<PAGE>
                                                                   Exhibit 10.11

NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF THE BANK'S
STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE BANK'S 1991 STOCK OPTION PLAN
SHALL HAVE FIRST BEEN APPROVED BY THE SHAREHOLDERS OF THE BANK HOLDING NOT LESS
THAN A MAJORITY OF THE OUTSTANDING SHARES OF THE BANK'S COMMON STOCK REPRESENTED
AND VOTING AT A MEETING OF SHAREHOLDERS AND BY A MAJORITY OF THE DISINTERESTED
SHARES REPRESENTED AND VOTING AT THE MEETING.

                                   PLUMAS BANK
                        INCENTIVE STOCK OPTION AGREEMENT

        This Incentive Stock Option Agreement dated the 19th day of July, 2000,
entered into by and between Plumas Bank (the "Bank"), and Robert T. Herr
("Optionee");

        WHEREAS, pursuant to the 1991 Stock Option Plan of the Bank (the
"Plan"), a copy of which is hereto attached, the Board of Directors of the Bank
(or the Stock Option Committee, if authorized by the Board of Directors) has
authorized granting to Optionee, an Incentive Stock Option to purchase all or
any part of Five Thousand (5,000) authorized but unissued shares of the Bank's
Common Stock for cash at the price of Ten Dollars and Seventy-Five Cents
($10.75) per share, such option to be for the term AND upon the terms and
conditions hereinafter stated;

        NOW, THEREFORE, it is hereby agreed:

        1. Grant of Option. Pursuant to said action of the Board of Directors
(or the Stock Option Committee) and pursuant to authorizations granted by all
appropriate regulatory and governmental agencies, the Bank hereby grants to
Optionee the option to purchase, upon and subject to the terms and conditions of
the Plan, as amended, which is incorporated in full herein by this reference,
all or any part of Five Thousand (5,000) shares of the Bank's Common Stock
(hereinafter called "stock") at the price of Ten Dollars and Seventy-Five Cents
($10.75) per share, which price is not less than 100% of the fair market value
of the stock (or not less than 110% of the fair market value for
Optionee-shareholders who possess more than 10% of the Bank's stock) as of the
date of action of the Board of Directors (or the Option Committee) granting this
option.

        2. Exercisability. This option shall be exercisable as to 1,000 on July
19, 2001, 1,000 on July 19, 2002, 1,000 on July 19, 2003, 1,000 on July 19,
2004, 1,000 on July 19, 2005. This option shall remain exercisable as to all of
such shares until July 19, 2010 (but not later than ten (10) years from the date
this option is granted) unless this option has expired or terminated


<PAGE>

earlier in accordance with the provisions hereof. Shares as to which this option
becomes exercisable pursuant to the foregoing provision may be purchased at any
time prior to expiration of this option.

        3. Exercise of Option. This option may be exercised by written notice
delivered to the Bank stating the number of shares with respect to which this
option is being exercised, together with cash in the amount of the purchase
price of such shares. Not less than ten (10) shares may be purchased at any one
time unless the number purchased is the total number which may be purchased
under this option and in no event may the option be exercised with respect to
fractional shares. Upon exercise, Optionee shall make appropriate arrangements
and shall be responsible for the withholding of any federal and state taxes then
due.

        4. Cessation of Employment. Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be employed by the Bank or a subsidiary
corporation for any reason other than Optionee's death or disability (as defined
in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended from time
to time), this option shall expire 90 days thereafter. During the three-month
period this option shall be exercisable only as to those installments, if any,
which had accrued as of the date when the Optionee ceased to be employed by the
Bank or the subsidiary corporation.

        5. Termination of Employment for Cause. If Optionee's employment by the
Bank or a subsidiary corporation is terminated for cause, this option shall
expire immediately, unless reinstated by the Board of Directors within thirty
days (30) days of such termination by given written notice of such reinstatement
to Optionee at his last known address. In the event of such reinstatement,
Optionee may exercise this option only to such extent, for such time, and upon
such terms and conditions as if Optionee had ceased to be employed by the Bank
or a subsidiary corporation upon the date of such termination for a reason other
than cause, death or disability. Termination for cause shall, include but not be
limited to, termination for malfeasance or gross misfeasance in the performance
of duties or conviction of illegal activity in connection therewith.

        6. Nontransferability; Death of Optionee. This option shall not be
transferable except by Will or by the laws of descent and distribution and shall
be exercisable during Optionee's lifetime only by Optionee. If Optionee dies
while employed by the Bank or a subsidiary corporation, or during the 90 day
period referred to in Paragraph 4 hereof, this option shall expire one (1) year
after the date of Optionee's



                                       2
<PAGE>

death or on the day specified in Paragraph 2 hereof, whichever is earlier. After
Optionee's death but before such expiration, the persons to whom Optionee's
rights under this option shall have passed by Will or by the applicable laws of
descent and distribution or the executor or administrator of Optionee's estate
shall have the right to exercise this option as to those shares for which
installments had accrued under Paragraph 2 hereof as of the date on which
Optionee ceased to be employed by the Bank or a subsidiary corporation. If the
Optionee shall terminate employment because of disability (as defined in Section
105(d)(4) of the Internal Revenue Code of 1986, as amended from time to time),
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 year of the date of
termination, but in no event later than the expiration date in paragraph 2.

        7. Employment. This Agreement shall not obligate the Bank or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bank or a subsidiary corporation to reduce
Optionee's compensation.

        8. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to the Bank's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.

        9. Modification and Termination by Board of Directors. The rights of
Optionee are subject to modification and termination upon the occurrence of
certain events as provided in Sections 13 and 14 of the Plan.

        10. Notification of Sale. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bank not more
than five (5) days after any sale or other disposition of such shares. No shares
issuable upon the exercise of this option shall be issued and delivered unless
and until all applicable requirements Of California and federal law pertaining
to the issuance and sale of such shares, and all applicable listing requirements
of the securities exchanges, if any, on which shares of the Bank of the same
class are then listed shall have been complied with.

        11. Notices. Any notice to the Bank provided for in this Agreement shall
be addressed to it in care of its President or Cashier at its main office and
any notice to Optionee shall be addressed to Optionee's address on file with the
Bank or a subsidiary corporation, or to such other address as either



                                       3
<PAGE>

may designate to the other in writing. Any notice shall be deemed to be duly
given if and when enclosed in a properly sealed envelope and addressed as stated
above and deposited, postage prepaid, with the United States Postal Service. In
lieu of giving notice by mail as aforesaid, any written notice under this
Agreement may be given to Optionee in person, and to the Bank by personal
delivery to its President or Cashier.

        12. Incentive Stock Option. This Stock Option Agreement is intended to
be an Incentive Stock Option Agreement as defined in Section 422A of the
Internal Revenue Code of 1986, as amended from time to time.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement.


OPTIONEE                                PLUMAS BANK


By  /s/ ROBERT T. HERR                  By  /s/ JERRY V. KEHR
    -------------------------              -------------------------------------
    Robert T. Herr                          Jerry V. Kehr, Chairman of the Board



                                        By  /s/ ROBERT SCHOENSEE
                                           -------------------------------------
                                            Robert Schoensee, Vice Chairman
                                            Of the Board



                                       4
<PAGE>


                       FIRST AMENDMENT TO THE PLUMAS BANK
                          1991 STOCK OPTION AGREEMENT

This First Amendment to the Plumas Bank 1991 Stock Option Agreement is entered
into by and between Robert Herr ("Optionee") and Plumas Bank on December 5, 2000
for the purpose of amending the option agreement ("Option") by and between
Optionee and Plumas Bank entered into on July 19, 2000.

WHEREAS, the Plumas Bank 1991 Stock Option Plan ("1991 Plan") previously only
allowed for stock option exercises by the payment of cash, and has since been
amended to allow the exercise of stock options by the delivery of existing
shares of Plumas Bank stock held by the option.

NOW, THEREFORE, the Optionee and the Bank agree to the amendment of the Option
as follows:

1.   AMENDMENT OF SECTION 3. The first sentence in Section 3 shall be amended in
     the entirety to read as follows:

          This option may be exercised by written notice delivered to the
          Bank stating the number of shares with respect to which this option is
          being exercised, together with the purchase price in cash or subject
          to applicable law, with Bank common stock previously acquired by the
          optionee and held by the optionee for a period of at least six months.

2.   AMENDMENT OF SECTION 3. A new sentence shall be added after the sentence in
     the aforementioned amendment to read in the entirety as follows:

          The equivalent dollar value of shares used to effect a purchase
          shall be the fair market value of the shares on the date of the
          exercise.


PLUMAS BANK                                        OPTIONEE

/s/ W. E. ELLIOTT                                  /s/ ROBERT T. HERR
------------------------------------               ----------------------------
William E. Elliott, President & CEO                Robert Herr


                                       5