Exhibit 10.26

Participation Agreement
The 2005 North Bay Bancorp Supplemental Executive Retirement Plan

Participant:            JOHN NERLAND

Eligibility Date:       December 12, 2005

The above named  Participant is authorized to receive  benefits  pursuant to The
2005 North Bay  Bancorp  Supplemental  Executive  Retirement  Plan as  described
below. Benefit accrual shall commence as of the Eligibility Date listed above.


         Applicable Percentage Schedule:

         After September 30, 2007           20%
         After September 30, 2008           40%
         After September 30, 2009           60%
         After September 30, 2010           80%
         After September 30, 2011           100%

     Benefit Amount: Unless an alternate method of payment is selected using the
attached  Distribution  Election Form, the Company shall pay to the  Participant
pursuant to the Plan during the Participant's  lifetime,  an amount equal to the
Participant's  vested  Applicable  Percentage of Seventy Five  Thousand  Dollars
($75,000.00) per year in twelve (12) equal monthly installments.

     (a)  The amount of  Participant  Benefits  payable  under the Plan shall be
          increased  annually at the rate of two percent  (2%) per year from the
          date of  commencement  of payments of the Benefits  until the death of
          the Participant.

     (b)  Notwithstanding the Participant's vested Applicable Percentage, if the
          Participant elects Early Retirement or in the event of any election by
          Participant to commence payments of vested Participant  Benefits prior
          to the  Participant's  attainment of the Normal  Retirement  Date, the
          Participant  Benefits  shall  be  the  greater  of (i)  the  Actuarial
          Equivalent   or  (ii)  that  amount   calculated   as   follows:   The
          Participant's  Benefits shall be decreased by a percentage  calculated
          by subtracting  the  Participant's  age as of the date payments are to
          commence (which cannot be earlier than the Early Retirement Date) from
          sixty-five  (65),  the age at which  payment of  Participant  Benefits
          would otherwise commence by the terms of the Plan, and multiplying the
          result by a factor of five (5) (for  example,  a 15%  reduction of the
          Participant  Benefits would occur if the  Participant's  age as of the
          date  payments  are  to  commence  is  sixty-two  (62),  based  on the
          following calculation: 65-62=3x5=15%).

<PAGE>

Normal Retirement Date:   Attainment of age sixty-five (65).

Early Retirement Date:  Attainment of age sixty-two (62).

Risk of Forfeiture:

Participant acknowledges that in the course of employment Participant has become
privy to confidential  information of the Company  including  customer  deposit,
loan, sales and marketing  information,  customer  account records,  proprietary
processing techniques,  information regarding vendors and products, training and
operations  memoranda  and  similar  information,   personnel  records,  pricing
information,  financial information, and trade secrets concerning or relating to
the business,  accounts, customers and employees and affairs of the Company (the
foregoing constituting "Confidential Information").  On account of the foregoing
and Participant's position of trust and confidence with the Company, Participant
agrees that in the event Participant  voluntarily terminates employment and such
termination  occurs after  Participant has achieved an Applicable  Percentage of
one hundred percent (100%) and such termination is not subject to the provisions
of Section  4.5 of the Plan,  Participant  shall  forfeit any and all rights and
benefits, including Participant Benefits payable under the Plan, Participant may
have under the terms of this Participation  Agreement and shall have no right to
be paid any of the amounts which would  otherwise be due or paid to  Participant
by the  Company  pursuant  to the  terms  of  this  Participation  Agreement  if
Participant  violates any of the following  provisions prior to attaining Normal
Retirement Age.


     (a)  Participant  shall  not  utilize  Confidential   Information,   either
          directly or indirectly, to call on, solicit, or take away as a client,
          customer or  prospective  client or  customer,  or attempt to call on,
          solicit or take away as a client,  customer or  prospective  client or
          customer,  any  person  or  entity  that  was a  client,  customer  or
          prospective  client or customer of the  Company.  For purposes of this
          Agreement "prospective client or customer" shall include any person or
          entity  with whom the  Company  has had  contact  for the  purpose  of
          soliciting business within six months prior to Participant's voluntary
          termination of employment or whom the Company  intended to contact for
          the purpose of soliciting business within six months after termination
          of employment,  of which contact or intended  contact  Participant had
          knowledge while employed by the Company. Participant acknowledges that
          it would be extremely  difficult or impractical  to determine  whether
          Participant  used  Confidential  Information  in  connection  with the
          activity  prohibited  by this  provision  and that it is reasonable to
          presume,  based upon  Participant's  period of service to the Company,
          that Participant used Confidential  Information in connection with any
          violation of this provision.

<PAGE>

     (b)  Participant shall not, either directly or indirectly, on Participant's
          own behalf or in the service or on behalf of others, solicit, divert ,
          attempt  to  solicit,  divert  or  induce  or  attempt  to  induce  to
          discontinue  employment  with the Company  any person  employed by the
          Company,  whether or not such  employee  is a full time  employee or a
          temporary  employee of the Company and whether or not such  employment
          is for a determined period or is at will.

     (c)  Participant shall not, either directly or indirectly, use, disclose or
          make available  Confidential  Information to any person or entity, nor
          shall Participant use,  disclose,  make available or cause to be used,
          disclosed  or  made   available,   or  permit  or  allow,   either  on
          Participant's own behalf or on behalf of others, any use or disclosure
          of such Confidential Information.

          Participant  acknowledges  and agrees that (i) a breach by Participant
          of any of the foregoing covenants will result in the Company incurring
          certain  costs  and  damages  in an  amount  that  would be  extremely
          difficult  or  impractical  to  ascertain,   (ii)  the  forfeiture  of
          Participant's   rights  and  benefits  under  this  Agreement  bear  a
          reasonable relationship to the damages which the Company may suffer by
          reason  of   Participant's   breach,   and  (iii)  the  forfeiture  of
          Participant's  rights and benefits  under this Agreement is reasonable
          and equitable  considering  that absent  forfeiture of such rights and
          benefits  the Company  will be in the  position of paying  benefits to
          Participant  while  suffering  damages  on  account  of  Participant's
          breach.


Participant:         ___________________________________________
                       John Nerland

North Bay Bancorp:   ___________________________________________
                      (Signature of Authorized Executive)

                         Susan Fonseca   SVP, Human Resources
                         ------------------------------------
                               (Print Name and Title)


Date:                __________________________