Exhibit
10.1


EXECUTIVE
RETENTION AGREEMENT


          THIS
EXECUTIVE RETENTION AGREEMENT (this “Agreement”) is made and entered into as of
this _________ day of __________ 2009, by and between PACIFIC STATE BANK, a
California corporation (“PSB”), and RICKY DEAN SIMAS, whose address is
________________, ____________, CA _______ (“Executive”).


W
I T N E S S E T H:


          WHEREAS,
Executive is currently employed by PSB as President of PSB, and the parties
wish to continue Executive’s employment on the terms and conditions set forth
in this Agreement; and


          WHEREAS,
it is in the best interest of PSB to offer the compensation set forth in this
Agreement to Executive.


          NOW,
THEREFORE, in consideration of the promises and the mutual covenants hereinafter
set forth, and intending to be legally bound hereby, it is hereby agreed as
follows:


	
  

 	
  

 
	
 1.

 	
 Position and Duties.

 



          Executive
agrees to and shall diligently and conscientiously devote Executive’s full
business time, attention, energy, knowledge, skill, and diligent efforts to the
business of PSB and the discharge of Executive’s duties hereunder. Executive
will abide by all policies and decisions made by PSB, as well as all applicable
federal, state, and local laws, regulations, and ordinances. Executive’s duties
under this Agreement shall be to serve as President of PSB, with the
responsibilities, rights, authority and duties customarily pertaining to such
office and as may be established from time to time by or under the direction of
the Board of Directors of PSB (the “Board”) or its designees. Executive shall
report to the Board. As an exempt, salaried employee, Executive shall work such
hours as required by the nature of Executive’s work assignments. PSB reserves
the right to modify Executive’s position and duties at any time in its sole
discretion.


          Executive
shall not engage in any activity that conflicts with or adversely affects
Executive’s performance of Executive’s duties under this Agreement; accept any
other employment, whether as an executive, as a consultant, or in any other
capacity, whether or not Executive is compensated therefore, or violate any of
the polices described in PSB’s then applicable Policy Manual, Employee
Handbook, or other PSB materials.


	
  

 	
  

 
	
 2.

 	
 Employment Term.

 



          Executive
is currently employed by PSB and, subject to the provisions of Section 3, the
parties agree that Executive’s employment shall continue until terminated
(“Employment Term”).


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 3.

 	
 At-Will.

 



          Executive
acknowledges and understands that at all times Executive’s employment with PSB is
“at-will,” which means that at all times, Executive’s employment may be terminated or changed for any reason, or
for no reason, with or without cause or notice.


          It
is PSB’s policy that all Executives are at-will employees. This at-will
employment policy is not modified by this Agreement and may not be modified by
any statements contained in PSB’s handbook or any other handbooks, employment applications, employee
handbook, or other materials provided to applicants and/or employees in
connection with their employment. None of these documents, whether singly or
combined, are to create an express or implied contract of employment for a
definite period, nor an express or implied contract concerning any terms or
conditions of employment. Similarly, PSB policies and practices with respect to any matter are not to be
considered as creating any contractual obligation on PSB’s part or as stating in any way that
termination will occur only for “just cause.” Statements of specific grounds
for termination set forth in PSB’s
handbook or in any other PSB documents are examples only, not all inclusive
lists, and are not intended to restrict PSB’s right to terminate employment.


          Completion
of an introductory period or conferral of regular status does not change an
Executive’s status as an at-will employee nor in any way restricts PSB’s right
to terminate such an employee or change the terms or conditions of Executive’s
employment.


          From
time to time, PSB may change its name or corporate structure. Such changes
shall not in any way alter the “at will” nature or unalterable fact that
Executive’s employment is “at will.”


	
  

 	
  

 
	
 4.

 	
 Place of Employment.

 



          Executive’s
performance of services under this Agreement shall be rendered at PSB’s
principal executive offices in Stockton, California, subject to the necessary
travel requirements of Executive’s position and duties hereunder.


	
  

 	
  

 
	
 5.

 	
 Compensation – Base Salary.

 



          PSB
shall pay to Executive during the Employment Term, base salary compensation at
an annual rate of not less than Two Hundred Thousand and 00/100 Dollars
($200,000.00). Upon the sale by PSB of a thirty percent (30%) or greater
shareholder interest in PSB stock or the sale of PSB stock through a public
offering, Executive’s annual salary shall be increased to Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000.00). The Board shall regularly review
Executive’s base salary in light of the performance of Executive and PSB, may,
in its sole discretion, maintain or increase (but not decrease) such base
salary by an amount PSB determines to be appropriate. Executive’s annual base
salary payable hereunder, as it may be maintained or increased from time to
time, is referred to herein as “Base Salary.” Base Salary shall be paid in
equal installments in accordance with PSB’s payroll practices in effect from
time to time for executive officers, but in no event less frequently than
monthly. In addition to the Base Salary, Executive shall be eligible to earn an
annual cash performance bonus (an “Annual Bonus”) as determined by the Board.


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 6.

 	
 Benefits.

 



          Executive
shall be eligible to participate in all employee benefit programs of PSB
offered from time to time during the Employment Term by PSB to employees or
executive officers of Executive’s rank, to the extent that Executive qualifies
under the eligibility provisions of the applicable plan or plans, in each case
consistent with PSB’s then-current practice as approved by the Board from time
to time. The foregoing shall not be construed to require PSB to establish such
plans or to prevent the modification or termination of such plans once
established, and no such action or failure thereof shall affect this Agreement.
Executive recognizes that PSB has the right, in its sole discretion, to amend,
modify, or terminate its benefit plans without creating any rights in
Executive. This Agreement shall not amend any rights of PSB or Executive under
the Salary Continuation Agreement dated September 30, 2003.


	
  

 	
  

 
	
 7.

 	
 Vacation.

 



          Executive
shall be entitled to paid vacation and sick time (“PTO”) consistent with the
PTO offered from time to time during the Employment Term by PSB to employees.


	
  

 	
  

 
	
 8.

 	
 Business Expenses.

 



          PSB
shall promptly reimburse Executive for Executive’s reasonable and necessary
expenditures for travel, entertainment, and similar items made in furtherance
of Executive’s duties under this Agreement consistent with the policies of PSB
as applied to all executive officers. Executive shall document and substantiate
such expenditures as required by the policies of PSB as applied to all
executive officers, including an itemized list of all expenses incurred, the
business purposes for which such expenses were incurred, and such receipts as
Executive reasonably has been able to obtain.


	
  

 	
  

 
	
 9.

 	
 Termination Following PSB’s Sale of
 PSB Stock.

 



          a.
          In the event that
during the Employment Term there is a sale by PSB of a thirty percent (30%) or
greater shareholder interest in PSB stock, and then prior to December 31, 2010
Executive is terminated by PSB, except for termination pursuant to Section 9
(b), then Executive shall be paid a monthly cash payment of Twenty Thousand
Eight Hundred Thirty-Three and 00/100 Dollars ($20,833.00) until the earlier of
either:


          (1)          Executive
finds new employment paying a gross salary of no less than Twenty Thousand
Eight Hundred Thirty-Three and 00/100 Dollars ($20,833.00) per month; or


          (2)          Twelve
months after termination of Executive by PSB.


                         Notwithstanding
the foregoing, in the event Executive finds new employment following
termination by PSB and Executive’s new employment pays less than Twenty
Thousand Eight Hundred Thirty-Three and 00/100 Dollars ($20,833.00) per month
gross salary, then the Twenty Thousand Eight Hundred Thirty-Three and 00/100
Dollars ($20,833.00) per month payment set forth above, shall be reduced by the
gross salary Executive is to be paid at Executive’s new employment. (For
example, if Executive finds new employment at Ten Thousand and 00/100 Dollars
($10,000.00) per month gross salary, Bank shall pay Executive Ten Thousand
Eight Hundred Thirty-Three and 00/100 Dollars ($10,833.00) per month until the
expiration of 12 months after Executive’s termination by PSB.)


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          b.          Notwithstanding
any provision of this Agreement to the contrary, PSB and the surviving
corporation shall not have any obligation to continue to employ, offer to
employ, or pay Executive any benefit or monies under this Agreement if
Executive has committed any of the following:


          (1)          Willful
breach of duty in the course of employment, or habitual neglect of employment
responsibilities and duties;


          (2)          Conviction
of any felony or crime involving moral turpitude, fraud, or dishonesty;


          (3)          Willful
violation of any state or federal banking or securities law, the rules or
regulations of any banking agency, or any material PSB rule, policy, or
resolution resulting in an adverse effect on PSB; or


          (4)          Disclosure
to any third party by the Executive, without authority or permission, of any
secret or confidential information of PSB.


	
  

 	
  

 
	
 10.

 	
 Designation of Beneficiaries.

 



          Executive
shall be entitled to select (and change, to the extent permitted under any
applicable law) a beneficiary or beneficiaries to receive any Compensation,
Deferred Compensation, or Benefits payable hereunder following the Executive’s
death by giving PSB written notice thereof. In the event of Executive’s death
or a judicial determination of Executive’s incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate, or other legal representative(s).


	
  

 	
  

 
	
 11.

 	
 No Conflict.

 



          Executive
represents and warrants to PSB that Executive has the capacity to enter into
this Agreement and the other agreements referred to herein, and that the
execution, delivery, and performance of this Agreement and such other
agreements by Executive will not violate any agreement, undertaking, or
covenant to which Executive is party or is otherwise bound, including any
obligations with respect to proprietary or confidential information of any
other person or entity.


	
  

 	
  

 
	
 12.

 	
 Key Man Insurance.

 



          PSB
will have the right throughout the Employment Term to obtain, maintain, or
increase insurance, in the name of PSB and for PSB’s sole benefit or otherwise,
on Executive’s life in such amount as the Board in the discretion of the Board.
Upon reasonable advance notice, Executive will cooperate in any and all
necessary physical examinations without expense to Executive, supply
information, and sign documents, and otherwise cooperate fully with PSB as PSB
may request in connection with any such insurance.


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 13.

 	
 Litigation Cooperation.

 



          Executive
agrees to cooperate with PSB
and its attorneys, both during and after the termination of Executive’s
employment, in connection with any litigation or other proceeding arising out
of or relating to matters of which Executive was involved prior to the
termination of Executive’s employment. Executive’s cooperation shall include,
without limitation, providing assistance to PSB’s counsel, experts and
consultants, and providing truthful testimony in pretrial and trial or other
proceedings. In the event that Executive’s cooperation is requested after the
termination of Executive’s employment, PSB will (a) seek to minimize
interruptions to Executive’s schedule to the extent consistent with its
interests in the matter; and (b) reimburse Executive for all reasonable and
appropriate out-of-pocket expenses actually incurred by Executive in connection
with such cooperation upon reasonable substantiation of such expenses.


	
  

 	
  

 
	
 14.

 	
 Notices.

 



          All
notices, requests, demands or communications regarding this Agreement shall be
in writing and shall be deemed to have been duly given:


          a.          When
delivered personally;


          b.          Three
business days after being mailed by first class certified mail, return receipt
requested, postage prepaid;


          c.          One
business day after being sent by a reputable overnight delivery service,
postage or delivery charges prepaid; or


          d.          On
the date on which a facsimile is transmitted to the parties at their respective
addresses stated below. Any party may change its address for notice and the
address to which copies must be sent by giving notice of the new addresses to
the other parties in accordance with this Section 14, except that any such
change of address notice shall not be effective unless and until received.


     If to PSB:


     PACIFIC STATE BANK, A
California corporation

     1899 W. March Lane

     Stockton, CA 95207

     Attn: Board of Directors


     If to Executive, to
Executive’s address set forth above.


	
  

 	
  

 
	
 15.

 	
 Amendments, Waivers, Etc.

 



          a.          No
amendment or modification of this Agreement shall be effective unless set forth
in a writing signed by PSB and Executive. No waiver by either party of any
breach by the other party of any provision or condition of this Agreement shall
be deemed a waiver of any other provision or condition. Any waiver must be in
writing and signed by the waiving party.


          b.          There
are no representations, agreements, arrangements, or understandings, oral or
written, among the parties relating to the subject matter hereof which are not
expressly set forth herein, and no party hereto has been induced to enter into
this Agreement, except by the agreements expressly contained herein.


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          c.          Nothing
herein contained shall be construed so as to require the commission of any act
contrary to law, and wherever there is a conflict between any provision of this
Agreement and any present or future statute, law, ordinance or regulation, the
latter shall prevail, but in such event the provision of this Agreement
affected shall be modified, amended, curtailed and/or limited only to the
extent necessary to bring it within legal requirements.


          d.          This
Agreement shall inure to the benefit of and be enforceable by Executive and
Executive’s heirs, executors, administrators, and legal representatives, and by
PSB and its successors and assigns. This Agreement is personal to Executive,
and neither this Agreement nor any rights hereunder may be assigned,
transferred, conveyed, or otherwise disposed of by Executive.


	
  

 	
  

 
	
 16.

 	
 Governing Law; Dispute Resolution.

 



          a.          
This Agreement shall be governed by and construed in accordance with the laws
of the State of California without reference to conflict of laws principles.


          b.          
ANY DISPUTE ARISING OUT OF OR RELATING TO EXECUTIVE’S EMPLOYMENT, WITH THE
EXCEPTION OF WORKERS’ COMPENSATION OR UNEMPLOYMENT CLAIMS, SHALL BE SUBMITTED
TO BINDING ARBITRATION CONDUCTED IN SAN JOAQUIN COUNTY, CALIFORNIA, PURSUANT TO
CALIFORNIA’S ARBITRATION LAW, CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ. THE
PARTIES SHALL HAVE THE RIGHT TO DISCOVERY PURSUANT TO CODE OF CIVIL PROCEDURE
SECTION 1283.05. THE ARBITRATOR SHALL BE A RETIRED JUDGE OR AN ATTORNEY
SELECTED BY THE PARTIES WHO IS EXPERIENCED IN EMPLOYMENT LAW MATTERS AND WHO
SHALL RENDER A WRITTEN ARBITRATION DECISION. IF THE PARTIES ARE UNABLE TO AGREE
UPON AN ARBITRATOR, THEN THE ARBITRATOR SHALL BE APPOINTED BY THE SUPERIOR
COURT IN THE COUNTY OF SAN JOAQUIN UPON PROPER APPLICATION. THE ARBITRATOR SHALL NOT
HAVE THE POWER TO COMMIT ERRORS OF LAW OR LEGAL REASONING, AND THE AWARD MAY BE
VACATED OR CORRECTED ON APPEAL TO A COURT OF COMPETENT JURISDICTION FOR ANY
SUCH ERROR. EXECUTIVE SHALL NOT BE REQUIRED TO PAY ARBITRATOR’S FEES.


	
  

 	
  

 
	
 17.

 	
 Attorney’s Fees.

 



          The
prevailing party in any dispute arising out of or relating to this Agreement
shall be entitled to reasonable attorney’s fees in addition to any other relief
to which that party may be entitled.


	
  

 	
  

 
	
 18.

 	
 Taxes.

 



All payments required to be made to Executive
hereunder, whether during the term of Executive’s employment hereunder or
otherwise, shall be subject to all applicable federal, state, and local tax
withholding laws.


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 19.

 	
 Headings, Etc.

 



          The
headings set forth herein are included solely for the purpose of identification
and shall not be used for the purpose of construing the meaning of the
provisions of this Agreement. Unless otherwise provided, references herein to
Exhibits and Sections refer to Exhibits to and Sections of this Agreement.


	
  

 	
  

 
	
 20.

 	
 Confidentiality.

 



          The
parties agree that the existence and terms of this Agreement are and shall
remain confidential. The parties shall not disclose the fact of this Agreement
or any of its terms or provisions to any person without the prior written
consent of the other party hereto; provided, however, that nothing in this
Section 20 shall prohibit disclosure of such information to the extent required
by law, nor prohibit disclosure of such information by each party to its own
legal or financial consultants, all of whom shall first agree to be bound by the
confidentiality provisions of this Section 20, nor prohibit disclosure of such
information within PSB in the ordinary course of its business to those persons
with a need to know, as reasonably determined by PSB.


21.          Construction. Each party has cooperated
in the drafting and preparation of this Agreement. Therefore, in any
construction to be made of this Agreement, the same shall not be construed
against either party on the basis that the party was the drafter.


	
  

 	
  

 
	
 22.

 	
 Severability.

 



          If
a court which has jurisdiction finds that any provision of this Agreement is
invalid, void, or unenforceable, all remaining portions of this Agreement shall
remain in full force and effect. Similarly, if a court which has jurisdiction
finds that any provision of this Agreement as applied to particular persons,
places, and/or circumstances is invalid, unenforceable, or void, the provision
as applied to any other persons, places, and/or circumstances, as well as the
balance of the Agreement, shall remain in full force and effect.


23.          Third Party Beneficiaries. This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement.


	
  

 	
  

 
	
 24.

 	
 Acknowledgment by Executive.

 



          Executive
represents that Executive is knowledgeable and sophisticated as to business
matters, including the subject matter of this Agreement, that Executive has
read this Agreement, and that Executive understands its terms. Executive
acknowledges that prior to assenting to the terms of this Agreement, Executive
has been given a reasonable time to review it, to consult with legal or other
counsel of Executive’s own choice, and to negotiate at arm’s length with PSB as
to its terms and contents.


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 25.

 	
 Acknowledgement by PSB.

 



          PSB
represents and warrants that it is fully authorized and empowered to enter into
this Agreement and that the performance of its obligations under this Agreement
will not violate any agreement between PSB and any person, corporation, or
other legal entity.


	
  

 	
  

 
	
 26.

 	
 Counterparts.

 



          This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.


	
  

 	
  

 
	
 27.

 	
 Employee Handbook.

 



          Executive
agrees to be fully bound by the terms of any Employee Handbook, Policy Manual,
or other PSB materials now or hereafter established by PSB, provided that any
such materials are applicable generally to all employees of PSB. In the event
of any conflict between the terms of any such documents and this Agreement, the
terms of this Agreement shall control.


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          IN
WITNESS WHEREOF, the parties have executed this Agreement on the date(s)
indicated.


     PACIFIC STATE BANK,


     A California corporation


By ________________________________             Dated: ___________________,
2009
      _____________________, [President or Board
Member]


     EXECUTIVE:


	
  

 	
  

 
	
 ____________________________

 	
 Dated: _____________, 2009

 
	
 RICKY DEAN SIMAS 

 	
  

 


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