EXHIBIT 10.4

EMPLOYMENT AGREEMENT

THIS AGREEMENTis made this 31 day of May, 2000, by and betweenCOAST NATIONAL
BANK(the "Bank"), having a principal place of business at 486 Marsh Street, San Luis Obispo, California 93401, andTHOMAS J.
SHERMAN("Executive"), whose residence address is 2855 El Cerrito, San Luis Obispo, California 93401.

W I T N E S S E T H:

WHEREAS, the Bank is a national banking association, with power to own property and carry on its business as it is now being conducted;

WHEREAS,
the Bank desires to avail itself of the skill, knowledge and experience of Executive in order to insure the successful management of its business; and

WHEREAS,
the parties hereto desire to specify the terms and conditions of Executive's employment by the Bank;

NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth, and intending to be legally bound, it is agreed that from and after June 1, 2000 (the "Effective
Date"), the following terms and conditions shall apply to Executive's said employment.



The
Bank hereby employs Executive, and Executive hereby accepts employment with the Bank, for a term of three (3) years, commencing on June 1, 2000, and ending on
May 31, 2003, unless terminated sooner in accordance with Section F. below. Upon expiration of this Agreement, the respective rights and obligations of the Parties hereunder shall cease,
except for any term that is subject to an express survival provision (e.g., Subsection D.5).



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June 1, 2000 - May 31, 2001

$110,000.00 (gross);June 1, 2001 - May 31, 2002

$120,000.00 (gross); andJune 1, 2002 - May 31, 2003

$130,000.00 (gross).


Said salary shall be payable in equal installments in conformity with the Bank's normal payroll practice, and shall be paid less all applicable taxes,
withholdings, and deductions.



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The
Parties acknowledge and agree that although the Membership shall be held in the Executive's name during the Term of this Agreement, the Membership shall remain an asset of the Bank
during the term of this Agreement, and the Executive may not sell, transfer, encumber or hypothecate in any manner the Membership without the Bank's prior written authorization. The Parties also agree
that upon the cessation of the Executive's employment with the Bank under this Agreement for any reason, including voluntary resignation or retirement, the Executive shall purchase the Membership from
the Bank. The purchase price to the Executive shall be $21,600.00, payable to the Bank in cash no later than ninety (90) days after the Executive's last day of active employment with the Bank.
The Executive hereby consents to the Bank's assignment of its rights hereunder in the event that the Bank is acquired by or is merged with another financial institution.

The
provisions of this Subsection D.5. shall be binding on and inure to the benefit of each Parties' successors and heirs, and shall survive the expiration or termination of this
Agreement.



Executive
shall be entitled to reimbursement by the Bank for any ordinary and necessary business expenses incurred by Executive in the performance of Executive's duties and in acting for
the Bank during the Term, which types of expenditures shall be determined by the Board of Directors, provided that:

1.    Each
such expenditure is of a nature qualifying it as a proper deduction on the federal and state income tax returns of the Bank as a business expense and not as
compensation to Executive; and

2.    Executive
furnishes to the Bank adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of such expenditures as deductible business expenses of the Bank and not as compensation to Executive.



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For
purposes of this Subsection F.2., "Cause" shall be deemed to exist if: (a) Executive fails to perform or habitually neglects the duties which he is required to perform
hereunder, (b) Executive engages in illegal activity which materially adversely affects the Bank's reputation in the community or which evidences the lack of Executive's fitness or ability to
perform Executive's duties as determined by the Board of Directors in good faith, or (c) Executive commits any act which would cause termination of coverage under the Bank's Bankers' Blanket
Bond as to Executive (as distinguished from termination of coverage as to the Bank as a whole).



For
purposes of this Agreement only, "physically or mentally disabled" shall be defined as Executive being unable to fully perform under this Agreement for a continuous period of ninety
(90) days or a cumulative period of one hundred twenty (120) days in any one calendar year. If there should be a dispute between the Bank and Executive as to Executive's physical or
mental disability for purposes of this Agreement, the question shall be settled by the opinion of an impartial reputable physician or psychiatrist agreed upon by the parties or their representatives,
or if the parties cannot agree within ten (10) days after a request for designation of such party, then by a physician or psychiatrist designated by the Los Angeles County Medical Association.
The certification of such physician or psychiatrist as to the question in dispute shall be final and binding upon the parties hereto.



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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

|                                                    |  | COAST NATIONAL BANK
|--------------------------------------------------- |  | -------------------
|                                                    |  | BY:                
|                                                    |  | BY:                
|/s/THOMAS J. SHERMANThomas J. Sherman ("Executive") |  |                    

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