FORM 10-K 12-31-2006


    EXHIBIT
      10.20

    AMENDED
      AND RESTATED

    TEMECULA
      VALLEY BANK

    SALARY
      CONTINUATION AGREEMENT

    


    THIS
      AGREEMENT is adopted this 29th
      day of
      December 2006, by and between the TEMECULA VALLEY BANK, located in Temecula,
      California (the "Company") and SCOTT
      J. WORD
      (the
      "Executive"), amending, restating and replacing the Amended and Restated
      Temecula Valley Bank, Salary Continuation Agreement dated September 30, 2004,
      and which was originally entered into on January 1, 2000.

    


    The
      purpose of the current amendment and restatement is to bring this agreement
      into
      documentary compliance with the requirements of Section 409A of the Internal
      Revenue Code. In addition, the benefit under this Agreement is increased to
      $80,000 annually. 

    


    INTRODUCTION

    


    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, prior to actual receipt of benefits.

    


    Article
      1

    Definitions

    


    Whenever
      used in this Agreement, the following words and phrases shall have the meanings
      specified:

    


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


     

    1.3  “Code”
      means
      the Internal Revenue Code of 1986, as amended.

     

    1.4  “Disability”
      means
      the Executive suffering a sickness, accident or injury which has been determined
      by the carrier of any individual or group disability insurance policy covering
      the Executive, or by the Social Security Administration, to be a disability
      rendering the Executive totally and permanently disabled. The Executive must
      submit proof to the Company of the carrier’s or Social Security Administration’s
      determination upon the request of the Company.

     

    1.5  “Early
      Termination”
      means
      the Termination of Employment before Normal Retirement Age for reasons other
      than death, Disability, Termination for Cause or following a Change in
      Control.

     

    1.6  “Early
      Termination Date”
means
      the month, day and year in which Early Termination occurs.

     

    1.7  “Effective
      Date”
      means
      January 1, 2005.

     

    1.8  “Normal
      Retirement Age”
means
      the Executive’s 65th birthday.

     

    1.9  “Normal
      Retirement Date”
means
      the later of the Normal Retirement Age or Termination of
      Employment.

     

    1.10  “Plan
      Year”
      means a
      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
      Agreement.

     

    1.11  “Separation
      from Service”
      shall
      mean that the Executive has experienced a Termination of Employment from the
      Company. Where the Executive continues to perform services for the Company
      following a Termination of Employment, however, and the facts and circumstances
      indicate that such services are intended by the Company and the Executive to
      be
      more than “insignificant” services, a Separation from Service will not be deemed
      to have occurred and any amounts deferred under this Agreement may not be paid
      or made available to the Executive. The determination of whether such services
      are considered “insignificant” will be based upon all facts and circumstances
      relating to the termination and upon any applicable rules and regulations issued
      under Section 409A of the Code. Military leave, sick leave, or other bona fide
      leaves of absence are not generally considered terminations of employment.
      

     

    1.12  “Termination
      for Cause”
      See
      Section 5.1.

     

    1.13  “Termination
      of Employment”
      means
      that the Executive ceases to be employed by the Company for any reason
      whatsoever other than by reason of a leave of absence, which is approved by
      the
      Company. For purposes of this Agreement, if there is a dispute over the
      employment status of the Executive or the date of the Executive’s Termination of
      Employment, the Company shall have the sole and absolute right to determine
      the
      termination date.

     

    Article
      2

    Lifetime
      Benefits

     

        2.1    Normal
      Retirement Benefit.
      Upon
      Termination of Employment on the Normal Retirement Date for reasons other than
      death, the Company shall pay to the Executive the benefit described in this
      Section 2.1 in lieu of any other benefit under this Agreement. 

     

            2.1.1    Amount
      of Benefit.
      The
      annual benefit under this Section 2.1 is $80,000 (Eighty Thousand Dollars).
      The
      Board of Directors may in its sole and absolute discretion may unilaterally
      increase the annual benefit amount at the end of each Plan Year from the date
      of
      this Agreement to the Executive’s Normal Retirement Date. 

     

            2.1.2    Payment
      of Benefit.
      The
      Company shall pay the annual benefit to the Executive in 12 equal monthly
      installments payable on the first day of each month commencing with the month
      following the Executive’s Separation from Service. The Company shall pay this
      annual benefit to the Executive for 15 years.

     

            2.1.3    Benefit
      Increases.
      Commencing on the first anniversary of the first benefit payment, and continuing
      on each subsequent anniversary, the Company's Board of Directors, in its sole
      discretion, may increase the benefit. 

     

        2.2     Early
      Termination Benefit.
      Upon
      Early Termination, the Company shall pay to the Executive the benefit described
      in this Section 2.2 in lieu of any other benefit under this
      Agreement.

     

            2.2.1    Amount
      of Benefit.
      The
      benefit under this Section 2.2 is the Accrued Liability Balance for the Plan
      Year ending immediately prior to the Early Termination Date, except, however,
      the Executive shall not be entitled to any benefit if he voluntarily terminates
      his employment prior to the end of the fifth Plan Year. 

    


            2.2.2    Payment
      of Benefit.
      The
      Company shall pay the annual benefit to the Executive in 12 equal monthly
      installments payable on the first day of each month commencing with the month
      following the Executive’s Separation from Service. The Company shall pay this
      annual benefit to the Executive for 15 years. 

    


        2.3    Disability
      Benefit.
      If the
      Executive terminates employment due to Disability prior to Normal Retirement
      Age, the Company shall pay to the Executive the benefit described in this
      Section 2.3 in lieu of any other benefit under this Agreement.

    


            2.3.1    Amount
      of Benefit.
      The
      benefit under this Section 2.3 is the Accrued Liability Balance for the Plan
      Year ending immediately prior to the date in which the Termination of Employment
      occurs. 

    


            2.3.2    Payment
      of Benefit.
      The
      Company shall pay the annual benefit to the Executive in 12 equal monthly
      installments payable on the first day of each month commencing with the month
      following Separation from Service. The Company shall pay this annual benefit
      to
      the Executive for 15 years.

    


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

    


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

    


            2.4.2    Payment
      of Benefit.
      The
      company shall pay 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 (as described under the “Separation from Service”
provision herein) if, pursuant to Internal Revenue Code Section 409A, Executive
      is considered a “specified employee” under Internal Revenue Code Section
      416(i). In the event a distribution is delayed pursuant to this Section 2.6,
      the
      originally scheduled distribution shall be delayed for 6 months, and shall
      commence instead on the first day of the seventh month following Separation
      from
      Service. 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 Company 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

    Death
      Benefits

    


    The
      Company shall not pay a death benefit under this Agreement. A death benefit
      may
      be provided according to the terms of a separate Split Dollar Agreement entered
      into by the Company and the Executive.

    


    Article
      4

    Beneficiaries

    


    Executive’s
      beneficiary shall not have the right to any benefit payments under this
      Agreement. 

    Article
      5

    General
      Limitations

    


        5.1    Termination
      for Cause.
      Notwithstanding any provision of this Agreement to the contrary, the Company
      shall not pay any benefit under this Agreement if the Company terminates the
      Executive's employment for:

    
      
        	
                (a)

              	
                any
                  act of embezzlement, fraud, breach of fiduciary duty or
                  dishonesty;

              
	
                (b)

              	
                deliberate
                  or repeated disregard of the policies and rules of Company as adopted
                  by
                  Company’s Board of Director

              
	
                (c)

              	
                unauthorized
                  use or disclosure of any of the trade secrets or confidential information
                  of Company;

              
	
                (d)

              	
                competition
                  with Company, inducement of any customer of the Company to breach
                  a
                  contract with the Company, or inducement of any principal for whom
                  the
                  Company acts as agent to terminate such agency
                  relationship;

              
	
                (e)

              	
                
                  gross
                    negligence adversely impacting the Company; or 

                

              
	
                (f)

              	
                willful
                  breach of this Agreement or any other willful misconduct.
                  

              


      

    

    


        5.2    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 shareholder
      in a corporation, or becomes associated with, in the capacity of employee,
      director, 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 Company within 2 years of Termination of Employment, which
      enterprise is, or may 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. This section shall not apply following a Change in Control.


    


        5.3    Suicide
      or Misstatement.
      No
      benefits shall be payable if the Executive commits suicide within two years
      after the date of this Agreement, or if the Executive has made any material
      misstatement of fact on any application for life insurance purchased by the
      Company. 

    


    Article
      6

    Claims
      and Review Procedures

    


        6.1    Claims
      Procedure.
      Any
      person or entity who has not received benefits under the Plan that he or she
      believes should be paid (“claimant”) shall make a claim for such benefits as
      follows:

    


            6.1.1    Initiation
      - Written Claim.
      The
      claimant initiates a claim by submitting to the Company a written claim for
      the
      benefits. 

    


            6.1.2    Timing
      of Company Response.
      The
      Company shall respond to such claimant within 90 days after receiving the claim.
      If the Company determines that special circumstances require additional time
      for
      processing the claim, the Company 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
      Company expects to render its decision. 

    


            6.1.3    Notice
      of Decision.
      If the
      Company denies part or all of the claim, the Company shall notify the claimant
      in writing of such denial. The Company 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 Plan 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 Plan’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.
                

            


    

     

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

    


            6.2.1   Initiation
      - Written Request.
      To
      initiate the review, the claimant, within 60 days after receiving the Company’s
      notice of denial, must file with the Company a written request for review.
      

    


            6.2.2  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 Company 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.


    


            6.2.3  Considerations
      on Review.
      In
      considering the review, the Company 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. 

    


            6.2.4    Timing
      of Company Response.
      The
      Company shall respond in writing to such claimant within 60 days after receiving
      the request for review. If the Company determines that special circumstances
      require additional time for processing the claim, the Company 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 Company expects to render its decision. 

    


            6.2.5    Notice
      of Decision.
      The
      Company shall notify the claimant in writing of its decision on review. The
      Company 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 Plan 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
      7

    Amendments
      and Termination

    


        7.1    This
      Agreement may be amended or terminated only by a written agreement signed by
      the
      Company and the Executive.

    


        7.2    Plan
      Terminations under Section 409A.
      Notwithstanding anything to the contrary in this Agreement, the Company may
      make
      distributions under certain circumstances following Plan termination under
      this
      Section 7.3. Any such distribution shall be made according to the rules set
      forth in the regulations promulgated under Section 409A of the Code, and shall
      conform to the following requirements:

    
      	
              (a)

            	
              
                Within
                  30 days before, or 12 months after a Change in
                  Control

              

            
	
              (b)

            	
              
                Upon
                  the Company’s dissolution or with the approval of a bankruptcy court;
                  or

              

            
	
              (c)

            	
              
                Upon
                  the Company’s termination of this and all similar plans with respect to
                  all participants, provided (1) that all distributions are made
                  no earlier
                  than 12 months and no later than 24 months following such termination;
                  (2)
                  the Company does not adopt any new similar plans for a minimum
                  of 5 years
                  following the date of such termination; and (3) no payments, other
                  than
                  those payments that would otherwise have been payable under the
                  terms of
                  the arrangement if the termination had not occurred, are made pursuant
                  to
                  this provision.

              

            


    

     

    Article
      8

    Miscellaneous

    


        8.1    Binding
      Effect.
      This
      Agreement shall bind the Executive and the Company, and their beneficiaries,
      survivors, executors, successors, administrators and transferees.

    


        8.2    No
      Guarantee of Employment.
      This
      Agreement is not an employment policy or contract. It does not give the
      Executive the right to remain an employee of the Company, nor does it interfere
      with the Company'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.

    


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

    


        8.4    Tax
      Withholding.
      The
      Company shall withhold any taxes that are required to be withheld from the
      benefits provided under this Agreement, including any taxes withheld pursuant
      to
      Section 409A of the Code.

    


        8.5    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.

    


        8.6    Unfunded
      Arrangement.
      The
      Executive and beneficiary are general unsecured creditors of the Company for
      the
      payment of benefits under this Agreement. The benefits represent the mere
      promise by the Company to pay 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 is a general asset of the Company to which the Executive
      and beneficiary have no preferred or secured claim.

    


        8.7    Entire
      Agreement. This
      Agreement constitutes the entire agreement between the Company 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.

    


        8.8    Administration.
      The
      Company shall have powers which are necessary to administer this Agreement,
      including but not limited to:

    
      	
              (a)

            	
              
                Interpreting
                  the provisions of the Agreement;

              

            
	
              (b)

            	
              
                Establishing
                  and revising the method of accounting for the
                  Agreement;

              

            
	
              (c)

            	
              
                Maintaining
                  a record of benefit payments; and

              

            
	
              (d)

            	
              
                Establishing
                  rules and prescribing any forms necessary or desirable to administer
                  the
                  Agreement.

              

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Executive and a duly authorized Company officer consent
      to
      this Agreement.

    


    EXECUTIVE:                                                                    COMPANY:

    


                                                                                TEMECULA
      VALLEY
      BANK

    


    
      	 	 	 	 
	By:/s/ Scott
              J. Word  	 	 	By:/s/ Donald
              A. Pitcher
	
              

            	 	 	
              

            
	
            	 	 	
              Executive
                Vice President and

              Chief
                Financial
                Officer