective any time during the term of this Agreement.

18.

Excise Tax Provision.

(a)

Anything in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any payment or
distribution by Bancshares to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section ) (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section, if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the “Reduced Amount”) that could be paid to the Executive such
that the

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receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate, shall
be reduced to the Reduced Amount.

(b)

Subject to the provisions of Section 17(a), all determinations required to be
made under this Section 17(a), including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Perry-Smith, LLP or
another certified public accounting firm as may be designated by the Executive
(the “Accounting Firm”) which shall provide detailed supporting calculations
both to Bancshares and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by Bancshares. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive shall appoint another recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by Bancshares. Any Gross-Up Payment, as
determined pursuant to this Section 17(a), shall be paid by Bancshares to the
Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
Bancshares and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting firm hereunder, it is possible that Gross-Up Payments which will not
have been made by Bancshares should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that
Bancshares exhausts its remedies pursuant to Section 17 and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Bancshares to or for the benefit of the
Executive.

(c) The Executive shall notify Bancshares in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
Bancshares of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise Bancshares of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to Bancshares (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If Bancshares notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

                 (i)            give Bancshares any information reasonably
requested by Bancshares relating to such claim,

                 (ii)           take such action in connection with contesting
such claim as Bancshares shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by Bancshares.

                 (iii)          cooperate with Bancshares in good faith in order
effectively to contest such claim, and

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                (iv)          permit Bancshares to participate in any
proceedings relating to such claim;

provided, however, that Bancshares shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 17 (c), Bancshares shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as Bancshares shall
determine; provided, however, that if Bancshares directs the Executive to pay
such claim and sue for a refund, Bancshares shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, Bancshares’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.  

                (d)           If, after the receipt by the Executive of an
amount advanced by Bancshares pursuant to Section 17 (c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject Bancshares’ complying with the requirements of Section 17 (c) promptly
pay to Bancshares the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by Bancshares pursuant to Section 17 (c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and Bancshares does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

19.

Indemnification.  To the fullest extent permitted by law, regulation, and
Bancshares’s Articles of Incorporation and Bylaws, Bancshares shall pay as and
when incurred all expenses, including legal and attorney costs, incurred by, or
shall satisfy as and when entered or levied a judgment or fine rendered or
levied against, Executive in an action brought by a third party against
Executive (whether or not Bancshares is joined as a party defendant) to impose a
liability or penalty on Executive for an act alleged to have been committed by
Executive while an officer of Bancshares, provided that Executive was acting in
good faith, within what Executive reasonably believed to be the scope of
Executive’s employment or authority and for a

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41304602.5

purpose which Executive reasonably believed to be in the best interests of
Bancshares or Bancshares’s shareholders, and in the case of a criminal
proceeding, that Executive had no reasonable cause to believe that Executive’s
conduct was unlawful.  Payments authorized hereunder include amounts paid and
expenses incurred in settling any such action or threatened action.  All rights
hereunder are limited by any applicable state or Federal laws.

20.

Severability.  To the extent any provision of this Agreement or portion thereof
shall be invalid or unenforceable, it shall be considered deleted therefrom (but
only for so long as such provision or portion thereof shall be invalid or
unenforceable) and the remainder of such provision and of this Agreement shall
be unaffected and shall continue in full force and effect to the fullest extent
permitted by law if enforcement would not frustrate the overall intent of the
parties (as such intent is manifested by all provisions of the Agreement
including such invalid, void, or otherwise unenforceable portion).

21.

Payment.  All amounts payable by Bancshares to Executive under this Agreement
shall be paid promptly on the dates required for such payment in this Agreement
without notice or demand.  

22.

Authority.  Each of the parties hereto hereby represents that each has taken all
actions necessary in order to execute and deliver this Agreement.

23.

Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

24.

Governing Law.  This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of California, without giving effect to
the choice of law principles thereof.

25.

Entire Agreement.  This Agreement and written agreements, if any, entered into
concurrently herewith constitute the entire agreement by Bancshares and
Executive with respect to the subject matter hereof and merges and supersedes
any and all prior discussions, negotiations, agreements or understandings
between Executive and Bancshares with respect to the subject matter hereof,
whether written or oral.  This Agreement may be amended or modified only by a
written instrument executed by Executive and Bancshares. With regard to such
amendments, alterations, or modifications, facsimile signatures shall be
effective as original signatures.  Any amendment, alteration, or modification
requiring the signature of more than one party may be signed in counterparts.

26.

Further Actions.  Each party agrees to perform any further acts and execute and
deliver any further documents reasonably necessary to carry out the provisions
of this Agreement.

27.

Time of Essence.  Time is of the essence of each and every term, condition,
obligation and provision hereof.

28.

No Third Party Beneficiaries.  This Agreement and each and every provision
hereof is for the exclusive benefit of the parties and not for the benefit of
any third party.

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29.

Headings.  The headings in this Agreement are inserted only as a matter of
convenience, and in no way define, limit, or extend or interpret the scope of
this Agreement or of any particular provision hereof.

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41304602.5

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

1st Century Bancshares, Inc.

By:

/s/Eric George

Eric George

Chairman, Board Compensation Committee

EXECUTIVE:

/s/Alan Rothenberg

Alan Rothenberg

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