EMPLOYMENT AGREEMENT

This Employment Agreement (this “ Agreement ”) is entered into by and between Imperial Capital Bancorp, a California bank holding company (“ Bancorp ”) and Imperial Capital Bank, a California bank (“Bank”) and Joseph W. Kiley III, an individual (“Executive” ), as of October 1, 2009 (the “ Effective Date ”) and shall be in effect for the period of one year, subject to renewal for such term as may be agreed upon by the parties.  As used herein, “Company” refers jointly and individually to the Bancorp and Bank.  This Agreement by and between the Company and Executive (collectively referred to as the “ Parties ”) is intended, where applicable, to comply with section 409A of the Internal Revenue Code of 1986, as amended (“ Code ”).  While following execution this Agreement shall be effective as of the Effective Date, it shall not be executed by the parties or become effective until all required regulatory approvals have been received.

Executive is hereby employed as the President and Chief Executive Officer of Bancorp and President and Chief Executive Officer of Bank.  Executive shall perform the customary duties of a Chief Executive Officer for a California bank holding company and bank, including but not limited to supervision of Company’s business and all subsidiary corporations and businesses owned or related to Company and such other duties as may from time to time be reasonably requested of Executive by the Board of Directors of Company (“ Board ”).  As used herein the term “business of Company” shall include the business of any of Company’s subsidiaries and related entities.  The duties of Executive shall include, but not be limited to, managing the Company so that it shall be in substantial and timely compliance with the requirements of any formal or informal administrative action or notice to which the Company may be subject, whether in the form of a cease and desist order, a memorandum of understanding or other regulatory action or requirement, provided, however, that any noncompliance with any such administrative action or notice that occurred prior to this Agreement shall not be attributed to Executive for purposes of the Company’s good faith determination of substantial and timely compliance.

Company hereby agrees that as of the Effective Date Executive shall be appointed a member of the Board in accordance with the bylaws of the Company and shall remain a member of the Board for so long as Executive is duly elected to a position on the Board in accordance with the bylaws of the Company and applicable law and this Agreement has not been terminated.  During the period of Executive’s election to the Board, Executive shall serve as a member of any or all committees to which he is appointed, except the Audit Committee and the Compensation Committee and any future Board committees which require only independent directors.  Executive also hereby agrees to accept appointment to other boards of directors and committees of subsidiary and related organizations of Company, except such committees that require an independent director.  Executive shall fulfill all of Executive’s duties as a Board and committee member without additional compensation.  Except as otherwise expressly provided by the terms of this Agreement, upon the termination of Executive’s employment under this Agreement by either Executive or Company, Executive’s service on the Board, all committees of the Company, all corporate offices of Company, and all of Company’s

To the fullest extent permitted by law all controversies between Executive and Company, including whether any termination is with or without cause, will be submitted for resolution to binding arbitration in accordance with the Employment Rules of the American Arbitration Association.  This means that, except as otherwise stated, both the Company and the Executive understand that arbitration will be their exclusive forum for resolving disputes between them, and that both parties waive their entitlement, if any, to have controversies between them decided by a court or a jury.  This provision shall not apply to any claim or controversy with respect to or arising out of any employee benefit plan or program of the Company to the extent that such plan or program requires participants, beneficiaries and other claimants to follow certain claims procedures specified therein

Throughout his employment with the Company as President and Chief Executive Officer, Executive shall donate his full time, attention, and energies to the business of Company and shall not be engaged in any other business activities, except personal investments or as expressly provided in this Agreement, without the prior written consent of Company.

In consideration for the services which Executive is to render under this Agreement, Company shall pay to Executive a base salary (“ Base Salary ”) in the amount and in installments as set forth in Schedule A, appended to and by this reference incorporated into this Agreement..  The Base Salary shall be payable to Executive in equal semi-monthly installments on the Company’s normal payroll schedule.

Executive shall also be entitled to participate in any other incentive programs which may be adopted from time to time by Company for Executive, subject to the terms thereof.  Amounts awarded Executive under any said incentive program shall be determined at the sole discretion of Company, including the vesting of any incentive awards.

Executive shall be reimbursed for all ordinary and necessary, documented expenses in conformity with Company policy, including any expenses for extended stays in or around the Company’s La Jolla headquarters, provided that Executive shall select accommodations in or around La Jolla that are economically reasonable in consultation with the Board.  Request for reimbursement of other expenses shall be presented to the Board in advance for approval.    The Company shall pay for Executive’s monthly membership dues for the Lakeside Golf Club.

Executive shall be paid an automobile allowance of $2,000 per month in accordance with the Company’s Corporate Officer Vehicle Program.

During his employment Executive shall be entitled to vacation leave at full salary at the discretion of Executive as time allows, so long as it is reasonable and does not jeopardize his responsibilities, of twenty (20) business days per annum; provided that Executive shall take as a portion of his vacation leave at least ten (10) consecutive business days per annum, unless otherwise waived by the Board.  At the termination of this Agreement for any reason, Executive shall be paid for any vacation leave accrued but not taken.

If Executive becomes disabled (as defined in section 409A of the Code) during his employment with Company pursuant to the terms of this Agreement, Company agrees to continue Executive’s Base Salary (i) for ninety (90) days from commencement of the disability or (ii) until Executive is able to return to work whichever is less.

Company shall provide to Executive, for the benefit of Executive and his eligible dependents,  during Executive’s employment with Company pursuant to this Agreement and at Company’s expense the same medical insurance, and dental insurance, which may be offered to Company’s other full-time Executives under any benefit plans as may be in effect from time to time.  In addition, during the term of this Agreement the Company shall pay the monthly premium for Executive’s existing disability insurance coverage (Northwestern Mutual Policy Nos. DI-417-740 and DI-489-489).

The parties acknowledge that Executive’s Base Salary has been set high enough under this Agreement so that Executive may pay for additional life insurance.  Executive shall have the right to determine whether to maintain life insurance and use part of his Base Salary to cover the premiums thereon, or to use the Base Salary for other purposes.  Company shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life.

(a)           As part of the consideration for entering this Agreement, the Board has agreed to grant Executive 127,928 incentive stock options on or about the Effective Date.  The stock option grant will vest as follows:  20% shall vest 12 months after the grant date.  Thereafter the options will vest 20% per year on the anniversary of the grant date.  Options will be totally vested in five years.  Stock Options will immediately vest and become exercisable upon the following:  (i) Termination by the Company without “cause” as defined in Section  19 below, (ii)  Termination by the Executive for “Good Reason” as defined in Section 19 and (iii) Expiration of this Agreement (as defined in Section  19(c) ) .

(b)           Such stock options shall be granted pursuant to and subject to the terms of the Company’s Stock Option Plan, as amended and shall be subject to such other terms as determined by the Board as may be set forth in the stock option award agreement.

(c)           Additional annual stock option grants may be recommended by the Compensation Committee subject to the approval of the Board of Directors.

Executive shall be entitled to participate in any retirement plans offered to other Executives of the company, such as Executive’s participation in the Company’s 401(k) plan.

All written, printed, electronic, visual or audio materials used by Executive in performing duties for Company, other than Executive’s personal notes and diaries, are and shall remain the property of Company.  Upon termination of Executive’s employment for any reason,.  Executive shall return all such materials to Company.

In the course of employment, Executive may have access to confidential information and trade secrets relating to Company’s business.  Except as required in the course of employment by Company, Executive shall not, without Company’s prior written consent, directly or indirectly disclose to anyone any confidential information relating to Company or any financial information, trade secrets or “know-how” that is germane to Company’s business and operations.

Executive recognizes and acknowledges that any financial information concerning any of Company’s customers, as it may exist from time to time, is strictly confidential and is a valuable, special and unique asset of Company’s business.  Executive shall not, either before or after termination of this Agreement, disclose to an