1.1                                Administrator . The Bank shall be the “Administrator” and, solely for the purposes of ERISA (as defined below), the “fiduciary” of this Agreement where a fiduciary is required by ERISA.

1.2                                Annual Deferral Amount .   The term “Annual Deferral Amount” shall mean that portion of Participant’s Director’s Fees that Participant elects to have (and which is) deferred, in accordance with the terms of this Plan, for any one Plan Year.  In addition, Participant must defer a minimum of Three Thousand Six Hundred ($3,600) each Deferral Period. In the event that Participant elects to defer a specific dollar amount (as opposed to a percentage of Fees), then such specified amount shall be presumed to be deferred on a pro-rata basis (i.e. each pay period) as if Director continuously provided services throughout the year. In the event that Director Separates From Service, all further Deferrals shall cease.

1.3                                Bank.    For the purpose of this Agreement, the term “Bank” or “Employer” shall be read so as to include the Santa Lucia Bank holding company, Santa Lucia Bancorp, when permissible.

1.4                                Beneficiary .  The term “ Beneficiary(ies)” shall refer to the person, persons or entity designated in writing by Director on forms provided by the Administrator (“Beneficiary Designation Form”) to receive the benefits payable under this Agreement. Director may change his Beneficiary from time to time, so long as permissible, by filing a new written Beneficiary Designation Form with the Administrator, and such designation shall be effective upon receipt by the Administrator. If Director has not validly designated a beneficiary, or if a designated Beneficiary predeceases Director, then any benefit owed pursuant to this Agreement shall be made to Director’s estate.

1.5                                Board of Directors .  The Board of Directors shall mean the Board of Directors for the Bank, hereinafter, the “Board”.

1.6                                Change in Control .   For the purpose of this Plan, a “Change in Control” shall be deemed to have occurred upon any of the following events, as such terms and events are defined in Internal Revenue Code Section 409A and the related guidance and Notices thereto. IRC 409A currently provides that a Change in Control Event shall include any of the following events (and for the purposes of this provision, the term “corporation” shall mean the Bank or the Bank’s holding company):

A.                                    A Change in the Ownership of a Corporation . A change in the ownership of a corporation occurs on the date that any one person or persons acting as a group (as defined in IRC 409A), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation.

B.                                      Change in the Effective Control of a Corporation. A change in the effective control of the corporation shall be deemed to occur on either of the following dates:

(i) The date any one person, or persons acting as a group acquires (or has acquired during the 12 month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the corporation possessing thirty percent (30%) or more of the total voting power of the stock of such corporation; or

(ii) The date a majority of members of the corporation’s board of directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors before the date of the appointment or election. (In this sub-paragraph, 409A limits “corporation” to the “relevant” corporation” as defined therein).

C.                                      Change in the Ownership of a Substantial Portion of a Corporation’s Assets . A change in the ownership of a substantial portion of a corporation’s assets shall be deemed to occur on the date that any one person or group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions. No Change in Control shall result if the assets are transferred to certain entities controlled directly or indirectly by the shareholders of the transferring corporation.

In addition to the forgoing, and in accordance with IRC 409A, in order to constitute a Change in Control event with respect Participant, the Change in Control event must relate to (i) the corporation for whom the Participant is performing services at the time of the Change in Control; (ii) the corporation that is liable for the payment of the deferred compensation (or all corporations liable for the payment if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of service by Participant for such corporation (or corporations) or there is a bona fide business purpose for such corporation or corporations to be liable for such payment and, in either case, no significant purpose of making such corporation or corporations liable for such payment is the avoidance of Federal income tax; or  (iii) a corporation that is a majority shareholder of a corporation identified above, or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified above. Should there be any question of whether a Change in Control has occurred such as to trigger payment of a benefit described herein, any ambiguity shall be resolved in accordance with the final regulations and any subsequent clarification of IRC 409A.

1.7                                The Code .  The “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.8                                Deferral Election Form. The term “Deferral Election Form” shall refer to the form established from time to time by the Bank that Participant completes, signs and returns to the Administrator to make a Deferral Election under the plan.

1.9                                Deferral Period . “Deferral Period” means the period over which Participant has elected to defer a portion of his Director’s Fees. Each Plan Year shall be a separate Deferral Period, however, the prior Deferral Election Form shall remain effective in the event that Participant fails to file a timely or subsequent Deferral Election Form.

1.10                         Deferred Compensation Account . The term “Deferred Compensation Account” shall refer to the amounts Participant has elected to defer over time. The Deferred Compensation Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to, or in respect of, a Participant pursuant to this Agreement.  The Deferred Compensation Account shall be equal to the sum of (i) all amounts deferred in each Deferral Period  under this Agreement, including all amounts deferred previously under the Original Agreement and (ii) interest thereon credited in accordance with the applicable interest crediting provisions, net of all distributions from such account. Amounts deferred pursuant to the Original Agreement and this Agreement shall be credited to the Deferred Compensation Account, along with the specified interest thereon.

In addition to the forgoing, the Deferred Compensation Account shall include those amounts previously deferred under the Director’s Santa Lucia Bank Director Retirement Agreement (effective as of February 1, 1997 and thereafter amended by virtue of the January 10, 2001 Amendment thereto)  and the  First Amended and Restated Santa Lucia National Bank Director Retirement Agreement.

1.11                         Director Benefit .  The term “Director Benefit” shall mean the benefit amounts determined pursuant to Paragraphs 1 through 6 (including sub-paragraphs, as applicable), forfeited, reduced or adjusted to the extent:  (a) required under the other provisions of this Agreement; (b) required by reason of the lawful order of any regulatory agency or body having jurisdiction over the Bank; or (c) required in order for the Bank to 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).

1.12                         Director Fees .  The term “Director Fees” shall refer to cash compensation paid by the Company to Director for his services, including annual retainers, chair retainers, meeting fees and cash paid for services performed as a Director.

1.13                         Effective Date.  The term “Effective Date” shall mean the date first written above.

1.14                         ERISA. The term “ERISA” shall mean the Employee Retirement Income

Security Act of 1974, as amended.

1.15                         IRC 409A . The term “IRC 409A” shall refer to the final regulations issued by the IRS and the Treasury Department under Section 409A of the Code.

1.16                         Leave Of Absence .   In accordance with Code Section 409A and, for the purpose of this Plan, the term “Leave of Absence” shall include military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or if longer, so long as the individual retains a right to reemployment with the Company under an applicable statute or by contract.  A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Company.  If the period of leave exceeds six (6) months and the individual does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.

1.17                         Normal Retirement Age. The term “Normal Retirement Age” shall mean  Director’s attainment of age Seventy-Five (75).

1.18                                        Plan. The “Plan” shall mean the Bank’s Deferred Compensation Plan, which shall be evidenced by this Agreement and the Deferral Election Form.

1.19                         Plan Year .  The term “Plan Year” shall mean the calendar year (January 1 through December 31 of any given year).

1.20                         Rate Of Interest.   The Rate of Interest shall refer to the percentage used to calculate earnings on the amounts in the Deferred Compensation Account.  The Rate of Interest shall be defined as an annual rate equal to the prime rate as reported in the Wall Street Journal on February 1 of each Plan Year and shall remain in effect until such annual re-evaluation.

1.21                         Removed for Cause . The term “Removed (Removal) for Cause” shall mean termination of Director’s Service by reason of any of the following: any act of embezzlement, fraud, breach of fiduciary duty, dishonesty, deliberate or reported disregard of the policies and rules of the Company as adopted by the Board of Directors of the Company, unauthorized use or disclosure of any trade secrets or confidential information of the Company, competition with the Company, inducement of any customer of the Company to breach a contract with the Company, inducement of any principal for whom the Company acts as an agent to terminate such agency relationship, gross negligence adversely impacting  the Company, willful breach of this Agreement, or any other willful misconduct.

1.22                         Service/ Separation From Service .   As it applies to Director, the term “Service” shall refer to the services Director provides and performs while serving on the Board of Directors.  In addition, the term “Separation from Service” shall be read and interpreted consistent with IRC  409A and any future notices or guidance related thereto.

As the term applies herein to individuals who are serving on the Board of Directors, but who are not also acting as employees of the Bank, the term “Separation from Service” shall mean the expiration of all contracts or ter