EXHIBIT 10.3

                       SECOND AMENDED EMPLOYMENT AGREEMENT


         This Second Amended Employment Agreement (the "Agreement") is entered
into as of February 20, 2004, by and between Sutter Holding Company, Inc., a
Delaware corporation ("Employer"), and William G. Knuff, III ("Employee").
                                    Recitals
         WHEREAS, Employee and Employer entered into that certain employment
agreement dated August 1, 2002 (the "Original Agreement") which set forth the
terms of the Employee's initial employment until August 31, 2004.

         WHEREAS, on February 12, 2003, Employee and Employer amended the
Original Agreement to pay an annual base salary of five hundred thousand dollars
($500,000), not to exceed the lesser of (i) 1.0% annually of Employer's reported
gross asset value, or (ii) 5.0% annually of Employer's reported total
shareholders' equity.

         NOW, THEREFORE, in consideration of the mutual covenants contained
         herein, the parties agree as follows:

         1.     Engagement. Employer hereby engages Employee to perform services
and duties for Employer in the capacities of Co-Chairman, Co-Chief Executive
Officer, and Chief Financial Officer. Employee accepts such engagement and
hereby agrees to perform the duties, undertake the responsibilities and exercise
the authority customarily performed, undertaken and exercised by persons
situated in a similar executive capacity. Excluding discretionary periods of
vacation and sick leave to which the Employee is entitled, the Employee agrees
to devote reasonable attention and time to the business and affairs of Employer
to the extent necessary to discharge the responsibilities assigned to the
Employee hereunder. Employer acknowledges that Employee is engaged in several
business activities and ventures, and that performance of Employee's duties
under this Agreement is not intended to be a full-time commitment.

         2. Term. The term of employment under this Agreement shall be for the
period commencing on the date hereof, and ending August 31, 2009; provided,
however, that the term of this Agreement shall be automatically extended for one
(1) year on each anniversary of this Agreement unless either Employer or
Employee shall have given written notice to the other at least ninety (90) days
prior thereto that the term of this Agreement shall not be so extended.

         3. Compensation.

                (A) Salary. In consideration of the services to be rendered by
Employee, Employer shall pay Employee an annual base salary of five hundred
thousand dollars (US $500,000), not to exceed the lesser of (i) 1.0% annually of
Employer's reported gross asset value, or (ii) 5.0% annually of Employer's
reported total shareholder's equity, payable monthly based upon the ending
balance sheet for the previous quarter. For purposes of clarity, the annual
salary of $500,000 shall be hereinafter referred to as "Base Salary", and the
actual annual salary paid after adjusting for either (i) or (ii) above, as the
case may be, shall be hereinafter referred to as "Effective Salary." Employer
may in its discretion from time to time increase, but may not decrease,
Employee's Base Salary. Both Employer and Employee note that it is possible for
the Employee's actual salary to decrease, without any action on the part of the
Employer's Board of Directors, since it is calculated based on Employer's
quarterly reported gross asset value and shareholder's equity, which are subject
to periodic fluctuation. Without any necessary action to be taken by the
Employer's Board of Directors, Base Salary shall be adjusted annually based on
changes in the U.S. Consumer Price Index ("CPI") with a starting point of
January 1, 2003.

                (B) Other Incentive Compensation. Employee will be eligible to
participate in any stock option or grant plan established by the Employer, and
shall be granted stock options annually or from time to time thereunder as
approved by the Employer's Board of Directors.


                                       1
<PAGE>


                (C) Change of Control. For purposes of this Agreement, a "Change
of Control", is defined as either (i) Employee's loss of voting control of
Employer, which is defined as any point in time when Employee's control of
voting stock, combined with the control of voting stock of Employer's other
officers and directors currently employed, is less than that of any other
entity's (i.e. institution, trust or individual) voting control; or (ii)
Employee's loss of or material reduction in compensation, or managerial scope
and control of Employer. In the event of a Change of Control as defined in (i)
above, notwithstanding any vesting provisions, all stock options granted to
Employee shall immediately vest, and additional stock options (with an exercise
price equal to the prevailing market price of the Employer's stock on the
effective date of the change of control, and with an expiration date that is ten
years from the effective date of the change of control) equal to 2% of the
Employer's then outstanding shares shall be immediately granted to Employee and
shall begin vesting on a schedule substantially similar to that applied to stock
options granted to other employees of the Employer. In the event of a Change of
Control as defined in (ii) above, notwithstanding any vesting provisions, all
stock options granted to Employee shall immediately vest, additional stock
options (with an exercise price equal to the prevailing market price of the
Employer's stock on the effective date of the change of control, and with an
expiration date that is ten years from the effective date of the change of
control) equal to 2% of the Employer's then outstanding shares shall be
immediately granted to Employee and be fully vested, and Employer shall
immediately pay to Employee cash compensation equal to the greater of (a)
Employee's Base Salary multiplied by three (3); or (b) Employee's Base Salary
multiplied by the number of years (including fractions of a year) remaining
under this Agreement.

         4. Expenses. Employee shall be entitled to receive prompt reimbursement
of all expenses reasonably incurred by him in connection with the performance of
his duties hereunder or for promoting, pursuing or otherwise furthering the
business or interests of Employer. Employer may require as a condition to
reimbursement the submission of an expense report accompanied by appropriate
receipts or other suitable evidence of the expenditure.

         5. Benefits. Employee shall be entitled to receive all standard
benefits offered by Employer to its employees and such other benefits as
Employer may in its discretion provide to Employee, including bonuses or other
incentive compensation. No bonus or incentive compensation shall be or be deemed
to be an increase in Employee's base salary.

         6. Termination Upon Disability or Death. In the event that Employee
shall become disabled, Employer may terminate this Agreement upon thirty (30)
days written notice to Employee. For purposes of this Agreement, the term
"disabled" is used as defined in the Amended and Restated Shareholders'
Agreement among Employer and certain of its shareholders, including Employee,
being entered into contemporaneously with this Agreement. If Employee dies
during the term of this Agreement or if this Agreement is terminated pursuant to
the preceding sentence, Employee or his estate shall be paid as additional
compensation hereunder, within sixty (60) days after such termination, an amount
equal to two times Employee's Effective Salary as then in effect, or the number
of years remaining under this Agreement multiplied by the Effective Salary,
whichever is greater, and all stock options granted to Employee shall
immediately vest.

         7. Termination for Cause. Employer may terminate its obligations under
this Agreement for cause upon thirty (30) days written notice. For purposes of
this Agreement, "Cause" means (a) continued and deliberate neglect by Employee
of employment duties continuing for thirty (30) days after written notice from
Employer specifying the neglect; (b) willful misconduct of Employee in
connection with the performance of any of his duties; (c) fraud, embezzlement,
theft or other dishonesty by Employee with respect to Employer; (d) the
commission by the Employer of any felony or any other crime involving dishonesty
or moral turpitude; or (e) material breach by Employee of Section 10 of this
Agreement. Upon such termination, all obligations of Employer to Employee under
this Agreement, except for any accrued and unpaid salary or benefits, shall
cease except as may otherwise be required by law. If Employer terminates the
employment of Employee pursuant to this Section 7, Employee shall have no
further liability or obligations to Employer except his obligations under
Section 10. In any action or proceeding in which Employer asserts the existence
of cause for termination, whether asserted as a claim, a counterclaim, an
affirmative defense, or otherwise, Employer shall have the burden of proving by
clear and convincing evidence that cause for termination exists.


                                       2
<PAGE>


         8. Termination without Cause. The Employer may, upon two weeks' written
notice, terminate Employee for any reason, without Cause and without liability.
Notwithstanding the foregoing, in the event Employee is terminated without
Cause, such termination will constitute a Change of Control for purposes of this
Agreement, in which case Section 3(C)(ii) specifically applies.

         9. Voluntary Termination. If Employee voluntarily resigns or otherwise
voluntarily leaves the employ of the Employer in violation of this Agreement,
Employer's obligations to Employee under this Agreement, except for any accrued
and unpaid salary and benefits, shall cease, unless Employee and Employer's
Board of Directors shall mutually agree otherwise.

         10. Confidentiality. Employee will maintain in strict confidence and
will not use or disclose, except for the business purposes of Employer, any
confidential information obtained from and belonging to Employer. Confidential
information includes, but is not limited to, trade secrets, supplier
information, customer information, pricing information, internal corporate
planning, Employer's secrets, historical financial data and forecasts,
long-range plans and strategies, and any other data or information of or
concerning Employer that is not generally known to the public or the industry in
which Employer is engaged.

         11. Severability and Enforcement. If any provision of this Agreement is
unlawful or against public policy and thus void or is otherwise declared void,
such provision shall not be deemed part of this Agreement, which otherwise shall
remain in full force and effect.

         12. Governing Law. This Agreement shall be construed according to the
laws of the State of Delaware, without giving effect to the principles of the
conflicts of law.

         13. Notices. All written notices required by this Agreement shall be
deemed given when delivered personally or sent by registered or certified mail
or courier service, return receipt requested, to the parties at their last known
addresses. Each party may, from time to time, and shall, upon request of the
other party, designate an address to which notices should be sent.

         14. Amendment. This Agreement may not be amended except by the written
agreement of the parties.

         15. Binding Effect. This Agreement shall be binding on Employee, his
heirs, executors, personal representative, and assigns, and on Employer, its
successors and assigns. Should there be a consolidation or merger of Employer
with or into another entity or a purchase of all or substantially all of the
assets of Employer by another entity, Employer shall take all action necessary
so that the surviving or acquiring entity will succeed to the rights and
obligations of Employer under and be bound by this Agreement.

         16. Entire Contract. This Agreement constitutes the entire agreement
between the parties.

         17. Contract Under Seal. The parties acknowledge that they intend this
contract to be a contract under seal. IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date specified above.

                                                 SUTTER HOLDING COMPANY, INC.


                                                 /s/ ROBERT E. DIXON
                                                 -----------------------------
Attest   KAREN LAMONTE                           By: Robert E. Dixon
      -----------------------                    Co-Chief Executive Officer

[CORPORATE SEAL]




                                                 /s/ WILLIAM G. KNUFF, III
                                                 -----------------------------
                                                 WILLIAM G. KNUFF, III





                                       3