AMERICAN RIVER HOLDINGS

                             1995 STOCK OPTION PLAN

1.    PURPOSE

      The purpose of the American River Holdings 1995 Stock Option Plan (the
"Plan") is to strengthen American River Holdings (the "Corporation") and those
corporations which are or hereafter become subsidiary corporations of the
Corporation by providing an additional means of attracting and retaining
competent directors, officers and management level employees and by providing to
participating directors, officers and management level employees added incentive
for high levels of performance. The Plan seeks to accomplish these purposes and
achieve these results by providing a means whereby such directors, officers and
management level employees may purchase shares of the common stock of the
Corporation pursuant to options granted in accordance with the Plan.

      Options granted pursuant to the Plan are intended to be either "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended from time to time (the "Code"), or "nonqualified stock
options", as shall be determined and designated upon the grant of each option
hereunder.

2.    ADMINISTRATION

      The Plan shall be administered by the Board of Directors (the "Board").
The Board in its sole discretion may from time to time appoint a committee (the
"Stock Option Committee") to administer the Plan and exercise all of the powers,
authority and discretion of the Board under the Plan. The Board may from time to
<PAGE>

time remove members from, or add members to, the Stock Option Committee, and
vacancies on the Stock Option Committee shall be filled by the Board. The Board
may abolish the Stock Option Committee at any time and/or revest in the Board
the administration of the Plan.

      Any action of the Board, or the Stock Option Committee, if applicable,
with respect to the administration of the Plan shall be taken pursuant to a
majority vote, or the unanimous written consent, of its members. Subject to the
express provisions of the Plan, the Board, or the Stock Option Committee, if
applicable, shall have the authority to construe and interpret the Plan, define
the terms used therein, prescribe, amend and rescind, the rules and regulations
relating to administration of the Plan, and make all other determinations
necessary or advisable for administration of the Plan.

      All decisions, determinations, interpretations or other actions by the
Board, or the Stock Option Committee, if applicable, shall be final, conclusive
and binding on all persons, optionees, grantees, subsidiary corporations of the
Corporation and any successors-in-interest to such parties.

      With regard to the granting of a stock option to a member of the Board, or
the Stock Option Committee, if applicable, such member must abstain from voting.

3.    INCENTIVE STOCK OPTIONS

      All options granted which are designated at the time of grant as an
"incentive stock option" shall be deemed an incentive stock option.

                                       2
<PAGE>

      (a) Incentive stock options granted under the Plan are intended to be
qualified under Section 422 of the Code.

      (b) Full-time salaried officers and management level employees of the
Corporation or a subsidiary corporation (as that term is defined in Section
424(f) of the Code), shall be eligible for selection to participate in the
incentive stock option portion of the Plan. No director of the Corporation who
is not also a full-time salaried officer or employee of the Corporation or a
subsidiary corporation, may be granted an incentive stock option hereunder.
Subject to the express provisions of the Plan, the Board, or the Stock Option
Committee, if applicable, shall (i) select from the eligible class of employees
to whom incentive stock options shall be granted and make recommendations to the
Board concerning the individuals to whom incentive stock options shall be
granted, (ii) determine the discretionary terms and provisions of the respective
incentive stock option agreements (which need not be identical), (iii) determine
the times at which such incentive stock options shall be granted, and (iv)
determine the number of shares subject to each incentive stock option. An
individual who has been granted an incentive stock option may, if he or she is
otherwise eligible under the Plan, be granted additional incentive stock options
if the Board shall so determine.

      (c) The Board shall determine the individuals who shall receive incentive
stock options and the terms and provisions of the incentive stock options, and
shall grant such incentive stock options to such individuals. Notwithstanding

                                       3
<PAGE>

the above sentence, however, the Board may delegate to the Stock Option
Committee the power to determine the individuals who shall receive incentive
stock options and the terms and provisions of such incentive stock options, and
the power to grant incentive stock options to such individuals.

      (d) Except as described in subsection (f) below, the Board, or the Stock
Option Committee, if applicable, shall not grant an incentive stock option to
purchase shares of the Corporation's common stock to any individual who, at the
time of the grant, owns stock possessing more than 10% of the total combined
voting power or value of all classes of stock of the Corporation or a subsidiary
corporation. The attribution rules of Section 424(d) of the Code shall apply in
the determination of ownership of stock for these purposes.

      (e) The aggregate fair market value (determined as of the time the
incentive stock option is granted) of stock with respect to which incentive
stock options are exercisable for the first time by an individual during any
calendar year (under all plans of the Corporation and its subsidiary
corporations, if any) shall not exceed $100,000, plus any greater amount as may
be permitted under subsequent amendments to the Code.

      (f) The purchase price of stock subject to each incentive stock option
shall be determined by the Board, or the Stock Option Committee, if applicable,
but shall not be less than one hundred percent (100%) of the fair market value
of such stock at the time such option is granted, except, in the case of
optionees who at the time of the grant own more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation or a

                                       4
<PAGE>

subsidiary corporation (as defined in Section 422 of the Code), in which case
the purchase price of the stock shall not be less than one hundred ten percent
(110%) of the fair market value of such stock at the time such option is granted
and the term of such option shall be for no more than five (5) years. The fair
market value of such stock shall be determined in accordance with any reasonable
valuation method, including the valuation methods described in Treasury
Regulation Section 20.2031-2.

4.    NONQUALIFIED STOCK OPTIONS

      (a) All options granted which are (i) in excess of the aggregate fair
market value limitations set forth in Section 3(e) hereof, (ii) designated at
the time of the grant as "nonqualified", or (iii) intended to be incentive stock
options but do not meet the requirements of incentive stock options, shall be
deemed nonqualified stock options. Nonqualified stock options granted hereunder
shall be so designated in the nonqualified stock option agreement entered into
between the Corporation and the optionee.

      (b) Directors, full-time salaried officers and management level employees
of the Corporation or a subsidiary corporation shall be eligible for selection
to participate in the nonqualified stock option portion of the Plan. Subject to
the express provisions of the Plan, the Board, or the Stock Option Committee, if
applicable, shall (i) select from the eligible class of individuals to whom
nonqualified stock options shall be granted and make recommendations to the
Board concerning the individuals to whom nonqualified stock options shall be
granted, (ii) determine the discretionary terms and provisions of the respective

                                       5
<PAGE>

nonqualified stock option agreements (which need not be identical), (iii)
determine the times at which such nonqualified stock options shall be granted,
and (iv) determine the number of shares subject to each nonqualified stock
option. An individual who has been granted a nonqualified stock option may, if
he or she is otherwise eligible under the Plan, be granted additional
nonqualified stock options if the Board shall so determine.

      (c) The Board shall determine the individuals who shall receive
nonqualified stock options and the terms and provisions of the nonqualified
stock options, and shall grant such nonqualified stock options to such
individuals. Notwithstanding the above sentence, however, the Board may delegate
to the Stock Option Committee the power to determine the individuals who shall
receive nonqualified stock options and the terms and provisions of such
nonqualified stock options, and the power to grant nonqualified stock options to
such individuals.

      (d) The purchase price of stock subject to each nonqualified stock option
shall be determined by the Board, or the Stock Option Committee, if applicable,
but shall not be less than one hundred percent (100%) of the fair market value
of such stock at the time such option is granted. The fair market value of such
stock shall be determined in accordance with any reasonable valuation method,
including the valuation methods described in Treasury Regulation 20.2031-2.

5.    STOCK SUBJECT TO THE PLAN

      Subject to adjustments as provided in Section 12, hereof, the stock to be
offered under the Plan shall be shares of the Corporation's authorized but

                                       6
<PAGE>

unissued common stock (hereinafter called "stock") and the aggregate amount of
stock to be delivered upon exercise of all options granted under the Plan shall
not exceed 240,000 shares. If any option shall be cancelled, surrendered or
expire for any reason without having been exercised in full, the underlying
shares subject thereto shall again be available for purposes of the Plan.

6.    CONTINUATION OF EMPLOYMENT

      Nothing contained in the Plan (or in any option agreement) shall obligate
the Corporation or a subsidiary corporation to employ any optionee for any
period or interfere in any way with the right of the Corporation or a subsidiary
corporation to reduce the optionee's compensation. However, the Corporation may
not reduce the terms of any option without the approval of the optionee.

7.    EXERCISE OF OPTIONS

      No option shall be exercisable until all necessary regulatory and
shareholder approvals of the Plan are obtained. Except as otherwise provided in
this section, each option shall be exercisable in such installments, which need
not be equal, and upon such contingencies as the Board, or the Stock Option
Committee, if applicable, shall determine; provided, however, that if an
optionee shall not in any given installment period purchase all of the shares
which the optionee is entitled to purchase in such installment period, the

                                       7
<PAGE>
optionee's right to purchase any shares not purchased in such installment period
shall continue until expiration or termination of such option. Notwithstanding
the foregoing, the options shall vest at the rate of at least 20% per year over
a five year period from the date the option is granted.

      Fractional share interests shall be disregarded, except that they may be
accumulated. Not less than ten (10) shares may be purchased at any one time
unless the number of shares purchased is the total number of shares which is
exercisable at such time. Options may be exercised by written notice delivered
to the Corporation stating the number of shares with respect to which the option
is being exercised, together with the full purchase price for such shares.
Payment of the option price in full, for the number of shares to be delivered,
must be made in cash, or subject to applicable law, with the Corporation's stock
previously acquired by the optionee. The equivalent dollar value of shares used
to effect a purchase shall be the fair market value of the shares on the date of
exercise. If the option is being exercised by any person other than the
optionee, said notice shall be accompanied by proof, satisfactory to counsel for
the Corporation, of the right of such person to exercise the option. Optionees
will have no rights as shareholders with respect to stock of the Corporation
subject to their stock option agreements until the date of issuance of the stock
certificate to them.

8.    NONTRANSFERABILITY OF OPTIONS

      Each option shall, by its terms, be nontransferable by the optionee other
than by will or the applicable laws of descent and distribution, and shall be

                                       8
<PAGE>

exercisable during his or her lifetime only by the optionee.

9.    CESSATION OF DIRECTORSHIP OR EMPLOYMENT

      Except as provided in Sections 10 and 20 hereof, if an optionee ceases to
be a director or an employee of the Corporation or a subsidiary corporation for
any reason other than his or her disability (as defined in Section 22(e)(3) of
the Code) or death, the optionee's option shall expire three (3) months after
the date of termination of such directorship or employment. During the period
after cessation of directorship or employment, such option shall be exercisable
only as to those installments, if any, which have accrued and/or vested as of
the date on which the optionee ceased to be a director or an employee of the
Corporation or a subsidiary corporation.

10.   TERMINATION OF EMPLOYMENT FOR CAUSE

      If the stock option agreement so provides and if an optionee's employment
by the Corporation or a subsidiary corporation is terminated for cause, the
optionee's option shall expire thirty (30) days from the date of such
termination. Termination for cause shall include, but not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties or
conviction of a crime involving moral turpitude, and, in any event, the
determination of the Board with respect thereto shall be final and conclusive.

                                       9
<PAGE>

11.   DISABILITY OR DEATH OF OPTIONEE

      If any optionee dies while serving as a director or an employee of the
Corporation or a subsidiary corporation, the option shall expire one (1) year
after the date of such death, except as provided in Section 20 hereof. After
such death but before such expiration, the persons to whom the optionee's rights
under the option shall have passed by will or the applicable laws of descent and
distribution or the executor or administrator of optionee's estate shall have
the right to exercise such option to the extent that installments, if any, had
accrued and/or vested as of the date on which the optionee ceased to be a
director or an employee of the Corporation or a subsidiary corporation.

      If the optionee shall terminate his or her directorship or employment
because of disability (as defined in Section 22(e)(3) of the Code), the optionee
may exercise this option to the extent he or she is entitled to do so at the
date of termination, at any time within one (1) year of the date of termination,
except as provided in Section 20 hereof.

      If any optionee dies during the three (3) month period referred to in
Section 9 hereof, the option shall expire one (1) year after the date of such
death, except as provided in Section 20 hereof.

12.   ADJUSTMENT UPON CHANGES IN CAPITALIZATION

      If the  outstanding  shares of the  stock of the  Corporation
are increased, decreased, changed into or exchanged for a different number or
kind of shares or securities of the Corporation through reorganization, merger,

                                       10
<PAGE>

recapitalization, reclassification, stock split, stock dividend, stock
consolidation or otherwise, without consideration to the Corporation, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares as to which options may be granted. A corresponding adjustment changing
the number or kind of shares and the exercise price per share allocated to
unexercised options or portions thereof, which shall have been granted prior to
any such change shall likewise be made. Any such adjustment, however, in an
outstanding option shall be made without change in the total price applicable to
the unexercised portion of the option, but with a corresponding adjustment in
the price for each share subject to the option. Any adjustment under this
Section 12 shall be made by the Board, whose determination as to what
adjustments shall be made, and the extent thereof, shall be final and
conclusive. No fractional shares of stock shall be issued or made available
under the Plan on account of any such adjustment, and fractional share-interests
shall be disregarded, except that they may be accumulated.

13.   TERMINATING EVENTS

      A Terminating Event shall be defined as any one of the following events:
(i) a dissolution or liquidation of the Corporation; (ii) a reorganization,
merger or consolidation of the Corporation with one or more corporations, the
result of which (A) the Corporation is not the surviving corporation, or (B) the
Corporation becomes a subsidiary of another corporation (which shall be deemed
to have occurred if another corporation shall own directly or indirectly, over
80% of the aggregate voting power of all outstanding equity securities of the
Corporation); (iii) a sale of substantially all the assets of the Corporation to
another corporation; or (iv) a sale of the equity securities of the Corporation
representing more than 80% of the aggregate voting power of all outstanding

                                       11
<PAGE>

equity securities of the Corporation to any person or entity, or any group of
persons and/or entities acting in concert. When the Corporation knows that a
Terminating Event will occur (i) the Corporation shall deliver to each optionee
no less than thirty (30) days prior to the Terminating Event, written
notification of the Terminating Event and the optionee's right to exercise all
options granted pursuant to the Plan, whether or not vested under the Plan or
applicable stock option agreement, and (ii) all outstanding options granted
pursuant to the Plan shall completely vest and become immediately exercisable as
to all shares granted pursuant to the option immediately prior to such
Terminating Event. This right of exercise shall be conditional upon execution of
a final plan of dissolution or liquidation or a definitive agreement of
consolidation or merger. Upon the occurrence of the Terminating Event all
outstanding options and the Plan shall terminate; provided, however, that any
outstanding options not exercised as of the occurrence of the Terminating Event
shall not terminate if there is a successor corporation which assumes the
outstanding options or substitutes for such options, new options covering the
stock of the successor corporation with appropriate adjustments as to the number
and kind of shares and prices.

                                       12
<PAGE>

14.   AMENDMENT AND TERMINATION

      The Board may at any time suspend, amend or terminate the Plan and may,
with the consent of the optionee, make such modification of the terms and
conditions of the option as it shall deem advisable; provided that, except as
permitted under the provisions of Sections 12 and 13 hereof, no amendment or
modification which would:

      (a)  increase the maximum number of shares which may be purchased pursuant
           to options granted under the Plan either in the aggregate or by an
           individual;

      (b)  change the minimum option price;

      (c)  increase  the  maximum  term  of  options  provided  for
           herein; or

      (d)  permit options to be granted to anyone other than directors,
           full-time salaried officers or management level employees of the
           Corporation or a subsidiary corporation;

may be adopted without the Corporation having first obtained any necessary
regulatory and shareholder approvals required by law.

      No option may be granted during any suspension or after termination of the
Plan. Amendment, suspension or termination of the Plan shall not (except as
otherwise provided in Section 12 hereof), without the consent of the optionee,
alter or impair any rights or obligations under any option theretofore granted.

15.   TIME OF GRANTING OPTIONS

      The time an option is granted, sometimes referred to as the date of grant,
shall be the day of the action of the Board, or the Stock Option Committee, if
applicable, described in Sections 3(c) and 4(c) hereof; provided, however, that
if appropriate resolutions of the Board, or the Stock Option Committee, if
applicable, indicate that an option is granted as of and on some future date,

                                       13
<PAGE>

the time such option is granted shall be such future date. If action by the
Board, or the Stock Option Committee, if applicable, is taken by unanimous
written consent of its members, the action of the Board, or the Stock Option
Committee, if applicable, shall be deemed to be at the time the last Board, or
Stock Option Committee, if applicable, member signs the consent.

16.   PRIVILEGES OF STOCK OWNERSHIP;
      SECURITIES LAW COMPLIANCE; NOTICE OF SALE

      No optionee shall be entitled to the privileges of stock ownership as to
any shares of stock not actually issued. No shares shall be purchased upon the
exercise of any option unless and until the Corporation has fully complied with
all applicable requirements of any regulatory agency having jurisdiction over
the Corporation, and all applicable requirements of any exchange upon which
stock of the Corporation may be listed. The optionee shall give the Corporation
notice of any sale or disposition of any such shares not more than five (5) days
after such sale or disposition.

17.   EFFECTIVE DATE OF THE PLAN

      The Plan shall be deemed adopted by the Board as of March 15, 1995 and
shall be effective immediately subject to approval by the shareholders of the
Corporation within twelve months of the date the Plan is adopted, by the vote of
a majority of the outstanding shares represented and voting at a meeting of
shareholders at which a quorum is present, or by the written consent vote of the
holders of a majority of the outstanding shares of the Corporation's stock.

                                       14
<PAGE>

18.   TERMINATION

      Unless previously terminated by the Board, the Plan shall terminate at the
close of business on a date ten (10) years from the earlier of the date of
approval by the Corporation's outstanding shares or the date of adoption of the
Plan by the Board. No options shall be granted under the Plan thereafter, but
such termination shall not affect any option theretofore granted.

19.   OPTION AGREEMENT

      Each option shall be evidenced by a written stock option agreement
executed by the Corporation and the optionee and shall contain each of the
provisions and agreements herein specifically required to be contained therein,
and such other terms and conditions as are deemed desirable and are not
inconsistent with the Plan. Each incentive stock option agreement shall contain
such terms and provisions as the Board, or the Stock Option Committee, if
applicable, may determine to be necessary in order to qualify such option as an
incentive stock option within the meaning of Section 422 of the Code.

20.   OPTION PERIOD

      Each option and all rights and obligations thereunder shall expire on such
date as the Board, or the Stock Option Committee, if applicable, may determine,
but not later than ten (10) years from the date such option is granted, and
shall be subject to earlier termination as provided elsewhere in the Plan.

                                       15
<PAGE>
21.   EXCULPATION AND INDEMNIFICATION

      To the extent permitted by applicable law in effect from time to time, no
member of the Board or the Stock Option Committee shall be liable for any act or
omission of any other member of the Board or the Stock Option Committee nor for
any act or omission on the member's own part, except the member's own willful
misconduct or gross negligence. The Corporation and its subsidiary corporations
shall pay expenses incurred by, and satisfy a judgment or fine rendered or
levied against, a present or former member of the Board or the Stock Option
Committee in any action brought by a third party against such person (whether or
not the Corporation is joined as a party defendant) to impose a liability or
penalty on such person while a member of the Board or the Stock Option Committee
arising with respect to the Plan or administration thereof or out of membership
on the Board or the Stock Option Committee, or all or any combination of the
preceding; provided, the Board determines in good faith that such member of the
Board or the Stock Option Committee was acting in good faith, within what such
member of the Board or the Stock Option Committee reasonably believed to be the
scope of his or her employment or authority, and for a purpose which he or she
reasonably believed to be in the best interests of the Corporation or its
shareholders. Payments authorized hereunder include amounts paid and expenses
incurred in settling any such action or threatened action. This Section 21 does
not apply to any action instituted or maintained in the right of the Corporation
by a shareholder or holder of a voting trust certificate representing shares of
the Corporation or a subsidiary corporation thereof. The provisions of this

                                       16
<PAGE>

Section 21 shall apply to the estate, executor, administrator, heirs, legatees
or devisees of a member of the Board or the Stock Option Committee, and the term
"person" as used in this Section 21 shall include the estate, executor,
administrator, heirs, legatees or devisees of such person.

22.   AGREEMENT AND REPRESENTATIONS OF OPTIONEE

      Unless  the  shares  of stock  covered  by the Plan have been
registered with the Securities Exchange Commission, each optionee shall, by
accepting an option, represent and agree, for himself or herself and his or her
transferees by will or the applicable laws of descent and distribution, that all
stock will be acquired for investment and not for resale or distribution. Upon
such exercise of any portion of an option, the person entitled to exercise the
same shall, upon request of the Corporation, furnish evidence satisfactory to
the Corporation (including a written and signed representation) to the effect
that the stock is being acquired in good faith for investment and not for resale
or distribution. Furthermore, the Corporation, at its sole discretion, may take
all reasonable steps, including affixing the following legend (and/or such other
legend or legends as counsel shall require) on certificates embodying the
shares:

      The shares represented by this certificate have not been registered under
      the Securities Act of 1933 and may not be sold, pledged, hypothecated or
      otherwise transferred or offered for sale in the absence of an effective
      registration statement with respect to them under the Securities Act of
      1933 or a written opinion of counsel for the optionee which opinion shall
      be acceptable to counsel for American River Holdings that registration is
      not required.

to assure itself against any sale or distribution by the optionee which does not

                                       17
<PAGE>

comply with the Plan or any federal or state securities laws.

      The Corporation agrees to remove any legend affixed to the certificates
embodying the shares pursuant to this Section 22 when all of the restrictions on
the transfer of the shares, whether imposed by the Plan or federal or state law,
have terminated.

23.   INFORMATION TO OPTIONEES

      The Corporation shall provide optionees with financial statements of the
Corporation at least annually.

24.   NONEXEMPT PLAN UNDER SECTION 16B-3

      The Plan is not a Section 16b-3 exempt plan.


                                       18