Document:

EX-10.22

	

Exhibit 10.22 

As amended through
12/15/03 

THE MIDDLEBY CORPORATION 

1998 STOCK INCENTIVE
PLAN 

Introduction 

     
        This
document contains the provisions of The Middleby Corporation 1998 Stock
Incentive Plan, as adopted effective as of February 19, 1998 (the
“Effective Date”). The purpose of this Plan is to provide a means to
attract and retain employees of experience and ability and to furnish additional
incentives to them. 

ARTICLE I 

Definitions 

     
        1.1.
     “Board” means the Company’s Board of Directors. 

     
        1.2.
     “Code” means the Internal Revenue Code of 1986, as amended. 

     
        1.3.
     “Company” means The Middleby Corporation, a Delaware corporation. 

     
        1.4.
     “Eligible Employee” means any employee of an Employer. 

     
        1.5.
     “Employer” means the Company or any affiliate or subsidiary of the Company. 

     
        1.6.
“Fair Market Value” means, as of any date, the closing price of
Stock on the national stock exchange or automated quotation system on which the
Stock is then listed or, if there was no trading in Stock on that date, the
closing price of Stock on such exchange or automated quotation system on the
next preceding date on which there was trading in Stock. 

     
        1.7.
“Grant” means any award of Options, Stock Appreciation Rights,
Restricted Stock or Performance Stock (or any combination thereof) made under
this Plan to an Eligible Employee. 

     
        1.8.
     “Option” means any stock option granted under this Plan. 

     
        1.9.
     “Performance Stock” means Stock issued pursuant to Article VII of this
Plan. 

     
        1.10.
    “Plan” means The Middleby Corporation 1998 Stock Incentive Plan, as set out
in this document and as subsequently amended. 

     
        1.11.
    “Recipient” means an Eligible Employee to whom a Grant has been made. 

 

	

     
        1.12.
“Restricted Stock” means Stock transferred to a Recipient in a
Grant which is, at the date on which the Grant is made, both (i) not
“transferable” and (ii) “subject to a substantial risk of
forfeiture,” within the meaning of Section 83 of the Code. 

     
        1.13.
    “Stock” means the Company’s authorized common stock, par value $.01
per share. 

     
        1.14.
“Stock Appreciation Right” means a right transferred to a
Recipient under a Grant which entitles the Recipient, upon exercise, to receive
a payment (in cash, Stock or a combination of cash and Stock) which is equal to
the increase (if any) in the Fair Market Value of a share of Stock between the
date as of which the Grant was made and the date as of which the right is
exercised. 

     
        1.15.
    The masculine gender includes the feminine, and the singular number includes the
plural, unless a different meaning is clearly required by the context. 

ARTICLE II 

Stock Available for
Grants 

     
        2.1.
1,500,000 shares of Stock are available for Grants under the Plan. The Stock
available for Grants may include unissued or reacquired shares. If a Grant
expires or is canceled, any shares which were not issued or fully vested under
the Grant at the time of expiration or cancellation will again be available for
Grants. 

     
        2.2.
     If there is a merger, consolidation, stock dividend, split-up, combination or
exchange of shares, recapitalization or change in capitalization with respect to Stock,
the total number of shares provided for in Section 2. 1. will be adjusted by the Board to
accurately reflect that event. 

ARTICLE III 

Making Grants 

     
        3.1.
(a) The Board may, at any time while the Plan is in effect and there is Stock
available for Grants, make Grants to Eligible Employees; provided, that the
selection of Eligible Employees for participation and decisions concerning the
timing, pricing and amount of a Grant shall be made solely by a committee
consisting solely of two or more directors. The number of shares of Stock
granted in a fiscal year to each executive officer whose compensation is subject
to reporting in the Company’s annual proxy statement (an “Executive
Officer”) shall not exceed 100,000 shares for any fiscal year during which
he serves as an Executive Officer, except that (i) a grant of 200,000 shares may
be made to Selim A. Bassoul in 2002, (ii) a grant of 325,000 shares may be made
to Selim A. Bassoul in 2003, and (iii) a grant of 170,000 shares may be made to
William F. Whitman, Jr. in 2003. 

     
        (b)
      No Grant may be made after February 19, 2008. 

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        (c)
      All grants and any exercises of Grants are conditioned upon stockholder approval of
the Plan as described in Section 9.2. 

     
        (d)
If there is a merger, consolidation, stock dividend, split-up, combination or exchange of
shares, recapitalization or change in capitalization with respect to Stock, or any other
corporate action with respect to Stock which, in the opinion of the Board, adversely
affects the relative value of a Grant, the number of shares and the exercise price (in
the case of an Option) of any Grant which is outstanding at the time of that event will
be adjusted by the Board to the extent necessary to remedy the adverse effect on the Grant’s
value.  

     
        3.2.
     (a)       The terms of each Grant will be set out in a written agreement. 

     
        (b)
Subject to the applicable provisions of Article IV, VI, VI or VII, a Grant may
contain any terms and conditions which the Board determines, as long as they are
consistent with the provisions of the Plan. Such terms may, without limitation,
include provisions that Grants shall terminate upon termination of employment in
specified circumstances. 

ARTICLE IV 

Options 

     
        4.1.
     The terms of each Option must include the following: 

     
        (i)
      The name of the Recipient. 

     
        (ii)
     The number of shares which are subject to the Option. 

     
        (iii)
    The term over which the Option may be exercised. 

     
        (iv)
A requirement that the Option is not transferable by the Recipient except by
will or the laws of descent and distribution and that, during his lifetime, it
is exercisable only by him. Provided that, subject to the approval of the Board,
an Option may be transferable as permitted under 17 C.F.R. sec. 240.16b-3 and 5,
as long as such transfers are made to one or more of the following: family
members, including children of the Recipient, the spouse of the Recipient, or
grandchildren of the Recipient, trusts for such family members or charities
(“Transferees”), and provided that such transfer is a bona fide gift
and accordingly, the Recipient receives no consideration for the transfer, and
that the Options transferred continue to be subject to the same terms and
conditions that were applicable to the Options immediately prior to the
transfer. In the event of such a transfer, the Transferee may not subsequently
transfer this Option. The designation of a beneficiary shall not constitute a
transfer. 

     
        (v)
A statement of whether the Option is intended to be an “incentive stock
option” under Section 422 of the Code or a “nonstatutory stock
option”. 

     
        4.2.
     An Option which is intended to be an incentive stock option under Section 422 of the
Code must contain the following terms: 

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        (i)
The exercise price per share must be at least 100% of the Stock’s Fair Market Value
on the date the Option is granted.  

     
        (ii)
The aggregate Fair Market Value (as of the date the Option is granted) of Stock with
respect to which incentive stock options are exercisable for the first time by the
Recipient during any calendar year (under all stock option plans of the Employers) may
not exceed $100,000.  

     
        (iii)
The term over which the Option may be exercised may never exceed ten years from the date
of Grant.  

     
        (iv)
If the Recipient, at the time the option is granted, owns 10% or more of the voting stock
of an Employer (including Stock which he is deemed to own under Section 424(d) of the
Code), the exercise price must be at least 110% of the Stock’s Fair Market Value as
of the Option’s date of grant, and the term of the Option may not be more than five
years from the date of grant.  

     
        4.3.
     (a)       An Option may be exercised, in whole or part, at any time during its term,
subject to any specific conditions in the Option’s terms and any rules adopted by
the Board for the exercise of Options. 

     
        (b)
A Recipient may pay the exercise price of an Option in cash or, in the Board’s
discretion, in shares of Stock owned by him (valued at Fair Market Value), with a note
payable to the Company, or in a combination of cash, notes and shares of Stock.  

     
        (c)
      The following rules apply to the exercise of Options: 

     
        (i)
If a Recipient dies, any Option may, to the extent it was exercisable at his death, be
exercised by his estate, within one year after his date of death or such shorter period
as the Option may provide.  

     
        (ii)
If a Recipient terminates employment because he has become permanently and totally
disabled, he may exercise any Option to the extent it was exercisable at his termination
of employment, but only within one year after his termination of employment or such
shorter period as the Option may provide.  

     
        (iii)
If a Recipient terminates employment for any reason other than death or permanent and
total disability, he may exercise any Option to the extent it was exercisable at his
termination of employment, but only within three months after his termination of
employment or such shorter or longer period as the Option may provide.  

     
        (iv)
Subparagraph (i), (ii) or (iii) can never operate to make an Option exercisable beyond
the term for which it was granted.  

     
        (d)
To the extent an Option is not exercised before the expiration of its term or before the
expiration of any shorter exercise period under paragraph (c), it will be canceled.  

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ARTICLE V 

Stock Appreciation
Rights 

     
        5.1.
     The terms of each Grant of Stock Appreciation Rights must include the following: 

     
        (i)
      The name of the Recipient. 

     
        (ii)
     The number of Stock Appreciation Rights which are being granted. 

     
        (iii)
The term over which the Stock Appreciation Rights may be exercised. This term
may never exceed ten years from the date of Grant. 

     
        (iv)
A description of any events which will cause cancellation of the Stock
Appreciation Rights before the end of the term described in subparagraph (iii). 

     
        (v)
Whether or not the Stock Appreciation Rights are issued in tandem with any
Option, and, if so, the manner in which the Recipient’s exercise of one
affects his right to exercise the other. 

     
        (vi)
A requirement that the Stock Appreciation Rights are not transferable by the
Recipient except by will or the laws of descent and distribution and that during
his lifetime such Rights are exercisable only by him. 

     
        5.2.
Stock Appreciation Rights which are issued in tandem with an Option which is
intended to be an incentive stock option under Section 422 of the Code must
contain the following terms: 

     
        (i)
      They will expire no later than at the expiration of the Option. 

     
        (ii)
Payment under the Stock Appreciation Rights may not exceed 100% of the difference between
the exercise price of the Option and the Fair Market Value of Stock on the date the Stock
Appreciation Rights are exercised.  

     
        (iii)
    They are transferable only when the Option is transferable, and under the same
conditions. 

     
        (iv)
     They are exercisable only when the Option is exercisable. 

     
        (v)
      They may only be exercised when the Fair Market Value of Stock exceeds the exercise
price of the Option. 

     
        5.3.
     (a)       Stock Appreciation Rights may be exercised at any time during their term,
subject to Section 5.2., to any specific conditions in their terms and to any rules
adopted by the Board for the exercise of Stock Appreciation Rights. 

     
        (b)
Determination of the form of payment upon exercise of a Stock Appreciation Right
(cash, Stock or a combination of cash and Stock) is solely in the discretion of
the Board. 

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ARTICLE VI 

Restricted Stock 

     
        6.1.
     The terms of each Grant of Restricted Stock must include the following: 

     
        (i)
      the name of the Recipient. 

     
        (ii)
     the number of shares of Restricted Stock which are being granted. 

     
        (iii)
whether the Recipient must pay any amount in connection with the Grant and if so, the
amount and terms of that payment. Such amount shall not exceed 10% of the Fair Market
Value of the Restricted Stock at the time the Grant is made, and may be such lesser
amount as shall be determined by the Board.  

     
        (iv)
     description of the restrictions applicable to the Grant and the conditions on which
the restriction may be removed. 

ARTICLE VII 

Performance Stock 

     
        7.1.
     The terms of each grant of Performance Stock must include the following: 

     
        (i)
      the name of the Recipient. 

     
        (ii)
     the number of shares of Performance Stock which are being granted. 

     
        (iii)
    details of the applicable performance period, if any, and performance criteria, if
any. 

     
        (iv)
     whether the Recipient must pay any amount in connection with the Grant and if so,
the amount and terms of that payment. 

ARTICLE VIII 

Administration 

     
        8.1.
     Subject to Section 3.l(a) hereof, the complete authority to control and manage the
operation and administration of the Plan is placed in the Board. 

     
        8.2.
     Subject to Section 3.l(a) hereof, the Board has all authority which is necessary or
appropriate for the operation and administration of the Plan, including the following: 

     
        (a)
      To make Grants and determine their terms, subject to the provisions of the Plan. 

     
        (b)
      To interpret the provisions of the Plan. 

     
        (c)
To adopt any rules, procedures and forms necessary for the operation and administration
of the Plan which are consistent with its provisions.  

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        (d)
      To determine all questions relating to the eligibility and other rights of all
persons under the Plan.  

     
        (e)
      To keep all records necessary for the operation and administration of the Plan.  

     
        (f)
      To designate or employ agents and counsel (who may also be employed by an Employer)
to assist in the administration of the Plan. 

     
        (g)
To cause any shares of Stock acquired by a Recipient through exercise of a Grant to be
recorded on the Company’s records in the Recipients’ name, and to cause such
shares to be issued to the Recipient or to his brokerage account, as he elects.  

     
        (h)
      To cause any withholding of tax required in connection with a Grant to be made. 

ARTICLE IX 

Amendment and
Termination 

     
        9.1.
     The Plan may be amended or terminated at any time by action of the Board.  However,
no amendment may, without stockholder approval: 

     
        (i)
      increase the aggregate number of shares available for Grants (except to reflect an
event described in section 2.2); or 

     
        (ii)
     extend the term of the Plan; or 

     
        (iii)
    change the definition of Eligible Employee for purposes of the Plan. 

     
        9.2.
If the Plan is not, within twelve months of its Effective Date, approved by a
majority of the shares voted at a regular or special meeting of the
Company’s stockholders, the Plan will terminate and all Grants made under
it will be canceled. 

     
        9.3.
     No amendment or termination of the Plan (other than termination under Section 9.2.)
may adversely modify any person’s rights under an Option unless he consents to the
modification in writing. 

ARTICLE X 

Miscellaneous 

     
        10.1.
Neither the provisions of this Plan, nor the fact that a Recipient receives a
Grant will constitute or be evidence of a contract of employment, position or
compensation level, or give such Recipient any right to continued employment
with the Employer. Neither the provisions of this Plan nor the fact that a
Recipient receives a Grant will be construed as the Company’s guarantee of
the tax effects for the Recipient of the receipt of a Grant, transfer of the
same, exercise of the same, or the retention or sale of the underlying Stock. 

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        10.2.
If any provision of this Plan is held illegal or invalid for any reason, such
illegality or invalidity will not affect the remaining provisions. Instead, each
provision is fully severable and this Plan will be construed and enforced as if
any illegal or invalid provision had never been included. 

     
        10.3.
Except as provided in federal law, the provisions of the Plan will be construed
in accordance with the laws of Illinois, without giving effect to principles of
conflicts of laws. 

8EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

     This Employment Agreement ("Agreement") is effective as of December 1, 2003
("Effective Date") and amends and restates that certain Employment Agreement
made as of January 1, 2003 ("Old Agreement") between Temecula Valley Bank, N.A.,
a national banking association ("Bank") and Brian Carlson ("Executive").

                                  R E C I T A L

     WHEREAS, at the direction of the Bank's Board of Directors ("Board of
Directors"), the Old Agreement is hereby revised and restated as provided
herein.

     WHEREAS, Bank desires that Executive continue be employed as Executive Vice
President/SBA Department Manager of Bank and Executive desires to be so
employed, subject to the terms and conditions herein stated.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the parties agree
as follows:

     1. TERM OF EMPLOYMENT

        1.1. Term. Bank hereby agrees to employ Executive, and Executive hereby
accepts employment with Bank, for the period (the "Term") commencing December 1,
2003 and terminating on such date and upon such terms as provided in Section 4
hereof.

     2. DUTIES OF EXECUTIVE

        2.1. Duties. Executive shall perform the duties of Executive Vice
President/SBA Department Manager of Bank, as specified in Exhibit "A" hereto,
and duties assigned by Bank's Chief Executive Officer and Board of Directors
subject to the powers by law vested in the Board of Directors of Bank and in
Bank's shareholders. During the Term, Executive shall perform the services
herein contemplated to be performed by Executive with due care faithfully,
diligently, to the best of Executive's ability and in compliance with all
applicable laws and Bank's Articles of Association and Bylaws.

        2.2. Exclusivity. Executive shall devote substantially all of
Executive's productive time, ability and attention to the business of Bank
during the Term. Executive shall not directly or indirectly render any services
of a business, commercial or professional nature to any other person, firm or
corporation for compensation without prior consent evidenced by a resolution
duly adopted by the Board of Directors, or the Executive Committee thereof.
otwithstanding the foregoing, Executive may (i) make investments of a passive
nature in any business or venture; and (ii) serve in any capacity in civic,
charitable or social organizations, provided, however, that such investments or
services shall not be in competition, directly or indirectly, in any manner with
Bank.

                                       1
<PAGE>

     3. COMPENSATION AND BENEFITS

        3.1. Salary and Bonus. For Executive's services hereunder, Bank shall
pay, or cause to be paid, as annual gross base salary, to Executive in the
amount of One Hundred Eighty Thousand Dollars ($180,000) during the Term
("Annual Salary"), beginning with the Effective Date, payable in substantially
equal installments in accordance with Bank's normal payroll periods as in effect
from time to time. In addition, Executive shall be paid a bonus (the "Bonus")
equal to thirty (30) basis points of the total original principal amount of
funded (to the extent disbursed) 7a and 504 SBA loans ("SBA Loans") as well as
construction, conventional and business & industry loans related to and made in
conjunction with SBA Loans, if such loans were generated by and processed
through Bank's SBA Department, as reasonably determined by Bank. The Bonus shall
be paid based upon monthly disbursements (or any partial calendar month
hereunder) within thirty (30) days of the end of the applicable calendar month.

        3.2. Vacation. Executive shall be entitled to four (4) weeks of vacation
leave each year of the Term accruing in accordance with Bank policy, of which
two (2) consecutive weeks must be taken in each calendar year ("Mandatory
Vacation"). Any vacation not used in excess of the Mandatory Vacation shall not
accumulate but at the end of each year of the Term, Executive shall be entitled
to vacation pay in lieu of vacation.

        3.3. Equipment. Bank shall provide for Executive's use an automobile,
the selection of which shall be within the discretion of the Board of Directors.
Bank shall pay all the expenses (including, but not limited to, maintenance,
fuel, insurance, registration) related to such automobile during the Term. Bank
shall also provide Executive with a cellular phone for Executive's reasonable
use in the performance of his duties hereunder. Bank shall pay all reasonable
expenses in connection with the business use of such cellular phone.

        3.4. Group Medical and Other Benefits. Bank shall provide for Executive,
at Bank's expense, participation in the medical and other benefit plans offered
to other similarly titled employees of Bank. Executive shall be eligible to
participate in Bank's 401(k) Plan. Executive will also be eligible to
participate in Bank's Senior Management Retirement Program on terms agreeable to
Bank and Executive.

        3.5. Sick Leave. Executive shall be entitled to sick leave in accordance
with Bank's personnel policy. Accrued sick leave may not be carried over from
prior periods and Executive shall not be entitled to be paid in lieu thereof.

        3.6. Stock Options. Executive shall be entitled to receive an option to
purchase fifteen thousand (15,000) shares of common stock of Temecula Valley
Bancorp Inc. ("Company") should a new stock option plan be approved by the
shareholders of the Company.

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<PAGE>

        3.7. Salary Deferment Program. Bank will use its best efforts to afford
to Executive, as soon as practicable, a salary deferment plan the terms of which
are acceptable to both parties.

     4. TERMINATION

        4.1. Termination With Cause. Except as otherwise provided herein, this
Agreement may be terminated by Bank, at Bank's option with notice to Executive,
upon the occurrence of any of the following events:

             (a)  A material breach by Executive of any of the express terms or
provisions of this Agreement;

             (b)  Executive is charged with illegal activity or pleads guilty to
or nolo contendere to, illegal activity;

             (c)  Executive has committed any illegal or dishonest act which
would cause termination of coverage under Bank's Bankers Blanket Bond as to
Executive or termination of coverage as to Bank as a whole;

             (d)  Executive fails to perform or neglects Executive's duties or
commits an act of malfeasance or misfeasance in connection therewith;

             (e)  Executive becomes permanently disabled, as determined in good
faith by the Board of Directors;

             (f)  The Comptroller of the Currency, or any other regulatory
agency having jurisdiction, requests Executive's dismissal or removal, issues a
notice of suspension or removal, finally removes, or suspends Executive from
office;

             (g)  The Comptroller of the Currency or other supervisory or
regulatory authority having jurisdiction takes possession of the property and
business of Bank; or

             (h)  The death of the Executive.

        4.2. Termination Without Cause. During the Term, subject to provisions
specifically intended to survive termination, this Agreement may be terminated
by either party without cause upon written notice to the other.

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<PAGE>

        4.3. Compensation Upon Termination. If Executive's employment is
terminated by Bank pursuant to Section 4.1 above, or by Executive pursuant to
Section 4.2, Executive shall then only be entitled to receive his Annual Salary
(as in effect immediately prior to termination) earned through the effective
date of such termination. If Executive's employment is terminated by Bank
pursuant to Section 4.2, subject to any limitations on payments under applicable
federal or state law, Executive shall be entitled to the same amount as if the
termination had been pursuant to Section 4.1, plus: (i) any earned but unpaid
Bonus; and (ii) an immediate payment of severance equal to Executive's Annual
Salary (as in effect immediately prior to termination) for one year, paid over
one year in substantially equal installments, in accordance with the Bank's
normal payroll periods as in effect from time to time.

        4.4. Vesting of Options Upon Change of Control. Executive's option
agreements covering stock options to be issued to him shall provide that in the
event of a Change in Control (as defined below), all options shall vest
immediately prior to any Change in Control. "Change of Control" means: (a) more
than fifty percent (50%) of the Company's voting stock is transferred to a
person or entity that is not an Affiliate of the Company prior to the
transaction ("Affiliate," as that term is defined in 12 U.S.C. Section 371c); or
(b) a merger or consolidation transaction pursuant to which the Company's
shareholders prior to the merger or consolidation own less than fifty percent
(50%) of the voting power with respect to the election of directors of the
resulting entity after the merger or consolidation.

        4.5. Other Employment. In the event of termination of Executive under
Section 4.2 and payment by Bank of the severance compensation, Executive agrees
not to seek or accept employment in the Banking industry for performance of
services within a twenty five (25) mile radius of every location Bank maintains
an office for a period of one (1) year from the effective date of termination.
If Executive chooses to accept such employment, he shall not be entitled to the
severance payments and to the extent paid, shall be repaid immediately to Bank.

     5. GENERAL PROVISIONS.

        5.1. Ownership of Books and Records; Confidentiality.

             (a)  All records or copies thereof of the accounts of customers,
and any other records and books relating in any manner whatsoever to Bank
customers, and all other files, books and records and other materials owned by
the Bank and the Company or used by it in connection with the conduct of its
business, whether prepared by Executive or otherwise coming into his possession,
shall be the exclusive property of the Company and the Bank regardless of who
actually prepared the original material, book or record. All such books and
records and other materials, together with all copies thereof, shall be
immediately returned to the Bank by Executive on any termination of his
employment; and

                                       4
<PAGE>

             (b)  During the Term, Executive will have access to and become
acquainted with what Executive and Bank acknowledge are trade secrets, to wit,
knowledge or data concerning the Bank and the Company, including their
operations and business, and the identity of customers, including knowledge of
their financial condition, their financial needs, as well as their methods of
doing business. Executive shall not disclose any of the aforesaid trade secrets,
directly or indirectly, or use them in any way, either during the Term or
thereafter, except as required in the course of Executive's employment with
Bank.

        5.2. Assignment and Modification. This Agreement, and the rights and
duties hereunder, may not be assigned by Executive.

        5.3. Notices. All notices required or permitted hereunder shall be in
writing and shall be delivered in person, sent by courier, by facsimile or
certified or registered mail, return receipt requested, postage prepaid as
follows:

        To Bank:                     Temecula Valley Bank, N.A.
                                     27710 Jefferson Drive, Suite A100
                                     Temecula, California 92590
                                     Attn: Stephen H. Wacknitz,
                                     President / Chief Executive Officer
                                     Facsimile:        (909) 694-9194

        To Executive:                Brian Carlson
                                     ___________________________________________
                                     Facsimile: ________________________________

        With a copy to:              Stephanie E. Allen, Esq.
                                     McAndrews, Allen & Matson
                                     2040 Main Street, 14th Floor
                                     Irvine, CA  92614
                                     Facsimile:        (949) 955-3723

or to such other party or address as either of the parties may designate in a
written notice served upon the other party in the manner provided herein. All
notices required or permitted hereunder shall be deemed duly given and received
on the date received if delivered in person, by courier or by facsimile, or on
the third day next succeeding the date of mailing if sent by certified or
registered mail, postage prepaid.

        5.4. Successors. This Agreement shall be binding upon, and shall inure
to the benefit of, the successors and assigns of the parties.

        5.5. Entire Agreement. Except as provided herein, this Agreement
constitutes the entire agreement between the parties, and all prior
negotiations, representations, or agreements between the parties, whether oral
or written, are merged into this Agreement. This Agreement may only be modified
by an agreement in writing executed by both of the parties hereto.

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<PAGE>

        5.6. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California.

        5.7. Executed Counterparts. This Agreement may be executed in one or
more counterparts, all of which together shall constitute a single agreement and
each of which shall be an original for all purposes.

        5.8. Section Headings. The various section headings are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement or any section hereof.

        5.9. Calendar Days/Close of Business. Unless the context so requires,
all periods terminating on a given day, period of days or date shall terminate
at the close of business on that day or date and references to "days" shall
refer to calendar days.

        5.10. Attorneys' Fees. In the event that any party shall bring an action
or arbitration in connection with the performance, breach or interpretation
hereof, then the prevailing party in such action as determined by the court or
other body having jurisdiction shall be entitled to recover from the losing
party in such action, as determined by the court or other body having
jurisdiction, all reasonable costs and expenses of litigation or arbitration,
including reasonable attorneys' fees, court costs, costs of investigation and
other costs reasonably related to such proceeding, in such amounts as may be
determined in the discretion of the court or other body having jurisdiction.

        5.11. Rules of Construction. The parties hereby agree that the normal
rule of construction, which requires the court to resolve any ambiguities
against the drafting party, shall not apply in interpreting this Agreement. Each
party to this Agreement has had sufficient opportunity to review it with
counsel. This Agreement shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of all parties hereto. Each provision of this Agreement shall be
interpreted in a manner to be effective and valid under applicable law, but if
any provision shall be prohibited or ruled invalid under applicable law, the
validity, legality and enforceability of the remaining provisions shall not,
except as otherwise required by law, be affected or impaired as a result of such
prohibition or ruling.

                                       6
<PAGE>

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

        Bank:                        TEMECULA VALLEY BANK, N.A.

                                     By:  /s/ Stephen H. Wacknitz
                                          -----------------------
                                          Stephen H. Wacknitz
                                          President and Chief Executive Officer

        Executive:                        /s/ Brian Carlson
                                          -----------------
                                          Brian Carlson

                                       7
<PAGE>

                                   Exhibit "A"

                                    Duties of
                            Executive Vice President
                            ------------------------

POSITION TITLE:         Executive Vice President/SBA Department

REPORTS DIRECTLY TO:    President/Chief Executive Officer

FUNCTION:               Senior Management of the SBA Department

DUTIES:

1.       Oversee overall growth of the Bank's SBA Department; Responsible for
         establishing, in consultation with the Bank's President and other key
         personnel, and achieving target growth of the Bank.

2.       Supervise and effectively manage SBA personnel.

3.       Aid in achieving CRA compliance.

4.       Ensure the policies and procedures of the SBA Department are adhered to
         and maintained up to industry standards; take initiative to implement
         any policy or procedure changes required by law or good sound
         practices.

                                       A-1

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