# [TO BE PLACED ON FIRST BANK OF BEVERLY HILLS LETTERHEAD]

Mr. Joseph W. Kiley, III
President
First Bank of Beverly Hills, F.S.B.
23901 Calabasas Road, Suite 1050
Calabasas, California  91302-1542

Re:  Modification of Employment, Confidentiality And Contingent Severance Agreement

Dear Joe:

This
Letter Agreement shall constitute a modification of the Employment,
Confidentiality and Contingent Severance Agreement effective March 12, 2001, by
and among First Bank of Beverly Hills, Wilshire Financial Services Group, and
Joseph W. Kiley, III (the Agreement). The Agreement is modified as
follows:

| | 1. | Effective August 30, 2001, your position (as set forth in Section 1.1) has been changed to
                  President.
| | -- | -------------------------------------------------------------------------------------------------------------------------

| | 2. | Effective August 30, 2001, your base salary (as set forth in Section 3.1) has been increased to
                  $200,000.00.
| | -- | ------------------------------------------------------------------------------------------------------------------------------

| | 3. | Effective October 2, 2001, your stock options (as set forth in Section 3.2) has
been increased by an additional 50,000 shares (to a total of 200,000 shares).
The exercise price for the additional 50,000 options shall be $1.90 per share
(which was the closing price on October 2, 2001).
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All other terms and conditions shall remain the same.

`Sincerely,


                                                     Rob Deutschman
                                                     Chairman of the Board of Directors
                                                     First Bank of Beverly Hills

Agreed and Accepted

Dated    ____________, 2001                 Wilshire Financial Services Group, Inc.


                                            By: ___________________________________
                                                      Stephen Glennon
                                                      President/Chief Executive Officer

Dated    ____________, 2001                 ______________________________________
                                                      Joseph W. Kiley, III`

# EMPLOYMENT, CONFIDENTIALITY AND
                           CONTINGENT SEVERANCE AGREEMENT

This Employment, Confidentiality and Contingent Severance Agreement (the Agreement) is made between
First Bank of Beverly Hills, F.S.B. (the Bank), a federally chartered savings bank, and Joseph W. Kiley, III
(the Employee).  The Bank is an affiliate of Wilshire Financial Services Group, Inc., a Delaware corporation
(the Company).

Accordingly,
on the basis of the representations, warranties, and covenants contained in this
Agreement, the parties agree as follows effective as of March 12, 2001 (the
Effective Date):

## 1.        ARTICLE 1 - EMPLOYMENT AND TERM

1.1     Employment.  The Bank shall employ the Employee as its Executive Vice President and
Chief Financial Officer (the Position), and the Employee accepts such employment, on the terms and
conditions set forth in this Agreement.

1.2     Pre-Employment Conditions.  Employment with the Bank is conditional upon: (a) the
Employees consent to and successful passing of a pre-employment drug test; (b) background, credit and
reference checks; and (c) all necessary regulatory approval.

1.3     Required Introductory Period.  Employee shall serve a 90-day introductory period
immediately following the Effective Date.

1.4     Term.  The term of employment under this Agreement shall commence on the Effective
Date, and shall continue for a period of 24 months thereafter.   Upon the expiration of such 24 month period,
the term of Employees employment under this Agreement shall automatically renew for successive periods of 12
months each, unless, at least 90 days before the expiration of such 24 month period or any succeeding 12 month
period, either the members of the board of directors of the Bank (the Board of Directors or the Board)
gives written notice of non-renewal to Employee, or Employee gives written notice of non-renewal to the Bank.
If such notice of non-renewal is timely given, the term of Employees employment under this Agreement shall
expire at the end of such 24  month period or at the end of the current 12 month period, as the case may be.
The term of Employees employment under the Agreement is referred to herein as the Term.

2.        ARTICLE 2 - DUTIES OF THE EMPLOYEE

2.1        Duties.  The Employee agrees to undertake and perform all duties as required of the
Position.  The Employee shall render such services and shall perform such duties and acts in connection with
any aspect of the Banks business as may be required by the Management or the Board of Directors of the Bank.
The Employee shall perform the services contemplated herein faithfully, diligently, to the best of Employees
ability, and in the best interests of the Bank.  The Employee shall devote the Employees full and exclusive
business time and efforts to the rendition of such services.  The Employee shall at all times perform such
services in compliance with (and, to the extent of Employees authority, shall ensure that the Bank is in
compliance with) any and all laws, rules, regulations, and policies applicable to the Bank, including, but not
limited to, the Federal Deposit Insurance Act and the regulations thereunder.  The Employee shall, at all
times, adhere to and obey any and all written internal rules and regulations governing the conduct of the
Banks employees, as established and modified from time to time.

2.2        Exclusive Services.  During his employment by the Bank, the Employee shall not,
without the express prior written consent of the Board of Directors of the Bank, engage directly or indirectly
in any outside employment or consulting of any kind, whether or not the Employee receives remuneration for
such services.  Further, the Employee shall not engage in any activity that would impair the Employees
ability to act and exercise judgment in the best interest of the Bank.

2.3        Subpoenas; Cooperation in Defense of the Bank.  If the Employee, during employment
or thereafter, is served with any subpoena or other compulsory judicial or administrative process calling for
production of confidential information or if the Employee is otherwise required by law or regulations to
disclose confidential information, the Employee will immediately, before making any such production or
disclosure, notify the Bank and provide it with such information as may be necessary for the Bank to take such
action as the Bank deems necessary to protect its interests.  The Employee agrees to cooperate reasonably with
the Bank, whether during employment or thereafter, in the prosecution or defense of all threatened claims or
actual litigation in which the Bank is or may become a party, whether now pending or hereafter brought, in
which the Employee has knowledge of relevant facts or issues.  The Employee shall be reimbursed for reasonable
expenses for travel time due to cooperating with the prosecution or defense of any litigation for the Bank.

2.4        Other Obligations.  The Employee acknowledges that the Bank from time to time may
have agreements with other persons or with various governmental agencies that impose obligations or
restrictions on the Bank regarding inventions or creative works made during the course of the Banks work
under such agreements, or that relate to the confidential nature of such work.  The Employee agrees to be
bound by all such obligations and restrictions of which the Employee is informed by the Bank and to take all
action necessary to discharge the obligations of the Bank thereunder.

3.        ARTICLE 3 - COMPENSATION

As the total consideration for the services that the Employee renders under this Agreement, the
Employee shall be entitled to the following:

3.1        Base Salary.The Bank shall pay to the Employee a base salary of
$180,000.00 per year, less
income tax and other applicable withholdings. The base salary shall be payable
in accordance with the Banks regular payroll practices.

3.2        Stock Options.  The Employee shall be entitled to options of 150,000 shares of
Common Stock of the Company (the Options), in accord with the terms and conditions set forth in the 1999
Equity Participation Plan of Wilshire Financial Services Group, Inc. (The Option Documents).  The strike
price will be the dollar weighted average for the stock on March 12, 2001.  The Options will vest in
accordance with the following schedule:

(a)          (a)     One-third on March 12, 2002.  These options are not exercisable prior to
September 12, 2002,
however, if before September 12, 2002, the Employee voluntarily terminates
his/her employment with the Bank or the Bank terminates the Employees
employment for Cause (as that term is defined in Section 4.3, below), these
options shall terminate immediately and shall not become exercisable at any
time;

(b)     One-third on March 12, 2003; and

(c)     One-third on March 12, 2004;

except that,
notwithstanding any other provision of this Agreement, if at any time before
March 12, 2004, there is a Change of Control, as defined hereinafter, of the
Company, then all of the Employees then-unvested Options shall accelerate and
vest immediately upon the closing of the event or events constituting a Change
of Control.

3.3        Bank Employee Benefits.  The Employee shall be entitled to participate in the Banks
employee benefit plans, medical, dental, vision, long-term disability, and short-term disability benefits or
insurance programs, if any, on the same basis as any of those benefits or insurance programs is available
generally to other officers of similar position under the Banks personnel policies.  The Bank and the Company
will not, without Employees written consent, make any changes in such plans, benefits or arrangements which
would materially adversely affect Employees rights or benefits thereunder, except to the extent such changes
are made applicable to all executive-level Bank and Company employees on a non-discriminatory basis.

3.4        Indemnity and Insurance.  The Employee shall receive all benefits and privileges to
which the Employee is entitled by law or pursuant to the Bylaws of the Bank or the Company.

3.5        Reimbursement for Expenses.  The Bank shall reimburse the Employee for any and all
reasonable and documented actual business expenses that the Employee incurs from time to time in the
performance of his duties under this Agreement, provided that reimbursement shall be made in accordance with
the policies and practices of the Bank; and

3.6        Vacation.  The Employee shall be entitled to personal time, to be used for sick and
vacation time, earned based on hours worked, to a maximum of 13.33 hours, per month.  Thus, a total of up to
160 hours or four weeks of personal time may be earned during a full year of employment.  Generally, employees
are not permitted to use personal time in excess of time earned.  The Employee Guidelines of the Bank provide
additional information.  Vacation time not used in any calendar year may be carried forward, provided,
however, that, once the Employee has accrued a number of vacation days equal to two hundred hours, the
Employee shall not be eligible to accrue additional days of vacation until he/she has taken one or more days
of vacation.  The Employee may, at his/her option, sell back to the Bank up to forty hours of
accrued-but-unused vacation.

3.7        Car Allowance.  The employee shall be entitled to a car allowance of $750.00 per
month.

4.        ARTICLE 4 - TERMINATION

4.1        Termination With or Without Cause During Introductory Period.  If the Bank
terminates the Employees employment during the Introductory Period (described in Section 1.3), the Bank shall
pay to the Employee only any base salary due under Article 3 of this Agreement, prorated through the date of
termination.  The Employee shall have no right to receive any further compensation or benefits otherwise
payable under any other provision of this Agreement.

4.2        Termination for Cause (12 C.F.R. ' 563.39).
Termination for Cause shall mean termination because of Employees personal
dishonesty, incompetence,
willful misconduct, any breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
For purposes of this Agreement, no act, or the failure to act, on Employees
part shall be willful unless done, or omitted to be done, not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Bank. Notwithstanding the foregoing, Employee shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to him a notice of termination which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the members of the Board at a meeting of the Board called and held for that
purpose (which may be telephonic), finding that in the good faith opinion of the
Board, Employee was guilty of conduct justifying termination for Cause and
specifying the particulars thereof in detail. Employee shall not have the right
to receive compensation or other benefits for any period after termination for
Cause which have not vested or been earned as of the date of such termination.
Employee shall have the right to receive compensation or other benefits which
have already vested or been earned as of the date of termination for Cause,
unless payment of such compensation or benefits is expressly prohibited by the
terms of any plan, program or agreement governing such compensation or benefits.

Notwithstanding the foregoing:

(a)        The Board of Directors of the Bank may terminate the Employees employment
at any time, but any
termination by the Banks Board of Directors other than termination for Cause
shall not prejudice the Employees right to compensation or other benefits under
this Agreement. The Employee shall have no right to receive compensation or
other benefits for any period after termination for Cause. Termination for Cause
shall include termination because of the Employees personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement.

(b)        If the Employee is suspended and/or temporarily prohibited from
participating in the
conduct of the Banks affairs by a notice served under section 8(e)(3) or (g)
(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)), the
Banks obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may in its discretion (i) pay the Employee all or part
of the compensation withheld while its contract obligations were suspended, or
(ii) reinstate (in whole or in part) any of its obligations which were
suspended.

(c)        If the Employee is removed and/or is permanently prohibited from
participating in the
conduct of the Banks affairs by an order issued under section 8(e)(4) or (g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the Employee shall not be affected.

(d)        If the Bank is in default (as defined in section (3)(x)(1) of the Federal
Deposit Insurance Act), all
obligations under this Agreement shall terminate as of the date of default, but
this paragraph (d) shall not affect any vested rights of the Employee.

(e)        All obligations under this Agreement shall be terminated, except to the
extent it is determined that continuation of this Agreement is necessary for the continued operation of the
association:

(1)        By the Director or his or her designee, at the time the Federal
Deposit Insurance Corporation or Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance
Act; or

(2)        By the Director or his or her designee, when the Director or his
or her designee approves a
supervisory merger to resolve problems related to the operation of the
association, or when the Bank is determined by the Director to be in an unsafe
or unsound condition; provided that any rights of the parties that
have already vested shall not be affected by such action.

(f)        If the Bank terminates the Employees employment without Cause at any time
during the Term, for
reasons other than a Change in Control (as defined below) of the Bank or the
Company, then, if the Employee agrees to and signs a waiver and release of all
claims (the form of such waivers and release to be provided by the Bank), the
Bank shall pay to the Employee severance pay in an amount equal to the remainder
of the Employees Base Salary from the date the Employee was terminated through
the date which is one year from the Effective Date. Such amounts shall be
payable in equal monthly installments.

(g)        During the Term, the above-described severance supersedes any and all other
severance or layoff
policies of the Bank. Absent a new employment agreement setting forth an
alternate severance arrangement, any involuntary termination by the Bank
subsequent to the Term shall be covered by the Banks general severance policy,
if any, then in existence.

4.3        Termination Upon An Other Event of Termination

(a)        Upon the occurrence of an Other Event of Termination (as herein defined)
during the Term, the
provisions of this Section 4.3 shall apply. As used in this Agreement, an Other
Event of Termination shall mean and include any one or more of the following:
(i) the termination by the Bank of Employees employment hereunder for any
reason other than a termination governed by Sections 4.1, 4.2, 4.4, 4.5 or 4.6
hereof; (ii) Employees resignation from the Banks employ upon any (A) failure
to elect or re-elect or to appoint or re-appoint Employee as Executive Vice
President and Chief Banking Officer of the Bank, unless consented to by the
Employee, (B) a material change in Employees functions, duties, or
responsibilities, which change would cause Employees position to become one of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Sections 1.1 and 2.1 hereof, unless consented to by
Employee, (C) a relocation of Employees principal place of employment outside
of Los Angeles County or Ventura County, California, unless consented to by the
Employee, (D) a material reduction in the aggregate benefits and perquisites to
the Employee from those being provided as of the effective date of this
Agreement, unless such reduction is (I) consented to by the Employee, (II)
applies generally to executive-level-employees of the Bank to the extent
Employee receives benefits or perquisites generally available to executive-level
employees of the Bank, or applies generally to executive level employees of the
Company to the extent Employee receives benefits or perquisites generally
available to executive-level employees of the Company, or (III) is a reduction
in the amount of Employees bonus based on the application of a formula or index
to the financial performance of the Bank, (E) a liquidation or dissolution of
the Bank, or (F) a material breach of this Agreement by the Bank or the Company.
Upon the occurrence of any event described in clauses (A), (B), (C), (D), (E) or
(F), above, Employee shall have the right to elect to terminate his employment
under this Agreement by resignation upon not less than thirty (30) days prior
written notice given within six full months after the event giving rise to said
right to elect.

(b)        Upon the occurrence of an Other Event of Termination, the Bank shall be
obligated to pay Employee,
or, in the event of his subsequent death, his beneficiary or beneficiaries, or
his estate, as the case may be, an amount equal to Employees then annual base
salary. Such amount shall be paid in six equal monthly installments commencing
on the 30th day after the Termination Date. Such amount shall be in
addition to any compensation or benefits earned by Employee or to which Employee
was entitled prior to the Termination Date. Such payments shall not be reduced
in the event the Employee obtains other employment following termination of
employment.

(c)        Upon the occurrence of an Other Event of Termination, the Bank will cause
to be continued life,
medical, dental and disability coverage substantially identical to the coverage
maintained by the Bank or the Company for Employee prior to his termination at
no premium cost to the Employee, except to the extent such coverage may be
changed in its application to all executive-level employees of the Bank if such
coverage was generally available on the date of an Other Event of Termination to
executive-level employees of the Bank, if such coverage was generally available
on the date of an Other Event of Termination to executive-level employees of the
Bank, or except to the extent such coverage may be changed in its application to
all executive-level employees of the Company if such coverage was generally
available on the date of an other Event of Termination to executive level
employees of the Company. The benefits provided under this Section 4.3(c) shall
continue until the earlier of (a) the expiration of one year following
Employees termination of employment with the Bank, or (b) the date Employee
becomes covered under any other group health plan not maintained by the Bank,
the Company or any of its subsidiaries; provided, however, that if such other
group health plan excludes any pre-existing condition that Employee or
Employees dependents may have when coverage under such group health plan would
otherwise begin, coverage under this Section 4.3(c) shall continue (but not
beyond the one year period described in clause (a) of this sentence) with
respect to such pre-existing condition until such exclusion under such other
group health plan lapses or expires. In the event Employee is required to make
an election under Sections 601 through 607 of the Employee Retirement Income
Security Act of 1974 (commonly known as COBRA) to qualify for the benefits
described in this Section 4.3(c), the obligations of the Bank under this Section
4.3(c) shall be conditioned upon Employees timely making such an election.

4.4        Change in Control.

(a)        For purposes of this Agreement, a Change in Control of the Bank or
Company shall mean: (i) any
person (as the term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the Exchange Act)), or more than one person
acting as a group, becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of voting securities of the
Bank, the Company or any subsidiary of the Company which owns a majority of the
outstanding voting securities of the Bank (the Direct Parent) representing 50%
or more of the Banks, the Companys or the Direct Parents outstanding voting
securities, except for any voting securities (A) of the Bank purchased by the
Company or Direct Parent, (B) of the Direct Parent purchased by the Company, or
(C) of the Bank or Company purchased by any employee benefit plan of the Bank or
the Company, or (ii) individuals who constitute the board of directors of the
Bank (including Employee, if Employee is a director) on the date hereof (the
Incumbent Board) cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of more than one-half of the
directors comprising the Incumbent Board, or whose nomination for election by
the companys stockholders was approved by the same nominating committee serving
under an Incumbent Board, shall be, for purposes of this clause (ii), considered
as though he were a member of the Incumbent Board, or (iii) the consummation of
(A) a merger, consolidation or reorganization to which the Bank, the Company or
the Direct Parent is a party, whether or not the Bank, the Company or the Direct
Parent is the entity surviving or resulting therefrom, or (B) a sale or other
disposition of all or substantially all of the assets of the Bank, the Company
or the Direct Parent, in one transaction or a series of related transactions, to
any person other than the Bank, the Company or the Direct Parent; provided,
however, that no such consummation will constitute a Change of Control pursuant
to this clause (iii) if persons who were stockholders of the Company immediately
before the consummation of the transaction are the beneficial owners immediately
following the consummation of the transaction, of more than 50% of the combined
voting power of the then outstanding voting securities of the person surviving
or resulting from any merger, consolidation or reorganization referred to in
clause (iii)(A) or the person to whom the assets of the Bank, the Company or the
Direct Parent are sold, assigned or disposed of in any transaction or series of
transactions referred to in clause (iii)(B).

(b)        If a Change in Control has occurred pursuant to Section 4.4(a) or the Board
has determined that a
Change in Control has occurred, Employee shall be entitled to the benefits
provided in paragraphs (c) and (d) of this Section 4.4 upon his subsequent
termination of employment at any time within 12 months following the Change in
Control due to: (i) Employees dismissal without Cause (as defined in Section
4.2) or (ii) Employees voluntary resignation following an Other Event of
Termination (as defined in Section 4.3).

(c)        Upon Employees entitlement to benefits pursuant to Section 4.4(b), the
Bank shall pay Employee, or
in the event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be, a sum equal to two times the average of Employees
Annual Cash Compensation for the five most recent taxable years that Employee
has been employed by the Bank or for such lesser number of years in the event
that Employee shall have been employed by the Bank for less than five years.
Such Annual Cash Compensation shall consist of Employees base salary,
commissions, bonuses, and directors or committee fees. Such payment shall be
made in one lump sum within 30 days after Employees termination of employment
which entitles Employee thereto; provided, however, that in the event the Bank
is not in compliance with its minimum capital requirements or if such payment
would cause the Banks capital to be reduced below its minimum regulatory
capital requirements, such payment shall be deferred until such time as the Bank
or successor thereto is in capital compliance. Such payment shall not be reduced
in the event Executive obtains other employment following termination of
employment.

(d)        Upon Employees entitlement to benefits pursuant to Section 4.4(b), the
Bank will cause to be
continued life, medical, dental and disability coverage substantially identical
to the coverage maintained by the Bank for Employee prior to his termination of
employment at no premium cost to the Employee, except to the extent such
coverage may be changed in its application to all executive level employees of
the Bank if such coverage was generally available on Executives Termination
Date to executive-level employees of the Bank, or except to the extent such
coverage may be changed in its application to all executive-level employees of
the Company if such coverage was generally available on Executive=s Termination
Date to executive-level employees of the Company. The benefits provided under
this Section 4.4(d) shall continue until the earlier of (a) the expiration of
one year following Employees termination of employment with the Bank, or (b)
the date Employee becomes covered under any other group health plan not
maintained by the Bank, the Company or any of its subsidiaries; provided,
however, that if such other group health plan excludes any pre-existing
condition that Employee or Employees dependents may have when coverage under
such group health plan would otherwise begin, coverage under this Section 4.4(d)
shall continue (but not beyond the one year period described in clause (a) of
this sentence) with respect to such pre-existing condition until such exclusion
under such other group health plan lapses or expires. In the event Employee is
required to make an election under Sections 601 through 607 of the Employee
Retirement Income Security Act of 1974 (commonly known as COBRA) to qualify for
the benefits described in this Section 4.4(d), the obligations of the Bank under
this Section 4.4(d) shall be conditioned upon Employees timely making such an
election.

(e)        Notwithstanding anything to the contrary in this Section 4.4, in no event
shall the aggregate
payments or benefits to be made or afforded to Employee under this Section 4.4
(the Termination Benefits) constitute an excess parachute payment under
Section 280G of the Internal Revenue Code of 1986, as amended or any successor
thereto, and in order to avoid such a result, Termination Benefits will be
reduced, if necessary, to an amount (the Non-Triggering Amount), the value of
which is $1.00 less than an amount equal to three times Employees base
amount, as determined in accordance with said Section 280G. The allocation of
the reduction required hereby among the Termination Benefits provided by this
Section 4.4 shall be determined by Employee.

4.5        Termination By the Employee or Death.  If the Employee terminates his employment
with the Bank for any reason other than the reasons set forth in Sections 4.3 and 4.4 hereof, or Employees
employment is terminated as a result of his death, the Bank shall pay to the Employee, or in the event of his
death, his beneficiary or beneficiaries or his estate, as the case may be, the base salary earned but unpaid
pursuant to Section 3.1 hereof through the Termination Date and any earned but unused vacation pay due to the
Employee at the Termination Date.  Any such payments due Employee, under this Section 4.5 shall be paid on the
Termination Date, unless the termination of Employees employment was due to his death, in which case, such
payment shall be made by no later than 30 days after the Termination Date.  Employee shall not have the right
to receive compensation or other benefits for any period after the Termination Date which have not vested or
been earned as of the Termination Date.  Employee shall have the right to receive compensation or other
benefits which have already vested or been earned as of the Termination Date, unless payment of such
compensation or benefits is expressly prohibited by the terms of any plan, program or agreement governing such
compensation or benefits.

4.6        Termination of Disability.  If (i) the Employee is absent from work for 180 calendar
days in any 12-month period by reason of illness or incapacity (whether physical or otherwise) or (ii) the
Board of Directors reasonably determines that the Employee is unable to perform his duties, services and
responsibilities hereunder by reason of illness or incapacity (whether physical or otherwise) for a total of
90 calendar days in any 12-month period during the Term (Disability), the Bank may terminate the Employees
employment hereunder as of the Termination Date specified in a written notice termination from the Bank to
Employee.  If the Employees employment is terminated by the Bank pursuant to this Section 4.6, the Bank shall
pay on the Termination Date to Employee the base salary earned but unpaid pursuant to Section 3.1 hereof
through the Termination Date and any earned but unused vacation pay due to the Employee at the Termination
Date.  In addition, the Employee shall be entitled to receive benefits based on the Banks applicable
disability plans then in effect.  Employee shall not have the right to receive compensation or other benefits
for any period after the Termination Date which have not vested or been earned as of the Termination Date.
Employee shall have the right to receive compensation or other benefits which have already vested or been
earned as of the Termination Date, unless payment of such compensation or benefits is expressly prohibited by
the terms of any plan, program or agreement governing such compensation or benefits.

4.7        Termination of Banks Obligation.  If, at any time within one year following
termination of employment, the Employee breaches any of the Employees obligations under Article 2, 5 or 6 of
this Agreement, then, in addition to any other remedy of the Bank, the Banks obligation, if any, to make
severance payments under Section 4.4 and 4.5(a) shall cease as of the date such breach occurs.  Moreover, the
Employee acknowledges that breach of Article 2, 5 or 6 of this Agreement will cause irreparable harm to the
Bank and, if the Employee fails to abide by these obligations, the Bank will be entitled to seek specific
performance, including immediate issuance of a temporary restraining order or preliminary injunction enforcing
this Agreement, and to seek judgment for damages caused by the Employees breach, and to seek other remedies
provided by applicable law.

4.8        Termination Date.  Any termination of Employees employment hereunder pursuant to
this Article 4 shall be effected by written notice other than a termination as a result of Employees death.
Any written notice of termination shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employees employment under the provisions so indicated.  The effective date of any such
termination (the Termination Date) shall be as follows:

(a)        In the event of a termination due to Employees death, the date of such
death.

(b)        In the event of termination for any reason other than Employees death, the
date specified in the
written notice of termination which in no event shall be prior to the date of
receipt of such notice.

4.9        Compliance With Safety and Soundness Standards.  Notwithstanding anything contained
herein to the contrary, in no event shall the total compensation paid out upon the departure of an Employee be
in excess of that considered safe and sound at the time of such payment, taking into consideration all
applicable laws, regulations, or other regulatory guidance, including but not limited to OTS Regulatory
Bulletin 27a or any similar or successor regulatory pronouncements.  Any payments made to the Employee,
pursuant to this Agreement or otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section
1828(k) and any regulations promulgated thereunder.

5.        ARTICLE 5- CONFIDENTIALITY AND NON-SOLICITATION

5.1        Nondisclosure.  Employee acknowledges that, in the course of employment with the
Bank, Employee will have access to and learn confidential information.  Confidential information includes but
is not limited to information about the Banks borrowers and clients, the terms and conditions under which the
Bank or its affiliates deal with borrowers and clients, pricing information for the purchase or sale of
assets, financing and securitization arrangements, research materials, manuals, computer programs, formulas
analyzing assets portfolios, techniques, data, marketing plans and tactics, technical information, lists of
asset sources, the processes and practices of the Bank and related companies, information contained in
electronic or computer files, financial information, salary and wage information, and other information that
is designated by the Bank or its affiliates as confidential or that Employee knows or should know is
confidential information provided by third parties that the Bank or its affiliates are obligated to keep
confidential and all other proprietary information of the Bank or its affiliates.  The Employee acknowledges
that all confidential information is and shall continue to be the exclusive property of the Bank or its
affiliates, whether or not prepared in whole or in part by the Employee and whether or not disclosed to or
entrusted to the Employee in connection with employment by the Bank.  The Employee agrees not to disclose
confidential information, directly or indirectly, under any circumstances or by any means, to any third
persons without the prior written consent of the Bank.  The Employee agrees that he will not copy, transmit,
reproduce, summarize, quote, or make any commercial or other use whatsoever of confidential information,
except as may be necessary to perform work done by Employee for the Bank.  The Employee agrees to exercise the
highest degree of care in safeguarding confidential information against loss, theft or other inadvertent
disclosure and agrees generally to take all steps necessary or requested by the Bank to ensure maintenance of
the confidentiality of the confidential information.  The Employee agrees in addition to the specific
covenants contained herein to comply with all of the Banks policies and procedures, as well as all applicable
laws, for the protection of confidential information.

5.2        Exclusions.  Section 6.1 shall not apply to the following information:  (a)
information now and hereafter voluntarily disseminated by the Bank to the public or which otherwise becomes
part of the public domain through lawful means; (b) information already known to the Employee as documented by
written records which predate Employees employment with the Bank; (c) information subsequently and rightfully
received from third parties and not subject to any obligation of confidentiality; or (d) information
independently developed by Employee after termination of his or her employment.

5.3        Confidential Proprietary and Trade Secret Information of Others.  Employee
represents that he or she has disclosed to the Bank any agreement to which Employee is or has been a party
regarding the confidential information of others and Employee understands that Employees employment by the
Bank will not require Employee to breach any such agreement.  Employee will not disclose such confidential
information to the Bank nor induce the Bank to use any trade secret proprietary information received from
another under an agreement or understanding prohibiting such use or disclosure.

5.4        Non-Solicitation of Employees.  During the period of six months after termination
date, the Employee shall not directly or indirectly solicit for employment or for independent contractor work
any employee of the Bank or the Company, and shall not encourage any such employee to leave the employment of
the Bank or the Company.

5.5        Non-Solicitation of Customers.  During the period of one year following the
termination date, the Employee shall not directly or indirectly: (a) solicit for business any customers of the
Bank or the Company; (b) encourage any such customers to stop using the facilities or services of the Bank or
the Company; or (c) encourage any such customers to use the facilities or services of any competitor of the
Bank or the Company.

5.6        Company to Benefit from Provisions.  To the extent any provisions of this Article 6
relates in any way to confidential information and trade secrets of the Company, then the obligations of
Employee set forth in this Article 6 shall also extend to the Company and inure to its benefit.

6.        ARTICLE 6 - BANKS OWNERSHIP IN Employees WORK

6.1      Banks Ownership.  The Employee agrees that all inventions, discoveries,
improvements, trade secrets, formulas, techniques, mask works, processes, and know-how, whether or not
patentable, and whether or not reduced to practice, that are conceived or developed during the Employees
employment with the Bank, either alone or jointly with others, or relating to the Bank or to the banking
industry shall be owned exclusively by the Bank, and the Employee hereby assigns to the Bank all Employees
right, title, and interest in all such intellectual property.  The Employee agrees that the Bank shall be the
sole owner of all rights pertaining thereto, including but not limited to domestic and foreign patents or
other rights pertaining thereto, and further agrees to execute all documents that the Bank reasonably
determines to be necessary or convenient for use in applying for, prosecuting, perfecting, or enforcing
patents or other intellectual property rights, including the execution of any assignments, patents
applications, or other documents that Bank may reasonably request.  The Employee shall claim no interest in
any inventions, copyrighted material, mask works, patents, or patent applications unless the Employee
demonstrates that any such invention, copyrighted material, mask, work, patent, or patent application was
developed before he or she began any employment with the Bank.  This provision is intended to apply only to
the extent permitted by applicable law.

6.2        Statutory Limitation on Assignment.  The Employee understands that the Bank is
hereby advising the Employee that any provision in this Agreement requiring the Employee to assign rights in
any invention does not apply to an invention that qualifies fully under the provisions of Section 2870 of the
California Labor Code. That Section provides, as follows:

(a)        Any provision in an employment agreement which provides that an employee
shall assign, or offer to
assign, any of his or her rights in invention to his or her employer shall not
apply to an invention that the employee developed entirely on his or her own
time without using the employers equipment, supplies facilities, or trade
secret information, except for those inventions that either:

(1)        Relate at the time of conception or reduction to practice of the
invention to the employers business, or actual or demonstrably anticipated research or development of the
employer; or

(2)        Result from any work performed by the employee from the employer.

(b)        To the extent a provision in an employment agreement purports to require an
employee to assign an
invention otherwise excluded from being required to be assigned under
subdivision (a), the provision is against the public policy of the state and is
unenforceable.

By signing this Agreement, the Employee acknowledges that this paragraph shall constitute written
notice of the provisions of Section 2870.

6.3      Ownership of Records.  Any written record that the Employee may maintain of
inventions, discoveries, improvements, trade secrets, formulae, processes, or know-how, whether or not
patentable and whether or not reduced to practice, and any such records relating to original works of
authorship or mask works made by the Employee, alone or jointly with others, in the course of the Employees
employment with the Bank shall remain the property of the Bank.  The Employee shall furnish the Bank any and
all such records immediately upon request.

6.4      Ventures.  If the Employee, during employment with the Bank, is engaged in or
associated with the planning or implementation of any project, program, or venture involving the Bank and any
third parties, all rights in the project, program, or venture shall belong to the Bank, and the Employee shall
not be entitled to any interest therein or to any commission, finders fee, or other compensation in
connection therewith other than the salary to be paid to the Employee as provided in this Agreement.

6.5        Return of Banks Property and Materials.  Upon termination of employment with the
Bank, the Employee shall deliver to the Bank all Bank property and materials that are in the Employees
possession or control, including all of the information described as confidential information in Section 6 of
this Agreement and including all other information relating to any inventions, discoveries, improvements,
trade secrets, formulae, processes, know-how, original works of authorship, or mask works of the Bank.

6.6        Company to Benefit from Provisions.  To the extent any provisions of this Article 6
relates in any way to information, property, rights, projects, ventures, or inventions of the Company, then
the obligations of Employee set forth in this Article 6 shall also extend to the Company and inure to its
benefit.

7.        ARTICLE 7 - ARBITRATION

Any claim or controversy between the parties which the parties are unable to resolve
themselves, including any claim arising out of Employees employment or the termination of that employment,
and including any claim arising out of, connected with, or related to the formation, interpretation,
performance or breach of this Agreement, and any claim or dispute as to whether a claim is subject to
arbitration, shall be submitted to and resolved exclusively by expedited arbitration by a single arbitrator in
accordance with the following procedures:

7.1        In the event of a claim or controversy subject to this arbitration provision, the
complaining party shall promptly send written notice to the other party identifying the matter in dispute and
the proposed remedy.  Following the giving of such notice, the parties shall meet and attempt in good faith to
resolve the matter.  In the event the parties are unable to resolve the matter within 21 days, the parties
shall meet and attempt in good faith to select a single arbitrator acceptable to both parties.  If a single
arbitrator is not selected by mutual consent within 10 business days following the giving of the written
notice of dispute, an arbitrator shall be selected from a list of nine persons, each of whom shall be an
attorney who is either engaged in the active practice of law or a recognized arbitrator and who, in either
event, is experienced in serving as an arbitrator in disputes between employers and employees, which list
shall be provided by the main Los Angeles office of the American Arbitration Association (AAA) or of the
Federal Mediation and Conciliation Service.  If, within three business days of the parties receipt of such
list, the parties are unable to agree upon an arbitrator from the list, then the parties shall each strike
names alternatively from the list, with the first to strike being determined by the flip of a coin.  After
each party has had four strikes, the remaining name on the list shall be the arbitrator.  If such person is
unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

7.2        Unless the parties agree otherwise, within 120 days of the selection of the
arbitrator, a hearing shall be conducted before such arbitrator at a time and a place in Los Angeles County
agreed upon by the parties.  In the event the parties are unable to agree upon the time or place of the
arbitration, the time and place within Los Angeles County shall be designated by the arbitrator after
consultation with the parties.  Within 30 days of the conclusion of the arbitration hearing, the arbitrator
shall issue an award, accompanied by a written decision explaining the basis for the arbitrators award.

7.3        In any arbitration hereunder, the Bank shall pay all administrative fees of the
arbitration and all fees of the arbitrator, except that Employee may, if he wishes, pay up to one-half of
those amounts.  Each party shall pay its own attorneys fees, costs, and expenses, unless the arbitrator
orders otherwise.  The prevailing party in such arbitration, as determined by the arbitrator, and in any
enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement
from the other party for all of the prevailing partys costs (including, but not limited to, the arbitrators
compensation), expenses, and attorneys fees.  The arbitrator shall have no authority to add to or to modify
this Agreement, shall apply all applicable law, and shall have no lesser and no greater remedial authority
than would a court of law resolving the same claim or controversy.  The arbitrator shall, upon an appropriate
motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it
would be entitled to summary judgment if the matter had been pursued in court litigation.  The parties shall
be entitled to reasonable discovery subject to the discretion of the arbitrator.

7.4        The decision of the arbitrator shall be final, binding, and non-appealable, except
as otherwise permitted by law, and may be enforced as a final judgment in any court of competent jurisdiction.

7.5        This agreement to resolve any disputes by arbitration shall extend to claims against
any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer,
director, shareholder, employee or agent of each party, or of any of the above, and shall apply as well to
claims arising out of state and federal statutes and local ordinances as well as to claims arising under the
common law or under this agreement.  This agreement, however, shall not apply to claims for workers
compensation or unemployment compensation benefits.

7.6        Notwithstanding the foregoing, and unless otherwise agreed between the parties,
either party may, in an appropriate matter, apply to a court for provisional relief, including a temporary
restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant
may be entitled may be rendered ineffectual without provisional relief.

7.7        Any arbitration hereunder shall be conducted in accordance with the employment rules
and procedures of the AAA then in effect; provided, however, that, in the event of any inconsistency between
the rules and procedures of the AAA and the terms of this Agreement, the terms of this Agreement shall prevail.

7.8        If any of the provisions of this Section 7 are determined to be unlawful or
otherwise unenforceable, in whole or in part, such determination shall not affect the validity of the
remainder of this Section 7, and this Section 7 shall be reformed to the extent necessary to carry out its
provisions to the greatest extent possible and to insure that the resolution of all conflicts between the
parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration.
If a court should find that the provisions of this Section 7 are not absolutely binding, then the parties
intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given
great weight by any finder of fact, and treated as determinative to the maximum extent permitted by law.

8.        ARTICLE 8 - MISCELLANEOUS

8.1        Severable Provisions.  The provisions of this Agreement are separate and distinct,
and if any provisions are determined to be unenforceable, in whole or in part, the remaining provisions, and
the enforceable parts of any partially unenforceable provisions, shall nevertheless be enforceable.

8.2        Indemnification.  The Bank and Employee are entering into an indemnification
agreement in the form attached hereto as Exhibit A.  Any payments made to Employee pursuant to such
indemnification agreement are subject to and conditioned upon compliance with 12 C.F.R. Section 545.121, and
any rules or regulations promulgated thereunder.

8.3        Successors and Assigns.  The Bank shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation, or otherwise to all or substantially all of the
business or assets of the Bank to expressly assume and agree to perform in writing this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if no such succession or
assignment had taken place.  This Agreement shall inure to the benefit of and be binding upon the Bank, its
successors and assigns, and upon the Employee and his heirs, executors, administrators and legal
representatives.  No party to this Agreement may delegate its or his duties hereunder without the prior
written consent of the other parties to this Agreement.

8.4        Governing Law.  Regardless of the choice of laws provisions of Oregon or of any
other jurisdiction, California law shall in all respects govern the validity, construction, and interpretation
of this Agreement.

8.5        Source of Payments.  All payments provided in this Agreement shall be timely paid in
cash or check from the general funds of the Bank.  The Company, however, unconditionally guarantees payment
and provision of all amounts and benefits due hereunder to Employee and, if such amounts and benefits due from
the Bank are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by
the Company.

8.6        Incorporation by Reference of Relevant Regulatory Law.  This Agreement incorporates
by reference all applicable regulatory law, including but not limited to12 U.S.C. section 1828(k) and any
regulations promulgated under it; 12 U.S.C. section 1818(e); and 12 C.F.R. section 563.39(b); and all
replacement statutes and regulations.

8.7        Integration.  This Agreement, including any documents expressly incorporated into it
by the terms of this Agreement, constitute the entire agreement between the parties and supersedes all prior
oral and written agreements, understandings, negotiations, and discussions relating to the subject matter of
this Agreement.  With this Agreement the parties rescind any previous employment agreements or arrangements
between themselves.  Any supplement, modification, waiver, or termination of this Agreement is valid only if
it is set forth in a writing signed by both parties.  The waiver of any provision of this Agreement shall not
constitute a waiver of any other provision and, unless otherwise stated, shall not constitute a continuing
waiver

8.8        No Oral Modification.  Any supplement, modification, waiver, or cancellation of this
Agreement is valid only if it is set forth in a writing signed by both parties.

8.9        No Waiver.  The waiver of any provision of this Agreement shall not constitute a
waiver of any other provision and, unless otherwise stated, shall not constitute a continuing waiver.

8.10        Notice.  Any notice or other communication required or permitted under this
Agreement shall be in writing and shall be deemed to have been given (i) if personally delivered, when so
delivered, (ii) if mailed, one week after having been placed in the United States mail, registered, or
certified, postage prepaid, addressed to the party to whom it is directed at the address listed below or (iii)
if given by facsimile, when the notice is transmitted to the facsimile number specified below, and the
appropriate answer back or telephonic confirmation is received:

`If to the Bank:
         --------------

         23901 Calabasas Road
         Suite 1050
         Calabasas, California 91302

         Attention: Chairman of the Board and Corporate Secretary

         Telephone: (818) 223-8084
         Facsimile:  (818) 223-8457

         If to the Employee:
         ------------------

         Joseph W. Kiley, III
         14009 Weddington Street
         Sherman Oaks, California  91401`

In order for a party to change its address or other information for the purpose of this section, the
party must first provide notice of that change in the manner required by this section.

9.        ARTICLE 9 - ADVICE OF COUNSEL

Each
party acknowledges that it has had an opportunity to negotiate, carefully
consider, and receive the advice of an attorney of its own choosing on the terms
of this Agreement before signing it. To the extent that any party does not seek
the advice of an attorney, it knowingly and freely waives such a right.

In witness whereof, the parties hereto have caused this Agreement to be executed as of the date and
year set forth below.

`First Bank of  Beverly Hills, F.S.B.

Date: ___________________                            By: ____________________________
                                                     Name:  Richard S. Cupp
                                                     Title:  President


                                                     Employee


Date: ___________________                             ____________________________
                                                      Name:  Joseph W. Kiley, III


                                                      Wilshire Financial Services Group, Inc.

Date: ___________________                             By: ____________________________
                                                      Name:
                                                      Title:`