**2007      SENIOR OFFICER INCENTIVE PLAN - A**

| I. | Trigger                Point: After-Tax Return on Beginning Equity1                must                be greater than the                Peer Group 50 Percentile Return on                Equity. |
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|   | (A) | Tax-exempt                income is grossed up to a fully taxable                equivalent. |
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|   | (B) | Incentive/Expense                accrual is added back to pre-tax                earnings. |
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|   | (C) | Trust                Preferred Interest is added back to pre-tax                earnings. |
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|   | (D) | Loan                Loss Recoveries are added back relative to prior year                adjustment. |
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|   | (E) | Extra-ordinary                income and expense not directly associated with operating the Bank,                is                excluded from pre-tax earnings. |
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|   | I. | Pool                Formula |
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|   | 1. | Trigger                Point must be achieved (50th                percentile for after tax earnings). |
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|   | 2. | Pool                is funded using peer group data derived from BancIntelligence.com                (Calculations assume a 35% tax rate and excludes Mutual’s & Sub                S’s): |
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|   | (A) | 5%                of Pacific Financial’s pretax earnings that place The Company up to the 50                percentile for Pre-tax Return on Equity (rounded up to the next 1⁄4%) for                banks between $500 and $1,000 million. |
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|   | (B) | 10%                of the pretax earnings above                the 50 percentile and less than the Pre-tax Return on Beginning Equity                (rounded up to the next 1⁄4%) that places The Company among the top 10% of                banks between $500 and $1,000                million. |
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|   | (C) | 15%                of the amount of pretax earnings that places the Company above the                90                percentile for Return on Equity (rounded up to the next 1⁄4%) for banks                between $500 and $1,000 million. |
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|   | II. | Pool                Distribution |
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|   | (A) | The                pool is divided among officers based on position, responsibility                and                performance. In the event an officer’s compensation along with financial                perks, such as a car provided or a car allowance exceeds the salary                range                maximum, that portion in excess of the maximum will be considered                prepaid                incentive and subtracted from the incentive paid to the officer. |
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|   | (B) | Each                year certain positions will have specific objectives that can increase                or                decrease the officer’s incentive compensation based on achievement of                their objectives. |
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|   | (C) | Anyone                with less than satisfactory performance during the year which includes                probation for performance will not                participate. |
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|   | (D) | Employees                who terminate employment prior to Incentive Pool payout are ineligible                to                participate. |
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|   | (E) | New                employees are eligible to participate, however, after 90 days of                employment. Participation is pro-rated beginning the 91st                day of employment. |
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|   | (F) | Retiring                employees participate pro-rata based on their last day of                employment. |
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|   | (G) | Should                The Bank achieve an after tax return on equity of equal to or greater                than                25%, Officers will be awarded a “Special Achievement Award”. The “Special                Achievement Award” will be in the form of a Hawaiian travel voucher                covering air, hotel accommodations, and a rental car, however, not                to                exceed $2500 in total value. Normal vacation time will be used to                facilitate use of the travel                voucher. |
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|   | (H) | The                Board of Directors reserves the right to alter, change, or eliminate                the                continuation of the Officer Incentive Plan at any time and at the                Board of                Director’s sole discretion. |
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