I. The Bank desires to have the Indemnitee continue to serve as a director or officer ofthe Bank free from undue concern for unpredictable, inappropriate or unreasonable legal risks andpersonal liabilities by reason of his/her acting in good faith in the performance ofhis/her duty to the Bank; and the Indemnitee desires to continue to serve as adirector or officer of the Bank; provided, and on the express condition, that theIndemnitee is furnished with the indemnity set forth hereinafter.**AGREEMENT**NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below andbased on the premises set forth above, the Bank and the Indemnitee do hereby agree as follows:**1. ****Agreement to Serve****.**The Indemnitee will serve or continue to serve as adirector or officer of the Bank to the best of his/her abilities at the will of theBank for so long as the Indemnitee is duly elected or appointed or until such time as theIndemnitee tenders his/her resignation in writing.**2.****Definitions****.**As used in this Agreement:(a) The term “Proceeding” shall include any threatened, pending or completed action, suit orproceeding, whether brought in the right of the Bank or otherwise and whether of a civil, criminal,administrative or investigative nature, including, but not limited to, actions, suits orproceedings brought under and/or predicated upon the Securities Act of 1933, as amended, and/or theSecurities Exchange Act of 1934, as amended, and/or their respective state counterparts, and/or anyrule or regulation promulgated thereunder, in which the Indemnitee may be or may have been involvedas a party or otherwise, by reason of the fact that the Indemnitee is or was a director orofficer of the Bank, by reason of any action taken by him/her or of any inaction onhis/her part while acting as such director or officer or by reason of the fact thathe/she is or was serving at the request of the Bank as a director, officer, employee oragent of another corporation, partnership, joint venture, trust or other enterprise, whether or nothe/she is serving in such capacity at the time any liability or expense is incurred forwhich indemnification or reimbursement can be provided under this Agreement.(b) The term “Expenses” includes, without limitation thereto, expenses of investigations, ofjudicial or administrative proceedings or appeals, attorneys’ fees and disbursements and anyexpenses of establishing a right to indemnification under Paragraph 7 of this Agreement, but shallnot include the amount of judgments, settlements, fines or penalties actually levied against theIndemnitee.**3.****Indemnity in Third Party Proceedings****.**Subject to Section 359.1 of Title 12 of theFederal Code of Regulations, the Bank shall indemnify the Indemnitee in accordance with theprovisions of this section if the Indemnitee is a party to or threatened to be made a party to orotherwise involved in any Proceeding (other than a Proceeding by or in the right of the Bank toprocure a judgment in its favor), by reason of the fact that the Indemnitee is or was a director,officer, employee or agent of the Bank or is or was serving at the request of the Bank as adirector, officer, employee or agent of another corporation, partnership, joint venture, trust orother enterprise, againstall Expenses, judgments, fines, settlements and other amounts actually and reasonably incurredby the Indemnitee in connection with such Proceeding, provided it is determined pursuant toParagraph 7 of this Agreement or by the court before which such action was brought or by theshareholders of the Bank in the manner prescribed by Section 317, that the Indemnitee acted in goodfaith and in a manner which he/she reasonably believed to be in the best interests of theBank and, in the case of a criminal proceeding, in addition, had no reasonable cause to believethat his/her conduct was unlawful. The termination of any such Proceeding by judgment,order of court, settlement, conviction, or upon a plea of nolo contendere, or its equivalent, shallnot, of itself, create a presumption that the Indemnitee did not act in good faith and in a mannerwhich he/she reasonably believed to be in the best interests of the Bank, and with respectto any criminal proceeding, that such person had reasonable cause to believe that his/herconduct was unlawful.
 
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With respect to any Proceeding involving Indemnitee as to which Section 359.1 of Title 12 ofthe Federal Code of Regulations is applicable, the Bank agrees to use its best efforts to activelyand fully comply with the requirements of Section 359.3 of Title 12 of the Federal Code ofRegulations to provide the Indemnitee with indemnification to the maximum permitted under suchsection.**4. ****Indemnity in Proceedings by or in the Right of the Bank****.**Subject to Section 359.1of Title 12 of the Federal Code of Regulations, the Bank shall indemnify the Indemnitee inaccordance with the provisions of this section if the Indemnitee is a party to or threatened to bemade a party to or otherwise involved in any Proceeding by or in the right of the Bank to procure ajudgment in its favor by reason of the fact that the Indemnitee is or was a director, officer,employee or agent of the Bank or is or was serving at the request of the Bank as a director,officer, employee or agent of another corporation, partnership, joint venture, trust or otherenterprise against all Expenses actually and reasonably incurred by the Indemnitee in connectionwith the defense or settlement of such Proceeding, provided it is determined pursuant to Paragraph7 of this Agreement or by the court before which such action was brought or by the shareholders ofthe Bank in the manner prescribed by Section 317, that the Indemnitee acted in good faith and in amanner which he/she believed to be in the best interests of the Bank and its shareholders.Notwithstanding the foregoing, no indemnification shall be made under this Paragraph 4:(a) in respect of any claim, issue or matter as to which the Indemnitee shall have beenadjudged to be liable to the Bank, unless and only to the extent that the court in which suchProceeding is or was pending shall determine upon application that, in view of all thecircumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for suchExpenses as such court shall determine;(b) of amounts paid in settling or otherwise disposing of a pending action without courtapproval;(c) of Expenses incurred in defending a pending action which is settled or otherwise disposedof without court approval; or(d) in respect of any act, omission or transaction set forth in Section 204(a)(10)(A)(i)-(vii)of the California Corporations Code.
 
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With respect to any Proceeding involving Indemnitee as to which Section 359.1 of Title 12 ofthe Federal Code of Regulations is applicable, the Bank agrees to use its best efforts to activelyand fully comply with the requirements of Section 359.3 of Title 12 of the Federal Code ofRegulations to provide the Indemnitee with indemnification to the maximum permitted under suchsection.**4A.****Additional Indemnity****.**The Bank further agrees to hold harmless and indemnifyIndemnitee to the fullest extent not prohibited by law and without duplication of indemnificationcoverage where indemnification is to be provided by reason of the fact that Indemnitee is, was, orat any time becomes, a director, officer, employee or agent of the Bank, or is or was serving, orat any time serves, at the request of the Bank as a director, officer, employee or agent of anothercorporation, partnership, joint venture, trust, employee benefit plan or other enterprise, except(a) in respect to remuneration paid to Indemnitee if it shall be determined by a finaladjudication (from which there is no right of appeal) that such remuneration was in violation oflaw;(b) on account of any action, claim or proceeding (other than a proceeding for enforcement ofIndemnitee for which Indemnitee is successful) initiated by Indemnitee unless such action, claim orproceeding was authorized in the specific case by action of the Board of Directors;(c) on account of Indemnitee’s conduct if it shall be determined by a final adjudication (fromwhich there is no right of appeal) that such conduct constituted the willful misappropriation ofcorporate assets by Indemnitee, disclosure of confidential information in willful and deliberatebreach in bad faith of Indemnitee’s fiduciary or contractual obligations to the Bank, or any otherwillful and deliberate breach in bad faith of Indemnitee’s duty to the Bank or its shareholders;(d) if a final adjudication (from which there is no right of appeal) by a court havingjurisdiction in the matter shall determine that such indemnification is not lawful (and, in thisrespect, both the Bank and Indemnitee have been advised that the Securities and Exchange Commissionbelieves that indemnification for liabilities arising under the federal securities laws is againstpublic policy and is, therefore, unenforceable, and that claims for indemnification should besubmitted to appropriate courts for adjudication);(e) in respect of any act, omission or transaction set forth in Section 204(a)(10)(A)(i)-(vii)of the California Corporations Code;(f) in respect of any claim, issue or matter as to which Indemnitee shall have been adjudgedto be liable to the Bank in the performance of Indemnitee’s duty to the Bank and its shareholders,unless and only to the extent that the court in which such proceeding is or was pending shalldetermine upon application that, in view of all the circumstances of the case, Indemnitee is fairlyand reasonably entitled to indemnity for expenses and then only to the extent that the court shalldetermine;(g) any act or omission by the Indemnitee as an officer, as applicable, notwithstanding thatthe Indemnitee officer may also be a director or that the Indemnitee’s action, if negligent orimproper, has been ratified by the directors of the Bank;
 
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(h) any prohibited indemnification as set forth in Section 359.3 of Title 12 of the FederalCode of Regulations et seq.(i) of amounts paid in settling or otherwise disposing of a pending action without courtapproval; or,(j) of expenses incurred in defending a pending action which is settled or otherwise disposedof without court approval.With respect to any Proceeding involving Indemnitee as to which Section 359.1 of Title 12 ofthe Federal Code of Regulations is applicable, the Bank agrees to use its best efforts to activelyand fully comply with the requirements of Section 359.3 of Title 12 of the Federal Code ofRegulations to provide the Indemnitee with indemnification to the maximum permitted under suchsection.**5. ****Indemnification of Expenses of Successful Party****.**Notwithstanding any otherprovision of this Agreement, to the extent that the Indemnitee has been successful on the merits indefense of any Proceeding or in defense of any claim, issue or matter therein, the Indemnitee shallbe indemnified against all Expenses actually and reasonably incurred in connection therewith.**6. ****Advances of Expenses****.**The Expenses incurred by the Indemnitee pursuant toParagraphs 3, 4 and/or 4A, as applicable, in defending any Proceeding shall be paid by the Bank inadvance of the final disposition of such Proceeding at the written request of the Indemnitee, ifthe Indemnitee shall provide an undertaking in the form attached hereto as Exhibit “A” to the Bankto repay such amount unless it is ultimately determined that the Indemnitee is entitled to thepayment of Expenses. The written request to the Bank shall include a description of the nature ofthe Proceeding and be accompanied by copies of any documents filed with a court relating to theProceeding.Notwithstanding the foregoing or any other provision of this Agreement, no advance shall bemade by the Bank if a determination is reasonably and promptly made by the Board of Directors by amajority vote of a quorum of disinterested directors, or (if such a quorum is not obtainable or,even if obtainable, a quorum of disinterested directors so directs) by independent legal counsel,that, based upon the facts known to the Board of Directors or counsel at the time suchdetermination is made, (a) the Indemnitee acted in bad faith or deliberately breachedhis/her duty to the Bank or its shareholders, and (b) as a result of such actions by theIndemnitee, it is more likely than not that it will ultimately be determined that the Indemnitee isnot entitled to indemnification under the terms of this Agreement.**7.****Rights of the Indemnitee to Indemnification Upon Application; Procedure UponApplication****.**To the extent a quorum of the Board of Directors of the Bank consisting ofdirectors who were or are not parties to a Proceeding is obtainable, the Board of Directors shalldetermine within 45 days after receipt of the written request of the Indemnitee for indemnificationwhether the Indemnitee has met the relevant standards for indemnification set forth in Paragraphs3, 4 and/or 4A as applicable, and, if it determines that such standards have been met, it shallprovide indemnification to the Indemnitee.
 
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Notwithstanding the foregoing, the Indemnitee may request independent counsel or may bringsuit in the court in which such Proceeding is or was pending to determine whether theIndemnitee is entitled to indemnification as provided by this Agreement. The Indemnitee’sexpenses incurred in connection with successfully establishing his/her right toindemnification, in whole or in part, shall also be indemnified by the Bank.**8. ****Partial Indemnification****.**If the Indemnitee is entitled under any provision of thisAgreement to indemnification by the Bank for some or a portion of the Expenses, judgments, fines,settlements or other amounts actually and reasonably incurred by him/her in theinvestigation, defense, appeal or settlement of any Proceeding but not, however, for the totalamount thereof, the Bank shall nevertheless indemnify the Indemnitee for the portion of suchExpenses, judgments, fines, settlements or other amounts to which the Indemnitee is entitled.**9. ****Directors’ and Officers’ Liability Insurance****.**The obtaining of directors’ andofficers’ liability insurance (“D&O Coverage”) at the expense of and by the Bank shall in no waylimit or diminish the obligation of the Bank to indemnify the Indemnitee as provided in thisAgreement; provided, however, that any amounts actually recovered by the Indemnitee from theinsurer providing D&O Coverage shall be applied in reduction of amounts otherwise owing by the Bankby reason of its indemnification under this Agreement and if the Bank pays any amounts to theIndemnitee pursuant to this Agreement, the Bank shall be subrogated to the Indemnitee’s rights andclaims against the insurer providing D&O Coverage and the Indemnitee shall execute such documentsas the Bank shall deem necessary to reflect such subrogation.**10.****Settlement of Claims****.**(a) If the Bank has not obtained D&O Coverage, the Indemnitee shall not settle any Proceedingfor which he/she intends to seek indemnification hereunder without first attempting toobtain the approval of the Bank. If the Indemnitee seeks such approval and such approval is notgranted by the Bank, the Indemnitee shall be free to settle the Proceeding and pursue anyprocedures to establish his/her right to indemnification as provided under this Agreement.If the Indemnitee seeks such approval and such approval is not granted by the Bank, but the Bankagrees to indemnify the Indemnitee, subject to Paragraph 4 herein, against any Expenses, judgments,fines, settlements or other amounts actually and reasonably incurred by the Indemnitee inconnection with such Proceeding, the Indemnitee shall not settle such Proceeding. If, however,under such circumstances the Indemnitee does settle such Proceeding, the Indemnitee shall forfeithis/her rights to indemnification under this Agreement.(b) If the Bank has obtained D&O Coverage, the Indemnitee shall not settle any Proceeding forwhich he/she intends to seek indemnification without first attempting to obtain anyapproval required with respect to such settlement by the insurance carrier of any applicable D&OCoverage. If the Indemnitee seeks such approval and such approval is not granted by the insurancecarrier of any applicable D&O Coverage, the Indemnitee shall not settle such Proceeding withoutthen attempting to obtain the approval of the Bank. In the event the Indemnitee seeks suchapproval from the Bank, the Bank and the Indemnitee shall have the same rights and obligations asset forth in Paragraph 10(a). If the Indemnitee seeks such approval from the Bank and suchapproval is granted, the Bank shall be subrogated to the Indemnitee’s rights and claims against theinsurance carrier of any applicable D&O Coverage and the Indemnitee shall execute such documents asthe Bank shall deem necessary to effect such subrogation.
 
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**11. ****Mutual Acknowledgment****.**Both the Bank and the Indemnitee acknowledge that incertain instances, Federal law or applicable public policy may prohibit the Bank from indemnifyingthe Indemnitee under this Agreement or otherwise.**12. ****Successors and Assigns****.**This Agreement shall be binding upon the Bank and itssuccessors and assigns and shall inure to the benefit of the Indemnitee and the Indemnitee’sspouse, heirs, executors and administrators.**13. ****Savings Clause****.**If this Agreement or any portion thereof be invalidated on anyground by any court of competent jurisdiction, then the Bank shall nevertheless indemnify theIndemnitee as to Expenses, judgments, fines, settlements or other amounts with respect to anyProceeding to the fullest extent permitted by any applicable portion of this Agreement that shallnot have been invalidated or by any other applicable law.**14. ****Governing Law****.**This Agreement shall be governed by and construed in accordancewith the laws of the State of California.**15. ****Notices****.**The Indemnitee shall, as a condition precedent to his/her rightto be indemnified under this Agreement, give to the Bank notice in writing as soon as practicableof any claim made against him/her for which indemnification will or could be sought underthis Agreement. Notice to the Bank shall be directed to Plumas Bank, 35 S. Lindan Ave., Quincy,California 95971, Attention: President (or such other address as the Bank shall designate inwriting to the Indemnitee).**16. ****Modification and Amendment****.**No amendment, modification, termination orcancellation of this Agreement, except as permitted pursuant to Section 11 above, shall be effectedunless in writing signed by both parties hereto.**17. ****Effective Date; Survival of Rights****.**This Agreement shall apply beginning onIndemnitee’s first date of being appointed or elected as an officer and/or director of the Bank orin the case of agents or employees on the date they were appointed to the position which gave riseto this indemnification. The rights conferred on Indemnitee by this Agreement shall continue afterIndemnitee has ceased to be a director, officer, employee or other agent of the Bank and shallinure to the benefit of Indemnitee’s heirs, executors and administrators.IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year set forthabove.           **INDEMNITEE**  **PLUMAS BANK**           By:    By:          Its:               
 
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**EXHIBIT A****Plumas Bank****Undertaking**   TO:                                         , President  Plumas Bancshares  35 S. Lindan Avenue  Quincy, California 95971I,                     , a director or officer of Plumas Bank, a California corporation,pursuant to Section 317(f) of the California Corporations Code and the terms of my IndemnificationAgreement with Plumas Bank agree to repay Plumas Bank for all Expenses advanced on my behalf indefense of any Proceeding or in defense of any claim, issue or matter therein, prior to thedisposition of such Proceeding, unless it shall be ultimately determined that I am entitled toindemnification under Section 317 of the California Corporations Code or Plumas Bank’s Articles ofIncorporation, Bylaws or my Indemnification Agreement.Dated:                                        **INDEMNITEE**By: