REDWOOD EMPIRE BANCORP
AMENDED AND RESTATED DIRECTOR COMPENSATION AGREEMENT

            THIS AMENDED AND RESTATED DIRECTOR COMPENSATION AGREEMENT (the
“Agreement”) was adopted on the 20th day of April, 2004, and amended and
restated on the 17th day of August, 2004, by and between REDWOOD EMPIRE BANCORP,
a holding company located in Santa Rosa, California (the “Company”), and DANA R.
JOHNSON (the “Director”).

            The purpose of this Agreement is to provide specified benefits to
the Director, a member of the Board of Directors of the Company who is neither
an employee or officer of the Company.  This Agreement shall be unfunded for tax
purposes and the Company will pay the benefits from its general assets.

            The Company and the Director agree as provided herein.

Article 1
Definitions

            Whenever used in this Agreement, the following words and phrases
shall have the meanings specified:

1.1       “Accrual Balance” means the liability that should be accrued by the
Company, under Generally Accepted Accounting Principles (“GAAP”), for the
Company’s obligation to the Director under this Agreement, by applying
Accounting Principles Board Opinion Number 12 (“APB 12”) as amended by Statement
of Financial Accounting Standards Number 106 (“FAS 106”) and the Discount Rate. 
Any one of a variety of amortization methods may be used to determine the
Accrual Balance.  However, once chosen, the method must be consistently
applied.  The Accrual Balance shall be reported by the Company to the Director
on Schedule A.

1.2       “Beneficiary” means each designated person, or the estate of the
deceased Director, entitled to benefits, if any, upon the death of the Director
determined pursuant to Article 4.

1.3       “Beneficiary Designation Form” means the form established from time to
time by the Plan Administrator that the Director completes, signs and returns to
the Plan Administrator to designate one or more Beneficiaries.

1.4       “Change of Control” means:

            (a)  the Company is a party to a merger, consolidation,  sale of
assets or other reorganization, or a proxy contest, as a consequence of which
more than fifty-one percent (51%) of the outstanding stock of the Company
changes hands to an unrelated entity; or

            (b)    a sale of substantially all of the assets of the Company.

            Notwithstanding the above, a Change of Control will not be deemed to
have occurred either (i) solely because of the acquisition  of securities of (or
any reporting requirement under the Exchange Act relating thereto) by an the
Executive benefit plan maintained by the Company or any of its affiliates for
its Executives or (B) if any shareholder of the Company holding more than
twenty-five percent (25%) of the combined voting power of the Company’s
outstanding securities as of the commencement date increases its holding to more
than fifty-one percent (51%) of such combined voting power.

            In addition, certain transfers are permitted within Section 318 of
the Code and such transfers shall not be deemed a Change of Control under this
Section 1.4.

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

1.6       “Disability” means the Director’s suffering a sickness, accident or
injury which has been determined by the insurance carrier of any individual or
group disability insurance policy covering the Director, or by the Social
Security Administration, to be a disability rendering the Director totally and
permanently disabled.  The Director must submit proof to the Plan Administrator
of the insurance carrier’s or Social Security Administration’s determination
upon the request of the Plan Administrator.

1.7       “Discount Rate” means the rate used by the Plan Administrator for
determining the Accrual Balance.  The initial Discount Rate is six percent
(6%).  However, the Plan Administrator, in its sole discretion, may adjust the
Discount Rate to maintain the rate within reasonable standards according to
GAAP.

1.8       “Early Retirement” means the Director’s Voluntary Early Termination
after attaining Early Retirement Age.

1.9       “Early Retirement Age” means the Director attaining age fifty-five
(55) and completing fifteen (15) Years of Service.

1.10     “Early Retirement Date” means the month, day, and year in which the
Termination of Service due to Early Retirement occurs.

1.11     “Early Termination” means that the Director, prior to Normal Retirement
Age, has been notified in writing that his service with the Company is
terminated for reasons other than an approved leave of absence, Termination for
Cause, Disability, or within 24 months following a Change of Control.

1.12     “Effective Date” means January 1, 2004.

1.13     “Normal Retirement Age” means the Director’s sixty-second (62nd)
birthday.

1.14     “Normal Retirement Date” means the later of the Normal Retirement Age
or Termination of Service.

1.15     “Plan Administrator” means the plan administrator described in Article
8.

1.16     “Plan Year” means a twelve-month period commencing on January 1 and
ending on December 31 of each year.  The initial Plan Year shall commence on the
Effective Date of this Agreement.

1.17     “Termination for Cause” has that meaning set forth in Article 5.

1.18     “Termination of Service” means that the Director ceases to serve as a
member and chairman of the board of, and a consultant to the Company for any
reason, voluntary or involuntary, other than by reason of a leave of absence
approved by the Company.

1.19     “Years of Service” means the total number of calendar years during
which the Director is a director of, or a consultant to, the Company, or any of
its affiliates or subsidiaries, with a minimum of 1,000 hours in any calendar
year, inclusive of any approved leaves of absence, beginning on the Director’s
date of retention.

Article 2
Benefits During Lifetime

2.1       Normal Retirement Benefit.  Upon Termination of Service on or after
the Normal Retirement Age for reasons other than death, the Company shall pay to
the Director the benefit described in this Section 2.1 in lieu of any other
benefit under this Article.

            2.1.1    Amount of Benefit.  The annual benefit under this Section
2.1 is $80,000 (Eighty Thousand Dollars). Commencing on the first anniversary of
the first benefit payment following Termination of Service, and continuing on
each subsequent anniversary, the Company’s Board of Directors shall increase
this benefit by two percent (2%) from the previous anniversary date.

            2.1.2    Payment of Benefit.  The Company shall pay the annual
benefit to the Director in twelve (12) equal monthly installments commencing on
the first day of the month following the Director’s Normal Retirement Date.  The
annual benefit shall be paid to the Director for fifteen (15) years.

2.2       Early Retirement Benefit.  Upon Termination of Service following the
Early Retirement Date, the Company shall pay to the Director the benefit
described in this Section 2.2 in lieu of any other benefit under this Article.

            2.2.1    Amount of Benefit.  The annual benefit under this Section
2.2 is the Early Retirement Benefit set forth on Schedule A for the Plan Year
during which the Early Retirement Date occurs.  This benefit is determined by
vesting the Director in the Normal Retirement Benefit described in Section
2.1.1., subject to the following vesting schedule:

Age at
Early Retirement

Percent Vested in
Normal Retirement Benefit

55

40%

56

50%

57

60%

58

70%

60

80%

61

90%

62

100%

            2.2.2    Payment of Benefit.  The Company shall pay the annual
benefit to the Director in twelve (12) equal monthly installments commencing on
the first day of the month following the Director’s Early Retirement Date.  The
annual benefit shall be paid to the Director for fifteen (15) years.

2.3       Early Termination Benefit.  Upon Early Termination, the Company shall
pay to the Director the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.

            2.3.1    Amount of Benefit.  The annual benefit under this Section
2.3 is the Early Termination Benefit set forth on Schedule A for the Plan Year
during which Termination of Service occurs.  This benefit is determined by
vesting the Director in one hundred percent (100%) of the Accrual Balance. Any
increase in the annual benefit under Section 2.1.1 shall require the
recalculation of this benefit on Schedule A.

            2.3.2    Payment of Benefit.  The Company shall pay the benefit to
the Director in a lump sum within ninety (90) days following the Termination of
Service.

2.4       Disability Benefit.  Upon Termination of Service due to Disability
prior to Normal Retirement Age, the Company shall pay to the Director the
benefit described in this Section 2.4 in lieu of any other benefit under this
Article.

            2.4.1    Amount of Benefit.  The benefit under this Section 2.4 is
the Disability Benefit set forth on Schedule A for the Plan Year during which
the Termination of Service occurs.  This benefit is determined by vesting the
Director in one hundred percent (100%) of the Accrual Balance.

            2.4.2    Payment of Benefit.  The Company shall pay the benefit to
the Director in a lump sum within ninety (90) days following Termination of
Service due to Disability.

2.5       Change of Control Benefit.  Upon a Change of Control followed within
twenty-four (24) months by the termination of the Director’s service as a
consultant to, or chairman and member of the board of directors of the Company,
the Company shall pay to the Director the benefit described in this Section 2.5
in lieu of any other benefit under this Article.

            2.5.1    Amount of Benefit.  The benefit under this Section 2.5
shall be four hundred thousand dollars ($400,000).

            2.5.2    Payment of Benefit.   The Company shall pay the benefit
described in Section 2.5.1 to the Director in a lump sum in cash within ninety
(90) days of the termination of the Director’s service as a consultant to, or
chairman and member of the board of directors of the Company.

Article 3
Death Benefits

3.1       Death During Active Service.  If the Director dies while in the active
service of the Company, no benefit shall be payable under this Agreement.

3.2       Death During Payment of a Benefit.  If the Director dies after any
benefit payments have commenced under Article 2 of this Agreement but before
receiving all such payments, the Company shall pay the remaining benefits to the
Beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.

3.2       Death After Termination of Service But Before Payment of a Benefit
Commences.  If the Director is entitled to any benefit payments under Article 2
of this Agreement, but dies prior to the commencement of said benefit payments,
the Company shall pay the same benefit payments to the Beneficiary that the
Director was entitled to prior to death except that the benefit payments shall
commence on the first day of the month following the date of the Director’s
death.

Article 4
Beneficiaries

4.1       Beneficiary Designation.  The Director shall have the right, at any
time, to designate a Beneficiary(ies) to receive any benefits payable under this
Agreement upon the death of the Director.  The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designation under
any other benefit plan of the Company in which the Director participates.

4.2       Beneficiary Designation: Change.   The Director shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form, and
delivering it to the Plan Administrator or its designated agent.  The Director’s
Beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Director or if the Director names a spouse as Beneficiary and
the marriage is subsequently dissolved.  The Director shall have the right to
change a Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures, as in effect from time to time.  Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled.  The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Director and accepted by the Plan Administrator prior to the Director’s death.

4.3       Acknowledgment.  No designation or change in designation of a
Beneficiary shall be effective until received, accepted and acknowledged in
writing by the Plan Administrator or its designated agent.

4.4       No Beneficiary Designation.  If the Director dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Director, then the Director’s spouse shall be the designated Beneficiary.  If
the Director has no surviving spouse, the benefits shall be made to the personal
representative of the Director’s estate.

4.5       Facility of Payment.  If the Plan Administrator determines in its
discretion that a benefit is to be paid to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of that
person’s property, the Plan Administrator may direct payment of such benefit to
the guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person.  The Plan Administrator may
require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit.  Any payment of a benefit
shall be a payment for the account of the Director and the Director’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Agreement for such payment amount.

Article 5
General Limitations

5.1       Termination for Cause.  Notwithstanding any provision of this
Agreement to the contrary, the Company shall not pay any benefit under this
Agreement if the Company’s Board of Directors terminates the Director’s service
as a consultant or member and chairman of the board of directors for:

            (a)        Gross negligence or gross neglect of duties to the
Company;

            (b)        Commission of a felony or of a gross misdemeanor
involving moral turpitude;

            (c)        Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the Director’s
service and resulting in a material adverse effect on the Company; or

            (d)        Issuance of an order for removal of the Director by the
Company’s banking regulators.

5.2       Excess Parachute Payment.  Notwithstanding any provision of this
Agreement to the contrary, to the extent any benefit would create an excise tax
under the excess parachute rules of Section 280G of the Code, the Company shall
reduce the benefit paid under this Agreement to the maximum benefit that would
not result in any such excise tax.

Article 6
Claims And Review Procedures

6.1       Claims Procedure.  A director or Beneficiary (“claimant”) who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows:

            6.1.1    Initiation – Written Claim.  The claimant initiates a claim
by submitting to the Plan Administrator a written claim for the benefits.

            6.1.2    Timing of Plan Administrator Response.  The Plan
Administrator shall respond to such claimant within 90 days after receiving the
claim.  If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional 90 days by notifying the claimant in writing,
prior to the end of the initial 90-day period, that an additional period is
required.  The notice of extension must set forth the special circumstances and
the date by which the Plan Administrator expects to render its decision.

            6.1.3    Notice of Decision.  If the Plan Administrator denies part
or all of the claim, the Plan Administrator shall notify the claimant in writing
of such denial.  The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant.  The notification shall set forth:

            (a)        The specific reasons for the denial;

            (b)        A reference to the specific provisions of the Agreement
on which the denial is based;

            (c)        A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation of why it is
needed;

            (d)        An explanation of the Agreement’s review procedures and
the time limits applicable to such procedures; and

            (e)        A statement of the claimant’s right to bring a civil
action following an adverse benefit determination on review.

6.2       Review Procedure.  If the Plan Administrator denies part or all of the
claim, the claimant shall have the opportunity for a full and fair review by the
Plan Administrator of the denial, as follows:

            6.2.1    Initiation – Written Request.  To initiate the review, the
claimant, within 60 days after receiving the Plan Administrator’s notice of
denial, must file with the Plan Administrator a written request for review.

            6.2.2    Additional Submissions – Information Access.  The claimant
shall then have the opportunity to submit written comments, documents, records
and other information relating to the claim.  The Plan Administrator shall also
provide the claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the
claimant’s claim for benefits.

            6.2.3    Considerations on Review.  In considering the review, the
Plan Administrator shall take into account all materials and information the
claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

            6.2.4    Timing of Plan Administrator Response.  The Plan
Administrator shall respond in writing to such claimant within 60 days after
receiving the request for review.  If the Plan Administrator determines that
special circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional 60 days by
notifying the claimant in writing, prior to the end of the initial 60-day
period, that an additional period is required.  The notice of extension must set
forth the special circumstances and the date by which the Plan Administrator
expects to render its decision.

            6.2.5    Notice of Decision.  The Plan Administrator shall notify
the claimant in writing of its decision on review.  The Plan Administrator shall
write the notification in a manner calculated to be understood by the claimant. 
The notification shall set forth:

            (a)        The specific reasons for the denial;

            (b)        A reference to the specific provisions of the Agreement
on which the denial is based;

            (c)        A statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the claimant’s claim for
benefits; and

            (d)        A statement of the claimant’s right to bring a civil
action.

Article 7
Amendments and Termination

         This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director. Provided, however, if the Company’s
Board of Directors determines that the Director is no longer a member of the
Board of Directors of the Company for reasons other than death, Disability or
retirement, the Company may amend or terminate this Agreement.  Upon such
amendment or termination the Company shall pay benefits to the Director as if
Early Termination occurred on the date of such amendment or termination,
regardless of whether Early Termination actually occurs.

         Notwithstanding the previous paragraph, the Company may amend or
terminate the plan at any time if, pursuant to legislative, judicial or
regulatory action, continuation of the Agreement would (i) cause benefits to be
taxable to the Director prior to actual receipt, or (ii) result in significant
financial penalties or other significantly detrimental ramifications to the
Company (other than the financial impact of paying the benefits).

Article 8
Administration of Agreement

8.1       Plan Administrator Duties.  This Agreement shall be administered by a
Plan Administrator which shall consist of the Board, or such committee or
person(s) as the Board shall appoint.  The Director may be a member of the Plan
Administrator.  The Plan Administrator shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administra­tion of this Agreement and (ii) decide or resolve
any and all ques­tions including interpretations of this Agreement, as may arise
in connection with the Agreement.

8.2       Agents.  In the administration of this Agreement, the Plan
Administrator may employ agents and delegate to them such administrative duties
as it sees fit, (including acting through a duly appointed representative), and
may from time to time consult with counsel who may be counsel to the Company.

8.3       Binding Effect of Decisions.  The decision or action of the Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement.  No Director or
Beneficiary shall be deemed to have any right, vested or nonvested, regarding
the continued use of any previously adopted assumptions, including but not
limited to the Discount Rate.

8.4       Indemnity of Plan Administrator.  The Company shall indemnify and hold
harmless the members of the Plan Administrator against any and all claims,
losses, damages, expenses or liabilities arising from any action or failure to
act with respect to this Agreement, except in the case of willful misconduct by
the Plan Administrator or any of its members.

8.5       Company Information.  To enable the Plan Administrator to perform its
functions, the Company shall supply full and timely information to the Plan
Administrator on all matters relating to the date and circum­stances of the
retirement, Disability, death, or Termination of Service of the Director, and
such other pertinent information as the Plan Administrator may reasonably
require.

8.6       Annual Statement. The Plan Administrator shall provide to the
Director, within 120 days after the end of each Plan Year, a statement setting
forth the benefits payable under this Agreement.

Article 9
Miscellaneous

9.1       Binding Effect.  This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.

9.2       No Guarantee of Continued Service.  This Agreement does not give the
Director the right to remain a consultant to, and member and chairman of the
board of directors of the Company, nor does it interfere with the Company’s
right to discharge the Director.  It also does not require the Director to
remain a consultant to, and member and chairman of the board of directors of the
Company, nor interfere with the Director’s right to terminate such service at
any time.

9.3       Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

9.4       Tax Withholding.  The Company shall withhold any taxes that, in its
reasonable judgment, are required to be withheld from the benefits provided
under this Agreement.  The Director acknowledges that the Company’s sole
liability regarding taxes is to forward any amounts withheld to the appropriate
taxing authority(ies).

9.5       Applicable Law.  The Agreement and all rights hereunder shall be
governed by the laws of the State of California, except to the extent preempted
by the laws of the United States of America.

9.6       Unfunded Arrangement.  The Director and Beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement.  The benefits represent the mere promise by the Company to pay such
benefits.  The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors.  Any insurance on the Director’s life is a general
asset of the Company to which the Director and Beneficiary have no preferred or
secured claim.

9.7       Reorganization.  The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement.  Upon the occurrence of such event, the term “Company” as
used in this Agreement shall be deemed to refer to the successor or survivor
company.

9.8       Entire Agreement.  This Agreement constitutes the entire agreement
between the Company and the Director as to the subject matter hereof.  No rights
are granted to the Director by virtue of this Agreement other than those
specifically set forth herein.

9.9       Interpretation.  Wherever the fulfillment of the intent and purpose of
this Agreement requires, and the context will permit, the use of the masculine
gender includes the feminine and use of the singular includes the plural.

9.10     Alternative Action.  In the event it shall become impossible for the
Company or the Plan Administrator to perform any act required by this Agreement,
the Company or Plan Administrator may in its discretion perform such alternative
act as most nearly carries out the intent and purpose of this Agreement and is
in the best interests of the Company.

9.11     Headings.  Article and section headings are for convenient reference
only and shall not control or affect the meaning or construction of any of its
provisions.

9.12     Validity.  In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced as if
such illegal and invalid provision has never been inserted herein.

9.13     Notice.  Any notice or filing required or permitted to be given to the
Company or Plan Administrator under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, to the
address below:

           

            Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.

            Any notice or filing required or permitted to be given to the
Director under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the Director.

         IN WITNESS WHEREOF, the Director and a duly authorized representative
of the Company have signed this Agreement.

DIRECTOR:

  

  

COMPANY:

  

  

REDWOOD EMPIRE BANCORP

  

  

/s/ Dana R. Johnson

  

  

By: /s/ Patrick Kilkenny

Dana R. Johnson

  

  

Title: President & CEO

REDWOOD EMPIRE BANCORP
SPLIT DOLLAR AGREEMENT

         THIS AGREEMENT was adopted the 20th day of April, 2004, and amended on
the 17th day of August, 2004, by and between REDWOOD EMPIRE BANCORP, located in
Santa Rosa, California (the “Company”), and DANA R. JOHNSON (the “Director”). 
This Agreement shall append the Split Dollar Endorsement entered into on even
date herewith or as subsequently amended, by and between the aforementioned
parties.

INTRODUCTION

         To encourage the Director to remain a consultant to, and member and
chairman of the board of directors of the Company,, the Company is willing to
divide the death proceeds of a life insurance policy on the Director’s life. 
The Company will pay life insurance premiums from its general assets.

AGREEMENT

         The Company and the Director agree as follows:

Article 1
General Definitions

The following terms shall have the meanings specified:

         1.1    “Insured” means the Director.

         1.2    “Insurer” means each life insurance carrier in which there is a
Split Dollar Policy Endorsement attached to this Agreement.

         1.3    “Normal Retirement Age” means the Director attaining sixty-two
(62) years of age.

         1.4    “Policy” means the specific life insurance policy or policies
issued by the Insurer.

         1.5    “Amended and Restated Director Compensation Agreement” means
that Amended and Restated Director Compensation Agreement between the Company
and the Director on even date herewith or as subsequently amended.

         1.6    “Termination for Cause”  shall be defined as set forth in
Article 7.

         1.7    “Termination of Service”  means that the Director ceases to
serve as a member and chairman of the board and a consultant of the Company for
any reason, voluntary or involuntary, other than by reason of a leave of absence
approved by the Company.

Article 2
Policy Ownership/Interests

         2.1    Company Ownership.  The Company is the sole owner of the Policy
and shall have the right to exercise all incidents of ownership.  The Company
shall be the beneficiary of the remaining death proceeds of the Policy after the
Interest of the Director or the Director’s transferee has been paid according to
Section 2.2 below.

         2.2    Director’s Interest.  The Director, or the Director’s assignee,
shall have the right to designate the Beneficiary of an amount of death proceeds
equal to $895,500 (Eight Hundred Ninety-Five Thousand Five Hundred Dollars),
subject to:

                  (a)  Forfeiture of Director’s rights upon Termination of
Service;

                  (b)  Termination of the Agreement and the corresponding
forfeiture of rights in accordance with Article 7 hereof; or

                  (c)  Forfeiture of the Director’s rights and interest
hereunder that the Company may reasonably consider necessary to conform with
applicable law (including the Sarbanes-Oxley Act of 2002).

         2.3    Option to Purchase.  The Company shall not sell, surrender or
transfer ownership of the Policy while this Agreement is in effect without first
giving the Director or the Director’s transferee the option to purchase the
Policy by one of the methods specified below for a period of sixty (60) days
from written notice of such intention.  This provision shall not impair the
right of the Company to terminate this Agreement.

                  2.3.1    Full Policy Purchase.   If the Company elects to
terminate the Agreement the Director or his/her transferee shall have the right
to purchase the Policy from the Company.  The purchase price shall be an amount
equal to the cash surrender value of the Policy.  Upon receipt of such purchase
price, the Company shall assign ownership of the Policy to the Director or
his/her transferee and relinquish all existing rights to the Policy.

                  2.3.2    Net Death Proceeds Purchase.   If the Company elects
to terminate the Agreement the Director or his/her transferee shall have the
right to purchase the Director’s Interest in the Policy as identified in Section
2.2 above.  The Company shall withdraw the Policy’s cash surrender value and
assign ownership of the Policy to the Director or his/her transferee.  The
Director or his/her transferee shall thereafter assume responsibility for any
fees and/or cost of insurance charges (the “Policy Expenses”) as necessary to
sustain the Policy.  If the Director or his/her transferee incurs Policy
Expenses, the Company shall annually reimburse the Director or his/her
transferee an amount equal to the annual Policy Expenses divided by one minus
the Director’s combined marginal income tax rate for the calendar year
immediately preceding such payment.  The Company’s reimbursement payment shall
be made within 30 days following receipt by the Company of evidence of the
payment of the Policy Expenses.  The Company’s obligation to make reimbursement
payments will automatically terminate upon the Director’s forfeiture of rights
under Section 2.2 above, otherwise payments shall continue until the Director’s
death.

         2.4    Comparable Coverage.  Nothing herein negates the Company’s right
to amend or terminate this Agreement under Article 7.  The Company is not
obligated to provide any additional resources to maintain the Policy in full
force and effect.  In addition, the Company may replace each Policy with a
comparable insurance policy to cover the benefit provided under this Agreement
and the Company and the Director shall execute a new Split-Dollar Policy
Endorsement for each new Policy.  The cash surrender value and any additional
death proceeds exclusive of those designated in Section 2.2 above for each new
Policy or any comparable policy shall be subject to the claims of the Company’s
creditors.  In the event that the Company decides to maintain the Policy after
the Director’s Termination of Participation in the Agreement, the Company shall
be the direct beneficiary of the entire death proceeds of the Policy.

Article 3
Premiums

         3.1    Premium Payment.   The Company shall pay any premiums due on the
Policy.

         3.2    Economic Benefit.  The Company shall determine the economic
benefit attributable to the Director based on the amount of the current term
rate for the Director’s age multiplied by the aggregate death benefit payable to
the Director’s beneficiary.  The “current term rate” is the minimum amount
required to be imputed under Revenue Rulings 64-328 and 66-110, or any
subsequent applicable authority.

         3.3    Imputed Income.   The Company shall impute the economic benefit
to the Director on an annual basis.

Article 4
Assignment

         The Director may assign without consideration all of the Director’s
interests in the Policy and in this Agreement to any person, entity or trust. 
In the event the Director transfers all of the Director’s interest in the
Policy, then all of the Director’s interest in the Policy and in the Agreement
shall be vested in the Director’s transferee, who shall be substituted as a
party hereunder and the Director shall have no further interest in the Policy or
in this Agreement.

Article 5
Insurer

         The Insurer shall be bound only by the terms of the Policy.  Any
payments the Insurer makes or actions it takes in accordance with the Policy
shall fully discharge it from all claims, suits and demands of all entities or
persons.  The Insurer shall not be bound by or be deemed to have notice of the
provisions of this Agreement.

Article 6
Claims and Review Procedure

         6.1    Claims Procedure.  Any person or entity who has not received
benefits under the Plan that he or she believes should be paid (the “claimant”)
shall make a claim for such benefits as follows:

                  6.1.1    Initiation – Written Claim.  The claimant initiates a
claim by submitting to the Company a written claim for the benefits.

                  6.1.2    Timing of Company Response.  The Company shall
respond to such claimant within 90 days after receiving the claim.  If the
Company determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 90 days by notifying the claimant in writing, prior to the end of the
initial 90-day period that an additional period is required.  The notice of
extension must set forth the special circumstances and the date by which the
Company expects to render its decision.

                  6.1.3    Notice of Decision.  If the Company denies part or
all of the claim, the Company shall notify the claimant in writing of such
denial.  The Company shall write the notification in a manner calculated to be
understood by the claimant.  The notification shall set forth:

                              (a)     The specific reasons for the denial,

                              (b)     A reference to the specific provisions of
this Agreement on which the denial is based,

                              (c)     A description of any additional
information or material necessary for the claimant to perfect the claim and an
explanation of why it is needed,

                              (d)     An explanation of this Agreement’s review
procedures and the time limits applicable to such procedures, and

                              (e)     A statement of the claimant’s right to
bring a civil action following an adverse benefit determination on review.

         6.2    Review Procedure.  If the Company denies part or all of the
claim, the claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:

                  6.2.1    Initiation – Written Request.  To initiate the
review, the claimant, within 60 days after receiving the Company’s notice of
denial, must file with the Company a written request for review.

                  6.2.2    Additional Submissions – Information Access.  The
claimant shall then have the opportunity to submit written comments, documents,
records and other information relating to the claim.  The Company shall also
provide the claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the
claimant’s claim for benefits.

                  6.2.3    Considerations on Review.  In considering the review,
the Company shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.

                  6.2.4    Timing of Company Response.  The Company shall
respond in writing to such claimant within 60 days after receiving the request
for review.  If the Company determines that special circumstances require
additional time for processing the claim, the Company can extend the response
period by an additional 60 days by notifying the claimant in writing, prior to
the end of the initial 60-day period that an additional period is required.  The
notice of extension must set forth the special circumstances and the date by
which the Company expects to render its decision.

                  6.2.5    Notice of Decision.  The Company shall notify the
claimant in writing of its decision on review.  The Company shall write the
notification in a manner calculated to be understood by the claimant.  The
notification shall set forth:

                              (a)     The specific reasons for the denial,

                              (b)     A reference to the specific provisions of
this Agreement on which the denial is based,

                              (c)     A statement that the claimant is entitled
to receive, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant to the claimant’s
claim for benefits, and

                              (d)     A statement of the claimant’s right to
bring a civil action.

Article 7
Amendments and Termination

         7.1    The Company may amend or terminate this Agreement at any time
prior to the Director’s death.  Such amendment or termination shall be by
written notice to the Director.  In the event the Company decides to maintain
the Policy after termination of the Agreement—subject to the provisions of
Section 2.3 of this Agreement—the Company shall be the direct beneficiary of the
entire death proceeds of the Policy.

         7.2    Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement if the Company
terminates the Director’s service as a consultant or member and chairman of the
board of directors for:

                  (a) Willful breach of duty in the course of service or
habitual neglect of the Director’s responsibilities and duties;

                  (b) Conviction of any felony or crime involving moral
turpitude, fraud or dishonesty;

                  (c) Willful violation of any state or federal banking or
securities law, the rules or regulations of any banking agency, or any material
Company rule, policy or resolution resulting in an adverse effect on the
Company; or

                  (d) Disclosure to any third party by the Director, without
authority or permission, of any secret or confidential information of the
Company.

         7.3    Suicide or Misstatement.  The Company shall not pay any benefit
under this Agreement if the Director commits suicide within three years after
the date of this Agreement.  In addition, the Company shall not pay any benefit
under this Agreement if the Director has made any material misstatement of fact
on an application or resume provided to the Company, or on any application for
any benefits provided by the Company to the Director.

Article 8
Miscellaneous

         8.1    Binding Effect.  This Agreement shall bind the Director and the
Company and their beneficiaries, survivors, executors, administrators and
transferees, and any Policy beneficiary.

         8.2    No Guarantee of Continued Service.  This Agreement does not give
the Director the right to remain a consultant to, and member and chairman of the
board of directors of the Company, nor does it interfere with the Company’s
right to discharge the Director.  It also does not require the Director to
remain a consultant to, and member and chairman of the board of directors of the
Company, nor interfere with the Director’s right to terminate such service at
any time.

         8.3    Applicable Law.  The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of California ,
except to the extent preempted by the laws of the United States of America.

         8.4    Reorganization.  The Company shall not merge or consolidate into
or with another company, or reorganize, or sell substantially all of its assets
to another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Company.

         8.5    Notice.  Any notice, consent or demand required or permitted to
be given under the provisions of this Split Dollar Agreement by one party to
another shall be in writing, shall be signed by the party giving or making the
same, and may be given either by delivering the same to such other party
personally, or by mailing the same, by United States certified mail, postage
prepaid, to such party, addressed to his or her last known address as shown on
the records of the Company.  The date of such mailing shall be deemed the date
of such mailed notice, consent or demand.

         8.6    Entire Agreement.  This Agreement constitutes the entire
agreement between the Company and the Director as to the subject matter hereof. 
No rights are granted to the Director by virtue of this Agreement other than
those specifically set forth herein.

         8.7    Administration.  The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:

                  (a)     Interpreting the provisions of this Agreement;

                  (b)     Establishing and revising the method of accounting for
this Agreement;

                  (c)     Maintaining a record of benefit payments; and

                  (d)     Establishing rules and prescribing any forms necessary
or desirable to administer this Agreement.

         8.8    Named Fiduciary.  The Company shall be the named fiduciary and
plan administrator under the Agreement.  The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.

         IN WITNESS WHEREOF, the Director and the Company consent to this
Agreement on the date above written.

DIRECTOR:

  

  

COMPANY:

  

  

REDWOOD EMPIRE BANCORP

  

  

/s/ Dana R. Johnson

  

  

By: /s/ Patrick Kilkenny

Dana R. Johnson

  

  

Title: President