Exhibit 10.1 Description of Bonus Plan
The Compensation Committee (the “Committee”) of the Board of Directors of
Peoples Financial Corporation (the “Company”) awards bonuses to the Company’s
executive officers based upon pre-determined performance objectives. The
executive officers are eligible to receive a bonus which is based on the
financial performance of the Company. The specific formula and pre-determined
goals were established by the Committee using the Company’s return on average
assets (“ROA”). The bonus calculation, which is approved by the Committee,
allows the executive officer to earn up to a maximum percentage of their salary
on established ROA targets. The targets and bonus calculations as a percentage
of salary and targets are:

                                              Base     Base + 1     Base + 2    
Base + 3     Maximum        
ROA Target
    .670 %     .800 %     .925 %     1.050 %     1.175 %  
Chief Executive Officer
    15.000 %     18.750 %     22.500 %     26.250 %     30.000 %  
Executive Vice President
    12.500 %     15.630 %     18.750 %     21.880 %     25.000 %  
All Other Named Executive Officers
    10.000 %     12.500 %     15.000 %     17.500 %     20.000 %