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                                                                   EXHIBIT 10.11

                              EMPLOYMENT AGREEMENT


        This Employment Agreement (the "Agreement") is made and entered into as
of August 1, 1997, by and among Gary W. Deems (the "Executive"), First Pacific
National Bank, a national banking association (the "Bank") and FP Bancorp, Inc.,
a Delaware corporation (the "Company"), with regard to the following:

        A. The Executive has made and is expected to make a major contribution
to the profitability, growth and financial strength of the Bank and the Company.
The Executive is an officer and an employee of both the Bank and the Company and
receives compensation for his services from both.

        B. The Bank and the Company consider the continued availability of the
Executive's services, managerial skills and business experience to be in the
best interests of the Bank and the Company and the shareholders of the Company
and desire to assure the continued services of the Executive on behalf of the
Bank and the Company.

        C. The Executive is willing to remain in the employ of the Bank and the
Company upon the understanding that the Bank will provide him with income
security and benefits if his employment with the Bank is terminated, upon
certain terms and conditions.

        D. The Executive and the Bank entered into a Change of Control Agreement
dated January 20, 1994, as amended by an Amendment to Change of Control
Agreement dated January 11, 1995 (the "Change of Control Agreement"). By
execution and delivery of this Agreement the Bank and the Executive intend to
terminate the Change of Control Agreement effective as of the date of this
Agreement because the matters covered by the Change of Control Agreement are
addressed in this Agreement.

        E. The Bank and the Executive desire to enter into a formal agreement
outlining the Executive's general duties as Chief Administrative Officer and
Executive Vice President of the Bank and the Company, and setting his
compensation for services in those capacities.

        NOW, THEREFORE, for valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

        1.     Definitions.

               "Bank" means First Pacific National Bank, a national banking
association, its successors and permitted assigns.

               "Bank Board" means the Board of Directors of the Bank.

               "Beneficiary" means the person or entity to receive rights or
benefits under this Agreement, as set forth in this Agreement, in the event of
the death of the Executive. Unless 

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otherwise specified in a written notice to the Bank, the Beneficiary shall be
the spouse of the Executive, if any, and if there is none, the estate of the
Executive or, in the discretion of the Bank, any trust as to which the Executive
both was a settlor and at the date of his death held a power of revocation.

               "Change of Control" means (i) the issuance or transfer of
sufficient shares of stock, or the merger, reorganization or consolidation of
the Bank or the Company, which results in more than fifty percent (50%) of the
voting stock of the Bank being owned by other than the Company or persons who
owned seventy-five percent (75%) or more of the voting stock of the Company
immediately prior to the closing of the transaction; or, (ii) a merger,
reorganization or consolidation of the Company, which results in more than fifty
percent (50%) of the voting stock of the Company being owned by persons who are
not holders of voting stock of the Company immediately prior to the closing of
the transaction, or the acquisition by any person (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934) or entity of more than fifty
percent (50%) of the voting stock of the Company.

               "Company" means FP Bancorp, Inc., a Delaware corporation, its
successors and permitted assigns.

               "Company Board" means the Board of Directors of the Company.

               "Disability" means an inability to perform the substantial and
material duties regularly performed by the Executive as an officer and employee
of the Bank, the Company or a wholly-owned subsidiary of either of them. Such
disability may result from sickness, injury, or a mental condition not directly
attributable to either sickness or injury. For purposes of this Agreement the
determination of the Executive's disability shall be made by the Board of
Directors of the appropriate entity with participation by the Executive or his
legally authorized representative. The Board of Directors shall make the final
and conclusive determination of disability, based upon all the evidence
presented to it and after due consideration of the information presented by the
Executive or his legally authorized representative.

               "Executive" means Gary W. Deems.

                2.      Employment. The Bank and the Company hereby each employ
the Executive as its Executive Vice President and Chief Administrative Officer,
and the Executive accepts the duties described herein, and agrees to discharge
the same faithfully and in the best of his ability. The Executive shall perform
such other duties as shall be from time to time prescribed by the Bank Board,
Company Board, the Chief Executive Officer of the Bank and the Chief Executive
Officer of the Company. The Executive shall devote his full business time and
attention to the business and affairs of the Bank and the Company.

                3.      Term. The Bank and the Company hereby employ the
Executive and the Executive hereby accepts employment with the Bank and the
Company from the date hereof through and including December 31, 1998, subject to
the terms of this Agreement. The parties 

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may by mutual agreement extend the term of this Agreement beyond such date, but
at no time shall the remaining term of this Agreement exceed two (2) years.

          4.   Compensation and Benefits. In consideration for the services to
be rendered by the Executive to the Bank, the Bank agrees to pay the Executive
the following compensation and benefits:

               4.1. Salary. The Bank shall pay the Executive a minimum salary at
the rate of One Hundred and Thirty-Seven Thousand and Forty Dollars
($137,040.00) per year, due and payable biweekly, or otherwise in accordance
with the Bank's policy for the scheduling of salary payments to employees as in
effect from time to time. Salary increases, if any, shall only be as approved by
the Bank Board and the Company Board.

               4.2. Withholding and Deductions. The Bank shall withhold and/or
deduct from any and all salary or other payments, all taxes which may be
required to be deducted or withheld under any provision of law (including, but
not limited to, social security payments and income tax withholding) now in
effect or which may become effective any time during the term of this Agreement.

               4.3. Executive Incentive Compensation. In general, the Bank and
the Company believe that superior performance of the Executive should be
rewarded and encouraged by incentive compensation. At least once a year, the
Bank Board and the Company Board will determine whether the Executive has
rendered and continues to render superior performance, and whether in light of
the Bank's and the Company's management policies, growth, earnings and expected
performance, economic conditions, and any other factors deemed relevant, such
compensation should be granted and whether previously granted incentives should
be retracted. Incentive compensation which has been earned or paid or both, may
not be withdrawn and the Executive shall not be liable for repayment of any such
compensation. Bonus compensation shall be deemed earned at the date declared by
the Bank Board or the Company Board and not before. However, neither the Bank
nor the Company shall be required to provide any compensation to the Executive
other than the salary and benefits required by this Agreement. The Bank Board
and the Company Board have full and complete discretion in determining what
incentive compensation, if any, should be provided to the Executive, and the
Executive shall have no particular right to incentive compensation. The
Executive shall be entitled to participate in any executive incentive
compensation plan that benefits or includes all of the other executives of the
Bank, that is, persons holding offices higher than vice president. For purposes
of this Agreement, "incentive compensation" shall generally mean any
compensation not otherwise required to be paid to the Executive under the terms
of this Agreement.

               4.4. Stock Options. The Executive shall be entitled to
participate in any incentive stock option or similar plan adopted by either the
Bank or the Company and approved by the stockholders, if required by law,
regulation or exchange rule, on such terms as are established by the Bank Board
and/or the Company Board in their complete discretion, and to the extent
determined by the Bank Board and/or the Company Board in their complete
discretion.

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               4.5. Automobile. The Bank shall furnish to the Executive a
Lincoln Mark VIII or comparable luxury automobile for his use in the performance
of his duties hereunder. All costs of such automobile, including operation,
maintenance, and insurance, shall be borne by the Bank. The Bank shall replace
the automobile after three (3) years of use, and before four (4) years of use by
the Executive. At the date hereof, the parties acknowledge that the Executive
has been furnished a 1995 Lincoln Mark VIII automobile and that it must be
replaced by the Bank after December 1997. The Executive agrees to maintain and
provide the Bank with adequate records of expenses incurred in the operation and
maintenance of each automobile furnished to him under this Paragraph.

               4.6. Expense Reimbursement. The Bank agrees to reimburse the
Executive for all ordinary and necessary expenses incurred by the Executive on
behalf of the Bank, including entertainment, meals, and travel expenses. Any
costs incurred by the Executive for conventions, meetings, seminars, club dues
and special social entertainment expenses, shall be reimbursed provided the
Chief Executive Officer of the Bank approves such.

               4.7. Insurance. The Bank shall provide at least the following
insurance benefits to the Executive:

                    4.7.1. Group life insurance with a life insurance benefit
equal to the lower of two times the annual salary of the Executive or the
maximum amount permitted under the Bank's then applicable group life insurance
plan.

                    4.7.2. Basic medical-dental and major medical with long-term
disability income benefit insurance to the same extent provided to all employees
of the Bank. Provision of this insurance is subject to the Executive's passing
the necessary physical examinations for qualification and other qualifications,
if any.

               4.8. Vacation. The Executive shall be entitled to twenty-two (22)
days of vacation each full calendar year, with at least ten (10) days to be
taken in a consecutive period. Vacation days shall be accrued, subject to
carryover from year to year, and otherwise accounted for and administered in
compliance with the Bank's employee policies as in effect from time to time. The
parties agree that the current Bank vacation policy requires, among other
things, that (i) all vacation days be used during the calendar year earned, to
the extent practical, (ii) permission for any carryover must be requested in
writing to the Chief Executive Officer of the Bank by the first of December in
the year the vacation was earned, (iii) any carryover vacation must be taken in
the first quarter of the year following the year in which it was earned and if
not, further accruals will cease until the carryover vacation is used, and (iv)
the Executive's vacation schedule is subject to the prior approval of the Chief
Executive Officer of the Bank.

        5.     Termination.

               5.1. Employer Right to Terminate Employment. The Bank Board has
the right to terminate the employment of the Executive with the Bank, and the
Company Board has the right to terminate the employment of the Executive with
the Company, at will with or without 

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cause upon delivery of written notice to the Executive (except in the case of
death of the Executive, in which event termination shall automatically occur at
the date of death), and for any of the following grounds:

                    5.1.1. Willful breach or habitual neglect or inability
(except where such inability is due to Disability or death) to perform the
Executive's duties hereunder, including without limitation failure to cooperate
with the Bank Board or Company Board in the structuring, documentation or
negotiation of a transaction that might result in a Change of Control;

                    5.1.2. Malfeasance or misfeasance in the performance of the
Executive's duties hereunder;

                    5.1.3. Immoral or illegal conduct;

                    5.1.4. Disability or death;

                    5.1.5. Determination in the complete discretion of the Bank
Board or the Company Board, as appropriate, that the employment of the Executive
should be terminated, without reference to the grounds set forth in Paragraphs
5.1.1, 5.1.2, 5.1.3 or 5.1.4, prior to the date the Executive's employment would
otherwise terminate hereunder, and specification in the notice described above
of the termination date.

               5.2. Termination by the Executive. The Executive may terminate
his employment hereunder prior to the date it would otherwise terminate under
this Agreement by delivering written notice to the Bank three (3) months in
advance of the date such termination is to take effect.

        6. Post-Termination Payments and Benefits. The following are the
post-termination payments and benefits to which the Executive is entitled upon
termination of employment in all positions with the Bank, the Company and any
wholly-owned subsidiary of either of them. These payments and benefits may be
paid or provided by the Bank, the Company and/or any wholly-owned subsidiary of
the Bank or the Company, as the Bank, the Company and any such subsidiary shall
determine. Termination by any such entity under Paragraph 6.1 shall be deemed to
be termination by all such entities. In the event that the Executive is
compensated by a wholly-owned subsidiary of the Bank or the Company and is
determined to be the entity to pay or provide any of the payments of benefits
under this Paragraph 6, the parties agree that any such entity shall be deemed a
party to this Agreement for the purposes of this Paragraph 6.

               6.1 Termination Resulting from Breach. In the event the
employment of the Executive is terminated under Paragraphs 5.1.1, 5.1.2 or
5.1.3, the Bank shall provide the Executive only the following:

                    6.1.1 the salary due him at the end of the month in which
such termination occurs; plus

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                    6.1.2 any pay in lieu of vacation accrued or carried forward
to, but not taken as of the date of termination; and

                    6.1.3 the insurance benefits described in Paragraph 4.7.2
shall be extended at the Bank's sole cost for a period of thirty (30) days
following the date of termination.

               6.2. Termination Resulting from Disability. In the event the
employment of the Executive is terminated under Paragraph 5.1.4 due to
disability, the Bank shall provide the Executive only the following:

                    6.1.1 the salary due him at the end of the month in which
such termination occurs; plus

                    6.2.2 any pay in lieu of vacation accrued or carried forward
to, but not taken as of the date of termination; and

                    6.2.3 the insurance benefits described in Paragraph 4.7.2
shall be extended at the Bank's sole cost for a period of thirty (30) days
following the date of termination.

               6.3 Termination Resulting from Death. In the event the employment
of the Executive is terminated under Paragraph 5.1.4 due to death, the Bank
shall provide only the following:

                    6.3.1. to the Beneficiary, the salary due the Executive at
the end of the month in which such termination occurs and continued salary for a
period of three (3) months from the date of termination; plus

                    6.3.2 any pay in lieu of vacation accrued or carried forward
to, but not taken as of the date of termination; and

                    6.3.3 the persons other than the Executive covered by
medical-dental and major medical insurance coverage benefits described in
Paragraph 4.7.2 at the date of termination shall continue to receive such
coverage at the Bank's sole cost for a period of ninety (90) days following the
date of termination.

               6.4  Termination by Notice from the Bank. In the event the
employment of the Executive is terminated under Paragraph 5.1.5., the Bank shall
provide the Executive only the following:

                    6.4.1 continued salary and the benefits described in
Paragraphs 4.1, 4.2, 4.5, and 4.6 to the date of termination, but in any event
for a period of at least twelve (12) months from the date notice of the
termination is delivered to the Executive; and

                    6.4.2 the Bank shall pay the Executive in lieu of vacation
for all vacation accrued or carried forward under Paragraph 4.8, but not taken
as of the date of termination; and


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                    6.4.3 the Bank shall extend the insurance benefits described
in Paragraph 4.7.2, except for long-term disability, at the Bank's sole cost for
twelve (12) months following the date of termination.

               6.5  Death Following Termination. In the event that the Executive
dies while receiving any payments under this Paragraph 6, these shall be
continued for the benefit of the Beneficiary, as would otherwise be required
under this Paragraph 6, but benefits provided with reference to Paragraphs 4.5,
4.6 and 4.7.2 shall not be continued.

               6.6  Change of Control.

                    6.6.1 Payment Following Certain Terminations Related to
Change of Control. "Change of Control Severance Benefits," as defined below,
shall be paid to the Executive by the Bank in respect of any "Change of Control
Termination," as defined below, taking place after the earlier to occur of (i)
the Bank or the Company entering into a definitive agreement expected to result
in a Change of Control, provided that such Change of Control actually occurs, or
(ii) a Change of Control. Change of Control Severance Benefits shall not be
payable with respect to a Change of Control Termination occurring more than two
years after the date of a Change of Control. In the event that a definitive
agreement expected to result in a Change of Control is entered into, but the
transaction is not consummated, the Change of Control Severance Benefits would
cease to be available at such time with respect to that transaction. For
example, in the event a definitive agreement for acquisition of the Bank is
entered into on December 31, 1997, the availability of Change of Control
Severance Benefits would be triggered in the event of a termination other than
for Cause; however, if the definitive agreement terminates on June 1, 1998, the
Change of Control Severance Benefits would cease to be available.

                    6.6.2 Change of Control Severance Benefits. "Change of
Control Severance Benefits" means: (i) a lump sum payment of an amount equal to
the lesser of (w) one (1) year's salary at the then current salary rate,
including any increases, under Paragraph 4.1 of this Agreement, or (x) the
salary that would otherwise be payable at the then current salary rate, through
the Executive's attainment of age 65, including any increases, under Paragraph
4.1 of this Agreement; plus the pro rata portion of the bonus (calculated on a
daily basis) that the Executive would have earned with respect to the portion of
the calendar year elapsed through the date of termination under the most
recently proposed executive bonus plan, if any, proposed within the prior twelve
(12) months, due within one month after the later of the date of a Change of
Control Termination or the actual occurrence of a Change of Control; and (ii)
continuation of benefits set forth in Paragraphs 4.5 and 4.7 for a period of the
lesser of one (1) year or the time until the Executive attains the age of 65, or
substitute equivalent benefits in the event that the particular benefits (for
instance, insurance coverage) are not carried by the Bank under its programs
following the Change of Control Termination, beginning after the later of the
date of a Change of Control Termination or the actual occurrence of a Change of
Control.

                    6.6.3 Change of Control Termination. "Change of Control
Termination" means the termination of employment of the Executive (i) by the
Bank other than under 

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Paragraphs 5.1.1, 5.1.2 or 5.1.3; (ii) by the Executive after the effective date
of a reduction in base salary below that set forth in Paragraph 4.1, or after
the Bank requires the Executive to be based at a location more than thirty-five
(35) miles from the Bank headquarters or executive offices on the date hereof
(other than required travel on Bank business); or (iii) within two years after
the earlier to occur of (y) the Bank or the Company entering into a definitive
agreement expected to result in a Change of Control, provided that such Change
of Control actually occurs, or (z) a Change of Control.

                    6.6.4 Offset. The obligations of the Bank under this
Paragraph 6.6 are not subject to offset for satisfaction of any other
obligations of the Bank under this Agreement, except that to the extent and for
the period of time during which any of the benefits provided by Paragraphs 4.5
and 4.7 are provided to the Executive these shall not be duplicated under this
Paragraph 6.6.

               6.7. Nonassignability. Neither the 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 the Executive under this Paragraph 6, nor shall any of
said rights or benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance, owed by the Executive or any other
person or entity, or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. The terms of this Paragraph 6.7 shall not
affect the interpretation of any provision of this Agreement.

               6.8. Claims Procedure. The Bank Board shall make all
determinations as to rights to benefits under this Paragraph 6.

               6.9. Obligations of the Bank and the Company. The Company shall
not be liable under any circumstance for the obligations of the Bank set forth
in this Paragraph 6 or otherwise set forth in this Agreement.

               6.10. Regulatory Restrictions. The parties understand and agree
that at the time any payment would otherwise be made or benefit provided under
this Paragraph 6 or Paragraph 7.3, depending on the facts and circumstances
existing at such time, the satisfaction of such obligations by the Bank 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 the Bank. Among other
things, the regulations at 12 C.F.R. Part 30, Appendix A promulgated pursuant to
Section 39(a) of the Federal Deposit Insurance Act, and at 12 C.F.R. Part 359,
or similar regulations or regulatory action following similar principles may
apply at such time. The Bank agrees that to the extent reasonably feasible, it
will in good faith seek to determine the position of the appropriate regulatory
authority in advance of each payment or benefit otherwise due under this
Paragraph 6 or Paragraph 7.3, including seeking the approval or acquiescence of
the appropriate regulatory authorities, if required. The parties understand,
acknowledge and agree that, notwithstanding any other provision of this
Agreement, the Bank shall not be obligated to make any payment or provide any
benefit under this Paragraph 6 or Paragraph 7.3 where (i) an appropriate
regulatory authority does not approve or acquiesce as required or (ii) the Bank
or the Company has been 

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informed either orally or in writing by a representative of the appropriate
regulatory authority that it is the position of such regulatory authority that
making such payment or providing such benefit would constitute an unsafe and
unsound practice, violate a written agreement with the regulatory authority,
violate an applicable rule or regulation, or would cause the representative of
the regulatory authority to recommend enforcement action against the Bank or the
Company.

               6.11. Right of Offset. Any and all of the benefits that would
otherwise be payable under this Paragraph 6 set forth hereinabove are subject to
the Bank's offset for any liability of Executive to the Bank or the Company to
the extent the Bank Board determines that such liability exists. Any claim of
offset available to either the Bank or the Company may be utilized by the Bank
as if and to the same extent as if the Bank and the Company were the same
entity.

               6.12 Overlapping Benefits and Payments. In the event that the
Executive receives payments and/or benefits under one of Paragraphs 6.1 through
6.5 or under a Salary Continuation Agreement or other agreement to the extent it
specifically references this Paragraph 6.12, the Executive may not receive
payments and/or benefits under one of the other of such Paragraphs or such
agreement, and the first such applicable of those Paragraphs or such other
agreement shall apply.

        7.     Additional Covenants.

               7.1. Keyman Life Insurance. The Bank shall have the right to
obtain and hold a "keyman" life insurance policy an the life of the Executive
with the Bank as beneficiary of the policy. The Executive agrees to provide any
information required for the issuance of such policy and submit himself to any
physical examination required for such policy.

               7.2. Unsecured General Creditor. Neither the 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 the Bank or the Company under the
provisions of this Agreement. No assets of the Bank or the Company shall be held
under any trust for the benefit of the Executive or any other person or entity
or held in any way as security for the fulfilling of the obligations of the Bank
or the Company under this Agreement. All of the Bank's and the Company's
respective assets shall be and remain the general, unpledged, unrestricted
assets of the Bank and the Company respectively. The Bank's and the Company's
respective 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. The Executive and any person or entity claiming
through him shall be unsecured general creditors with respect to any rights or
benefits hereunder.

               7.3. Indemnification. To the extent permitted by law, the Bank
shall indemnify the Executive in the event he was or is a party or is threatened
to be made a party in any action brought by a third party against the Executive
(whether or not the Bank is joined as a party defendant) against expenses,
judgments, fines, settlement, and other amounts actually and reasonably incurred
in connection with said action if the Executive acted in good faith and in a
manner the Executive reasonably believed to be in the best interests of the
Bank, all providing the 

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alleged conduct of the Executive arose out of and was within the course and
scope of his employment as an officer or employee of the Bank. This Paragraph
7.3 shall not limit any other rights to indemnification that the Executive may
now or hereafter have by law or under the articles, bylaws or resolutions of
either of the Bank or the Company or otherwise.

               7.4. Dispute Resolution.

                    7.4.1 The parties agree that if a dispute arises concerning
any provision of this Agreement or the rights and duties of any person or entity
hereunder, the parties agree first to try in good faith to settle the dispute.
In the event that the parties cannot settle the dispute, any party shall have
the right to submit the dispute, other than any dispute related to Paragraph 6.6
as to which only the Executive shall have the right to submit the dispute, to
binding arbitration. Such arbitration shall be held before a single arbitrator
agreed upon by the parties to the dispute, and if they cannot agree, any party
may petition a California Superior Court in San Diego County for appointment of
an arbitrator. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, subject to
any contrary and/or additional terms of this Paragraph 7.4 and Paragraph 9.10.

                    7.4.2 The rules of evidence shall not apply to any
arbitration under this Paragraph 7.4. However, in all other respects, the
arbitrator shall follow applicable law.

                    7.4.3 Subject to Paragraph 9.10, each party shall bear
one-half of the costs and expenses of arbitration, and for purposes of this
provision, the Company and the Bank shall be considered to be one party.

                    7.4.4 The decision of the arbitrator or panel of arbitrators
shall be binding, enforceable, and non-appealable, and may be entered in any
court having jurisdiction thereof.

                    7.4.5 Payment of any and all amounts granted by an
arbitrator or panel or arbitrators hereunder shall be made within fifteen (15)
days following the date of the decision, and thereafter, shall bear interest at
the then current maximum legal rate per month until paid in full.

                    7.4.6 The arbitrator shall not have the power to award
damages to the Executive for emotional distress or pain and suffering or to
award consequential damages, but shall be empowered to award the Executive only
damages in the amount found by the arbitrator to be owed and unpaid under the
terms of the Agreement.

                    7.4.7 Any arbitration conducted under this Paragraph 7.4
shall be conducted in a confidential private proceeding and the fact of the
proceeding and the substance of the matters addressed in the proceeding shall be
kept confidential by the parties, provided that disclosure may be made by any
party to the arbitration upon notice to the other party or parties in the event
that such disclosure is required by applicable law or regulation or legal
process, or, in the case of the Bank or the Company in the event that the Bank
or the Company is advised by counsel that such disclosure is required or
advisable. Notwithstanding the foregoing, the parties 

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agree that any regulatory authority with jurisdiction over the Bank or the
Company may be informed at any time of all facts regarding the arbitration, and
that the Bank and the Company each have the right to file regulatory notices
and/or reports referencing the arbitration and its subject matter.

                    7.4.8 The parties to an arbitration shall cause the
arbitration to be heard and completed within six (6) months after the submission
of a dispute to arbitration. To assure such goal is attained, the parties shall
cause their counsel and affiliated or employed witnesses to be available at such
times as are necessary to complete the arbitration within this time and shall
require at the time of selection of arbitrators that potential arbitrators
confirm their availability and ability to complete the arbitration within this
time.

               7.5. Return of Documents. The Executive expressly agrees that all
manuals, document, files, reports, studies, customer lists, business plans, loan
and deposit program plans and outlines, customer solicitation and follow-up
techniques and plans, marketing plans, investment banker and financial advisor
relationships and arrangements, employee policies, incentive compensation
arrangements, instruments, software, and other materials used and/or developed
by the Executive during the Term, whether in paper, computer readable, computer
coded, magnetic, compact disk or other tangible or electronic form are solely
the property of the Bank or the Company, and the Executive has no right, title
or interest therein. The Executive hereby further acknowledges that all such
items constitute confidential trade secrets, the wrongful use or disclosure of
which to the public or competitors of the Bank or the Company would materially
adversely affect the business and prospects of the Bank or the Company. Upon
termination of employment of the Executive, the Executive or the Executive's
representatives shall promptly deliver possession of all said property, in
whatever form, to the Bank and the Company in good condition.

               7.6 Resignations. The Executive agrees that upon termination of
employment, for whatever reason, he will submit his resignations from all
offices and directorships with the Company, the Bank and all subsidiaries of
either of them.

        8.     Other Agreements. The parties agree that all rights and benefits
under the Change of Control Agreement, are hereby terminated and that no
obligations or rights are owed or held by any party to those agreements. The
parties further agree that to the extent of any inconsistency between this
Agreement and any employee manual or policy of the Company or the Bank, that the
terms of this Agreement shall supersede the terms of such employee manual or
policy.

        9.     General Provisions.

               9.1. Notices. Unless otherwise specifically permitted by this
Agreement, all notices or other communications required or permitted under this
Agreement shall be in writing, and shall be personally delivered or sent by
registered or certified mail, postage prepaid return receipt requested, or sent
by telecopy, provided that the telecopy cover sheet contain 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 

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with the provisions of this paragraph, 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 paragraph 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 telecopy, when sent. Notices shall be given at the following
addresses:

If to the Bank or to the Company:
        First Pacific National Bank
        or FP Bancorp, Inc.
        613 West Valley Parkway
        Escondido, California  92025
        Attention: Mark N. Baker

With a copy to:
        Higgs, Fletcher & Mack LLP
        401 West "A" Street, Suite 2000
        San Diego, California  92101
        Attention: Kurt L. Kicklighter
        Telecopier: (619) 696-1410

If to the Executive:
        Gary W. Deems




The address for delivery of notices may be changed by the relevant party by
giving notice of such change in accordance with this paragraph.

               9.2. Complete Agreement; Modifications. This Agreement and
written agreements, if any, entered into concurrently herewith (i) constitute
the parties' entire agreement, including all terms, conditions, definitions,
warranties, representations, and covenants, with respect to the subject matter
hereof, (ii) merge all prior discussions and negotiations between or among any
or all of them as to the subject matter hereof, and (iii) supersede and replace
all terms, conditions, definitions, warranties, representations, covenants,
agreements, promises and understandings, whether oral or written, with respect
to the subject matter hereof. This Agreement may not be amended, altered or
modified except by a writing signed by the party to be bound. With regard to
such amendments, alterations, or modifications, telecopied 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.

               9.3. 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.


                                       12

<PAGE>   13

               9.4. Assignment. No party may assign its rights under this
Agreement without the prior written consent of the other parties hereto.

               9.5. Successors and Assigns. Except as explicitly provided herein
to the contrary, this Agreement shall be binding upon and inure to the benefit
of the parties, their respective successors and permitted assigns.

               9.6. Severability. If any portion of this Agreement shall be held
by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable 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).

               9.7. Extension Not a Waiver. 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.

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

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

               9.10. Attorneys' Fees. Should any litigation (including any
proceedings in a bankruptcy court) or arbitration be commenced between the
parties hereto or their representatives concerning any provision of this
Agreement or the rights and duties of any person or entity hereunder, the party
or parties prevailing in such litigation or arbitration shall be entitled, in
addition to such other relief as may be granted, to the attorneys' fees and
court or arbitration costs incurred by reason of such litigation or arbitration,
including attorneys' and experts' fees incurred in preparation for or
investigation of any matter relating to such litigation or arbitration up to a
maximum of $25,000. Should an arbitrator determine that no party is clearly or
completely the "prevailing" party, the arbitrator shall be entitled to apportion
fees and costs or to deny any award of fees and costs.

               9.11. 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.

               9.12. References. A reference to a particular paragraph of this
Agreement shall be deemed to include references to all subordinate paragraphs,
if any.


                                       13

<PAGE>   14

               9.13. Counterparts. This Agreement may be signed in multiple
counterparts with the same force and effect as if all original signatures
appeared on one copy; and in the event this Agreement is signed in counterparts,
each counterpart shall be deemed an original and all of the counterparts shall
be deemed to be one agreement.

               9.14. Applicable Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of California.

               9.15 Replacement of Prior Agreement. The parties agree that this
Agreement replaces the Employment Agreement previously executed by them dated
"April __, 1997." That prior agreement is of no force and effect as of the date
of this Agreement.

        IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
                                       /s/ GARY W. DEEMS
                                       -----------------------------------------
                                       Gary W. Deems



                                       FIRST PACIFIC NATIONAL BANK, a national
                                       banking association


                                       By: /s/ MARK N. BAKER
                                           -------------------------------------
                                       Its: CHAIRMAN
                                           -------------------------------------

                                       FP BANCORP, INC., a Delaware corporation


                                       By: /s/ MARK N. BAKER
                                           -------------------------------------
                                       Its: CHAIRMAN
                                           -------------------------------------


                                       14