FIRST AMENDMENT TO
                            THE NORTH VALLEY BANCORP
                          EMPLOYEE STOCK OWNERSHIP PLAN


The First Amendment (Amendment) is hereby adopted by North Valley Bancorp
(Employer).

                                    RECITALS

A.   The Employer adopted The North Valley Bancorp Employee Stock Ownership Plan
     (Plan) effective January 1, 1977.

B.   The Plan was amended from time to time and was restated effective January
     1, 1999.

C.   The Plan received a favorable determination letter as to the tax qualified
     status of the Plan dated March 29, 2000.

D.   Effective October 11, 2000, the Six Rivers National Bank Employee Stock
     Ownership Plan was merged into the Plan.

E.   The Employer now wishes to amend the Plan to:

     1.  Reflect the provisions of the Community Renewal Tax Relief Act of 2000
         (CRA 2000) by adding the model amendment language suggested by the IRS
         in IRS Notice 2001-37, dealing with the definition of compensation for
         certain plan purposes;

     2.  Conform to the final regulations under the Internal Revenue Code (Code)
         section 401(a)(9) published on April 17, 2002, relating to required
         minimum distributions from retirement plans;

     3.  Reflect certain provisions of the Economic Growth and Tax Relief
         Reconciliation Act of 2001 (EGTRRA). The amendments reflect the model
         amendment language suggested by the IRS in Notice 2001-57, dealing with
         certain plan limits and other general matters;

     4.  Amend the Claims Procedure article of the Plan to reflect the final
         regulations issued by the Department of Labor, effective for all claims
         filed on or after January 1, 2002; and

     5.  Clarify the definition of Disability under the Plan.

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                              OPERATIVE PROVISIONS

In accordance with the foregoing recitals, the Employer and the Trustees hereby
amend the Plan effective January 1, 2002, as follows:

1.   Plan Section 2 is amended to include a new definition of Disability a
     follows:

         Disability.

         "Disability" shall mean total and permanent disability of a
         Participant, by reason of physical or mental illness, resulting in the
         inability to perform any gainful employment resulting in termination of
         his Service with the Company, and which is determined by the Social
         Security Administration to constitute total and permanent Disability
         under the federal Social Security Acts.

Community Renewal Tax Relief Act provisions. The Employer hereby amends the Plan
to adopt the following model amendment language (as published in IRS Notice
2001-37), effective January 1, 2001.

2.   Plan Section 2 is amended by adding a new subparagraph (a) at the end of
     the definition of Compensation to read as follows:

     (a) For limitation years beginning on or after January 1, 2001, for
         purposes of applying the limitation described in Section 7 of the Plan,
         Compensation paid or made available during such limitation years shall
         include elective amounts that are not includible in the gross income of
         the Employee by reason of Code section 132(f)(4).

         This Amendment shall also apply to the definition of Compensation for
         all purposes under the Plan.

Code section 401(a)(9) provisions. The Employer hereby amends the Plan to adopt
the following model amendment language effective January 1, 2001.

3.   Plan Section 12 is amended by adding a new subparagraph (e) to read, in its
     entirety, as follows:

     (e) With respect to distributions under the Plan made for calendar years
         beginning on or after January 1, 2001, the Plan will apply the minimum
         distribution requirements of Code section 401(a)(9) in accordance with
         the regulations under Code section 401(a)(9) that were proposed on
         January 17, 2001, notwithstanding any provision of the Plan to the
         contrary. With respect to distributions under the Plan made for
         calendar years beginning on or after January 1, 2003, the Plan will
         apply the minimum distribution requirements of Code section 401(a)(9)
         in accordance with the final Regulations under Code section 401(a)(9)
         that were published on April 17, 2002.

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The following amendments to the Plan are adopted to reflect certain provisions
of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). The
following amendments are intended as good faith compliance with the requirements
of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued
thereunder. This model amendment language (as published in IRS Notice 2001-57)
is effective as of October 1, 2002.

4.   The Plan Section 2, is amended to reflect a change in the maximum annual
     considered compensation by adding a new subparagraph (b) at the end of the
     definition of Compensation to read as follows:

     (b) The annual compensation of each participant taken into account in
         determining allocations for any plan year beginning after December 31,
         2001, shall not exceed two hundred thousand dollars ($200,000), as
         adjusted for cost-of-living increases in accordance with Code Section
         401(a)(17)(B). Annual compensation means compensation during the plan
         year or such other consecutive twelve (12) month period over which
         compensation is otherwise determined under the plan (the determination
         period).

         The cost-of-living adjustment in effect for a calendar year applies to
         annual compensation for the determination period that begins with or
         with in such calendar year.

5.   Plan Section 7, dealing with Allocation Limitations, is amended, effective
     for limitation years beginning after December 31, 2001, to reflect a change
     in the maximum annual addition by the addition of the following
     subparagraph (a) to the end of Section 7:

     (a) Maximum Annual Addition.

         Effective as of January 1, 2002, except to the extent otherwise
         permitted for catch-up contributions under EGTRRA section 631 and Code
         section 414(v), if applicable, the annual addition that may be
         contributed or allocated to a participant's account under the plan for
         any limitation year shall not exceed the lesser of:

         (1)  Forty thousand dollars ($40,000), as adjusted for increases in the
              cost-of-living under Code section 415(d), or

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         (2)  One hundred percent (100%) of the participant's compensation,
              within the meaning of Code section 415(c)(3), for the limitation
              year.

         The compensation limited referred to in (2), above, shall not apply to
         any contribution for medical benefits after separation from service
         (within the meaning of Code section 401(h) or Code section 419A(f)(2))
         which is otherwise treated as an annual addition.

6.   Plan Section 7 is amended by adding the following subparagraph (b)
     effective January 1, 2005:

     (b) Prohibited Allocation Of Stock For S corporations.

         (1)  No Company Stock of an S corporation may be allocated under this
              Plan during a Nonallocation Year for the benefit of a Disqualified
              Person.

         (2)  The following definitions apply for purposes of this Prohibited
              Allocation Of Stock For S corporations section:

              (A)  A "Nonallocation Year" means any Plan Year during which, at
                   any time during such Plan Year:

                   (i)  The Plan holds Company Stock in an S corporation;

                   (ii)  Disqualified Persons own at least fifty percent (50%)
                         of the number of shares of stock in the S corporation;
                         or

                   (iii) The rules of Code section 318(a) apply for purposes of
                         determining the fifty percent (50%) ownership
                         prohibition by Disqualified Persons under this
                         subsection except that:

                         (a) The members of a Participant's family will also
                             include Family Members defined below;

                         (b) A Participant will not be considered as owning an
                             option to acquire stock and the rules of Code
                             section 318(a)(4) do not apply; and

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<PAGE>

                         (c) A Participant will be treated as owning
                             Deemed-Owned Shares regardless of the trust
                             exception in Code section 18(a)(2)(B)(i).

                   Synthetic Equity shall be counted as outstanding stock of the
                   Company in accordance with the requirements of Code section
                   409(p)(5) and the regulations, if any, when determining if a
                   Plan Year is a Nonallocation Year. If a Nonallocation Year
                   results without counting Synthetic Equity, then Synthetic
                   Equity will not be counted if it would result in a Plan Year
                   not being a Nonallocation Year.

              (B)  "Disqualified Person" means any Participant if:

                   (i)   The aggregate of Deemed-Owned shares of such
                         Participant and his Family Members is at least twenty
                         percent (20%) of the number of Deemed-Owned Shares of
                         stock in the S corporation;

                   (ii)  In the case of a Participant not described in a above,
                         the number of Deemed-Owned shares of such Participant
                         is at least ten percent (10%) of the number of
                         Deemed-Owned shares of stock in the S corporation; or

                   (iii) He is a Family Member of a Disqualified Person under
                         paragraph (i), has Deemed-Owned Shares and is not
                         otherwise treated as a Disqualified Person under
                         paragraph (i).

              (C)  "Deemed-Owned Shares" means with respect to any Participant:

                   (i)   The Company Stock in the S corporation allocated to a
                         Participant under the Plan;

                   (ii)  A Participant's share of the stock in the S corporation
                         which is held by the Plan, but not allocated under the
                         Plan to Participants. A Participant's share of
                         unallocated S corporation stock is the amount of
                         unallocated stock that would be allocated to such
                         Participant if the unallocated stock were allocated to

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                         all Participants in the same proportion as the most
                         recent stock allocation under the Plan; and

                   (iii) Synthetic Equity shall be counted as Deemed-Owned
                         Shares of the Participant in accordance with the
                         requirements of Code section 409(p)(5) and the
                         regulations, if any, when determining if the
                         Participant is a Disqualified Person.

              (D)  "Family Member" means with respect to any Participant:

                   (i)   The Participant's spouse, except if they are legally
                         separated under a decree of divorce or separate
                         maintenance;

                   (ii)  An ancestor or lineal descendant of the Participant or
                         his spouse;

                   (iii) A brother or sister of the Participant or his spouse
                         and any lineal descendant of such brother or sister; or

                   (iv)  The spouse of any individual described in paragraphs
                         (ii) or (iii) above.

              (E)  "Synthetic Equity" means any stock option, warrant,
                   restricted stock, deferred issuance stock right, or similar
                   interest or right that gives the holder the right to acquire
                   or receive stock of the S corporation in the future. Except
                   to the extent provided in regulations, Synthetic Equity also
                   includes a stock appreciation right, phantom stock unit, or
                   similar right to a future cash payment based on the value of
                   such stock or appreciation in such value.

7.   Plan Section 13, is amended by adding a new subparagraph (g) to the
     existing plan section to read as follows:

     (g) Rollover Provisions.

         (1)  Effective Date.

              This section shall apply to distributions made after December 31,
              2001.

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         (2)  Modification Of Definition Of Eligible Retirement Plan.

              For purposes of the direct rollover provisions in Plan Section 13,
              an eligible retirement plan shall also mean an annuity contract
              described in Code section 403(b) and an eligible plan under Code
              section 457(b) which is maintained by a state, political
              subdivision of a state, or any agency or instrumentality of a
              state or political subdivision of a state and which agrees to
              separately account for amounts transferred into such plan from
              this plan. The definition of eligible retirement plan shall also
              apply in the case of a distribution to a surviving spouse, or to a
              spouse or former spouse who is the alternate payee under a
              qualified domestic relation order, as defined in Code section
              414(p).

         (3)  Modification Of Definition Of Eligible Rollover Distribution To
              Exclude Hardship Distributions.

              For purposes of the direct rollover provisions in Plan Section 13,
              any amount that is distributed on account of hardship shall not be
              an eligible rollover distribution and the distributee may not
              elect to have any portion of such a distribution paid directly to
              an eligible retirement plan.

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<PAGE>

         (4)  Modification of Definition Of Eligible Rollover Distribution To
              Include After-Tax Employee Contributions.

              For purposes of the direct rollover provisions in Plan Section 13,
              a portion of a distribution shall not fail to be an eligible
              rollover distribution merely because the portion consists of
              after-tax employee contributions which are not includible in gross
              income. However, such portion may be transferred only to an
              individual retirement account or annuity described in Code
              sections 408(a) or 408(b), or to a qualified defined contribution
              plan described in Code sections 401(a) or 403(a) that agrees to
              separately account for amounts so transferred, including
              separately accounting for the portion of such distribution which
              is includible in gross income and the portion of such distribution
              which is not so includible.

8.   Plan Section 16, dealing with claims, is amended in its entirety to read as
     follows, effective January 1, 2002:

     Claims Procedure

     The Employee Retirement Income Security Act of 1974 (ERISA) requires the
     Plan Administrator to establish procedures for processing claims which
     afford participants a reasonable opportunity for a full and fair review of
     their claims. These claims procedures contain the provisions required by
     the Labor Regulations at 29 CFR 2520.503-1. The Plan Administrator shall
     have absolute discretion to determine Participants, and Beneficiaries,
     rights to benefits under the Plan. All benefit claim decisions will be made
     in accordance with the terms of the Plan documents and the Plan terms will
     be applied consistently to all claimants.

     (a) Filing A Benefit Claim.

         A Participant, a Beneficiary or his or her representative can initiate
         the benefit claim process by submitting to the Plan Administrator fully
         completed distribution election forms, if needed, or a letter clearly
         stating that a claim is being filed. A claim shall not be deemed to be
         "filed" for the purposes of these claim and appeals procedures however,
         until all necessary and applicable forms are completed and submitted to
         the Plan Administrator. A claim will be considered submitted if
         delivered to a member of the Plan Administrator directly, or to the
         Plan Administrator, in care of the office of the employer which handles
         personnel and human resources matters.

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<PAGE>

     (b) Notice of Benefit Denial.

         (1)  Timing Of Notice.

              If a benefit claim is wholly or partially denied, the Plan
              Administrator will notify the Participant, the Beneficiary or his
              or her representative of the denial within a reasonable period of
              time, but no later than ninety (90) days after the Plan's receipt
              of the claim. If the Plan Administrator determines that an
              extension of the time for processing the claim is needed, the Plan
              Administrator will notify the Participant, the Beneficiary or his
              or her representative of the reasons for the extension and the
              extended due date before the end of the ninety (90) day period
              after the filing of the claim. The extended period will not exceed
              one hundred eighty (180) days after the date of the filing of the
              claim.

         (2)  Content Of Notice.

              A notice of a benefit denial will be provided in either written
              form or via e-mail. The notice will provide the following
              information:

              (A)  The specific reason(s) for the denial;

              (B)  Reference to the specific Plan provisions on which the denial
                   is based;

              (C)  A description of any additional information necessary for the
                   claim to be granted and an explanation of why such
                   information is necessary; and

              (D)  A description of the claim review procedures, the time limits
                   under the procedures and a statement regarding your right to
                   bring a civil action under ERISA section 502(a) following a
                   benefit denial.

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     (c) Appeal Of Benefit Denial.

         (1)  Review Process.

              The review process will be as follows:

              (A)  A Participant, Beneficiary or representative have sixty (60)
                   days following receipt of the notice of benefit denial in
                   which to file an appeal of the decision with the Plan
                   Administrator;

              (B)  A Participant, Beneficiary or representative may submit
                   written comments, documents, records and other information
                   related to the benefit claim on appeal;

              (C)  A Participant, Beneficiary or representative will be
                   provided, upon request and free of charge, access to and
                   copies of all documents, records and other information
                   relevant to the benefit claim (a document is considered
                   relevant to the claim if it: (i) was relied upon in making
                   the benefit decision; (ii) was submitted, considered or
                   generated in the course of making the benefit decision,
                   without regard as to whether it was relied upon in making the
                   decision; or (iii) demonstrates compliance in making the
                   benefit decision with the requirement that benefit decisions
                   must follow the terms of the Plan and be consistent when
                   applied to similarly situated claimants); and

              (D)  The review on appeal will consider all comments, documents,
                   records and other information submitted by the Participant,
                   without regard to whether such information was submitted or
                   considered in the initial benefit denial.

         (2)  Timing Of Notice Of Appeals Decision.

              The Plan Administrator will notify the Participant, Beneficiary or
              his or her representative of the appeals decision (whether or not
              a complete or partial denial) within a reasonable period of time,
              but no later than sixty (60) days after the Plan's receipt of the
              appeal. If the Plan Administrator determines that an extension of
              the time for processing the claim is needed, the Plan
              Administrator will notify the Participant, Beneficiary or his or

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<PAGE>

              her representative of the reasons for the extension and the
              extended due date before the end of the sixty (60) day period
              after the filing of the appeal. The extended period will not
              exceed one hundred twenty (120) days after the date of the filing
              of the appeal.

         (3)  Content Of Notice Of Appeals Decision.

              A notice of a benefit determination on appeal will be provided in
              written form or via e-mail. If the decision is in whole or in part
              a denial of the appeal, the notice will provide the following
              information:

              (A)  The specific reason(s) for the denial;

              (B)  Reference to the specific plan provisions on which the denial
                   is based;

              (C)  A statement that the Participant, Beneficiary or
                   representative is entitled to receive, upon request and free
                   of charge, access to and copies of all documents, records and
                   other information relevant to the benefit claim (a document
                   is considered relevant to the claim if it: (i) was relied
                   upon in making the benefit decision; (ii) was submitted,
                   considered or generated in the course of making the benefit
                   decision, without regard as to whether it was relied upon in
                   making the decision; or (iii) demonstrates compliance in
                   making the benefit decision with the requirement that benefit
                   decisions must follow the terms of the plan and be consistent
                   when applied to similarly situated claimants); and

              (D)  A statement regarding the Participant's or Beneficiary's
                   right to bring a civil action under ERISA section 502(a)
                   following a benefit denial on appeal.

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9.  Plan Section 19 amended to add a subsection (3) to read as follows:

    (e)  Modification Of Top-Heavy Rules.

         (1)  Effective Date.

              This section shall apply for purposes of determining whether the
              plan is a top-heavy plan under Code section 416(g) for plan years
              beginning after December 31, 2001, and whether the plan satisfies
              the minimum benefits requirements of Code section 416(c) for such
              years. This section modifies and amends, to the extent necessary,
              any provision of the Plan that conflicts with this amendment.

         (2)  Determination Of Top-Heavy Status.

              (A)  Key Employee.

                   Key employee means any employee or former employee (including
                   any deceased employee) who at any time during the plan year
                   that includes the determination date was an officer of the
                   employer having annual compensation greater than one hundred
                   thirty thousand dollars ($130,000) (as adjusted under Code
                   section 416(i)(1) for plan years beginning after December 31,
                   2002), a five percent (5%) owner of the employer, or a one
                   percent (1%) owner of the employer having annual compensation
                   of more than one hundred fifty thousand dollars ($150,000).
                   For this purpose, annual compensation means compensation
                   within the meaning of Code section 415(c)(3). The
                   determination of who is a key employee will be made in
                   accordance with Code section 416(i)(1) and the applicable
                   regulations and other guidance of general applicability
                   issued thereunder.

              (B)  Determination Of Present Values And Amounts.

                   The subparagraph shall apply for purposes of determining the
                   present values of accrued benefits and the amounts of account
                   balances of employees as of the determination date.

                   (i)  Distributions during year ending on the determination
                        date. The present values of accrued benefits and the
                        amounts of account balances of an employee as of the

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                        determination date shall be increased by the
                        distributions made with respect to the employee under
                        the plan and any plan aggregated with the plan under
                        Code section 416(g)(2) during the one (1) year period
                        ending on the determination date. The preceding sentence
                        shall also apply to distributions under a terminated
                        plan which, had it not been terminated, would have been
                        aggregated with the plan under Code section
                        416(g)(2)(A)(i). In the case of a distribution made for
                        a reason other than separation from service, death, or
                        disability, this provision shall be applied by
                        substituting "five (5) year period" for "one (1) year
                        period."

                   (ii) Employees not performing services during year ending on
                        the determination date.

                        The accrued benefits and accounts of any individual who
                        has not performed services for the employer during the
                        one (1) year period ending on the determination date
                        shall not be taken into account.

         (3)  Minimum Benefits.

              (A)  Matching Contributions.

                   Employer matching contributions shall be taken into account
                   for purposes of satisfying the minimum contribution
                   requirements of Code section 416(c)(2) and the plan. The
                   preceding sentence shall apply with respect to matching
                   contributions under the plan or, if the plan provides that
                   the minimum contribution requirement shall be met in another
                   plan, such other plan. Employer matching contributions that
                   are used to satisfy the minimum contribution requirements
                   shall be treated as matching contributions for purposes of
                   the actual contribution percentage test and other
                   requirements of Code section 401(m).

              (B)  Contributions Under Other Plans.

                   The minimum benefit requirement of an Employer contribution
                   consisting of three percent (3%) of compensation shall be met

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<PAGE>

                   by contributions to the Plan as described in Plan section
                   19(c). All non-key employees shall be eligible for the
                   minimum contribution.

10. This Amendment is intended as good faith compliance with the requirements of
    EGTRRA and is to be construed in accordance with the requirements of EGTRRA
    and the guidance issued thereunder.

11. The language of this Amendment shall supersede the provisions of the Plan to
    the extent those provisions are inconsistent with the provisions of this
    amendment. Except as amended above, the remaining provisions of the Plan
    shall remain in full force and effect.

12. In all other respects, the Plan is hereby ratified, approved and confirmed.

IN WITNESS WHEREOF, the Employer has executed and adopted this Amendment on this
____ day of October 2002.

                                        EMPLOYER

                                        NORTH VALLEY BANCORP
                                        A California Corporation



                                        By:
                                             -----------------------------
                                             Michael J. Cushman, President

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