Document:

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                                                                    EXHIBIT 10.8

                     EXECUTIVE SALARY CONTINUATION AGREEMENT

This Agreement is made and entered into this 1st day of October, 2001, by and
between Redlands Centennial Bank, a California state banking corporation (the
"Employer"), and Beth Sanders, an individual residing in the State of California
(hereinafter referred to as the "Executive").

                                    RECITALS

WHEREAS, the Executive is an employee of the Employer and is serving as its
Executive Vice President and Chief Financial Officer;

WHEREAS, the Executive's experience and knowledge of the affairs of the Employer
and the banking industry are extensive and valuable;

WHEREAS, it is deemed to be in the best interests of the Employer to provide the
Executive with certain salary continuation benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Employer's employment; and

WHEREAS, the Executive and the Employer wish to specify in writing the terms and
conditions upon which this additional compensatory incentive will be provided to
the Executive, or to the Executive's spouse or the Executive's designated
beneficiaries, as the case may be;

NOW, THEREFORE, in consideration of the services to be performed in the future,
as well as the mutual promises and covenants contained herein, the Executive and
the Employer agree as follows:

AGREEMENT

1. Terms and Definitions.

I.I. Administrator. The Employer shall be the "Administrator" and, solely for
the purposes of ERISA, the "fiduciary" of this Agreement where a fiduciary is
required by ERISA.

1.2. Annual Benefit. The term "Annual Benefit" shall mean an annual sum of
Seventy-five thousand dollars ($75,000), increased by 3% on the anniversary of
the Executive's birthday beginning with the first anniversary after Executive
reaches or would have reached age 65 and continuing until all benefits pursuant
to this Agreement are paid, multiplied by the Applicable Percentage (defined
below) and then reduced to the extent required: (1) under the other provisions
of this Agreement; (ii) by reason of the lawful order of any regulatory agency
or body having jurisdiction over the Employer; and (111) in order for the
Employer to properly comply with any and all applicable state and federal laws,
including, but not limited to, income, employment and disability income tax laws
(eg., FICA, FUTA, SDI).

1.3. Applicable Percentage. The term "Applicable Percentage" shall mean that
percentage listed on Schedule "A" attached hereto which is adjacent to the
number of complete years (with a "year" being the performance of personal
services for or on behalf of the Employer as an employee for a period of 365
days) which have elapsed starting from the Effective Date of this Agreement and
ending on the date the Executive's employment is terminated for purposes of this
Agreement. In the event the Executive's employment with the Employer is
terminated other than by reason of death, termination for cause or Retirement on
the part of the Executive, the Executive shall be deemed for purposes
<PAGE>

of determining the number of complete years to have completed a year of service
in its entirety for any partial year of service after the last anniversary date
of the Effective Date during which the Executive's employment is terminated,
provided that in no event shall the Executive be deemed to have completed a year
of service for the partial year that occurs prior to the first anniversary date
of this Agreement.

1.4. Beneficiary . The term "beneficiary" or "designated beneficiary" shall mean
the person or persons whom the Executive shall designate in a valid Beneficiary
Designation, a copy of which is attached hereto as Exhibit "B", to receive the
benefits provided hereunder. A Beneficiary Designation shall be valid only if it
is in the form attached hereto and made a part hereof and is received by the
Administrator prior to the Executive's death.

1.5. The Code. The "Code" shall mean the Internal Revenue Code of 1986, as
amended (the "Code").

1.6. Effective Date. The term "Effective Date" shall mean the date upon which
this Agreement was entered into by the parties, as first written above.

1.7. ERISA. The term "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.

1.8. Plan Year. The term "Plan Year" shall mean the Employer's calendar year.

1.9. Retirement. The term "Retirement" or "Retires" shall refer to the date on
which the Executive attains the age of at least sixty-five (65) and acknowledges
in writing to the Employer to be the last day she will provide any significant
personal services, whether as an employee, director or independent consultant or
contractor, to the Employer. For purposes of this Agreement, the phrase
"significant personal services" shall mean more than ten (10) hours of personal
services rendered to one or more individuals or entities in any thirty (30) day
period.

1.10 Sale of Business. The term "Sale of Business" shall mean any (1) merger,
consolidation or reorganization of the Employer in which (A) the Employer does
not survive or (B) the Employer survives with a resulting change in beneficial
ownership of the Employer of more than 50% of the voting shares of the Employer,
(ii) sale of more than 50% of the beneficial ownership of the voting shares of
the Employer to any person or group of persons acting in concert, or (Ili)
transfer or sale of more than 50% of the total market value of the assets of the
Employer as reflected in the most recent published balance sheet of the
Employer.

1.11. Surviving Spouse. The term "Surviving Spouse" shall mean the person, if
any, who shall be legally married to the Executive on the date of the
Executive's death.

1.12. Termination for Cause. The term "Termination for Cause" shall mean the
termination of the Executive by the Employer upon the occurrence of any of the
following events:

     (i) the Executive is convicted of illegal activity by a court of competent
jurisdiction or pleads guilty to or nolo contendere to illegal activity, which
activity materially adversely affects the Employer's reputation in the community
or which evidences the lack of the Executive's fitness or ability to perform the
Executive's duty as determined by the Board of Directors in good faith;

     (ii) the Executive has committed any illegal or dishonest act which would
cause termination of coverage under the Employer's Bankers' Blanket Bond as to
the Executive, as distinguished from termination of coverage as to the Employer
as a whole;

     (iii) the Executive materially fails to perform, or habitually neglects,
the Executive's duties or commits a material act of malfeasance or misfeasance
in connection therewith; or

     (iv) an action is commenced by any bank regulatory agency having
jurisdiction, to remove or suspend the Executive from office, or a cease and
desist order under 12 U.S.C. 1818(b) or any similar Federal or state statute is
issued against the Executive or the Employer which calls for the Executive's
suspension or removal from office.
<PAGE>

2. Scope, Purpose and Effect.

2.1. Contract of Employment. Although this Agreement is intended to provide the
Executive with an additional incentive to remain in the employ of the Employer,
this Agreement shall not be deemed to constitute a contract of employment
between the Executive and the Employer nor shall any provision of this Agreement
restrict or expand the right of the Employer to terminate the Executive's
employment. This Agreement shall have no impact or effect upon any separate
written employment agreement which the Executive may have with the Employer, it
being the parties' intention and agreement that unless this Agreement is
specifically referenced in said employment agreement (or any modification
thereto), this Agreement (and the Employer's obligations hereunder) shall stand
separate and apart and shall have no effect upon, nor be affected by, the terms
and provisions of said employment agreement.

2.2. Fringe Benefit. The benefits provided by this Agreement are granted by the
Employer as a fringe benefit to the Executive and are not a part of any salary
reduction plan or any arrangement deferring a bonus or a salary increase. The
Executive has no option to take any current payments or bonus in lieu of the
benefits provided by this Agreement.

3. Payments Upon or After Retirement.

3.1. Payments Upon Retirement. If the Executive shall remain in the continuous
employment of the Employer until Retirement, the Executive shall be entitled to
be paid the Annual Benefit, with the Applicable Percent equal to 100% for a
period of fifteen (15) years, in one hundred eighty (180) equal monthly
installments, with each installment to be paid on the first day of each month,
beginning with the month following the month in which the Executive Retires or
upon such later date as may be mutually agreed upon in writing by the Executive
and the Employer in advance of said Retirement Date.

3.2. Payments in the Event of Death After Retirement. The Employer agrees that
if the Executive Retires, but shall die before receiving all of the one hundred
eighty (ISO) monthly payments described in paragraph 3.1 above, the Employer
will make the remaining monthly payments, undiminished and on the same schedule
as if the Executive had not died, to the Executive's designated beneficiary. If
a valid Beneficiary Designation is not in effect, then the remaining amounts due
to the Executive under the term of this Agreement shall be paid to the
Executive's Surviving Spouse. If the Executive leaves no Surviving Spouse, the
remaining amounts due to the Executive under the terms of this Agreement shall
be paid to the duly qualified personal representative, executor or administrator
of the Executive's estate.

4. Payments in the Event of Death Prior to Retirement. In the event the
Executive should die while actively employed by the Employer at any time after
the Effective Date of this Agreement, but prior to Retirement, the Employer
agrees to pay the Annual Benefit with the Applicable Percentage equal to 100%
for a period of fifteen (15) years in one hundred eighty (180) equal monthly
installments, with each installment to be paid on the first of each month
beginning with the month following the Executive's death, to the Executive's
designated beneficiary. If a valid Beneficiary Designation is not in effect,
then the amounts due to the Executive under the terms of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the amounts due to the Executive under the terms of this Agreement shall
be paid to the duly qualified personal representative, executor or administrator
of the Executive's estate.

5. Payments in the Event Employment is Terminated Other than by Death,
Termination for Cause or Retirement. As indicated in Paragraph 2 above, the
Employer reserves the right to terminate the Executive's employment, with or
without cause but subject to any written employment agreement which may then
exist, at any time prior to the Executive's Retirement. In the event that the
employment of the Executive shall be terminated for any reason, including
voluntary termination by the Executive, but other than by reason of (i) death,
(ii) Termination for Cause, or (ill) Retirement, the Executive or her legal
representative shall be entitled to be paid the Annual Benefit, with the
Applicable Percentage as set forth in Schedule A and as determined by the
applicable years of service at the time of
<PAGE>

termination of employment with the Employer, for a period of fifteen (15) years
in one hundred eighty (180) equal monthly installments, with each installment to
be paid on the first day of each month, beginning with the month following the
month in which the Executive terminates employment and attains sixty-five (65)
years of age, provided that in the event the Executive dies after such
termination but prior to age 65 then such benefits are to be paid beginning with
the month following the Executive's death.

5.1 Termination in a Sale of Business. In the event there is a Sale of Business,
following which Executive is not retained in the same or comparable position,
the Executive shall be entitled to be paid in cash in a lump sum on the date of
the consummation of the Sale of Business, the present value of the aggregate
amount of'. the Annual Benefit as if it were to be paid beginning at Executive's
Retirement, with the Applicable Percentage being 100%, being paid for a period
of fifteen (15) years in one hundred eighty (180) monthly installments beginning
on the first day of the month following the consummation of the Sale of
Business. The present value of the amount shall be determined using the long
term monthly Applicable Federal Rate at the time of the consummation of the Sale
of Business. Notwithstanding the prior paragraph, no payment shall be made to
Executive pursuant to this Agreement to the extent that such payment when
aggregated with all other payments considered for purposes of calculating a
parachute payment results in an excess parachute payment as defined under
Section 28OG of the Code. If the Internal Revenue Service or any other tax
authority makes any claim, demand or assessment in any form based directly or
indirectly, in whole or in part, on the allegation that any payment under this
Agreement and/or any other payment by Employer to or for the benefit of the
Executive at any time constitutes a "parachute payment" under Section 28OG of
the Code or any similar or successor provision of federal or state law,
Executive agrees that Employer, its successors and assigns shall have no
obligation, whether for defense, indemnification, reimbursement or otherwise,
with respect to such claim, demand or assessment. No benefit payments provided
in this Paragraph 5.1 shall be made to Executive, Executive's designated
beneficiary, Surviving Spouse or Executive's estate if the Executive is entitled
to benefits provided by any other Paragraph of this Agreement.

6. Termination for Cause. Notwithstanding anything to the contrary, in the event
the termination of employment of the Executive is Termination for Cause as
defined in Paragraph 1. 13, the Executive shall not be entitled to any benefits
pursuant to this agreement.

7. No Ownership Rights to the Employer's Assets. The Employer reserves the right
to determine, in its sole and absolute discretion, whether, to what extent and
by what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement ("Benefits"). The rights of the
Executive or any beneficiary of the Executive under this Agreement shall be
solely those of an unsecured creditor of the Employer. In the event that the
Employer, in its sole and absolute discretion, elects to acquire an insurance
policy, an annuity or any other asset to recoup the costs or any portion thereof
of the Benefits, then such insurance policy, annuity or other asset shall not be
deemed to be held under any trust for the benefit of the Executive or her
beneficiaries or to be security for the performance of the obligations of the
Employer under this Agreement, but shall be, and remain, a general unpledged,
unrestricted asset of the Employer. The Executive and her beneficiaries shall
have no rights whatsoever with respect to, or any claim against, any such
insurance policy, annuity or other asset. In connection with the Employer
electing to acquire any such insurance policy or annuity, the Executive agrees
to cooperate to facilitate such acquisition, and pursuant thereto shall execute
such documents and undergo such medical examinations or tests as the Employer
may reasonably request.

8. Claims Procedure. The Employer shall, but only to the extent necessary to
comply with ERISA, be designated as the named fiduciary under this Agreement and
shall have authority to control and manage the operation and administration of
this Agreement. Consistent therewith, the Employer shall make all determinations
as to the rights to benefits under this Agreement. Any decision by the Employer
denying a claim by the Executive, the Executive's spouse, or the Executive's
beneficiary for benefits under this Agreement shall be stated in writing and
delivered or mailed, via registered or certified mail, to the Executive, the
Executive's spouse or the Executive's beneficiary, as the case may be. Such
decision shall set forth the specific reasons for the denial of a claim. In
addition, the Employer
<PAGE>

shall provide the Executive, the Executive's spouse or the Executive's
beneficiary with a reasonable opportunity for a full and fair review of the
decision denying such claim.

9. Status of an Unsecured General Creditor. Notwithstanding anything contained
herein to the contrary: (1) neither the Executive, the Executive's spouse nor
the Executive's beneficiary shall have any legal or equitable rights, interests
or claims in or to any specific property or assets of the Employer; (ii) none of
the Employer's assets shall be held in or under any trust for the benefit of the
Executive, the Executive's spouse or the Executive's beneficiary or held in any
way as security for the fulfillment of the obligations of the Employer under
this Agreement; (111) all of the Employer's assets shall be and remain the
general unpledged and unrestricted assets of the Employer; (iv) the Employer's
obligation under this Agreement shall be that of an unfunded and unsecured
promise by the Employer to pay money in the future; and (v) the Executive, the
Executive's spouse and the Executive's beneficiary shall be unsecured general
creditors with respect to any benefits which may be payable under the terms of
this Agreement.

10. Covenant Not to Interfere. The Executive agrees not to take any action which
prevents the Employer from collecting the proceeds of any life insurance policy
which the Employer may happen to own at the time of the Executive's death and of
which the Employer is the designated beneficiary.

11. Miscellaneous.

11.1. Opportunity to Consult with Independent Counsel. The Executive
acknowledges that she has been afforded the opportunity to consult with
independent counsel of her choosing regarding both the benefits granted to her
under the terms of this Agreement and the terms and conditions which may affect
the Executive's right to these benefits. The Executive further acknowledges that
she has read, understands and consents to all of the terms and conditions of
this Agreement, and that she enters into this Agreement with a full
understanding of its terms and conditions.

11.2. Arbitration of Disputes. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
presently located at Los Angeles, California. In the event JAMS is unable or
unwilling to conduct the arbitration provided for under the terms of this
Paragraph, or has discontinued its business, the parties agree that a
representative member, selected by the mutual agreement of the parties, of the
American Arbitration Association ("AAA"), presently located at Los Angeles,
California, shall conduct the binding arbitration referred to in this Paragraph.
Notice of the demand for arbitration shall be filed in writing with the other
party to this Agreement and with JAMS (or AAA, if necessary). In no event shall
the demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. The arbitration shall
be subject to such rules of procedure used or established by JAMS, or if there
are none, the rules of procedure used or established by AAA. Any award rendered
by JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, beneficiaries, legal representatives, agents, successors
and assigns, and may be entered in any court having jurisdiction thereof. The
obligation of the parties to arbitrate pursuant to this clause shall be
specifically enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in Southern California,
unless otherwise agreed to by the parties.

11.3. Attorneys' Fees. In the event of any arbitration or litigation concerning
any controversy, claim or dispute between the parties hereto, arising out of or
relating to this Agreement or the breach hereof, or the interpretation hereof,
the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.
<PAGE>

11.4. Notice. Any notice required or permitted of either the Executive or the
Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

If to the Employer:

Redlands Centennial Bank 218 East State Street Redlands, California 92373
Attention: Timothy Walbridge, President/CEO

If to the Executive:

Beth Sanders 1310 5th Avenue Redlands, California 92374

11.5. Assignment. Neither the Executive, the Executive's spouse, nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, hypothecate, modify or otherwise encumber any part or all of the amounts
payable hereunder, nor, prior to payment in accordance with the terms of this
Agreement, shall any portion of such amounts be: (i) subject to seizure by any
creditor of any such beneficiary, by a proceeding at law or in equity, for the
payment of any debts, judgments, alimony or separate maintenance obligations
which may be owed by the Executive, the Executive's spouse, or any designated
beneficiary; or (11) transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. Any such attempted assignment or transfer
shall be void and shall terminate this Agreement, and the Employer shall
thereupon have no further liability hereunder.

11.6. Binding Effect/Merger or Reorganization. This Agreement shall be binding
upon and inure to the benefit of the Executive and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement. Upon
the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such surviving or successor firm, person, entity or
corporation.

11.7. Nonwaiver. The failure of either party to enforce at any time or for any
period of time any one or more of the terms or conditions of this Agreement
shall not be a waiver of such term(s) or condition(s) or of that party's right
thereafter to enforce each and every term and condition of this Agreement.

11.8. Partial Invalidity. If any term, provision, covenant or condition of this
Agreement is determined by an arbitrator or a court, as the case may be, to be
invalid, void, or unenforceable, such determination shall not render any other
term, provision, covenant or condition invalid, void or unenforceable, and the
Agreement shall remain in full force and effect notwithstanding such partial
invalidity.

11.9. Entire Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties with respect to the subject
matter of this Agreement and contains all of the covenants and agreements
between the parties with respect thereto. Each party to this Agreement
acknowledges that no other representations, inducements, promises or agreements,
oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not set forth herein, and that no other agreement,
statement or promise not contained in this Agreement shall be valid or binding
on either party.

11. 10. Modifications. Any modification of this Agreement shall be effective
only if it is in writing and signed by each party or such party's authorized
representative.
<PAGE>

11.11. Paragraph Headings. The paragraph headings used in this Agreement are
included solely for the convenience of the parties and shall not affect or be
used in connection with the interpretation of this Agreement.

11.12. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.

11.13. Governing Law. The laws of the State of California, other than those laws
denominated choice of law rules, and, where applicable, the rules and
regulations of the Federal Deposit Insurance Corporation or any other regulatory
agency or governmental authority having jurisdiction over the Employer, shall
govern the validity, interpretation, construction and effect of this Agreement.

12. Right of the Employer to Pay a Lump Sum. Unless expressly provided for
herein, the Employer shall at its sole discretion have the right to pay in a
lump sum the then present value using a discount rate that is to be mutually
agreed upon between the Employer and the Executive or the Executive's
beneficiary of all payments vested and due the Executive or the Executive's
beneficiary pursuant to this Agreement.

IN WITNESS WHEREOF, the Employer and the Executive have executed this Agreement
on the date first above-written in the City of Redlands, San Bernardino County,
California.

 /s/ Timothy Walbridge                              /s/ Beth Sanders
-------------------------------                    -----------------------------
REDLANDS CENTENNIAL BANK                           BETH SANDERS
"Employer"                                         "Executive"
Timothy Walbridge, President/CEO

SCHEDULE A

NUMBER OF            COMPLETE APPLICABLE
YEARS OF SERVICE     PERCENTAGE
1                            10%
2                            20%
3                            30%
4                            40%
5                            50%
6                            60%
7                            70%
8                            80%
9                            90%
10  or more                 100%<PAGE>

                                                                    EXHIBIT 10.9

                     EXECUTIVE SALARY CONTINUATION AGREEMENT

This Agreement is made and entered into this I" day of October, 2001, by and
between Palomar Community Bank, a California state banking corporation (the
"Employer"), and Richard Sanborn, an individual residing in the State of
California (hereinafter referred to as the "Executive").

                                    RECITALS

WHEREAS, the Executive is an employee of the Employer and is serving as its
President/CEO;

WHEREAS, the Executive's experience and knowledge of the affairs of the Employer
and the banking industry are extensive and valuable;

WHEREAS, it is deemed to be in the best interests of the Employer to provide the
Executive with certain salary continuation benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Employer's employment; and

WHEREAS, the Executive and the Employer wish to specify in writing the terms and
conditions upon which this additional compensatory incentive will be provided to
the Executive, or to the Executive's spouse or the Executive's designated
beneficiaries, as the case may be;

NOW, THEREFORE, in consideration of the services to be performed in the future,
as well as the mutual promises and covenants contained herein, the Executive and
the Employer agree as follows:

AGREEMENT

1. Terms and Definitions.

1.1. Administrator. The Employer shall be the "Administrator" and, solely for
the purposes of ERISA, the "fiduciary" of this Agreement where a fiduciary is
required by ERISA.

1.2. Annual Benefit. The term "Annual Benefit" shall mean an annual sum of
seventy five thousand dollars ($75,000), multiplied by the Applicable Percentage
(defined below) and then reduced to the extent required: (i) under the other
provisions of this Agreement; (11) by reason of the lawful order of any
regulatory agency or body having jurisdiction over the Employer; and (iii) in
order for the Employer to properly comply with any and all applicable state and
federal laws, including, but not limited to, income, employment and disability
income tax laws (e.g., FICA, FUTA, SDI).

1.3. Applicable Percentage. The term "Applicable Percentage" shall mean that
percentage listed on Schedule "A" attached hereto which is adjacent to the
number of complete years (with a "year" being the performance of personal
services for or on behalf of the Employer as an employee for a period of 365
days) which have elapsed starting from the Effective Date of this Agreement and
ending on the date the Executive's employment is terminated for purposes of this
Agreement. In tile event the Executive's employment with the Employer is
terminated other than by reason of death, termination for cause or Retirement on
the part of the Executive, the Executive for purposes of determining the number
of complete years to have completed a year of service in its entirety for any
partial year of service after the last anniversary date of the Effective Date
during which the Executive's employment is terminated, provided that in no event
shall the Executive be deemed to have completed a year of service for the
partial year that occurs prior to the first anniversary date of this Agreement.
<PAGE>

1.4. Beneficiary . The term "beneficiary" or "designated beneficiary" shall mean
the person or persons whom the Executive shall designate in a valid Beneficiary
Designation, a copy of which is attached hereto as Exhibit "B", to receive the
benefits provided hereunder. A Beneficiary Designation shall be valid only if it
is in the form attached hereto and made a part hereof and is received by the
Administrator prior to the Executive's death.

1.5. The Code. The "Code" shall mean the Internal Revenue Code of 1986, as
amended (the "Code").

1.6. Effective Date. The term "Effective Date" shall mean the date upon which
this Agreement was entered into by the parties, as first written above.

1.7. ERISA. The term "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.

1.8. Plan Year. The term "Plan Year" shall mean the Employer's calendar year.

1.9. Retirement. The term "Retirement" or "Retires" shall refer to the date on
which the Executive attains the age of at least sixty-five (65) and acknowledges
in writing to the Employer to be the last day he will provide any significant
personal services, whether as an employee, director or independent consultant or
contractor, to the Employer. For purposes of this Agreement, the phrase
"significant personal services" shall mean more than ten (10) hours of personal
services rendered to one or more individuals or entities in any thirty-day (30)
period.

1.10 Sale of Business. The term "Sale of Business" shall mean any (1) merger,
consolidation or reorganization of the Employer in which (A) the Employer does
not survive or (B) the Employer survives with a resulting change in beneficial
ownership of the Employer of more than 50% of the voting shares of the Employer,
(ii) sale of more than 50% of the beneficial ownership of the voting shares of
the Employer to any person or group of persons acting in concert, or (iii)
transfer or sale of more than 50% of the total market value of the assets of the
Employer as reflected in the most recent published balance sheet of the
Employer.

1.11. Surviving Spouse. The term "Surviving Spouse" shall mean the person, if
any, who shall be legally married to the Executive on the date of the
Executive's death.

1.12. Termination for Cause. The term "Termination for Cause" shall mean the
termination of the Executive by the Employer upon the occurrence of any of the
following events:

     (i) the Executive is convicted of illegal activity by a court of competent
jurisdiction or pleads guilty to or nolo contendere to illegal activity, which
activity materially adversely affects the Employer's reputation in the community
or which evidences the lack of the Executive's fitness or ability to perform the
Executive's duty as determined by the Board of Directors in good faith;

     (ii) the Executive has committed any illegal or dishonest act which would
cause termination of coverage under the Employer's Bankers' Blanket Bond as to
the Executive, as distinguished from termination of coverage as to the Employer
as a whole;

     (iii) the Executive materially falls to perform, or habitually neglects,
the Executive's duties or commits a material act of malfeasance or misfeasance
in connection therewith; or

     (iv) an action is commenced by any bank regulatory agency having
jurisdiction, to remove or suspend the Executive from office, or a cease and
desist order under 12 U.S.C. 1818(b) or any similar Federal or state
<PAGE>

statute is issued against the Executive or the Employer which calls for the
Executive's suspension or removal from office.

2. Scope, Purpose and Effect.

2.1. Contract of Employment. Although this Agreement is intended to provide the
Executive with an additional incentive to remain in the employ of the Employer,
this Agreement shall not be deemed to constitute a contract of employment
between the Executive and the Employer nor shall any provision of this Agreement
restrict or expand the right of the Employer to terminate the Executive's
employment. This Agreement shall have no impact or effect upon any separate
written employment agreement which the Executive may have with the Employer, it
being the parties' intention and agreement that unless this Agreement is
specifically referenced in said employment agreement (or any modification
thereto), this Agreement (and the Employer's obligations hereunder) shall stand
separate and apart and shall have no effect upon, nor be affected by, the terms
and provisions of said employment agreement.

2.2. Fringe Benefit. The benefits provided by this Agreement are granted by the
Employer as a fringe benefit to the Executive and are not a part of any salary
reduction plan or any arrangement deferring a bonus or a salary increase. The
Executive has no option to take any current payments or bonus in lieu of the
benefits provided by this Agreement.

3. Payments Upon or After Retirement.

3.1. Payments Upon Retirement. If the Executive shall remain in the continuous
employment of the Employer until Retirement, the Executive shall be entitled to
be paid the Annual Benefit, with the Applicable Percent equal to 100% for a
period of fifteen (15) years, in one hundred eighty (180) equal monthly
installments, with each installment to be paid on the first day of each month,
beginning with the month following the month in which the Executive Retires or
upon such later date as may be mutually agreed upon in writing by the Executive
and the Employer in advance of said Retirement Date.

3.2. Payments in the Event of Death After Retirement. The Employer agrees that
if the Executive Retires, but shall die before receiving all of the one hundred
eighty (180) monthly payments described in paragraph 3.1 above, the Employer
will make the remaining monthly payments, undiminished and on the same schedule
as if the Executive had not died, to the Executive's designated beneficiary. If
a valid Beneficiary Designation is not in effect, then the remaining amounts due
to the Executive under the term of this Agreement shall be paid to the
Executive's Surviving Spouse. If the Executive leaves no Surviving Spouse, the
remaining amounts due to the Executive under the terms of this Agreement shall
be paid to the duly qualified personal representative, executor or administrator
of the Executive's estate.

4. Payments in the Event of Death Prior to Retirement. In the event the
Executive should die while actively employed by the Employer at any time after
the Effective Date of this Agreement, but prior to Retirement, the Employer
agrees to pay the Annual Benefit with the Applicable Percentage equal to 100%
for a period of fifteen (15) years in one hundred eighty (180) equal monthly
installments, with each installment to be paid on the first of each month
beginning with the month following the Executive's death, to the Executive's
designated beneficiary. If a valid Beneficiary Designation is not in effect,
then the amounts due to the Executive under the terms of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the amounts due to the Executive under the terms of this Agreement shall
be paid to the duly qualified personal representative, executor or administrator
of the Executive's estate.
<PAGE>

5. Payments in the Event Employment are Terminated Other than by Death,
Termination for Cause or Retirement. As indicated in Paragraph 2 above, the
Employer reserves the right to terminate the Executive's employment, with or
without cause but subject to any written employment agreement which may then
exist, at any time prior to the Executive's Retirement. In the event that the
employment of the Executive shall be terminated for any reason, including
voluntary termination by the Executive, but other than by reason of (i) death,
(ii) Termination for Cause, or (iii) Retirement, the Executive or his legal
representative shall be entitled to be paid the Annual Benefit, with the
Applicable Percentage as set forth in Schedule A and as determined by the
applicable years of service at the time of termination of employment with the
Employer, for a period of fifteen (15) years in one hundred eighty (180) equal
monthly installments, with each installment to be paid on the first day of each
month, beginning with the month following the month in which the Executive
terminates employment and attains sixty-five (65) years of age, provided that in
the event the Executive dies after such termination but prior to age 65 then
such benefits are to be paid beginning with the month following the Executive's
death.

5.1 Termination in a Sale of Business. In the event there is a Sale of Business,
following which Executive is not retained in the same or comparable position,
the Executive shall be entitled to be paid in cash in a lump sum on the date of
the consummation of the Sale of Business, the present value of the aggregate
amount of- the Annual Benefit, with the Applicable Percentage being 100%, being
paid for a period of fifteen (15) years in one hundred eighty (180) monthly
installments beginning on the first day of the month following the consummation
of the Sale of Business. The present value of the amount shall be determined
using the long term monthly Applicable Federal Rate at the time of the
consummation of the Sale of Business. Notwithstanding the prior paragraph, no
payment shall be made to Executive pursuant to this Agreement to the extent that
such payment when aggregated with all other payments considered for purposes of
calculating a parachute payment results in an excess parachute payment as
defined under Section 28OG of the Code. If the Internal Revenue Service or any
other tax authority makes any claim, demand or assessment in any form based
directly or indirectly, in whole or in part, on the allegation that any payment
under this Agreement and/or any other payment by Employer to or for the benefit
of the Executive at any time constitutes a "parachute payment" under Section
28OG of the Code or any similar or successor provision of federal or state law,
Executive agrees that Employer, its successors and assigns shall have no
obligation, whether for defense, indemnification, reimbursement or otherwise,
with respect to such claim, demand or assessment. No benefit payments provided
in this Paragraph 5.1 shall be made to Executive, Executive's designated
beneficiary, Surviving Spouse or Executive's estate if the Executive is entitled
to benefits provided by any other Paragraph of this Agreement.

6. Termination for Cause. Notwithstanding anything to the contrary, in the event
the termination of employment of the Executive is Termination for Cause as
defined in Paragraph 1. 13, the Executive shall not be entitled to any benefits
pursuant to this agreement.

7. No Ownership Rights to the Employer's Assets. The Employer reserves the right
to determine, in its sole and absolute discretion, whether, to what extent and
by what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement ("Benefits"). The rights of the
Executive or any beneficiary of the Executive under this Agreement shall be
solely those of an unsecured creditor of the Employer. In the event that the
Employer, in its sole and absolute discretion, elects to acquire an insurance
policy, an annuity or any other asset to recoup the costs or any portion thereof
of the Benefits, then such insurance policy, annuity or other asset shall not be
deemed to be held under any trust for the benefit of the Executive or his
beneficiaries or to be security for the performance of the obligations of the
Employer under this Agreement, but shall be, and remain, a general unpledged
unrestricted asset of the Employer. The Executive and his beneficiaries shall
have no rights whatsoever with respect to, or any claim against, any such
insurance policy, annuity or other asset. In
<PAGE>

connection with the Employer electing to acquire any such insurance policy or
annuity, the Executive agrees to cooperate to facilitate such acquisition, and
pursuant thereto shall execute such documents and undergo such medical
examinations or tests as the Employer may reasonably request.

8. Claims Procedure. The Employer shall, but only to the extent necessary to
comply with ERISA, be designated as the named fiduciary under this Agreement and
shall have authority to control and manage the operation and administration of
this Agreement. Consistent therewith, the Employer shall make all determinations
as to the rights to benefits under this Agreement. Any decision by the Employer
denying a claim by the Executive, the Executive's spouse, or the Executive's
beneficiary for benefits under this Agreement shall be stated in writing and
delivered or mailed, via registered or certified mail, to the Executive, the
Executive's spouse or the Executive's beneficiary, as the case may be. Such
decision shall set forth the specific reasons for the denial of a claim. In
addition, the Employer shall provide the Executive, the Executive's spouse or
the Executive's beneficiary with a reasonable opportunity for a full and fair
review of the decision denying such claim.

9. Status of an Unsecured General Creditor. Notwithstanding anything contained
herein to the contrary: (1) neither the Executive, the Executive's spouse nor
the Executive's beneficiary shall have any legal or equitable rights, interests
or claims in or to any specific property or assets of the Employer; (ii) none of
the Employer's assets shall be held in or under any trust for the benefit of the
Executive, the Executive's spouse or the Executive's beneficiary or held in any
way as security for the fulfillment of the obligations of the Employer under
this Agreement-, (111) all of the Employer's assets shall be and remain the
general unpledged and unrestricted assets of the Employer; (iv) the Employer's
obligation under this Agreement shall be that of an unfunded and unsecured
promise by the Employer to pay money in the future; and (v) the Executive, the
Executive's spouse and the Executive's beneficiary shall be unsecured general
creditors with respect to any benefits which may be payable under the terms of
this Agreement.

10. Covenant Not to Interfere. The Executive agrees not to take any action which
prevents the Employer from collecting the proceeds of any life insurance policy
which the Employer may happen to own at the time of the Executive's death and of
which the Employer is the designated beneficiary.

11. Miscellaneous.

11.1. Opportunity to Consult with Independent Counsel. The Executive
acknowledges that he has been afforded the opportunity to consult with
independent counsel of his choosing regarding both the benefits granted to him
under the terms of this Agreement and the terms and conditions which may affect
the Executive's right to these benefits. The Executive further acknowledges that
he has read, understands and consents to all of the terms and conditions of this
Agreement, and that he enters into this Agreement with a full understanding of
its terms and conditions.

11.2. Arbitration of Disputes. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
presently located at Los Angeles, California. In the event JAMS is unable or
unwilling to conduct the arbitration provided for under the terms of this
Paragraph, or has discontinued its business, the parties agree that a
representative member, selected by the mutual agreement of the parties, of the
American Arbitration Association ("AAA"), presently located at Los Angeles,
California, shall conduct the binding arbitration referred to in this Paragraph.
Notice of the demand for arbitration shall be filed in writing with the
<PAGE>

other party to this Agreement and with JAMS (or AAA, if necessary). In no event
shall the demand for arbitration be made after the date when institution of
legal or equitable proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitations. The
arbitration shall be subject to such rules of procedure used or established by
JAMS, or if there are none, the rules of procedure used or established by AAA.
Any award rendered by JAMS or AAA shall be final and binding upon the parties,
and as applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns, and may be entered in any court having
jurisdiction thereof. The obligation of the parties to arbitrate pursuant to
this clause shall be specifically enforceable in accordance with, and shall be
conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Southern California, unless otherwise agreed to by the parties.

11.3. Attorneys' Fees. In the event of any arbitration or litigation concerning
any controversy, claim or dispute between the parties hereto, arising out of or
relating to this Agreement or the breach hereof, or the interpretation hereof,
the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.

11.4. Notice. Any notice required or permitted of either the Executive or the
Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

If to the Employer:
Palomar Community Bank 355 W. Grand Avenue Escondido, CA 92025 Attention:
Richard Sanborn

If to the Executive:
Richard Sanborn 12537 Caminito Vista Soledad San Diego, CA 92130

11.5. Assignment . Neither the Executive, the Executive's spouse, nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, hypothecate, modify or otherwise encumber any part or all of the amounts
payable hereunder, nor, prior to payment in accordance with the terms of this
Agreement, shall any portion of such amounts be: (1) subject to seizure by any
creditor of any such beneficiary, by a proceeding at law or in equity, for the
payment of any debts, judgments, alimony or separate maintenance obligations
which may be owed by the Executive, the Executive's spouse, or any designated
beneficiary; or (11) transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. Any such attempted assignment or transfer
shall be void and shall terminate this Agreement, and the Employer shall
thereupon have no further liability hereunder.

11.6. Binding Effect/Merger or Reorganization. This Agreement shall be binding
upon and inure to the benefit of the Executive and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and
<PAGE>

until such succeeding or continuing corporation, firm or person agrees to assume
and discharge the obligations of the Employer under this Agreement. Upon the
occurrence of such event, the term "Employer" as used in this Agreement shall be
deemed to refer to such surviving or successor firm, person, entity or
corporation.

11.7. Nonwaiver. The failure of either party to enforce at any time or for any
period of time any one or more of the terms or conditions of this Agreement
shall not be a waiver of such term(s) or condition(s) or of that party's right
thereafter to enforce each and every term and condition of this Agreement.

11.8. Partial Invalidity. If any term, provision, covenant or condition of this
Agreement is determined by an arbitrator or a court, as the case may be, to be
invalid, void, or unenforceable, such determination shall not render any other
term provision, covenant or condition invalid, void or unenforceable, and the
Agreement shall remain in full force and effect notwithstanding such partial
invalidity.

11.9. Entire Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties with respect to the subject
matter of this Agreement and contains all of the covenants and agreements
between the parties with respect thereto. Each party to this Agreement
acknowledges that no other representations, inducements, promises or agreements,
oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not set forth herein, and that no other agreement,
statement or promise not contained in this Agreement shall be valid or binding
on either party.

11.10. Modifications. Any modification of this Agreement shall be effective only
if it is in writing and signed by each party or such party's authorized
representative.

11.11. Paragraph Headings. The paragraph headings used in this Agreement are
included solely for the convenience of the parties and shall not affect or be
used in connection with the interpretation of this Agreement.

11.12. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.

11.13. Governing Law. The laws of the State of California, other than those laws
denominated choice of law rules, and, where applicable, the rules and
regulations of the Federal Deposit Insurance Corporation or any other regulatory
agency or governmental authority having jurisdiction over the Employer, shall
govern the validity, interpretation, construction and effect of this Agreement.

12. Right of the Employer to Pay a Lump Sum. Unless expressly provided for
herein, the Employer shall at its sole discretion have the right to pay in a
lump sum the then present value using a discount rate that is to be mutually
agreed upon between the Employer and the Executive or the Executive's
beneficiary of all payments vested and due the Executive or the Executive's
beneficiary pursuant to this Agreement.

IN WITNESS WHEREOF, the Employer and the Executive have executed this Agreement
on the date first above-written in the City of Escondido, San Diego County,
California.

 /s/ Robert A. Wedeking                                   /s/ Richard Sanborn
----------------------------------------                 -----------------------
PALOMAR COMMUNITY BANK                                   RICHARD SANBORN
"Employer"                                               "Executive"
Robert A. Wedeking Chairman of the Board
<PAGE>

SCHEDULE A
NUMBER OF COMPLETE                APPLICABLE
YEARS OF SERVICE                  PERCENTAGE
 1                                    5%
 2                                    5%
 3                                    5%
 4                                    5%
 5                                    5%
 6                                    5%
 7                                    5%
 8                                    5%
 9                                    5%
 10                                   5%
 11                                   5%
 12                                   5%
 13                                   5%
 14                                   5%
 15                                   5%
 16                                   5%
 17                                   5%
 18                                   5%
 19                                   5%
 20 or more                          100%

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