Exhibit 10.1

August 26, 2010

Via Email

Leslie S. Biller

10877 Wilshire Blvd., Ste. 1702

Los Angeles, CA 90024

Dear Mr. Biller:

The Board of Directors (the “Board”) of Sterling Financial Corporation
(“Sterling”) is pleased to offer you the position as a Director and
non-executive Chairman of the Board of Sterling, which offer is contingent on
completion of the currently pending capital raise and receipt of regulatory
approval. Your service as a Director and Chairman of the Board will commence on
the later of (1) the successful completion of Sterling’s capital raise and
(2) the receipt of all necessary regulatory approvals related to your service as
a Director and Chairman of the Board and the details of this offer.

The following are the detailed terms of this offer:

1. During your service as Chairman of the Board, you will receive an annual
retainer of $150,000, pending regulatory approval, which shall be paid quarterly
in accordance with Sterling’s standard practice for director fees. If you step
down as Chairman of the Board, but remain as a director of Sterling, your fees
will be reduced to the then current amount paid to other Directors who do not
serve as Chair of the Board or any of its committees.

2. Following the later of (a) the date you commence serving as Chairman of the
Board and (b) the date on which Sterling shall have obtained shareholder
approval of both (i) an amendment to its Articles of Incorporation increasing
the number of authorized shares of common stock and (ii) a new equity incentive
plan, Sterling will have the option, in its sole discretion, to elect within 30
days thereafter to pay you according to 2.A. or 2.B. below, as follows:

A. Grant you a number of shares of restricted stock having a fair market value
of up to $4.5 million based on the trading price of Sterling’s common stock on
the date of grant, which shall have the vesting schedule set forth in 3.A.
below, it being understood that: (1) Sterling would only make such grant if the
total expense that would be recognized by Sterling for such grant would not
exceed $4.5 million based on the trading price of Sterling’s common stock on the
date of grant; (2) such number of shares of restricted stock would be no fewer
than 22 million; (3) if the trading price of Sterling’s common stock on the date
of grant is below $0.20 per share, the Company would grant you 22.5 million
shares of restricted stock; and (4) in order to avoid anti-dilution adjustments
under the warrant held by the U.S. Department of the Treasury, the minimum value
at which Sterling would grant restricted stock would be $0.20 per share of
restricted stock (i.e., the maximum number of shares of restricted stock that
would be granted to you would be 22.5 million); or

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Leslie S. Biller

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B. Award you cash compensation of $4.5 million, payable according to the payment
schedule set forth in 3.B. below.

If Sterling’s new equity incentive plan has not been approved by Sterling’s
shareholders by September 1, 2010, the Board will be deemed to have elected to
award you cash compensation pursuant to 2.B. above, and the initial payment of
$1.5 million will be payable no later than 10 business days following
September 1, 2010.

3. Vesting/Payment Schedule

A. If Sterling elects to grant you restricted stock pursuant to 2.A. above, such
restricted stock will vest according to the following schedule:

 

  •  

33.3% of the shares will vest immediately upon the date of grant.

 

  •  

13.3% of the shares shall vest on December 31, 2010.

 

  •  

13.3% of the shares shall vest on June 30, 2011.

 

  •  

13.3% of the shares shall vest on December 31, 2011.

 

  •  

13.3% of the shares shall vest on June 30, 2012.

 

  •  

The remaining shares shall vest on December 31, 2012.

B. If Sterling elects to award you cash compensation pursuant to 2.B. above,
such payments will be made to you according to the following schedule:

 

  •  

$1.5 million will be paid to you promptly following Sterling’s election to make
the payment in cash.

 

  •  

$600,000 shall be paid to you on December 31, 2010.

 

  •  

$600,000 shall be paid to you on June 30, 2011.

 

  •  

$600,000 shall be paid to you on December 31, 2011.

 

  •  

$600,000 shall be paid to you on June 30, 2012.

 

  •  

$600,000 shall be paid to you on December 31, 2012.

4. If you voluntarily resign from the Board, any amount not yet paid in cash or
any shares of restricted stock that remain unvested at that time shall be
forfeited.

In addition, you have indicated your desire to invest between $4 million and $7
million in cash in the Series D preferred stock and common stock in the private
placement on the terms described in Sterling’s Confidential Private Placement
Memorandum issued on May 3, 2010 and concurrently with the investments made by
the other investors in the private placement. Sterling has confirmed with the
placement agents that as an “accredited investor” you will be given the
opportunity to so invest provided that you execute the required documentation
and otherwise meet the eligibility requirements set forth therein. For the
avoidance of doubt, any investment you make will not be contingent upon your
becoming Chairman of the Board or

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Leslie S. Biller

Page 3

 

otherwise serving on the Board and will not be unwound or cancelled if for any
reason you are not elected to the Board or if you leave the Board. The
opportunity to so invest is separate and apart from your compensation as
Chairman of the Board and will have no impact upon your opportunity to serve on
the Board, to act as Chairman of the Board or otherwise provide service to
Sterling.

As we have previously indicated, due to the current regulatory restrictions
under which Sterling is operating, the terms of this offer must be made subject
to all necessary regulatory approvals, including approval of your service as a
Director and as Chairman of the Board and approval with respect to the terms of
your compensation set forth above. In conjunction with obtaining the necessary
regulatory approvals, we request that you agree to complete all necessary
paperwork required in the regulatory approval process within 10 business days
following your acceptance of this offer. One of Sterling’s attorneys will
contact you regarding the regulatory approval process and the necessary
paperwork.

As a Director of Sterling and as Sterling’s Chairman of the Board, you will have
certain responsibilities, which will generally include the following:

 

  •  

Collaborating with the Board and the Chief Executive Officer in establishing
short-term and long-term strategies, objectives, goals, plans and policies for
Sterling and its subsidiaries.

 

  •  

Providing leadership and direction, and guiding the activities of Sterling to
ensure short- and long-term profitability, equitable treatment and development
of employees, and maintenance of a good corporate-community relationship.

 

  •  

Convening, presiding over and actively participating in meetings of Sterling’s
Board of Directors. Reading materials distributed prior to the meetings and
sharing experience and expertise during Board discussions. Supporting decisions
that are arrived at by the Board. Ensuring that confidential information shared
at the meetings is held in confidence.

 

  •  

Collaborating with the Board and the Chief Executive Officer to establish and
maintain a corporate governance framework that ensures sound risk management,
affirms high standards of business conduct, emphasizes the importance of
integrity and honesty in the conduct of business, and ensures the integrity of
Sterling’s controls and procedures, including its internal control over
financial reporting.

 

  •  

Collaborating with the Board and the Chief Executive Officer to ensure sound
regulatory relationships.

 

  •  

Collaborating with the Board and the Chief Executive Officer to benchmark the
Board’s skill set and to establish the appropriate composition of Board members
under a strong corporate governance framework.

 

  •  

Providing direction and guidance over personnel activities that affect the Chief
Executive Officer, including salary, incentives, and performance objectives, to
ensure solid efforts toward the attainment of company goals.

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Leslie S. Biller

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We look forward to your joining the Sterling team in the near future. If you
have any further questions regarding the terms of this offer, please feel free
to give me a call. Otherwise, please indicate your acceptance of the terms of
this letter by signing below and returning it to Karla Gehlen, Sterling Savings
Bank’s HR Executive.

 

Sincerely, /s/ William L. Eisenhart William L. Eisenhart Chairman of the Board
Agreed and accepted:

/s/ Leslie S. Biller

Leslie S. Biller