Exhibit 10.1


 


EMPLOYMENT
AGREEMENT


 


This Employment Agreement
(the “Agreement”) is made and entered into as of October 26, 2007 (the “Effective
Date”) by and between A. Vincent Siciliano (“Executive”) and 1st
Pacific Bancorp, a California corporation (“Bancorp”) and 1st
Pacific Bank of California, a California state-chartered bank (“Bank”)
(collectively, Bancorp and Bank are referred to as the “Employer”), with regard
to the following:


 


A.                                   Executive has served as the President and
Chief Executive Officer of Bank under an Employment Agreement between Executive
and Bank dated January 1, 2005 (the “Former Employment Agreement”).


 


B.                                     Executive and the Employer have agreed
that Executive shall continue to serve as the President and Chief Executive
Officer and a full-time employee of the Employer under the terms of this
Agreement, and as such is expected to make a major contribution to the
profitability, growth and financial strength of the Employer.


 


C.                                     The Employer considers the availability
of Executive’s services, managerial skills and business experience to be in the
best interests of the Employer and the shareholders of the Employer and desires
to assure the continued services of Executive on behalf of the Employer.


 


D.                                    Executive is willing to be employed by the
Employer upon the understanding that the Employer will provide him with income
security and Benefits if his employment with the Employer is terminated, upon
certain terms and conditions.


 


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


 


1.                                       Definitions.


 


“Automobile” shall have the meaning set forth
in Paragraph 3.5.


 


“Bancorp” means 1st Pacific Bancorp, a
California corporation, its successors and permitted assigns.


 


“Bancorp Board” means the Board of Directors of
Bancorp.


 


“Bank” means 1st Pacific Bank of California, a
California state-chartered bank, 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 Executive. Unless otherwise specified
in a written notice to Bank, the Beneficiary shall be the spouse of Executive,
if any, and if there is none, the estate of Executive (including any trust
created by the terms of Executive’s will) or, if Executive provides Bank with
written notice thereof prior to his death, any trust as to which Executive was
a settlor with a power of revocation.


 


1

















 


“Benefits” means the types and amounts of
benefits provided under Paragraph 3.7, provided that if at the date of
reference the terms of any Employer insurance plan prohibit the continuance or
recommencement of insurance benefits that Executive formerly held, Employer
shall be obligated to pay to Executive in cash on a monthly basis an amount
equal to Employer’s former premium payments (pro rated on a monthly basis) for
the benefit of Executive under such plan, except that if Executive is entitled
to COBRA health insurance benefits the amount shall be increased to the amount
payable by Executive for such benefits if higher than Employer’s former premium
payments.


 


“Change of Control” means the occurrence of any
of the following events:


 


(i)                                     any “person” (as used in
Section 13(d) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder) becomes the “beneficial owner” (as defined in Rule  13d-3) of securities representing a majority
of the voting power of the then outstanding securities of the Bank;


 


(ii)                                  a sale of assets involving all or
substantially all of the assets of Bancorp or Bank; or


 


(iii)                               a merger or consolidation of Bancorp or Bank in which
the holders of securities of Bancorp or Bank immediately prior to such event
hold in the aggregate less than a majority of the securities of Bancorp or Bank
or any other surviving or resulting entity immediately after such event.


 


“Change of Control Severance Benefits” means
(i) an amount equal to two and one-half times (2.5) the sum of (y)
Executive’s base annual salary at the rate then in effect in accordance with
Paragraph 3.1, plus (z) the amount paid to or earned by Executive
under the Plan for either of the immediately preceding two calendar years,
whichever is greater; and (ii) continuation of Benefits provided under
Paragraph 3.7 or substitute equivalent Benefits in the event that the
particular Benefits (for instance, insurance coverage) are not carried by the
Employer under its programs following the Change of Control Termination, for a
period of twelve (12) months.


 


“Change of Control Termination” means the
termination of employment of Executive within a period beginning six (6) months
prior to a Change of Control and ending twelve (12) months after a Change of
Control (i) by the Employer under Paragraph 4.1.5; or (ii) by
Executive under Paragraph 4.2 for Good Cause.


 


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


 


“Disability” shall be deemed to occur on the
date that benefits under the Employer’s group long term disability insurance
are first payable for the benefit of Executive.


 


“Employer” means Bancorp and Bank.


 


“Employer Board” means the Boards of Directors
of Bancorp and Bank.


 


“Executive” means A. Vincent Siciliano, or if
deceased, his Beneficiary.


 


2

















 


“Expiration Date” means December 31, 2011,
unless extended by mutual written agreement by the parties prior to June 30,
2011, to December 31, 2012.


 


“Good Cause” means:  (i) a reduction in Executive’s base
salary below the rate then in effect in accordance with Paragraph 3.1;
(ii) the Employer requiring that Executive be based at a location more
than fifty (50) miles from the Employer’s headquarters as of the Effective Date
(excluding travel for Employer business and other temporary relocations of no
more than thirty (30) days individually); (iii) a reduction in his title;
(iv) the continuation after a Change of Control, or imposition within six
(6) months after a Change of Control, of a material reduction in the
duties or authority of Executive so that he is no longer performing
substantially all of the duties of a president and chief executive officer of a
community bank; or (v) a breach by the Employer of this Agreement.


 


“Plan” means the 1st Pacific Bank of California
Senior Executive Bonus Plan (“SEBP”) for Senior Management, approved by the
applicable Bancorp Board or Bank Board no later than, and with an effective
date no later than, January 1, 2008.


 


“Separation and Consulting Agreement” means the
Separation and Consulting Agreement and General Release of Claims,
substantially in the form attached hereto as Exhibit A.


 


“Trade secrets and other proprietary and
confidential information” means and consists of, for example, and not
intending to be inclusive, information concerning any matters relating to the
business of the Employer, any of its customers, governmental relations,
customer contacts, underwriting methodology, loan program configuration and
qualification strategies, marketing strategies and proposals, or any other
information concerning the business of the Employer, its subsidiaries and
affiliates, and the Employer’s good will; provided that “Trade secrets and
other proprietary and confidential information” shall not be deemed to include
information that is or becomes, through no fault of Executive, in the public
domain.


 


2.                                       Rights and Duties of Executive.


 


2.1                                 Employment. The Employer hereby employs Executive as its
President and Chief Executive Officer, and Executive accepts the duties
described herein, and agrees to discharge the same faithfully and to the best
of his ability. Executive shall perform such other duties as shall be from time
to time prescribed by the Employer Board. Executive shall devote his full
business time and attention to the business and affairs of the Employer; provided, however, as long as Executive is employed as the
President and Chief Executive Officer of the Employer, he shall be entitled to
membership on the Employer’s Board.


 


2.2                                 Termination of Former Employment
Agreement. As of
the Effective Date, and except as otherwise provided under Paragraph 7.2, the
Former Employment Agreement shall terminate without further liability of the
Employer or Executive thereunder of any kind.


 


2.3                                 At-Will Employment. Executive’s employment with the
Employer is not for a fixed period of time and can be terminated at the will of
either Executive or the Employer at any time, with or without notice, and with
or without cause. There are no agreements between 


 


3

















 


Executive and the
Employer contrary to Executive’s at-will status. Neither an Employer Board
member nor a manager, supervisor, employee or agent of the Employer is
authorized to alter Executive’s at-will status, except for the Chairperson of
the Employer Board or a person designated by the Employer Board, and then only
in a writing signed both by the Chairperson of the Employer Board, or a person
designated by the Employer Board, and Executive following adoption of a
resolution by the Employer Board authorizing the specific change reflected in
such writing and authorizing the Chairperson of the Employer Board, or a person
designated by the Employer Board, to sign such writing. Executive should neither
assume nor imply any promise of employment for any specified period of time
except through such a signed writing. This Agreement shall terminate
immediately without further liability or obligation to Executive if
(i) the Bank is closed by any supervisory authority, or (ii) any
supervisory authority demands, by proposed consent agreement or by a Prompt
Corrective Action Directive, or pursuant to cease and desist powers, the
removal of Executive from his position as the President or Chief Executive
Officer of the Employer. Should Executive remain employed under this Agreement
through the Expiration Date, Executive’s employment with the Employer shall
automatically terminate on that date and this Agreement shall be of no force or
effect on or after that date, subject to Paragraphs 5.4 and 8.6.


 


2.4                                 Outside Activities. Executive shall not have other
employment, consulting, charitable or independent contractor work that
materially interferes with the fulfillment of Executive’s duties to the
Employer. Executive shall not undertake expanded commitments to business or
charitable activities or engage in new such activities before consulting with
the Chairperson of the Employer or the Chairperson of the Compensation
Committee of the Employer Board. Executive will not provide services to, hold
or make any investment in or loan to, or participate in the management or
business of, any bank, savings and loan, credit union, thrift and loan,
industrial loan or other entity engaged in the business of making loans or
accepting deposits or both without the consent of the Employer Board; provided
that Executive may own less than 5% of the voting stock of any company that
files reports under the Securities Exchange Act of 1934.


 


3.                                       Compensation and Benefits. In consideration for the services to be
rendered by Executive to the Employer, the Employer agrees to provide Executive
with the following compensation and benefits:


 


3.1                                 Salary. The Employer shall pay Executive a minimum annual
base salary of Two Hundred Fifty Five Thousand Dollars ($255,000) for the
period of October 1, 2007 to December 31, 2008. On January 1, 2009 and each
following year, the minimum base salary shall be increased by four percent (4%)
to the following: (i) $265,200 for 2009, (ii) $275,800 for 2010, and (iii)
$286,800 for 2011. Other salary increases, if any, shall only be as approved by
the Employer Board in its sole discretion.


 


3.2                                 Stock Option Grant and Restricted Stock
Grant. Concurrent
with the execution of this Agreement, the Employer has provided Executive with
one grant of restricted stock and one grant of stock options pursuant to the 1st
Pacific Bancorp 2007 Omnibus Stock Incentive Plan. The first grant is for
10,000 shares of restricted stock subject to the terms and conditions set forth
in the Restricted Stock Grant Agreement attached hereto as Exhibit C, approved
by the Employer Board simultaneously with its approval of this Agreement. The 


 


4

















 


second grant is for
40,000 stock options subject to the terms and conditions set forth in the
Performance Based Stock Option Agreement attached hereto as Exhibit D approved
by the Employer Board simultaneously with its approval of this Agreement. Both
the Restricted Stock Grant Agreement and the Performance Based Stock Option
Agreement are incorporated by reference to this Agreement. It is hereby
acknowledged that the restricted stock grant, Executive may make an election
under § 83(b) of the Internal Revenue Code of 1986. It is the intention of the
Employer and Executive for shares of Bancorp to be quoted on NASDAQ prior to
December 31, 2007. Therefore in light of this intention, the grant date for the
10,000 shares of restricted stock shall be the first day Bancorp’s shares are
quoted on NASDAQ.


 


3.3                                 Withholding and Deductions. The Employer shall withhold and/or
deduct from any and all salary or other payments to Executive, 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
Executive’s employment with the Employer. Notwithstanding the foregoing,
Employer shall permit Executive to satisfy any withholding tax obligations that
arise from the vesting of grants under Paragraph 3.2 by Executive electing to
have the Employer withhold from the shares to be issued pursuant to the
Restricted Stock Grant Agreement that number of shares having a fair market
value equal to the amount required to be withheld.


 


3.4                                 Executive Incentive Compensation. In general, the Employer believes that
superior performance of Executive should be rewarded and encouraged by
incentive compensation. The Employer Board shall adopt the Plan pursuant to
which Executive may be entitled to incentive compensation provided that the
performance goals of the Employer as set forth in the Plan are achieved and the
terms and conditions of the Plan are satisfied. The performance goals contained
in the Plan will be evaluated annually by the Employer Board in consultation
with Executive no later than the first month of the calendar year. In addition,
Executive shall be entitled to other incentive compensation and bonuses as the
Employer Board may determine in its sole discretion.


 


3.5                                 Automobile. The Employer shall provide Executive with the use of
an Automobile, to be owned or leased by the Employer, mutually agreeable to the
Employer and Executive. Notwithstanding the preceding sentence, the Automobile
shall: (i) be a new vehicle, (ii) a Lexus SUV or its equivalent in price, and
(iii) replaced every 36 months, with the first replacement beginning during the
fourth quarter of 2007. All loan and lease payments and operating costs of the
Automobile shall be borne by the Employer, including expenses relating to
gasoline and insurance coverage. Executive agrees to maintain and provide the
Employer with adequate records of expenses incurred in the operation and
maintenance of the Automobile and the extent of the business use of the
Automobile. Within ten (10) business days after the Employer’s obligation to
provide the Automobile ceases, except in the event the Automobile is required
to be transferred to Executive under one of Paragraphs 5.2.1(c), 5.3.1, 5.4.1
or 5.4.2, the Automobile shall be returned to the Employer, or, at Executive’s
option, the Employer shall transfer the Automobile to Executive in exchange for
Executive’s pay-off of any lease or loan (including early lease termination
charges, taxes and other costs related to such pay-off), or payment to the
Employer of the book value of the Employer’s investment in the Automobile at
the time of the transfer.


 


5

















 


3.6                                 Expense Reimbursement. The Employer agrees to reimburse
Executive for all ordinary and necessary expenses incurred by Executive on
behalf of the Employer in accordance with the Employer’s policies and
procedures as in effect from time to time, including entertainment, meal,
travel expenses and dues relating to his membership at a golf club.


 


3.7                                 Benefits. The Employer shall provide life insurance with a
life insurance benefit equal to at least one and one-half times the annual
salary of Executive at the rate then in effect under Paragraph 3.1, which
shall be provided through any group life insurance plan of the Employer at the
Employer’s option. The Employer shall provide to Executive the long-term
disability insurance provided by the Employer to employees at the Effective
Date under the Employer’s group plan or shall replace it with similar coverage
so long as Executive is employed by the Employer. Executive shall be entitled
to participate in such other insurance benefits as are generally provided to
the employees of the Employer from time to time.


 


3.8                                 Other Benefit Programs. Executive shall be entitled to
participate in any other benefit programs and/or to receive any other fringe
benefits as are made available to or provided for other members of executive
management of the Employer.


 


3.9                                 Vacation. In addition to vacation accrued as of the Effective
Date, Executive shall accrue five (5) weeks of vacation time and pay per annum,
which shall be scheduled in Executive’s discretion, subject to and taking into
account applicable banking laws and regulations. Unused vacation may be accrued
up to a maximum of six (6) weeks of unused vacation in addition to the vacation
to which Executive may be entitled in the current year, and thereafter
Executive shall cease to accrue unused vacation until used.


 


3.10                           Directors and Officers Insurance. During the term of this Agreement, the
Employer agrees to maintain, at the Employer’s sole expense, directors and
officers liability insurance to protect Executive from liability resulting from
the performance of his duties hereunder and as a member of the Employer Board.
The determination of the amount of coverage shall be the sole discretion of the
Employer Board.


 


3.11                           Review of Total Compensation. Between September 30, 2009 and December
31, 2009, or earlier if there is a merger involving the Employer where the
Employer’s asset size increases by an amount equal to at least $100 million,
Employer Board shall conduct a review of Executive’s “total compensation” (as
such term is used in the SEC’s proxy disclosure rules, S-K Item 402(c)(2)(x))
for fairness to compare the Employer’s financial performance to the financial
performance of the Employer’s peer group. Such review shall be completed
pursuant to a written report shared with Executive. Notwithstanding the
foregoing Employer’s Board shall not be required to make any adjustment to
Executive’s compensation as a result of such review.


 


4.                                       Termination.


 


4.1                                 Employer Right to Terminate Employment. Nothing in this Agreement shall
adversely affect the right of the Employer Board to terminate Executive. The
Employer Board has the right to terminate the employment of Executive with the
Employer at will, with or without cause, upon delivery of written notice to
Executive thirty (30) days in advance of such 


 


6

















 


termination (except in
the case of death of Executive or pursuant to paragraph 4.1.3, in which event
termination shall automatically occur at the date of death or upon the event
described in Paragraph 4.1.3), and including, but not limited to, for any of
the following grounds:


 


4.1.1                        Willful breach or habitual neglect or
inability (except where such inability is due to Disability or death) to
perform Executive’s duties hereunder, however, this Paragraph 4.1.1 shall not
be effective unless the Employer provides Executive written notice of such
breach, neglect or inability and an opportunity for Executive to cure within
thirty (30) days of such notice;


 


4.1.2                        Malfeasance or misfeasance in the
performance of Executive’s duties hereunder, imposition of a regulatory order
to remove Executive, failure to comply with a direction by the Employer Board,
material breach of Employer policy or procedure, or breach of this Agreement;
however, this Paragraph 4.1.2 shall not be effective related to Executive’s
removal for malfeasance or misfeasance, or other failure or breach of this
Agreement, unless the Employer provides Executive written notice of such
malfeasance or misfeasance,  or other
failure or breach and an opportunity for Executive to cure within thirty (30)
days of such notice.


 


4.1.3                        Illegal conduct, conviction of a felony,
conviction of a misdemeanor involving moral turpitude;


 


4.1.4                        Disability or death;


 


4.1.5                        Determination in the complete discretion
of the Employer Board that the employment of Executive should be terminated
prior to the Expiration Date, without reference to the grounds set forth in
Paragraphs 4.1.1, 4.1.2, 4.1.3 or 4.1.4, and specification of the
termination date in the notice described in Paragraph 4.1.


 


4.2                                 Termination by Executive. Executive may terminate his employment
with the Employer at will, for any reason, and without advance notice. However,
as a courtesy, Executive is requested to deliver written notice to the Employer
three (3) months in advance of the date such termination is to take
effect, except with respect to a termination for Good Cause. Executive may
terminate his employment with the Employer prior to the Expiration Date for
Good Cause upon thirty (30) days notice to the Employer and the Employer’s
failure to cure within that time. To be effective, such notice must be given by
Executive no later than thirty (30) days from Executive’s actual knowledge of
the occurrence of the event that constitutes Good Cause, provided that if Good
Cause results from a material reduction in the duties or authority of Executive
so that he is no longer performing substantially all of the duties of a
president and chief executive officer of a community bank and such reduction
occurs before a Change of Control occurs and continues after the Change of
Control occurs, Executive shall be required to give the thirty (30) day notice
described above within fifteen (15) days of the Change of Control.


 


4.3                                 Termination Upon Expiration. Should Executive remain employed under
this Agreement through the date five (5) months prior to the Expiration
Date, Executive shall have the right, while he is still employed, to provide
written notice to the Employer of his desire to remain employed after the
Expiration Date on or before the date four (4) months prior to the 


 


7

















 


Expiration Date. If
Executive and the Employer have not entered into an amendment of this Agreement
extending its term or another written agreement replacing this Agreement on or
prior to the date three (3) months prior to the Expiration Date, and
Executive’s employment is not otherwise terminated, Executive’s employment
shall automatically terminate on the Expiration Date. If such an extension or
replacement is not entered into on or prior to three (3) months prior to the
Expiration Date, Executive shall be deemed to have been given advance notice by
the Employer that his employment with the Employer will terminate as of the
Expiration Date. Nothing in this Paragraph shall prejudice the at-will
status of Executive or require the Employer to negotiate with Executive.


 


4.4                                 Post-Notice Activities of Executive. In the event termination is not
effective immediately upon the delivery of notice of termination by the
Employer or Executive, the Employer shall have the right to require that during
the period between the giving of notice and the effective date of termination,
Executive’s activities and responsibilities be curtailed as deemed appropriate
by the Employer. Such curtailment shall include, without limitation, removing
Executive from corporate offices, requiring Executive to be physically absent
from the Employer’s facilities, and eliminating Executive’s access to computer
systems, e-mail and telephone systems.


 


4.5                                 Automatic Resignations. Upon notice of termination of employment
Executive shall, automatically and without further action by any party, be
deemed to have resigned from all directorships with the Employer and any of its
subsidiaries and affiliates. Upon termination of employment, Executive shall,
automatically and without further action by any party, be deemed to have
resigned from all offices and other capacities with the Employer and any of its
subsidiaries and affiliates.


 


5.                                       Post-Termination Payments and Benefits. The following are the post-termination
payments and benefits to which Executive is entitled upon termination of
employment with the Employer.


 


5.1                                 Termination Resulting from Breach. In the event the employment of
Executive is terminated under Paragraphs 4.1.1, 4.1.2 or 4.1.3, the
Employer shall provide Executive only the base salary, Benefits, and a payout
of all accrued but unused vacation days under Paragraph 3.9, if any,
then-provided, on the terms then-provided, due him through the date of
termination and shall not be obligated to provide any other compensation or
Benefits.


 


5.2                                 Other Terminations.


 


5.2.1                        Payments. In the event the employment of Executive is
terminated under Paragraphs 4.1.4 or 4.1.5, or under Paragraph 4.2
for Good Cause, and subject to Executive first entering into the Separation and
Consulting Agreement (which shall not be required if such termination is caused
by Executive’s death) and such agreement being fully effective, the Employer
shall provide Executive only the following:


 


(a)                                  a payment equal to twenty four (24)
months of the base salary at the rate then in effect in accordance with
Paragraph 3.1, with such payment to be made in two equal installments, the
first of which shall be paid to Executive within five (5) days following
the 


 


8

















 


date the Separation and
Consulting Agreement is fully effective (which shall not be required if such
termination is caused by Executive’s death), and the second of which shall be
paid to Executive on the year anniversary of such date;


 


(b)                                 the incentive compensation under the Plan
Executive would have earned had he remained employed on the date such
compensation was paid under the Plan, correspondingly reduced in a pro rata
manner to reflect the time Executive was employed by the Employer, and subject
to the terms and conditions of the Plan that are not contrary to this Paragraph
5.2.1(b);


 


(c)                                  all right, title and interest in the
Automobile to Executive as soon as reasonably practicable following the date
the Separation and Consulting Agreement (which shall not be required if such
termination is caused by Executive’s death) is fully effective;


 


(d)                                 a payout of all accrued but unused
vacation as of the date of termination;


 


(e)                                  in lieu of Employer-paid medical
benefits, twelve (12) monthly payments equal to Employer’s monthly defined
contribution in force at the date of termination including Employer premium
support and any Employer paid Health Savings Account (HSA) contributions if
executive is enrolled in a HSA qualifying high deductible health plan on the
date of termination. At his own expense. Executive shall have the right to
elect to continue Employer group health coverage as permitted under COBRA; and


 


(f)                                    continuation of other non-medical
Benefits, if any, then provided under Paragraph 3.7, for a period of twelve
(12) months from the date of termination...


 


5.2.2                        Executive’s Right to Waive Payments. Executive shall have the right to waive
his rights to receive such payments and Benefits otherwise due under this
Paragraph 5.2 by giving advance written notice of such waiver to the
Employer. After receipt of such notice, the Employer shall have no further
obligation to provide any payments or Benefits under this Paragraph 5.2.


 


5.3                                 Change of Control.


 


5.3.1                        Payment Following Certain Terminations
Related to Change of Control. Subject to Executive first entering into the
Separation and Consulting Agreement and such agreement being fully effective,
in respect of any Change of Control Termination the Employer shall pay to
Executive the Change of Control Severance Benefits in a lump sum (except for
the Benefits under Paragraph 3.7, which shall be continued) within five
(5) days following the date the Separation and Consulting Agreement is
fully effective, and take such actions as may be necessary to transfer and
assign all right, title and interest in the Automobile to Executive as soon as
reasonably practicable following the date the Separation and Consulting
Agreement is fully effective.


 


5.3.2                        Executive’s Right to Waive Payments. Executive shall have the right to waive
his rights to receive payments and Benefits otherwise due under this
Paragraph 5.3 by giving advance written notice of such waiver to the
Employer. After receipt of such notice, 


 


9

















 


the Employer shall have
no further obligation to provide any payments or Benefits under this
Paragraph 5.3.


 


5.3.3                        Adjustments in Payments. The terms of this Paragraph 5.3.3
override and control any and all other terms of this Agreement to the extent
inconsistent with this Paragraph 5.3.3. This Paragraph 5.3.3 shall
apply to the extent that the aggregate present value of any or all payments and
Benefits in the nature of compensation to (or for the benefit of) Executive
provided under this Agreement or otherwise provided to Executive by or on
behalf of the Employer or any affiliate, parent or controlling entity of the
Employer, constitute a “parachute payment” under the provisions of
Section 280G of the Code, and the regulations thereunder (the “Total
Payments”). In the event that the Total Payments would exceed an amount equal
to 299% of Executive’s “base amount” as that term is defined in
Section 280G of the Code, as determined by the independent public
accountants for the Employer (the “Accountants”), prior to the first relevant
payment under this Agreement, the Employer shall inform Executive of this
determination and payment shall be delayed for a period of no longer than 30
days. During that 30 days, the Accountants, legal counsel to the Employer,
Executive and Executive’s tax advisors shall review the tax impact to Executive
of all of the payments and Benefits included in the calculation of the “parachute
payment” and Employer shall pay to Executive under this Agreement whichever of
the following would provide Executive with the higher after-tax compensation,
after taking into account all applicable state and federal taxes (computed at
the highest marginal rate) including Executive’s share of F.I.C.A. and Medicare
taxes and any taxes payable pursuant to Section 4999 of the Code: a
reduced payment under this Agreement (or a reduction in other payments or
Benefits included in the Total Payments to the extent agreed by Executive and
legally and contractually permissible) such that the Total Payments are no more
than 299% of the “base amount”; or the payment required under this Agreement.


 


5.3.4                        Section 409A. In the event that Section 409A applies
to any compensation with respect to separation from service, payment of that
compensation shall be delayed if Executive is a “specified employee,” as
defined in Section 409A(a)(2)(B)(i), and such delayed payment is required under
Section 409A. Such delay shall last six months from the date of separation of
service. On the day following the end of such six-month period, Employer shall
make a catch up payment to Executive equal to the total amount of such payment
that would have been made during the six-month period but for this provision,
with interest calculated at the prime rate as quoted by Bank at the date of
Executive’s separation from service.


 


5.4                                 Termination at Expiration Date. If
Executive’s employment is terminated as a result of expiration of this
Agreement at the Expiration Date, the Employer shall provide Executive only the
following:


 


5.4.1                        if within ten (10) business days
following the Expiration Date, Executive first enters into the Separation and
Consulting Agreement and that agreement is fully effective, the Employer shall
pay Executive his base monthly salary at the rate in effect at the Expiration
Date under Paragraph 3.1 for a period of twenty four (24) months from
the date the Separation and Consulting Agreement is fully effective, with the
first payment to be paid one month after such date, or at the option of the
Employer a lump sum payment of such amount, and take such actions as may be
necessary to transfer and assign all right, title and interest in the


 


10

















 


Automobile to Executive
as soon as reasonably practicable following the date the Separation and Consulting
Agreement is fully effective.


 


5.4.2                        if within ten (10) business days
following the Expiration Date, Executive does not enter into the Separation and
Consulting Agreement and that agreement is not fully effective, the Employer
has the option to pay Executive his base monthly salary at the rate in effect
at the date of termination under Paragraph 3.1 for a period of twenty four
(24) months from the date of termination, with the first payment to be
paid on the one month anniversary of such date, and take such actions as may be
necessary to transfer and assign all right, title and interest in the
Automobile to Executive as soon as reasonably practicable following the
Expiration Date, and if the Employer provides the first such payment and
transfers and assigns the Automobile, regardless of whether Executive has
executed and entered into the Separation and Consulting Agreement with the
Employer, Executive shall be deemed bound by such agreement in the form
attached hereto in exchange for the consideration provided in this Paragraph,
as if executed and delivered by him and fully effective, other than with
respect to releases of claims and consideration for those releases;


 


5.4.3                        a payout of all accrued but unused
vacation as of the date of termination;


 


5.4.4                        in lieu 
of Employer-paid medical benefits, twelve (12) monthly payments equal to
Employer’s monthly defined contribution in force at the date of termination
including Employer premium support and any Employer paid HSA contributions if
executive is enrolled in a HAS qualifying high deductible health plan on the
date of termination. At his own expense, Executive shall have the right to
elect to continue Employer group health coverage as permitted under COBRA;


 


5.4.5                        continuation of other non-medical Benefits,
if any, then provided under Paragraph 3.7, for a period of twelve (12) months
from the date of termination; and


 


5.4.6                        payment of certain incentive compensation
under the Plan, subject to the terms and conditions of the Plan that are not
contrary to this Paragraph 5.4.6.


 


5.5                                 Consideration for Payments and Remedies. Except as where Executive’s termination
is caused by his death, and without limiting any other remedies available to
the Employer, the payments to be made under Paragraphs 5.2, 5.3 or 5.4 (subject
to the exceptions stated therein) after the date of termination of Executive’s
employment shall be subject to Executive’s execution of the Separation and
Consulting Agreement, and Executive’s continued compliance with the Separation
and Consulting Agreement and the terms of this Agreement that are effective
after termination of Executive’s employment, through the making of the last
such payment.


 


5.6                                 Death Following Termination. In the event that Executive dies while
receiving any payments under this Paragraph 5, such payments shall be
continued for the benefit of the Beneficiary, as would otherwise be required
under this Paragraph 5.


 


5.7                                 Nonassignability. Neither Executive nor any other person
or entity shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify, 


 


11

















 


or otherwise encumber in
advance any of the rights or benefits of Executive under this Paragraph 5,
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 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 5.7
shall not affect the interpretation of any provision of this Agreement.


 


5.8                                 Claims Procedure. The Employer Board shall make all
determinations as to rights to benefits under this Paragraph 5.


 


5.9                                 Regulatory Restrictions. The parties understand and agree that
at the time any payment would otherwise be made or benefit provided under this
Paragraph 5, depending on the facts and circumstances existing at such
time, the satisfaction of such obligations by the Employer 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 Employer. 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 Employer 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 5, 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 Employer shall not be obligated to make any
payment or provide any benefit under this Paragraph 5 where (i) an
appropriate regulatory authority does not approve or acquiesce as required or
(ii) the Employer has been 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, law or regulation,
or would cause the representative of the regulatory authority to recommend
enforcement action against the Employer.


 


5.10                           Right of Offset. Any and all of the compensation and
Benefits that would otherwise be provided under this Paragraph 5 are
subject to the Employer’s offset for any legal liability of Executive to the
Employer to the extent the Employer Board determines that such legal liability
exists. In addition, without limiting the remedies of the Employer otherwise
available under this Agreement or otherwise, all compensation and Benefits that
would otherwise be payable under this Paragraph 5 shall cease as of the
date Executive first violates any of the provisions included in
Paragraphs 6.4, 6.5 or 6.6.


 


5.11                           Overlapping Benefits and Payments. In the event that Executive receives
payments and/or Benefits under one of Paragraphs 5.1 through 5.4,
inclusive, Executive may not receive payments and/or Benefits under one of the
other of such Paragraphs, and the first such applicable of those
Paragraphs shall apply.


 


12

















 


6.                                       Additional Covenants.


 


6.1                                 Insurance. The Employer shall have the right to obtain and hold
a “keyman” life insurance policy on the life of Executive and disability
insurance covering Executive, in each case, with the Employer as beneficiary of
such policy. Executive agrees to provide any information required for the issuance
of any such policy and submit himself to any physical examination required for
any such policy.


 


6.2                                 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 the Employer under the provisions of this
Agreement. No assets of the Employer 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 the Employer under this
Agreement. All of the Employer’s assets shall be and remain the general,
unpledged, unrestricted assets of the Employer. The Employer’s 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.


 


6.3                                 Dispute Resolution. Simultaneously with the execution of
this Agreement, the parties have entered into the Arbitration Agreement
attached as Exhibit B, which the parties agree shall govern the resolution
of any and all disputes referenced therein.


 


6.4                                 Return of Documents. Executive expressly agrees that upon
termination of employment he will return to the Employer all Employer 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, employee policies, incentive
compensation arrangements, instruments, software, and other materials used
and/or developed by Executive during his employment, whether in paper, computer
readable, computer coded, magnetic, compact disk or other tangible or
electronic form.


 


6.5                                 Confidentiality.


 


6.5.1                        Definition. During the term of employment with the Employer,
Executive will have access to and become acquainted with various trade secrets
and other proprietary and confidential information which are owned by the
Employer and which are used in the operation of the Employer’s business, the
wrongful use or disclosure of which to the public or competitors of the
Employer would materially adversely affect the business and prospects of the
Employer.


 


6.5.2                        No Disclosure. Executive shall not disclose or use in
any manner, directly or indirectly, any trade secrets and other proprietary and
confidential information either during the Term or at any time thereafter, except
as required in the course of employment with the Employer.


 


13

















 


6.6                                 Business Protection Covenants.


 


6.6.1                        Covenant Not to Compete. Executive agrees that he will not,
during the course of employment or during any period following the termination
of his employment during which he is receiving compensation or benefits under
Paragraphs 5.2, 5.3 or 5.4, 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 the Employer, its subsidiaries or affiliates (“Competitive
Business”) within the county of San Diego (the “Market Area”),
(ii) directly or indirectly own, manage, operate, control, be employed by,
or provide management or consulting services in any capacity to any firm,
corporation, or other entity (other than the Employer or its subsidiaries or
affiliates) engaged in any Competitive Business in the Market Area, or
(iii) directly or indirectly solicit or otherwise intentionally cause any
employee, officer, or member of the Employer Board or any of its subsidiaries
or affiliates to engage in any action prohibited under (i) or (ii) of
this Paragraph 6.6.1.


 


6.6.2                        Inducing Employees To Leave The Employer;
Employment of Employees. Any attempt on the part of Executive to induce others to leave the
Employer’s employ, or the employ of any of its subsidiaries or affiliates, or
any effort by Executive to interfere with the Employer’s relationship with its
other employees would be harmful and damaging to the Employer. Executive agrees
that during the term of employment and during any period following the
termination of his employment during which he is receiving compensation or
Benefits under Paragraphs 5.2, 5.3 or 5.4, Executive will not in any way,
directly or indirectly (i) induce or attempt to induce any employee of the
Employer or any of its subsidiaries of affiliates to quit employment with the
Employer or the relevant subsidiary or affiliate; (ii) otherwise
materially interferes with or disrupt the relationships between the Employer
and its subsidiaries and affiliates and their respective employees; or
(iii) solicit, entice, or hire away any employee of the Employer or any of
its subsidiaries or affiliates.


 


6.6.3                        Equitable Relief. Executive acknowledges and agrees that
irreparable injury will result to the Employer in the event of a breach of any
of the provisions of this Paragraph 6 (the “Designated Provisions”)
and that the Employer will have no adequate remedy at law with respect thereto.
Accordingly, in the event of a material breach of any Designated Provision, and
in addition to any other legal or equitable remedy the Employer or its
subsidiaries or affiliates may have, the Employer and any relevant subsidiary
or affiliate shall be entitled to the entry of a preliminary and permanent
injunction (including, without limitation, specific performance) to restrain
the violation or breach thereof by Executive or any affiliates, agents, or any
other persons acting for or with Executive in any capacity whatsoever, and
Executive submits to the jurisdiction of such court in any such action. Any
such remedy shall be granted pursuant to the dispute resolution procedures applicable
under Paragraph 6.3.


 


6.6.4                        Severability. It is the desire and intent of the
parties that the provisions of this Paragraph 6 shall be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Paragraph 6 shall be adjudicated or found to be invalid
or unenforceable, such provisions shall be deemed amended to delete therefrom
the portion thus adjudicated or found to be invalid or unenforceable, such
deletion to apply only with respect to 


 


14

















 


the operation of such
provision in the particular jurisdiction in which such adjudication or finding
is made. In addition, should any court or arbitrator determine that the
provisions of this Paragraph 6 shall be unenforceable with respect to
scope, duration, or geographic area, such court or arbitrator shall be
empowered to substitute, to the extent enforceable, provisions similar hereto
or other provisions so as to provide to the Employer, to the fullest extent
permitted by applicable law, the benefits intended by this Paragraph 6.


 


6.7                                 Indemnification. Due to Executive’s relationship to the
Employer as a member of the Employer Board, an officer or an employee, and to
the fullest extent permitted by law and in accordance with the procedures and
substantive requirements imposed by law and applicable regulation (including 12
C.F.R. Part 359, or similar regulations or regulatory action following similar
principles), the Employer shall indemnify Executive on an after-tax basis 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 Executive (whether or not the Employer
is joined as a party defendant) against expenses, judgments, fines, settlement,
and other amounts actually and reasonably incurred in connection with said
action, provided Executive acted in good faith and in a manner Executive
reasonably believed to be in the best interests of the Employer, and provided
the alleged conduct of Executive arose out of and was within the course and
scope of his employment as an officer or employee of the Employer or in his
position as a member of the Employer Board. This Paragraph 6.7 shall not
limit any other rights to indemnification that Executive may now or hereafter
have by law or under the articles, bylaws or resolutions of the Employer or
otherwise. Notwithstanding anything in this Agreement to the contrary, this
Paragraph 6.7 shall survive the termination of this Agreement.


 


7.                                       Other Agreements.


 


7.1                                 Employer Policies and Manuals. The parties further agree that to the
extent of any inconsistency between this Agreement and any employee manual or
policy of the Employer, that the terms of this Agreement shall supersede the
terms of such employee manual or policy.


 


7.2                                 Outstanding Stock Options. The provisions of this Agreement are
not and shall not be interpreted to change the terms of any outstanding stock
options previously granted by the Employer to Executive. Without limiting the
foregoing, the provisions regarding the grant of options to purchase up to
28,750 shares of the Employer stock set forth in Paragraph 4.4 of the
Employment Agreement by and between Executive and the Employer dated February
12, 2002 (the “2002 Agreement”) are not amended by this Agreement and shall be
deemed included in this Agreement, and the references in that paragraph to
other provisions of the 2002 Agreement are hereby incorporated by reference for
the limited purpose of continuing to effectuate the agreement of the parties
set forth in Paragraph 4.4 of the 2002 Agreement. The parties intend that this
Agreement be considered as establishing an “extended term” for purposes of that
provision..


 


8.                                       General Provisions.


 


8.1                                 Notices. Unless otherwise specifically permitted by this
Agreement, all notices or other communications required or permitted under this
Agreement shall be in writing, 


 


15

















 


and shall be personally
delivered or sent by registered or certified mail, postage prepaid return
receipt requested, or sent by facsimile, provided that the facsimile 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 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 facsimile, when sent. Notices
shall be given at the following addresses:


 


If to Executive:


 


A. Vincent Siciliano


9333 Genesee, Suite 300


San Diego, CA 92121


Fax: 
858-875-2020


 


With a copy to:


 


Anthony J. Eppert, Esq.


Shearman & Sterling LLP


1080 Marsh Road


Menlo Park, CA 94025


Fax: 
650-838-3699


 


If to the Employer:


 


James G. Knight, M.D.


Chairman


1st Pacific Bank of California


9333 Genesee, Suite 300


San Diego, CA 92121


Fax: 
858-875-2020


 


With a copy to:


 


Gary Steven Findley, Esq.


Gary Steven Findley and Associates


1470 N. Hundley


Anaheim, CA 
92806


Fax:  714-630-7910


 


16

















 


With a copy to:


 


Kurt L. Kicklighter, Esq.


Luce, Forward, Hamilton & Scripps LLP


601 West Broadway, Suite 2600


San Diego, CA 
92101


Fax: 
619-645-5339


 


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


 


8.2                                 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 respect
to the Employer, such amendment, alteration or modification may only be made on
behalf of the Employer by the Chairperson of the Personnel Committee of the
Employer Board, the Chairperson of the Employer Board or another person
specifically designated by the Employer Board. 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.


 


8.3                                 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.


 


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


 


8.5                                 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.


 


8.6                                 Termination and Survival. Upon the termination of the employment
of Executive, the Employer may terminate this Agreement upon notice to Executive,
which may be provided at the time notice of termination of employment is
provided by either party.


 


8.6.1                        The obligations of Executive and the
rights of the Employer under Paragraphs 4.5, 5.9, 5.10, 5.11 and 6.3
through and including 6.6 shall survive the termination of this Agreement,
provided that if Executive and the Employer have entered into the Separation 


 


17

















 


and Consulting Agreement,
the dispute resolution provisions of the Separation and Consulting Agreement
shall apply to and govern any and all disputes related to this Agreement.


 


8.6.2                        The obligations of the Employer to
Executive which by their terms are to continue after termination of employment
under Paragraphs 5 and 6.7 shall survive such termination of employment
and termination of the Agreement. The notice provisions of Paragraph 8.1
shall survive termination of employment and termination of the Agreement.


 


8.6.3                        Notwithstanding any provision of this
Agreement to the contrary, this Agreement shall terminate and, therefore, among
other things, none of the provisions providing for compensation or Benefits to
Executive shall be of any effect, in the event that the Employer is placed into
a conservatorship or receivership, it loses its Federal deposit insurance, or
its banking charter is revoked.


 


8.7                                 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).


 


8.8                                 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.


 


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


 


8.10                           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.


 


8.11                           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.


 


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


 


8.13                           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.


 


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


 


18

















 


8.15                           Representation by Counsel. This Agreement has been negotiated by
the parties with the assistance of their respective counsel and at their own
cost and expense. For this reason the principle that an agreement shall be
interpreted against the party that drafted it shall not apply to this
Agreement.


 


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


 


	
   

  	
   

  	
   

  	
      /s/ A. Vincent Siciliano

  
	
   

  	
   

  	
  A. Vincent Siciliano

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1st PACIFIC BANCORP, a

  
	
   

  	
   

  	
  California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/ James G. Knight

  
	
   

  	
   

  	
   

  	
      James G. Knight, M.D.,
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1st PACIFIC BANK OF CALIFORNIA, a

  
	
   

  	
   

  	
  California state-chartered bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/ James G. Knight

  
	
   

  	
   

  	
   

  	
      James G. Knight, M.D.,
  Chairman

  



 


19
















 


EXHIBIT A


 


SEPARATION AND CONSULTING AGREEMENT


AND


GENERAL RELEASE OF CLAIMS


 


This Separation and
Consulting Agreement and General Release of Claims (this “Agreement”) is
entered into by and between A. Vincent Siciliano (“Employee”), and 1st
Pacific Bancorp, a California corporation (“Bancorp”) and 1st
Pacific Bank of California, a California state bank (“Bank”) (collectively,
Bancorp and Bank are referred to as the “Employer”) .


 


RECITALS


 


A.                                   Employee commenced employment with the
Employer on or about                     .
Employee’s employment with the Employer terminated on                     ,
         .


 


B.                                     Employee and the Bank desire to settle
and compromise any and all possible claims against the Bank by Employee arising
out of their relationship to date, including Employee’s employment with the
Bank and the termination of Employee’s employment, and to provide for a general
release of any and all such claims.


 


AGREEMENT


 


1.                                       Separation Pay/Consideration. In consideration of the covenants and
releases set forth herein, the Bank agrees to pay Employee the amount payable
to him and the non-monetary consideration (if any) due him, pursuant to and in
accordance with, Paragraphs 5.2, 5.3 or 5.4, as the case may be, of the
Employment Agreement dated October     , 2007, by and
between the Employer and Employee (the “Employment Agreement”), less all
applicable state and federal deductions (in each case, the “Payment”), $2,000
of which shall be consideration for Employee’s release of ADEA claims as set
forth in Section 5, below; provided that no such Payment shall be made
until at least eight (8) days have past since Employee’s execution of this
Agreement. The check representing the Payment shall be mailed to Employee at
his/her home address at 411 Hidden Pines Lane, Del Mar, CA 92014.


 


2.                                       Consulting Services. The Employer will retain Employee as a
consultant and Employee will provide consulting services to the Employer, under
the direction of the Chief Executive Officer of the Bank or his delegee, for a
period of six months (the “Consulting Term”), in order to assist in the
maintenance of Bank’s customer, investor and employee relationships, including
without limitation services of the following types: (a) provision of
specific information regarding the service requirements of specific customers
and their business and financial practices; (b) identification of and
introduction to prospective customers of Bank; (c) advice regarding
specific Bank employee relations and issues; (d) assistance in development
of marketing plans; (e) assistance in fostering continued relationships
with customers of Bank to whom Employee provided services or as to which he was
their primary contact at Bank; (f) assisting in litigation or arbitration
matters involving Bancorp or Bank, including appearing for depositions;
(g) assisting in regulatory relations and (h) performance of special
projects as yet 


 

















 


undetermined. It is specifically understood that if
Executive is not subject to Section 409A the Consulting Term shall be extended
for an additional six months.


 


a.                                       During the Consulting Term, Employee
shall be available to provide consulting services to Employer upon reasonable
notice and at reasonable times on a quarterly basis not to exceed 40 hours per
month.


 


b.                                      Employee’s consulting obligation to
Employer shall not prevent him from engaging in other employment, consulting
and business relationships, provided these do not breach any of the other
provisions of this Agreement or any other agreement with Employer or prevent
him from providing consulting services hereunder.


 


3.                                       Covenants. During the Consulting Term and for the term of any
Section 409A waiting period, Employee re-affirms and agrees that he shall
comply with his obligations and duties under Section 6 of the Employment
Agreement.


 


4.                                       Release of All Claims Except Age
Discrimination in Employment Act of 1967 (“ADEA”) Claims.


 


a.                                       In consideration of the payment and other
benefits described in Section 1, which Employee would otherwise not be
entitled to except for signing this Agreement, Employee does hereby
unconditionally, irrevocably and absolutely release and discharge the Employer
and any related holding, parent, sister or subsidiary entities and all of their
respective boards of directors, officers, employees, agents, volunteers,
attorneys, insurers, divisions, successors and assigns from any and all loss,
liability, claims, demands, causes of action or suits of any type, whether in
law and/or in equity, related directly or indirectly, or in any way connected
with any transaction, affairs or occurrences between them to date, including,
but not limited to, Employee’s employment with the Employer and the termination
of said employment. This Agreement specifically applies, without limitation, to
any and all contract or tort claims, claims for wrongful termination, wage
claims, and claims arising under Title VII of the Civil Rights Act of 1991, the
Americans with Disabilities Act, the Equal Pay Act, the California Fair
Employment and Housing Act, the Fair Labor Standards Act, the Family and
Medical Leave Act, the California Family Rights Act, the California Labor Code,
and any and all federal or state statutes or provisions governing the
employment relationship or discrimination in employment except the federal
statute specifically excluded hereafter. This release specifically excludes any
and all loss, liability, claims, demands, causes of action or suits of any type
arising under the ADEA. Employee’s release of ADEA claims will be addressed
separately in Section 3 of this Agreement.


 


b.                                      Employee irrevocably and absolutely
agrees that he/she will not prosecute nor allow to be prosecuted on his/her
behalf, in any administrative agency, whether federal or state, or in any
court, whether federal or state, any claim or demand of any type related to the
matters released above, it being the intention of the parties that with the
execution by Employee of this release, the Employer and any related holding,
parent, sister or subsidiary corporations or entities and all of their
respective boards of directors, officers, employees, agents, volunteers,
attorneys, insurers, divisions, successors and assigns will be absolutely,
unconditionally and forever 


 

















 


discharged of and from all obligations to or on behalf
of Employee related in any way to the matters discharged herein.


 


5.                                       Release of All ADEA Claims.


 


a.                                       This section of the Agreement exclusively
addresses Employee’s release of claims arising under federal law involving
discrimination on the basis of age in employment (age 40 and above). This section
is provided separately, in compliance with federal law, including but not
limited to the Older Workers’ Benefit Protection Act of 1990, to ensure that
Employee clearly understands his/her rights so that any release of age
discrimination claims under federal law (the ADEA) is knowing and voluntary on
the part of Employee.


 


b.                                      Employee represents, acknowledges and
agrees that the Employer has advised him/her, in writing, to discuss this
Agreement with an attorney, and to the extent, if any, that Employee has
desired, Employee has done so; that the Employer has given Employee twenty-one
(21) days from receipt of this Agreement to review and consider this Agreement
before signing it, and Employee understands that he may use as much of this
twenty-one (21) day period as he wishes prior to signing; that no promise,
representation, warranty or agreements not contained herein have been made by
or with anyone to cause him to sign this Agreement; that he has read this
Agreement in its entirety, and fully understands and is aware of its meaning,
intent, content and legal effect; and that he is executing this release
voluntarily and free of any duress or coercion.


 


c.                                       The parties acknowledge that for a period
of seven (7) days following the execution of this Agreement, Employee may
revoke the Agreement, and the Agreement shall not become effective or
enforceable until the revocation period has expired. This Agreement shall
become effective eight (8) days after it has been signed by Employee and
the Employer, and in the event the parties do not sign on the same date, then
this Agreement shall become effective eight (8) days after the date it is
signed by Employee.


 


d.                                      In consideration of the separation
payment and other benefits made to Employee described in Section 1 of this
Agreement, which Employee would otherwise not be entitled to except for signing
this Agreement, Employee does hereby unconditionally, irrevocably and
absolutely release and discharge the Employer and any related holding, parent,
sister or subsidiary entities and all of their respective boards of directors,
officers, employees, agents, volunteers, attorneys, insurers, divisions,
successors and assigns from any and all loss, liability, claims, demands,
causes of action or suits of any type arising under the ADEA and related
directly or indirectly to Employee’s employment with the Employer and the
termination of said employment.


 


6.                                       Section 1542 Waiver. Employee does expressly waive all of
the benefits and rights granted to him/her pursuant to California Civil Code
section 1542, which reads:


 


A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OF OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM 


 

















 


MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.


 


Employee does certify
that he/she has read all of this Agreement, including the release provisions
contained herein and the quoted Civil Code section, above, and that he/she
fully understands all of the same. Employee hereby expressly agrees that this
Agreement shall extend and apply to all unknown, unsuspected and unanticipated
injuries and damages (including, without limitation, those arising under the
ADEA), as well as those injuries and damages that are now disclosed.


 


7.                                       Confidentiality. Employee agrees that all matters
relative to this Agreement, including the negotiations leading up to this
Agreement and its terms, shall remain confidential. Accordingly, Employee
hereby agrees that, with the exception of his spouse, regulatory agencies of
the Employer and tax and legal advisors, he will not discuss, disclose or
reveal to any other persons, entities or organizations, whether within or
outside of the Employer, the terms and conditions of this Agreement.


 


8.                                       Non-Disparagement. Employee agrees that he will not
disparage the Employer or any of its directors, employees, agents or volunteers
or otherwise interfere with the Employer’s business, vendor or other
relationships. Employee agrees not to make any derogatory or adverse statements,
written or verbal, to anyone regarding the Employer or any of its present or
former directors, employees, agents or volunteers. The Employer agrees that it
will neither disparage Employee nor make any derogatory or adverse statements,
written or verbal, to anyone regarding Employee. If an arbitrator determines
that the Employer has breached its obligations under this Section 8, to
the extent the Payment has not been paid in full, the Employer shall be
required to make the Payment in full to Employee within five (5) days
following such arbitrator’s determination. Nothing in this Section 8 shall
prohibit or relate to any statement by any person to any bank regulatory
agency.


 


9.                                       Entire Agreement. The parties further declare and
represent that no promise, inducement or agreement not herein expressed has
been made to them and that this Agreement contains the full and entire
agreement between and among the parties, and that the terms of this Agreement
are contractual and not a mere recital.


 


10.                                 Future Employment. Employee agrees that the Employer will
not be obligated to offer employment to him or to hire him for any reason,
regardless of the circumstances, at any time on or after the date of this
Agreement. Employee agrees that he will not apply for nor accept any such
employment.


 


11.                                 Trade Secret/Proprietary Information. Employee hereby reaffirms his
obligations under his Employment Agreement with the Employer to which this
Agreement relates, which shall remain in effect to the extent provided in the
Employment Agreement. Employee further agrees that he shall not disclose to any
person(s) or entity(ies) at any time or in any manner, directly or
indirectly, any information relating to the operations of the Employer which
has not already been disclosed to the general public. Employee agrees that this
provision includes, but is not limited to, the following information:
proprietary information and/or trade secrets; secret formulae; customer lists
and/or names; product and service prices; customer charges; contracts; 


 

















 


contract negotiations and employee relations matters.
Employee understands and agrees that this list is not all-inclusive.


 


12.                                 Return of Company Property. Employee agrees to promptly return all
property or information belonging to the Employer, including all keys,
computers, cellular telephones, and any document or property Employee generated
during his employment at the Employer, and agrees that no such property will be
in his possession or control at the time he receives the consideration specified
in Section 1. This includes all property or information that may have come
into his possession as a result of his employment with the Employer. Employee
further acknowledges that he has not retained any copies of any such
information.


 


13.                                 Applicable Law. The validity, interpretation, and
performance of this Agreement shall be construed and interpreted according to
the laws of the State of California.


 


14.                                 Dispute Resolution. Any dispute arising out of or related
to this Agreement shall be resolved through binding arbitration through
JAMS/Endispute in San Diego, California, under the then current applicable
rules of JAMS/Endispute. Each party shall be responsible for its or his/her own
costs and attorneys’ fees in connection with the arbitration.


 


15.                                 Complete Defense. This Agreement may be pleaded as a full
and complete defense against any action, suit or proceeding which may be
prosecuted, instituted or attempted by either party in breach thereof.


 


16.                                 Severability. If any provision of this Agreement, or
part thereof, is held invalid, void or voidable as against public policy or
otherwise, the invalidity shall not affect other provisions, or parts thereof,
which may be given effect without the invalid provision or part. To this
extent, the provisions, and parts thereof, of this Agreement are declared to be
severable.


 


17.                                 No Admission of Liability. It is understood that this Agreement is
not an admission of any liability by the Employer


 


18.                                 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.


 


19.                                 Counterparts. This Agreement may be signed in
counterparts. A facsimile signature shall have the same force and effect as an
original signature.


 


Employee and the Employer have read the foregoing
Agreement and know its contents and fully understand it. Employee and the
Employer acknowledge that they have fully discussed this Agreement with their
respective attorneys to the extent desired, or have had the opportunity to do
so, and fully understand the consequences of this Agreement. No party is being
influenced by any statement made by or on behalf of any of the other party to
this Agreement. Employee and the Employer have relied and are relying solely
upon his or its own judgment, belief and knowledge of the nature, extent,
effect and consequences relating to this Agreement and/or upon the advice of
their own legal counsel concerning the consequences of this Agreement.


 

















 


IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the dates shown below.


 


 


	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INSERT EMPLOYEE
  NAME]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1st
  Pacific Bank of California:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1st
  Pacific Bancorp:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
										



 

















 


EXHIBIT B


 


EXECUTIVE
ARBITRATION AGREEMENT


 


THIS EXECUTIVE
ARBITRATION AGREEMENT (“Arbitration Agreement”) is made by and between 1st
Pacific Bancorp, a California corporation (“Bancorp”), and 1st Pacific
Bank of California, a California state-chartered bank (“Bank”)
(collectively, Bancorp and Bank are referred to as the “Employer”), and
A. Vincent Siciliano (the “Executive”), effective as of the date that
the Employment Agreement between the Employer and Executive executed contemporaneously
herewith (the “Employment Agreement”), becomes effective.


 


The purpose of this
Arbitration Agreement is to establish final and binding arbitration for
disputes arising out of Executive’s employment, the Employment Agreement or the
termination of Executive’s employment. Executive and the Employer desire to
arbitrate their disputes on the terms and conditions set forth below, in order
to gain the benefits of a speedy, impartial dispute-resolution procedure.
Executive and the Employer agree to the following:


 


1.                                       Claims Covered By The Arbitration
Agreement.
Executive and the Employer mutually consent to the resolution by final and
binding arbitration of all claims or controversies (“claims”) that the
Employer may have against Executive or that Executive may have against the
Employer or against its officers, directors, partners, employees, agents,
pension or benefit plans, administrators, or fiduciaries, or any subsidiary or
affiliated company or corporation (collectively referred to as the “Employer”),
relating to, resulting from, or in any way arising out of Executive’s
employment relationship with the Employer, the Employment Agreement and/or the
termination of Executive’s employment relationship with the Employer, to the
extent permitted by law. The claims covered by this Arbitration Agreement
include, but are not limited to, claims for wages or other compensation due;
claims for breach of any contract or covenant (express or implied); tort
claims; 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 procedure different from this one); and claims for
violation of any public policy, federal, state or other governmental law,
statute, regulation or ordinance.


 


2.                                       Required Notice Of Claims And Statute Of
Limitations.
Executive may initiate arbitration by serving or mailing a written notice to
the Board of Directors of Bancorp at Bancorp’s administrative headquarters,
care of the Corporate Secretary. The Employer may initiate arbitration by
serving or mailing a written notice to Executive at his last known address. The
written notice must specify the claims asserted against the other party. Notice
of any claim sought to be arbitrated must be served within the limitations
period established by applicable federal or state law.


 


3.                                       Arbitration Procedures. After demand for arbitration has been
made by serving written notice under the terms of Section 3 of this
Arbitration Agreement, the party demanding arbitration shall file a demand for
arbitration with the American Arbitration Association (“AAA”). Except as
otherwise provided in this Arbitration Agreement, the arbitration will be 


 

















 


conducted according to
the then applicable arbitration rules of AAA for the arbitration of employment
disputes.


 


4.                                       Discovery. Discovery shall be allowed and conducted pursuant to
the then applicable arbitration rules of AAA for the arbitration of employment
disputes.


 


5.                                       Choice of Law. The arbitrator shall apply the
substantive law (and the law of remedies, if applicable) of the State of
California, or federal law, or both, as applicable to the
claim(s) asserted. The arbitrator shall have authority to resolve any
dispute relating to the interpretation, applicability, enforceability or formation
of this Arbitration Agreement, including but not limited to any claim that all
or any part of this Arbitration Agreement is void or voidable.


 


6.                                       Summary Judgment. Either party may file a motion for
summary judgment with the arbitrator. The arbitrator is entitled to resolve
some or all of the asserted claims through such a motion. The standards to be
applied by the arbitrator in ruling on a motion for summary judgment shall be
the applicable laws as specified in Section 5 of this Arbitration Agreement.


 


7.                                       Application For Emergency Injunctive
And/Or Other Equitable Relief. Claims by the Employer or Executive for emergency
injunctive and/or other equitable relief relating to unfair competition and/or
the use and/or unauthorized disclosure of trade secrets or confidential
information shall be subject to the then current version of the AAA’s Optional
Rules for Emergency Measures of Protection set forth within the AAA’s
Commercial Dispute Resolution Procedures. The AAA shall appoint a single
emergency arbitrator to handle the claim(s) for emergency relief. The
emergency arbitrator selected by the AAA shall be either a retired judge or an
individual experienced in handling matters involving claims for emergency
injunctive and/or other equitable relief relating to unfair competition and the
use or unauthorized disclosure of trade secrets and/or confidential
information.


 


8.                                       Arbitration Decision. The arbitrator’s decision will be final
and binding. The arbitrator shall issue a written arbitration decision
revealing the essential findings and conclusions upon which the decision and/or
award is based. A party’s right to appeal the decision is limited to grounds
provided under applicable federal or state law.


 


9.                                       Place Of Arbitration. The arbitration will be at a mutually
convenient location, which must be within 50 miles of Executive’s last
employment location with the Employer. If the parties cannot agree upon a
location, then the arbitration will be held at AAA’s office nearest to
Executive’s last employment location with the Employer.


 


10.                                 Severability. Should any portion of this Arbitration
Agreement be found to be unenforceable, such portion will be severed from this
Arbitration Agreement, and the remaining portions shall continue to be
enforceable.


 


11.                                 Section Headings. The section headings of this
Arbitration Agreement are intended solely for the convenience of reference and
shall not in any manner amplify, limit, modify or otherwise be used in
interpretation of any provisions hereof.


 

















 


12.                                 Construction. This Arbitration Agreement shall not be
interpreted for or against any party on the basis that such party or its legal
representative caused part or all of this Arbitration Agreement to be drafted.


 


13.                                 Consideration. The Employer’s offer to employ
Executive, and the promises by the Employer and Executive to arbitrate
differences, rather than litigate them before courts or other bodies, provide
consideration for each other.


 


14.                                 Fees and Costs. Each party may be represented by an
attorney or other representative selected by the party. Each party shall be
responsible for its own attorneys’ or representative’s fees. However, if any
party prevails on a statutory claim which affords the prevailing party’s
attorneys’ fees, or if there is a written agreement providing for fees, the
arbitrator may award reasonable fees to the prevailing party. In no event shall
Executive be required to pay administrative fees, including arbitrator’s fees,
beyond the fees which would have been incurred by Executive, if any, had the
dispute(s) arbitrated under this Arbitration Agreement been litigated in
state or federal court; the Employer shall be responsible for all
administrative fees exceeding such amount.


 


15.                                 Enforcement of Arbitration Agreement. Should either party file a court action
concerning or refuse to arbitrate a claim which is subject to arbitration under
this Arbitration Agreement, the other party shall be entitled to recover its
costs and reasonable attorneys’ fees incurred in enforcing this Arbitration
Agreement in court.


 


16.                                 Sole And Entire Agreement. This Arbitration Agreement expresses
the entire agreement of the parties and there are no other agreements, oral or
written, concerning arbitration, except as provided herein, and except for the
Employment Agreement which incorporates this Arbitration Agreement by
reference. By itself, this Arbitration Agreement is not, and shall not be
construed to create, any contract of employment, express or implied.


 


17.                                 Requirements for Modification or
Revocation. This
Arbitration Agreement shall survive the termination of Executive’s employment.
It can only be revoked or modified by a writing signed by the Chairperson of
the Personnel Committee of Bancorp’s Board of Directors, the Chairperson of
Bancorp’s Board of Directors or another person specifically designated by the
Board of Directors of Bancorp and Executive, that specifically states an intent
to revoke or modify this Arbitration Agreement.


 


18.                                 Waiver of Jury Trial/Exclusive Remedy. EXECUTIVE
AND THE EMPLOYER WAIVE ANY CONSTITUTIONAL OR STATUTORY RIGHT TO HAVE ANY
DISPUTE BETWEEN THEM COVERED BY THE TERMS OF THIS ARBITRATION AGREEMENT DECIDED
BY A COURT OF LAW AND/OR BY A JURY IN A COURT.


 


19.                                 Voluntary Agreement. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE
HAS CAREFULLY READ THIS ARBITRATION AGREEMENT, UNDERSTANDS ITS TERMS, AND
AGREES THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE EMPLOYER AND
EXECUTIVE RELATING TO THE SUBJECTS COVERED IN THE ARBITRATION AGREEMENT ARE
CONTAINED IN IT. EXECUTIVE 


 

















 


HAS VOLUNTARILY ENTERED
INTO THE ARBITRATION AGREEMENT WITHOUT RELIANCE ON ANY PROVISIONS OR
REPRESENTATIONS BY THE EMPLOYER, OTHER THAN THOSE CONTAINED IN THIS ARBITRATION
AGREEMENT OR EMPLOYMENT AGREEMENT INTO WHICH IT IS INCORPORATED BY REFERENCE.


 


EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS BEEN
GIVEN THE OPPORTUNITY TO DISCUSS THIS ARBITRATION AGREEMENT AND THE EMPLOYMENT
AGREEMENT WITH EXECUTIVE’S PRIVATE LEGAL COUNSEL AND EXECUTIVE HAS UTILIZED
THAT OPPORTUNITY TO THE EXTENT DESIRED.


 


 


	
  Dated:

  	
    October 26,
  2007

  	
   

  	
   

  	
   

  	
     /s/ A. Vincent Siciliano

  
	
   

  	
   

  	
  A. Vincent Siciliano, Executive

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1st PACIFIC BANK OF CALIFORNIA,

  
	
   

  	
   

  	
  a California state-chartered bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
    October 26,
  2007

  	
   

  	
   

  	
  By:

  	
     /s/ James G. Knight

  
	
   

  	
   

  	
   

  	
     James G. Knight, M.D., Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1st PACIFIC BANCORP,

  
	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
    October 26,
  2007

  	
   

  	
   

  	
  By:

  	
     /s/ James G. Knight

  
	
   

  	
   

  	
   

  	
     James G. Knight, M.D., Chairman

  



 

















 


EXHIBIT C


 


RESTRICTED
STOCK AWARD AGREEMENT


 

















 


1st
PACIFIC BANCORP 2007 OMNIBUS STOCK INCENTIVE PLAN


 


Restricted Stock Award
Agreement


 


THIS Restricted Stock Award Agreement (the “Award
Agreement”) is made this     day of                        ,
          , between 1st
Pacific Bancorp  (the “Company”)
and A. Vincent Siciliano (the “Participant”) pursuant and subject to the
provisions of the 1st Pacific Bancorp  2007 Omnibus Stock Incentive Plan (the “Plan”). Unless
otherwise defined herein, all terms used in this Award Agreement that are
defined in the Plan shall have the meaning as defined in the Plan.


 


W  I 
T  N  E  S  S 
E  T  H:


 


1.                                       Award
of Restricted Stock. Pursuant to the provisions of the Plan, the Company
will and hereby does award to the Participant on this date Ten Thousand
(10,000) shares of the Company’s Common Stock (“Restricted Stock”) subject to
the terms and conditions of this Award Agreement and the Plan.


 


2.                                       Vesting
Schedule. Restricted Stock Awards are subject to forfeiture and shall not
vest until such time as the Participant satisfies the following vesting
schedule:


 


	
  Vesting Date

  	
   

  	
  Vested Percentage

  	
   

  
	
  January 1, 2008

  	
   

  	
  25

  	
  %

  
	
  January 1, 2009

  	
   

  	
  25

  	
  %

  
	
  January 1, 2010

  	
   

  	
  25

  	
  %

  
	
  January 1, 2011

  	
   

  	
  25

  	
  %

  



 


Awards pursuant to this Award Agreement are void to
the extent not vested, if Participant’s employment with the Company terminates
for any reason prior to satisfying this vesting schedule.


 


3.                                       Value
and Taxation. The Company has determined that each share of Restricted
Stock has a value of                      
($             )
on the date of grant. Upon obtaining a vested percentage under Section 2
of this Award Agreement, Participant shall have taxable income on that date
equal to its then Fair Market Value (unless Participant timely filed an
election under Code § 83(b), see Exhibit A).
The Participant hereby agrees that the Company shall withhold applicable taxes on
such amount from other income or assets payable to the Participant as required
to satisfy all withholding requirements. To satisfy withholding tax
obligations, the Participant may, at his election, require the Company to
withhold from the Shares to be issued, upon vesting, that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld.
The Fair Market Value of the Shares to be withheld will be determined on the
date that the amount of tax to be withheld is determined.


 


4.                                       Period
of Restriction. No portion of the Restricted Stock granted pursuant to this
Award Agreement may be sold, pledged, assigned, transferred, encumbered or
disposed of in any manner by the Participant until such portion of the
Restricted Stock becomes vested in accordance with Section 2 of this Award
Agreement.


 


5.                                       Endorsement
of Restricted Stock Certificates. All Restricted Stock certificates issued
pursuant to this Award Agreement and the Plan shall be endorsed as follows:


 

















 


THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS AND PROVISIONS OF THE 1ST PACIFIC BANCORP 2007
OMNIBUS STOCK INCENTIVE PLAN AND ITS UNDERLYING RESTRICTED STOCK AWARD
AGREEMENT AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS
OF SUCH PLAN AND AGREEMENT.


 


THE SHARES REPRESENTED BY THIS CERTIFICATE  HAVE NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT, AND ARE TRANSFERABLE ONLY
IN THE EVENT TRANSFER CAN BE OFFERED AND EFFECTED IN COMPLIANCE WITH APPLICABLE
FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS, AND IN COMPLIANCE WITH THE
TERMS OF SUCH PLAN AND AGREEMENT.


 


Any certificate issued at any time in exchange or
substitution for any certificate bearing such legends also shall bear such
legends, unless the Period of Restrictions contained in Section 4 of this Award
Agreement, as determined solely by the Administrator, are no longer in effect.


 


6.                                       Enforcement
of Restrictions. In addition to causing the legend contained above in
Section 5 be placed on the Restricted Stock certificates, the Administrator
shall enforce the restrictions of this Award Agreement by requiring the
Participant to keep the Restricted Stock certificate(s), duly endorsed, in the
custody of the Company until such time as the Restricted Stock is no longer
subject to the Period of Restriction of Section 4 of this Award Agreement.


 


7.                                       Issuance
of Certificates. The Company shall issue Stock certificates to the
Participant as soon as practicable after the last day in which the Period of
Restrictions in Section 4 of this Award Agreement no longer apply.


 


8.                                       Securities
Registration. THE SECURITIES BEING
OFFERED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND ARE QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAW, OR SUCH OFFER, SALE OR TRANSFER IS EXEMPT THEREFROM.


 


9.                                       Representation
of Participant.


 


(a)                                  Participant
is aware that an investment in the Shares is subject to a high degree of risk,
including the possibility of the complete loss of all investment, the lack of a
public market, and limited transferability such that it will not be possible to
liquidate the investment readily, and Participant is capable of bearing these
risks and burdens and will reasonably benefit from this investment.


 

















 


(b)                                 Participant
has not been advised that any person will receive compensation as a Participant
representative or in any other capacity in connection with Participant’s
receipt of the Shares.


 


(c)                                  The
offer to grant the Shares was directly communicated to the Participant by the
Company through one or more representatives of the Company in such a manner
that the Participant was able to ask questions of and receive answers from such
representative concerning the terms and conditions of this investment and
activities of the Company; at no time was the Participant presented with or
solicited by or through any leaflet, public promotional meeting, radio or
television presentation, or any other form of general advertising or general
solicitation in connection with such communicated offer.


 


(d)                                 Except
as expressly disclosed in this Award Agreement, the Shares are being acquired
solely for Participant’s own account, for investment, and not with a view to
the resale, distribution, subdivision, or fractionalization thereof.


 


(e)                                  The
Shares have been offered pursuant to exemptions provided under federal and
state securities laws based upon the sophistication and financial strength of
prospective Participants. Under these exemptions, the rules which govern the
form and content of disclosures to persons less sophisticated than the
participant or having less financial strength than the Participant, do not
apply and the Participant bears the responsibility for analyzing the business
and tax consequences of an investment in the Shares and for analyzing the
Company. Participant acknowledges that he or she is entitled to such
information and documents from the Company as it may require in order to
exercise this responsibility, and that in order to exercise this responsibility
effectively, the Participant must be diligent in making such inquiries and in
exercising good business judgment as to the information obtained.


 


(f)                                    No
federal or state agency has made any finding or determination as to the
fairness for public investment nor any recommendation or endorsement of the
Shares. The Shares have not been registered with the Securities Exchange
Commission or with any state agency, nor does the Company plan to seek any such
registration in the future. Because of the unregistered status of the Shares,
there are substantial restrictions on the transferability of the Shares under
state and federal securities law.


 


10.                                 Rights
as Shareholder. Neither Participant nor his or her executor, administrator,
heirs or legatees, shall be, or have any rights or privileges of, a shareholder
of the Company in respect of the Restricted Stock issuable under this Award
Agreement, unless and until certificates representing such shares have been
issued in his or her name.


 


11.                                 Successors
and Assigns. Except as otherwise expressly provided herein, this Award
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective representatives, successors and assigns. A Participant may
not assign any of his or her rights or delegate any of his or her duties
hereunder, without the prior written consent of the Company, which may be
withheld at its sole and absolute discretion, and any such attempted assignment
or delegation without such consent shall be void.


 


12.                                 Escrow.
For purposes of facilitating the enforcement of the provisions of this Award
Agreement, the Participant agrees, immediately upon receipt of the
certificate(s) for the Restricted Stock, to deliver such certificate(s),
together with an Assignment Separate from


 

















 


Certificate in the form
attached hereto as Exhibit B, Executed in lank by the Participant with respect
to each such stock certificate, to the Secretary or Assistant Secretary of the
Company, or their designee, to hold in escrow for sol long as such Restricted
Stock has not vested  pursuant to Section
2 of this Award Agreement, with the authority to take all such actions and to
effectuate all such transfers and/or releases as may be necessary or
appropriate to accomplish the objectives of this Award Agreement in accordance
with the terms hereof. The Participant hereby acknowledges that the appointment
of the Secretary or Assistant Secretary of the Company (or their designee) as
the escrow holder hereunder with the stated authorities is a material
inducement to the Company to make this Award Agreement and that such
appointment is coupled with an interest and accordingly irrevocable. The
Participant agrees that such escrow holder shall not be liable to any party
hereto (or to any other party) for any actions or omissions unless such escrow
holder is grossly negligent relative thereto. The escrow holder may rely upon
any letter, notice or other document executed by any signature purported to be
genuine, and may resign at any time. Upon the vesting of Restricted Stock, the
escrow holder will, without further order or instruction, transmit to the Participant
the certificate evidencing the underlying shares of Common Stock, subject,
however, to satisfaction of any withholding obligations provided in Section 3
of this Award Agreement.


 


13.                                 Notices.
All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given on the second business day
following the date mailed by United States Mail, postage prepaid, to the
parties or their assignees at the following addresses, or at such other address
as shall be given in writing by either party to the other:


 


Company:                                          James
G. Knight, M.D., Chairman 


1st Pacific Bank of California


6907 Camino Degrazia


San Diego, California 92111


 


Participant:                                    A.
Vincent Siciliano


411 Hidden Pines Lane


Del Mar, California 92014


 


14.                                 Choice
of Law and Venue. The Plan and this Award Agreement and all questions
relating to its validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws of the State of
California. Any legal proceeding arising out of this Award Agreement shall be
brought only in a state or federal court of competent jurisdiction located in
San Diego, California.


 


15.                                 Amendment.
This Award Agreement may be amended or modified only by the written agreement
of all parties hereto.


 


16.                                 Entire
Agreement. The Plan and this Award Agreement constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all prior agreements, understanding, inducements
or conditions, express or implied, oral or written, relating to the subject
matter hereof, except as herein contained. The express terms of the Plan and
this Award Agreement control and supersede any course of performance and/or
usage of trade inconsistent with any of the terms hereof.


 

















 


17.                                 Attorney
Fees. If any legal action is necessary to enforce the terms of this Award
Agreement, the prevailing party shall be entitled to recover, in addition to
other amounts to which the prevailing party may be entitled, actual attorneys’
fees and costs.


 


18.                                 Severability.
The provisions of this Award Agreement are severable. In the event that one or
more of the provisions contained in the Plan or this Award Agreement or in any
other agreement referred to herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not effect the remaining provisions of the Plan or
Award Agreement. Further a court of competent jurisdiction shall have the
authority to rewrite, interpret or construe the terms of the Plan and Award
Agreement so as to render them enforceable to the maximum extent allowed by
law, consistent with the intent of the parties as evidenced hereby.


 


19.                                 Counterparts.
This Award Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument.


 


IN WITNESS WHEREOF, 1st Pacific Bancorp has
caused this Award Agreement to be signed by the Committee, and the Participant
has affixed his or her signature hereto.


 


1st
Pacific Bancorp:


 


	
   

  	
   

  
	
  James G. Knight, M.D., Chairman

  



 


ACCEPTANCE AND
ACKNOWLEDGMENT


 


I, a resident of the State of California, accept the
Restricted Stock Award described in this Award Agreement and in the Plan, and
acknowledge receipt of a copy of the Plan and this Award Agreement. I further
acknowledge that I have read the Plan and Award Agreement carefully, I fully
understand their contents, and I agree to be bound by the same.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A. Vincent Siciliano

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Participant Soc. Sec. #

  



 

















 


EXHIBIT A


 


ELECTION TO
INCLUDE IN INCOME IN YEAR OF TRANSFER OF PROPERTY PURSUANT TO
§ 83(b) OF THE INTERNAL REVENUE CODE


 


PURSUANT to § 83(b) of the Internal Revenue
Code, the undersigned hereby elects to include in income the value of the
property described below and supplies the following information in accordance
with the regulations promulgated under § 83(b):


 


	
  (1)

  	
  Name:

  	
   

  	
   

  
	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Soc. Sec. #:

  	
   

  	
   

  
						



 


(2)                                  Description
of the Property with respect to which the election is being made:


 


(3)                                  The
date on which the property was transferred is                   ,     ,
and the taxable year to which this election relates is the calendar year          .


 


(4)                                  The
nature of the restriction(s) to which the property is subject is:


 


The property is
non-transferable in the taxpayer’s hands, by virtue of language to that effect
stamped on the stock certificate.


 


(5)                                  Fair
Market Value:  The fair market value at
the time of transfer (determined without regard to any restrictions other than
restrictions which by their terms will never lapse) of the property with
respect to which this election is being made is $               per
share.


 


(6)                                  Amount
paid for property:  $        .


 


(7)                                  Furnishing
statement to employer: A copy of this statement has been furnished to the 1st Pacific
Bancorp.


 


Dated                          ,      .


 


 


	
   

  	
   

  
	
   

  	
  [Signature]

  



 

















 


 


EXHIBIT B


 


1ST
PACIFIC BANCORP 2007 OMNIBUS STOCK INCENTIVE PLAN


 


Stock
Assignment Separate from Certificate


 


[Please sign this
document but do not date it. The date and information of the transferee will be
completed if and when the shares are assigned.]


 


FOR VALUE
RECEIVED,                                    hereby
sells, assigns and transfers unto                                          ,
                                          (                    )
shares of the Common Stock of 1st Pacific Bancorp (the “Company”), standing
in his name on the books of the Company represented by Certificate No.         herewith,
and does hereby irrevocably constitute and appoint the Secretary of the Company
attorney to transfer the said stock in the books of the Company with full power
of substitution.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of Participant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name

  



 

















 


EXHIBIT D


 


NON-QUALIFIED
STOCK OPTION AGREEMENT


 

















 


1ST
PACIFIC BANCORP 2007 OMNIBUS STOCK INCENTIVE PLAN


 


Non-Qualified
Stock Option Agreement


 


THIS Non-Qualified Stock Option Agreement (“Award
Agreement”) is made this   26   day of   October,
2007, between 1st Pacific Bancorp (the “Company”) and A. Vincent
Siciliano (“Participant”) pursuant and subject to the provisions of the 1st
Pacific Bancorp 2007 Omnibus Stock Incentive Plan (the “Plan”). Unless
otherwise defined herein, all terms used in this Award Agreement that are
defined in the Plan shall have the meaning as defined in the Plan.


 


1.                                       Award of Non-Qualified Stock Option. Pursuant to the provisions of the Plan,
the Company will and hereby does award to the Participant a Non-Qualified Stock
Option to purchase up to Forty Thousand (40,000) shares of Common Stock. Subject
to the other terms of this Award Agreement and the provisions of the Plan that
accelerate or terminate vesting or result in early termination in certain
circumstances, this Non-Qualified Stock Option shall be exercisable only with
respect to vested shares, on or after the applicable Vesting Date, under the
following terms:


 


(a)  Vesting
Schedule:  Vesting is subject to a
performance-based graded vesting schedule that annually measures ROAE of 1st
Pacific Bank of California (the “Bank”) for the Performance Period against ROAE
of the Comparative Group for that same Performance Period. Each “Performance
Period” shall be the calendar year. The first Performance Period under this
Agreement shall run from January 1, 2008 to December 31, 2008. A maximum
of 10,000 shares can become vested for any single Performance Period. Vesting
shall be based on the Bank’s ROAE during each Performance Period relative to
the Comparative Group for that same Performance Period, as shown on the
following table:


 


 


	
  Bank ROAE Relative to Comparative Group  

  	
   

  	
   

  
	
  (Performance Standard)

  	
   

  	
  Vesting Amount

  
	
   

  	
   

  	
   

  
	
  2008 Performance Period: Bank ROAE must be equal to
  or greater than the ROAE at the top of the lower 33rd percentile
  of members of the Comparative Group

  	
   

  	
  10,000 Shares

  
	
   

  	
   

  	
   

  
	
  2009 Performance Period: Bank ROAE must be equal to
  or greater than the ROAE at the top of the 50th percentile of
  members of the Comparative Group

  	
   

  	
  10,000 Shares

  
	
   

  	
   

  	
   

  
	
  2010 Performance Period: Bank ROAE must be equal to
  or greater than the ROAE at the top of the 50th percentile of
  members of the Comparative Group

  	
   

  	
  10,000 Shares

  
	
   

  	
   

  	
   

  
	
  2011 Performance Period: Bank ROAE must be equal to
  or greater than the ROAE at the top of the 50th percentile of
  members of the Comparative Group

  	
   

  	
  10,000 Shares

  



 

















 


	
  Each Performance Period after 2011: Bank ROAE must
  be equal to or greater than the ROAE at the top of the 50th
  percentile of members of the Comparative Group

  	
   

  	
  100% of available Roll Forward Shares, if any,
  provided that a maximum of 10,000 Shares may vest for any given Performance
  Period)

  



 


Vesting can occur for a given Performance Period only
if the Participant is still employed by the Company on the last day of that
Performance Period.


 


The Company may, in its discretion, lower the
performance standards for any given Performance Period. The Company shall lower
the performance standards for any given Performance Period to match the actual
and ultimate performance goals applicable under the 1st  Pacific
Bank of California Incentive Compensation Plan for Senior Management.


 


(b)  Roll
Forward Shares:  Any unvested shares
that do not become vested for a Performance Period shall be rolled forward for
possible vesting in a subsequent Performance Period. For example, if the
performance standards are not met for the first two Performance Periods (2008
and 2009), then there will still be 40,000 unvested shares available for
vesting after 2009. Continuing this example, if the performance standards are
met for 2010, then 10,000 of the 40,000 unvested shares will vest for that 2010
Performance Period, and the remaining 30,000 shares will roll forward for
possible vesting in subsequent Performance Periods. All unvested shares will
continue to roll forward to subsequent Performance Periods during the term of
this Award Agreement. A maximum of 10,000 shares can become vested for any
single Performance Period.


 


(c)  Vesting
Date:  The Committee shall make the
determination of whether the above vesting Schedule is satisfied for a given
Performance Period using the information applicable to the Performance Period
for the Bank and the Comparative Group. Such determination shall occur as soon
as administratively possible following such Performance Period, and in no event
later than two weeks after such data is available by the FFIEC following the
Performance Period for which ROAE would be measured. Notwithstanding anything
in this Agreement to the contrary, if ROAE of one or more members of a
Comparative Group cannot be calculated as of the end of a Performance Period
because such information is not available or for any other reason, then ROAE of
such member of the Comparative Group shall be calculated and construed in a
manner that is most favorable to the Participant.


 


(d)  ROAE
Defined:  For purposes of this
Agreement, and as applied to the Bank and each member of the Comparative Group,
ROAE for the Performance shall be as set forth in the FFIEC data base.


 


(e)  Comparative
Group Defined:  Until Such time as
changed with the consent of the Participant, the Comparative Group for purposes
of this Agreement shall consist of the following:


 

















 


	
  1. 1st
  Centennial Bank

  	
   

  	
  Redlands, California

  
	
  2. American Business
  Bank

  	
   

  	
  Los Angeles, California

  
	
  3. American River Bank

  	
   

  	
  Sacramento, California

  
	
  4. Bank of Alameda

  	
   

  	
  Alameda, California

  
	
  5. Bridge Bank, N.A.

  	
   

  	
  San Jose, California

  
	
  6. Butte Community Bank

  	
   

  	
  Chico, California

  
	
  7. Desert Hills Bank

  	
   

  	
  Phoenix, Arizona

  
	
  8. First Commerce Bank

  	
   

  	
  Encino, California

  
	
  9. First National Bank
  of Northern California

  	
   

  	
  Daly City, California

  
	
  10. Heritage Oaks Bank

  	
   

  	
  Paso Robles, California

  
	
  11. National Bank of
  California

  	
   

  	
  Los Angeles, California

  
	
  12. Nevada Security
  Bank

  	
   

  	
  Reno, Nevada

  
	
  13. Pacific State Bank

  	
   

  	
  Stockton, California

  
	
  14. Premier Commercial
  Bank

  	
   

  	
  Anaheim, California

  
	
  15. Premier Valley Bank

  	
   

  	
  Fresno, California

  
	
  16. Regents Bank, N.A.

  	
   

  	
  La Jolla, California

  
	
  17. Valley Business
  Bank

  	
   

  	
  Visalia, California

  



 


Notwithstanding the foregoing, the Company reserves
the right to adjust the Plan’s Comparative Group from time to time. If the
Participant and the Company do not agree on the Company’s proposed adjustments,
then the Participant shall have the right to present his position to the full
board of directors. In that event, implementing the adjustments proposed by the
Company shall require a two-thirds majority of those directors present and
eligible to vote.


 


2.                                       Exercise Price. The exercise price of this Award is                           eleven and one half dollars   ($11.50) per Share, which is not less than
the Fair Market Value of Common Stock on the date of grant of this Award. The
exercise price per Share shall be paid upon exercise of all or any part of each
installment which has become exercisable by the Participant. Payment of the
exercise price shall be made by cash at the time of exercise.


 


3.                                       Minimum Exercise. The minimum number of Shares with
respect to which this Award may be exercised at any one time is the lesser of
1,000 or the number of Shares as to which this Award is exercisable at the date
of exercise.


 


4.                                       Taxation. The Participant acknowledges that federal and state
income and payroll tax may apply upon exercise of this Award. The Participant
hereby agrees that if withholding is required, the Company shall withhold
applicable taxes on such amount from other income or assets payable to the
Participant as required to satisfy all withholding requirements. If withholding
pursuant to the foregoing sentence is insufficient (in the sole judgment of the
Company) to satisfy the full withholding obligation, the Participant agrees
that he or she will pay over to the Company the amount of cash necessary to
satisfy such remaining withholding obligation on the date this Award is
exercised or at a time thereafter specified in writing by the Company.


 


5.                                       Assurances Upon Exercise. The Participant hereby makes the
following representations, and the Company may require any person to whom this
Award is transferred


 

















 


under Section 9 of
this Award Agreement to make the following representations, as a condition of
exercising this Award: (i) that he or she has the requisite knowledge and
experience in financial and business matters and/or he or she will employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising this Award; and
(ii) that he or she is acquiring Shares subject to this Award for such
person’s own account and not with any present intention of selling or otherwise
distributing the Shares. The foregoing requirements and assurances given
pursuant to such requirements, shall be inoperative if: (i) the issuance
of the Shares upon the exercise of this Award has been registered under a then
currently effective registration statement under the Securities Act of 1933, as
amended; or (ii) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
upon exercise of this Award as such counsel deems necessary or appropriate in
order to comply with Applicable Laws, including, but not limited to, legends
restricting the transfer of the stock.


 


6.                                       Term. The term of this Award Agreement commences on the
date hereof and, unless sooner terminated as set forth in the Plan, terminates
ten (10) years from the date it was granted. Notwithstanding the provisions of
Section 6.4(b) of the Plan, if the Participant’s employment with the Company is
terminated as described in Section 4.1.5 of the Participant’s Employment
Agreement dated October 26, 2007 (the “Employment Agreement”), then this Option
shall remain exercisable for the remainder of the otherwise applicable term of
the Award Agreement, notwithstanding such termination, provided that the
Participant complies with the Business Protection Covenants of Section 6.6 of
the Employment Agreement. If the Participant fails to comply with the Business
Protection Covenants of Section 6.6 of the Employment Agreement, then the
Options under this Award Agreement shall be automatically terminated.


 


7.                                       Participant Acknowledgments. By executing this Award Agreement, the
Participant acknowledges and agrees as follows:


 


(a)                                  The Participant and his or her
transferees have no rights as a shareholder with respect to any Shares covered
by this Award Agreement until the date of the issuance of a stock certificate
for such Shares.


 


(b)                                 The Company is not providing the
Participant with advice, warranties or representations regarding any of the
legal or tax effects to the Participant with respect to this Award Agreement or
the Fair Market Value of the Common Stock.


 


8.                                       Notice of Exercise. This Award may be exercised, to the
extent specified above, by delivering written notice of exercise together with
the exercise price to the Secretary of the Company, or to such other person as
the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to the Plan. The
notice must specify the number of Shares to be purchased upon exercise and a
date within fifteen (15) days after receipt of the notice by the Company on
which the purchase is to be completed.


 

















 


9.                                       Transferability. Other than pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act) and unless determined otherwise by the Administrator, this Award
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or distribution, and
may be exercised, during the lifetime of the Participant, only by the
Participant.


 


10.                                 Securities Registration. THE
SECURITIES BEING OFFERED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE INCLUDED
IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ARE QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFER, SALE OR TRANSFER IS EXEMPT
THEREFROM.


 


11.                                 Successors and Assigns. Except as otherwise expressly provided
herein, this Award Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective representatives, successors and
assigns. The Participant may not assign any of his or her rights or delegate
any of his or her duties hereunder, without the written consent of the Company,
which may be withheld in its sole and absolute discretion, and any such
attempted assignment or delegation without such consent shall be void.


 


12.                                 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given to the Company when received by the Secretary of the Company, and to
the Participant on the second business day following the date mailed by United
States Mail, postage prepaid, at the following addresses, or at such other
address as shall be given in writing by either party to the other:


 


Company:                                          James
G. Knight, M.D., Chairman 


1st Pacific Bank of California


6907 Camino Degrazia


San Diego, California 92111


 


Participant:                                    A.
Vincent Siciliano


411 Hidden Pines Lane


Del Mar, California 92014


 


13.                                 Choice of Law and Venue. This Award Agreement and all questions
relating to its validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to the conflict of laws provisions thereof. Any
legal proceeding arising out of this Award Agreement shall be brought only in a
state or federal court of competent jurisdiction located in San Diego,
California.


 


14.                                 Amendment. This Award Agreement may be amended or modified only
by the written agreement of all parties hereto.


 


15.                                 Entire Agreement. The Plan and this Award Agreement and
the other documents delivered hereunder constitute the full and entire
understanding and agreement between the 


 

















 


parties with regard to
the subject matter hereof, and supersede all prior agreements, understanding,
inducements or conditions, express or implied, oral or written, relating to the
subject matter hereof, except as herein contained. The express terms of the
Plan and this Award Agreement control and supersede any course of performance
and/or usage of trade inconsistent with any of the terms hereof.


 


16.                                 Attorney Fees. If any legal action is necessary to
enforce the terms of this Award Agreement, the prevailing party shall be
entitled to recover, in addition to other amounts to which the prevailing party
may be entitled, actual attorneys’ fees and costs.


 


17.                                 Severability. The provisions of this Award Agreement
are severable. In the event that one or more of the provisions contained in the
Plan or this Award Agreement or in any other agreement referred to herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity or unenforceability shall not effect the remaining
provisions of the Plan or the Award Agreement. Further a court of competent
jurisdiction shall have the authority to rewrite, interpret or construe the
terms of the Plan and Award Agreement so as to render them enforceable to the
maximum extent allowed by law, consistent with the intent of the parties as
evidenced hereby.


 


18.                                 Counterparts. This Award Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.


 


IN WITNESS
WHEREOF, 1st Pacific Bancorp has caused this Award Agreement to be
signed by the Administrator, and the Participant has affixed his or her
signature hereto.


 


1st
Pacific Bancorp:


 


	
            /s/
  James G. Knight

  	
   

  
	
  James G. Knight, M.D., Chairman

  



 


ACCEPTANCE AND
ACKNOWLEDGMENT


 


I, a resident of the State
of                           ,
accept the Non-Qualified Stock Option Award described in this Award Agreement
and in the Plan, and acknowledge receipt of a copy of the Plan and this Award
Agreement. I further acknowledge that I have read the Plan and Award Agreement
carefully, I fully understand their contents, and I agree to be bound by the
same.


 


 


	
  Dated:

  	
   

  	
  October 26, 2007

  	
   

  	
   

  	
             /s/
  A. Vincent Siciliano

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  A. Vincent Siciliano