Exhibit 10.1


    Exhibit
      10.1

    
      

    


    AMENDED
      AND RESTATED

    EMPLOYMENT
      AGREEMENT

    AMONG

    VINEYARD
      NATIONAL BANCORP AND 

    VINEYARD
      BANK, NATIONAL ASSOCIATION AND

    NORMAN
      ANTONIO MORALES

    


    


    Adopted
      and Approved on April 9, 2007

    Effective
      as of: October 2, 2006

    


    This
      Amended and Restated Employment Agreement (referred to as "Employment
      Agreement") is made effective on the date the term begins as described below
      in
      Paragraph 4 and is among Vineyard Bank, National Association, a national banking
      association (referred to as "Bank"), Vineyard National Bancorp, a California
      corporation (referred to as "Bancorp"), and Norman Antonio Morales (referred
      to
      as "Morales"). This Employment Agreement amends and completely restates that
      certain Employment Agreement adopted and approved on January 15, 2004 and
      effective as of October 1, 2003 and that certain Amendment to Employment
      Agreement adopted and approved on September 29, 2006 and effective as of October
      1, 2006, each among the Bank, the Bancorp and Morales (collectively, the
“Original Employment Agreement”).

    


    1. Employment.
      Bank
      and Bancorp employ Morales as President and Chief Executive Officer of the
      Bank
      and the Bancorp, and Morales accepts employment with both entities upon the
      terms and conditions described below.

    


    2. Duties.
      Morales
      shall perform the duties of President and Chief Executive Officer of Bank and
      Bancorp, subject to the powers vested by law in the Board of Directors of the
      Bank and Bancorp and in Bank’s and Bancorp's shareholders. During the term of
      the Employment Agreement, Morales shall perform his duties faithfully,
      diligently, and to the best of his ability, consistent with the highest and
      best
      standards of the banking industry and in compliance with all applicable laws,
      both federal and state, and the Bank's Articles of Association and Bylaws and
      the Bancorp's Articles of Incorporation and Bylaws. Under the direction of
      and
      in cooperation with the Board of Directors, he shall provide leadership,
      direction, and guidance of the Bank's activities to assure short- and long-range
      profitability and planned growth of the Bank. The duties are as
      follows:

    


    In
      General:

    


    a. Keep
      the
      Board of Directors informed of financial results of operations, the status
      of
      loans, banking competition, and new business developments.

    


    b. Make
      recommendations to the Board of Directors on a wide range of subjects, including
      but not limited to, officer appointments and changes in organization, loans,
      benefit administration and physical plant renovation.

    


    c. Meet
      regularly with officers and other key staff; communicate policies and goals;
      and
      delegate responsibility for daily operations and administration.

    


    d. Assure
      the smooth flow of information throughout the Bank and coordinate the various
      functional operations.

    


    e. Assure
      that the needs of the major customers are satisfied. 

    


    f. Represent
      the Bank and provide leadership in key community activities. 

    


    g. Resolve
      serious customer complaints. 

    


    h. Supervise,
      with the executive management, the officer staff and consult with them on
      staffing and organizational needs.

    


    i. Work
      with
      the officers in resolving personnel problems in their areas of responsibility;
      meet with individual staff members, when necessary, to resolve
      problems.

    


    j. Monitor
      the Bank's job evaluation and salary administration programs.

    


    k. Participate
      in professional associations; attend conventions, conferences, and seminars;
      and
      read pertinent publications.

    


    1. Maintain
      close relationships with other bankers to be aware of new services or
      opportunities to increase profit or decrease expenses.

    


    m. Serve
      as
      a member of all executive committees. 

    


    Organization:

    


    a. Give
      overall direction to development and maintenance of standards for operating
      efficiency with comprehensive, specific, and measurable goals.

    


    b. Research,
      develop, and implement new strategies for profitability and operating
      efficiency. 

    


    c. Develop,
      in cooperation with the executive committee, ongoing short- and long-range
      plans. 

    


    d. Evaluate
      operations to identify needs and current problems.

    


    Finances:

    


    a. Review
      operational budgets to see that they meet the goals and objectives as
      identified.

    


    b. Pose
      revisions and alternatives to the budgets when necessary.

    


    


    


    


    Relationships:

    


    a. Review
      personnel performance evaluation of department heads to ensure that they are
      complementary to the maintenance of employee morale, efficiency, and
      development.

    


    b. Provide
      direct guidance of personnel activities with members of the executive committee
      as the activities relate to salary administration, management incentives, and
      performance objectives to ensure solid team efforts toward the attainment of
      department and bank goals.

    


    c. Conduct
      performance evaluations for members of the executive committee.

    


    d. Participate
      in outside activities which enhance the Bank, personal growth, and the
      community.

    


    3. Devotion
      of Entire Time to Bank's and Bancorp's Business.
      Morales
      shall devote his entire productive time, ability and attention to the business
      of the Bank and the Bancorp during the term of the Employment Agreement. Morales
      shall not directly or indirectly render any competitive services of a business,
      commercial, or professional nature to any other person or organization, whether
      for compensation or otherwise, without the prior written consent of the Boards
      of Directors of the Bank and Bancorp. Notwithstanding the above however, Morales
      may continue to sit on all for-profit boards of directors which he presently
      sits on with the knowledge of the Bank and the Bancorp and may continue to
      receive any compensation to which he is entitled for his limited efforts in
      that
      regard. Morales may also sit on any non-profit boards, corporations or
      foundations for no compensation but in the furtherance of the best interests
      of
      the community and to promote the good name of the Bank and Bancorp. This
      Employment Agreement shall not be interpreted to prohibit Morales from making
      passive personal investments or conducting personal business affairs if those
      activities do not materially interfere with the services required under this
      Employment Agreement.

    


    4. Term

    


    a. The
      term
      of this Employment Agreement is for four (4) years commencing as of January
      1,
      2006 through and including December 31, 2009. The term shall be automatically
      extended for an additional year at the end of each year thus making it a three
      (3) year "rolling" contract, unless the Board of Directors of the Bank or the
      Bancorp elects not to renew the term by giving written notice to Morales by
      September 1 of the year in which the Directors decide not to renew the
      term.

    


    b. All
      parties to the Employment Agreement shall have the absolute right to terminate
      the Employment Agreement at any time in accordance with the terms and conditions
      described below. Notwithstanding the fact that some provisions of the Employment
      Agreement may refer to future dates beyond the termination date of the
      Employment Agreement, nothing in the Employment Agreement shall in any way
      grant
      any future employment under the terms of the Employment Agreement beyond the
      termination date except as set forth above. Nothing in the Employment Agreement
      shall in any way obligate either party to have a future employment relationship
      except as set forth in the Employment Agreement.

    


    5. Salary.
      Morales
      shall receive a base salary of four hundred seventy-five thousand dollars
      ($475,000.00) per year, payable in equal monthly installments during the term
      of
      his employment. This shall remain as Morales’ base salary until it is increased
      in the sole discretion of the Boards of Directors of the Bank and Bancorp,
      which
      shall review said salary at the end of every calendar year and render a decision
      by January 31 of the following calendar year whether to increase said salary.
      These Boards may not, however, decrease said salary, other than as part of
      an
      across-the-board salary decrease that affects substantially all the executives
      and/or employees of the Bank and Bancorp. The Bank and Bancorp shall allocate
      Morales’ annual salary expense between them, in their sole discretion.


    


    6. Incentive
      Bonus.
      For
      calendar years 2006, 2007, 2008 and 2009, the Bancorp shall determine an
      incentive bonus to Morales, on the terms described hereinafter. The computation
      of this incentive bonus shall be based on Morales’ accrued base salary for the
      applicable calendar year, subject to a maximum of one hundred twenty percent
      (120%) of said accrued base salary. Any incentive bonus payable shall be paid
      to
      Morales no later than fifteen (15) days after the Bancorp’s receipt of the
      audited financial statements for the year in question but within the time period
      to be deductible in the prior year. This incentive bonus shall be based on
      measurements of the Bancorp’s performance for the calendar year in question, in
      accordance with the schedules below. As used in the schedules below, “Return on
      Average Common Equity” shall mean the return on average common equity of the
      Bancorp for the year ending December 31 in the calendar year for which the
      incentive bonus is being determined, and “EPS Growth” shall mean the growth in
      the annual earnings per share of the Bancorp on a fully diluted basis for the
      year ending December 31 in the calendar year for which the incentive bonus
      is
      being determined as compared to the annual earnings per share as of December
      31
      for the immediately preceding calendar year.

    


    2006
      Calendar Year Incentive Schedule

    


    

      
        	
                Return
                  on AverageBancorp Equity

              	 	
                Incentive
                  Payout %

              	 	
                Incentive
                  Payout

              	 
	
                0
                  -11%

              	 	 	
                0%

              	
                 

              	
                $

              	
                -

              	 
	
                12.0
                  - 12.9%

              	 	 	
                14%

              	
                 

              	
                $

              	
                79,800

              	 
	
                13.0
                  - 13.9%

              	 	 	
                20%

              	
                 

              	
                $

              	
                114,000

              	 
	
                14.0
                  -14.9%

              	 	 	
                25%

              	
                 

              	
                $

              	
                142,500

              	 
	
                15.0
                  -15.9%

              	 	 	
                30%

              	
                 

              	
                $

              	
                171,000

              	 
	
                16.0
                  -16.9%

              	 	 	
                40%

              	
                 

              	
                $

              	
                228,000

              	 
	
                17.0
                  -17.9%

              	 	 	
                50%

              	
                 

              	
                $

              	
                285,000

              	 
	
                18.0
                  -18.9%

              	 	 	
                65%

              	
                 

              	
                $

              	
                370,500

              	 
	
                19.0
                  -19.9%

              	 	 	
                80%

              	
                 

              	
                $

              	
                456,000

              	 
	
                20.0
                  -20.9%

              	 	 	
                95%

              	
                 

              	
                $

              	
                541,500

              	 
	
                21.0
                  +

              	 	 	
                100%

              	
                 

              	
                $

              	
                570,000

              	 


      

    

    


    


    2007,
      2008 and 2009 Calendar Years Incentive Schedule

    


    
      	
              Return
                on Average Common
                Equity

            	
              Bonus
                as % of Accrued
                Salary

            	
              Fully
                Diluted 

              EPS

              Growth

            	
              Bonus
                as % of Accrued
                Salary

            
	
              12%

            	
              0%

            	
              10%

            	
              0%

            
	
              13%

            	
              7.5%

            	
              11%

            	
              6%

            
	
              14%

            	
              15.0%

            	
              12%

            	
              12%

            
	
              15%

            	
              22.5%

            	
              13%

            	
              18%

            
	
              16%

            	
              30.0%

            	
              14%

            	
              24%

            
	
              17%

            	
              37.5%

            	
              15%

            	
              30%

            
	
              18%

            	
              45.0%

            	
              16%

            	
              36%

            
	
              19%

            	
              52.5%

            	
              17%

            	
              42%

            
	
              20%

            	
              60.0%

            	
              18%

            	
              48%

            
	 	 	
              19%

            	
              54%

            
	 	 	
              20%

            	
              60%

            


    

    


    The
      Board
      of Directors shall interpolate between the minimum and maximum percentages
      shown
      hereinabove.

    


    7. Severance
      Payment and Benefits upon a Change in Control.

    


    a. If
      Morales maintains his employment for twelve (12) months following a Change
      in
      Control, as defined below, on substantially the same terms as this Employment
      Agreement, including, but not limited to his then current salary level, then
      no
      severance payment will be due to Morales hereunder. For purposes of this
      Employment Agreement, “Change in Control” shall have the same meaning ascribed
      to such term in the 2006 Incentive Stock Plan of Vineyard National Bancorp
      (“2006 Plan”).

    


    b. In
      the
      event that Morales is terminated or there is a material decrease in his
      responsibilities, duties or title as set forth herein at any time during the
      twelve (12) month period following a Change in Control, then upon the occurrence
      of such event, Morales shall be entitled to: (i) receive a lump sum cash
      severance payment equal to two times Morales’ base salary for the immediately
      preceding 12 month period plus
      two
      times his bonus earned for the 12 month period immediately preceding the Change
      in Control, and (ii) continue participating in all group insurance, life
      insurance, health, accident and disability plans, programs and arrangements
      in
      which Morales was entitled to participate immediately prior to the Change in
      Control for a period of twenty-four (24) months at no cost to Morales. The
      severance payment is to be paid as agreed upon between the Bank and Morales
      as a
      severance payment and Morales' employment with the Bank shall terminate. This
      severance payment is to be made irrespective of whether Morales is terminated
      for cause or not at the time, as long as a Change in Control event has occurred
      and his position or title is materially changed within the 12 month period
      following the Change in Control. 

    


    c. Notwithstanding
      anything to the contrary contained herein, any and all stock options, shares
      of
      restricted stock or other equity awards granted to Morales by the Bank or the
      Bancorp shall immediately become vested and exercisable upon a Change in
      Control. 

    


    8. Stock
      Options.
      

    


    a. Effective
      two (2) days after the next public release of the Bancorp’s quarterly earnings
      which occurs on or after the effective date of this Employment Agreement and
      on
      the tenth (10th) day after the release of the Bancorp’s audited financial
      statements of annual earnings for calendar years 2006, 2007 and 2008, so long
      as
      Morales is employed by the Bank on said day the Board of Directors shall grant
      Morales incentive stock options to buy fifty thousand (50,000) shares of common
      stock of the Bancorp, with the purchase price of each such share being one
      hundred percent (100%) of the fair market value (“FMV”) of a share of Bancorp
      common stock on the date of the option grant (unless otherwise determined by
      the
      Bancorp, FMV shall be the closing price of a share of stock on the date of
      option grant), with the term of each such option being four (4) years from
      the
      date of option grant, and with said options not becoming vested until the third
      (3rd) anniversary of the date of option grant, and then being one hundred
      percent (100%) vested. Except as provided hereinabove or hereinafter, the terms
      and conditions of the 2006 Plan shall apply to such option grants for all
      conditions and events. In accordance with the Original Employment Agreement
      and
      the provisions of this paragraph, the Board of Directors previously granted
      to
      Morales stock options to buy fifty thousand (50,000) shares of common stock
      of
      the Bancorp on each of October 30, 2006 (the date two [2] days after the first
      public press release of Bancorp earnings after the effective date of this
      Employment Agreement) and March 19, 2007 (the date ten [10] days after the
      release of the Bancorp’s audited financial statements for the 2006 calendar
      year).

    


    b. In
      addition to the accelerated vesting provisions under Section 7(c) hereof, in
      the
      event of Morales’s death, disability or termination without cause, his stock
      options will vest only if permitted under the applicable Stock Option Agreement
      with respect to the options granted thereby, the 2006 Plan, or if accelerated
      by
      the Plan Administrator at its discretion in accordance with the 2006
      Plan.

    


    9. Restricted
      Stock Grants.
      Restricted stock grants will be considered after the stock options which have
      been granted are vested. However, the Board has the discretion to grant such
      stock grants as a bonus. 

    


    10. Country
      Club Membership.
      Morales
      will present to the Board of the Bank information about membership in a local
      country club. The Bank will own the membership and is to approve the location
      of
      the club and cost of the membership. Said membership may be exercised by Morales
      and his family at the discretion of the Board.

    


    11. Automobile
      Allowance.
      The
      Bank will provide Morales with an automobile allowance in the amount of one
      thousand five hundred dollars ($1,500.00) a month to be used to pay for a leased
      automobile by the Bank in the performance of his duties on behalf of the Bank
      and Bancorp during the term of this Employment. In the event that the lease
      amount exceeds one thousand five hundred dollars ($1,500) a month, Morales
      will
      reimburse the Bank the difference. The Bank will also pay all the operating
      costs of the automobile in addition to paying for gasoline for the automobile
      when used on behalf of the Bank and Bancorp during the term of this Employment
      Agreement. Morales will reimburse the Bank and Bancorp for personal use of
      the
      automobile.

    


    12. Expenses.
      Morales
      shall be entitled to reimbursement by Bank for any expenses reasonably and
      necessarily incurred in the performance of his duties on behalf of the Bank
      and
      Bancorp during the term of this Employment Agreement which the Board of
      Directors of the Bank deems satisfactorily documented.

    


    13. Personal
      Time Off.
      During
      the term of this Employment Agreement, Morales shall be entitled to five (5)
      weeks of paid personal time off per year, or according to the amounts and
      conditions as outlined in the Bank's Employee Handbook.

    


    14. Insurance
      Benefits and Deferred Compensation.
      Bank
      and Bancorp shall provide Morales at the Bank's expense with full participation
      in the Bank's present accident, health and term life insurance benefit programs
      for the maximum benefits available through the California Banker's Association
      Group Insurance program or through any equivalent program which the Bank
      subsequently adopts. Morales shall also have available to him any of the
      deferred compensation programs to which he is eligible as an employee of the
      Bank and Bancorp, which benefits and rights shall be governed solely by that
      program and not this Employment Agreement.

    


    15.
       Termination.
      Morales, the Bank, or the Bancorp may terminate this Employment Agreement only
      under the following terms and conditions:

    


    a. At
      any
      time during the term of this Employment Agreement, Morales may resign from
      his
      employment with the Bank and Bancorp by submitting his written letter of
      resignation to the two Boards of Directors for their acceptance. Upon their
      acceptance of the letter of resignation, Morales shall be entitled to no further
      compensation from the Bank or Bancorp whatsoever after the effective date of
      the
      end of his employment with the Bank and Bancorp except for any deferred
      compensation benefits due.

    


    b. At
      any
      time during the term of this Employment Agreement, the Board of Directors of
      the
      Bank or Bancorp may terminate the employment of Morales with or without
      cause.

    


    In
      the
      event the termination of Morales is elected by the Board of Directors without
      cause during the term of this Employment Agreement, then Morales shall be
      entitled to "severance pay" equal to two years of his then current salary and
      twice the bonus earned for the immediately preceding twelve (12) calendar months
      before the termination.

    


    In
      the
      event the Board terminates the employment of Morales "for cause," then Morales
      shall be entitled to no payment under this Employment Agreement beyond the
      date
      of his termination. For purposes of this Employment Agreement, “for cause” shall
      mean termination because of personal dishonesty or incompetence which has or
      could adversely affect the Bank or the Bancorp; willful misconduct; breach
      of
      fiduciary duty involving personal profit; intentional failure to perform stated
      duties; willful violation of any law, rule, order or regulation (other than
      traffic violations or other misdemeanor offenses); termination of this
      Employment Agreement by any government regulatory agency as specified in
      Paragraph 16 below or a material breach of any provision of this Agreement.
      

    


    c. In
      the
      event that Morales shall suffer a permanent mental or physical disability as
      determined by the medical opinion of a physician duly licensed to practice
      medicine in the State of California, then each Board may terminate the
      Employment Agreement and Morales shall be entitled to the compensation provided
      for under Paragraph 15 b. above as if he were terminated without cause with
      the
      exception that the Bank and Bancorp shall be entitled to an offset for any
      disability benefits which are to be paid to Morales as a result of any
      disability insurance which is carried by the Bank and Bancorp for Morales.
      The
      disability insurance proceeds shall be applied against the severance pay owed
      to
      Morales under these circumstances.

    


    16. Action
      by Government Regulatory Agency.
      In the
      event that the employment of Morales is ordered to be terminated by any
      government regulatory agency, or in the event the Bank or Bancorp is closed
      or
      taken over by any government regulatory agency, or in the event the Bank and
      Bancorp have been taken over by a federal bankruptcy court, the government
      regulatory agency or the bankruptcy court may immediately terminate this
      Employment Agreement and the Bank and Bancorp shall have no further obligation
      to pay any severance pay or any other sums to Morales under this contract beyond
      the date of the actual termination of his employment.

    


    17. Ownership
      of Business Records.
      All
      records of the accounts of customers and any other records and books relating
      in
      any manner whatsoever to the customers or the business of the Bank and Bancorp,
      whether prepared by Morales or otherwise, shall be the exclusive property of
      the
      Bank and Bancorp. All such books and records shall be immediately delivered
      to
      the Bank by Morales on any termination of this Employment Agreement. Morales
      shall not be entitled to keep or preserve records or copies of records of the
      Bank and Bancorp made by him for any reason during the performance of his
      duties. All of Morales' personal effects and papers shall remain his personal
      property.

    


    18.
       Reimbursement
      of Disallowed Compensation and Expenses.
      In the
      event any compensation paid to Morales or expenses paid for Morales, or any
      reimbursement of expenses paid to Morales, shall upon audit or other examination
      of the income tax returns of the Bank and Bancorp be determined not to be an
      allowed deduction from the gross income of the Bank or Bancorp, and such
      determination shall be accepted by the Bank or Bancorp, or such determination
      shall be rendered final by the appropriate state or federal taxing authority,
      or
      a judgment of a court of competent jurisdiction, and no timely appeal taken
      therefrom, then in such event, Morales will repay to the Bank or Bancorp the
      amount of such disallowed compensation or expenses, or both. Such repayment
      may
      not be waived by the Bank and Bancorp.

    


    19.
       Bank
      and Bancorp's Authority.
      Morales
      shall observe and comply with the rules and regulations of the Bank and Bancorp
      as adopted by the Bank and Bancorp, either orally or in writing, respecting
      performance of his duties, and shall carry out and shall perform orders,
      directions, and policies announced to Morales by the Bank and Bancorp, from
      time
      to time, either orally or in writing.

    


    20.
       Indemnity.
      The
      Bank and the Bancorp shall indemnify Morales for all losses sustained by Morales
      in direct consequence of the discharge of his duties on the Bank and Bancorp's
      behalf.

    


    21. Waiver.
      The
      failure of any party to insist on strict compliance with any of the terms,
      covenants, or conditions of this Employment Agreement by the other parties
      shall
      not be deemed a waiver of that term, covenant, or condition, nor shall any
      waiver or relinquishment of any right or power at any one time or times be
      deemed a waiver or relinquishment of that right or power for all or any other
      times.

    


    22. Partial
      Invalidity.
      If any
      provision of this Employment Agreement is held by a court of competent
      jurisdiction or by arbitration to be invalid, void, or unenforceable, the
      remaining provisions shall nevertheless continue in full force without being
      impaired or invalidated in any way.

    


    23. Non-Assignability.
      It is
      hereby agreed that Morales’ rights and obligations under this Employment
      Agreement are personal and not assignable.

    


    24. Entire
      Agreement.
      This
      Employment Agreement contains the entire agreement and understanding of the
      parties to it. No amendment or variation of the terms of this employment
      Agreement shall be valid unless made in writing and executed by Morales and
      duly
      authorized representatives of the Bank and Bancorp.

    


    25. Binding
      Effect.
      This
      Employment Agreement shall be binding on and inure to the benefit of the heirs,
      personal representatives, successors, beneficiaries, and assigns of the parties,
      subject, however to the restrictions on assignment contained in the Employment
      Agreement.

    


    26. Governing
      Law.
      The
      Employment Agreement is drawn to be effective in the State of California and
      shall be construed in accordance with California law.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      the
      parties have executed this Employment Agreement.

    


    VINEYARD
      BANK, NATIONAL ASSOCIATION,

    A
      National Banking Association

    


    Dated:
      ____________________   

    


    By: _______________________   

    


    


    


    VINEYARD
      NATIONAL BANCORP,

    A
      California Corporation

    


    Dated:
      ____________________   

    


    By: _______________________   

    


    


    


    Dated:
      _____________________________

    


    


    ____________________________________

    NORMAN
      ANTONIO MORALES