EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

     THIS  EMPLOYMENT  AGREEMENT  (the  "Agreement"),  between  The  Bank of the
Pacific,  a  Washington  business  corporation  ("the  Bank") and Dennis A. Long
("Executive") is dated as of January 27, 2004 and will be effective  January 27,
2004.

                                    RECITALS

A.   The Bank of the Pacific is a Washington  banking  corporation.  The Bank is
     engaged in the  business  of  commercial  banking in Grays  Harbor  County,
     Pacific County and Wahkakiam County, Washington.

B.   The Executive  represents  he has  considerable  experience,  expertise and
     training in management related to banking and services offered by the Bank.
     The Bank desires and intends to employ the Executive  pursuant to the terms
     and conditions set forth in this Agreement.

C.   Both the Bank and the  Executive  have  read and  understand  the terms and
     provisions set forth in this Agreement, and have been afforded a reasonable
     opportunity to review this Agreement and to consult with an attorney.

                                    AGREEMENT

The parties agree as follows:

1.   Employment.  The Bank will  employ the  Executive  for the Term,  except as
     specifically  stated herein,  and the Executive accepts employment with the
     Bank  on the  terms  and  conditions  set  forth  in  this  Agreement.  The
     Executive's  title will be "President and Chief Executive  Officer" for the
     Bank.

2.   Effective Date and Term.

     (a)  Effective  Date.  This  Agreement  is  effective as of the 27th Day of
          January 2004.

     (b)  Term. The initial term of this Agreement is three years,  beginning on
          the effective date stated in paragraph  2(a), and shall  automatically
          renew for an additional term of one year on each  anniversary  date of
          the Agreement,  so as to create a three year term on each  anniversary
          date, unless notice of termination or nonrenewal is provided by either
          party pursuant to paragraph 5(a).

3.   Duties.  The  Executive  will serve as the  President  and Chief  Executive
     Officer and faithfully and  diligently  perform the duties  assigned to the
     Executive by The Bank's

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     Board of Directors.  The Executive will use his best efforts to perform his
     duties and will devote all his working time and  attention to these duties.
     These duties will include, without limitation, the following:

     (a)  Company Performance. The Executive will be responsible for all aspects
          of The Bank's performance,  including,  without limitation,  directing
          that daily  operational  and  managerial  matters are  performed  in a
          manner  consistent  with The Bank's  policies.  These duties will also
          include  formulating and implementing The Bank's expansion  strategies
          performing  all tasks in  connection  with The Bank's  management  and
          affairs that are normal and customary to the Chief Executive Officer's
          position.

     (b)  Modification  of Duties.  The Executive will perform such other duties
          as may be appropriate to his office and as may be prescribed from time
          to  time  by  The   Bank's   Board  of   Directors.   New  duties  and
          responsibilities  prescribed to the Executive will be consistent  with
          the  Executive's  position as The Bank  President and Chief  Executive
          Officer, and shall not include immoral or unlawful acts.

4.   Compensation.

     (a)  Salary.  Initially,  the employee will receive a salary of $164,320.00
          per year,  to be paid at regular  intervals by the Bank in  accordance
          with its regular payroll  schedules.  The  Executive's  salary will be
          subject to annual review and adjustment as set forth in Section 4(g).

     (b)  Director Fees. As a Company Director,  Executive will receive director
          fees including annual retainer and regular meeting attendance.

     (c)  Incentive  Compensation.  Executive will be eligible to participate in
          the Executive bonus program.  A  disinterested  majority of the Bank's
          Board of Directors  will  determine  the amount of the bonus pool,  if
          any, based on the profitability, safety and soundness of the Bank. The
          Executive's bonus, if any, will reflect the Executive's performance in
          his  area  of  responsibility  and  his  contribution  to the  overall
          performance  of the Bank during the year,  as  determined  in the sole
          discretion of the Bank's Board of Directors. No incentive compensation
          bonus shall be paid for any calendar year or portion thereof, in which
          this  Agreement is  terminated  or not renewed,  or in which notice of
          nonrenewal  or  termination  is  given,   regardless  of  reasons  for
          termination or nonrenewal, and regardless of which party terminates or
          declines to renew this Agreement.  The Executive will also be entitled
          to  participate  in  stock  bonus  or  stock  option  plans  generally
          available to senior executives of the Bank.
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     (d)  Standard Benefits. The Bank will provide to the Executive the standard
          benefits  provided in  accordance  with the Bank's  benefit  plans and
          policies,  including but not limited to health  insurance,  disability
          insurance, life insurance and five (5) weeks of paid vacation per year
          accrued in accordance with the Bank's benefit plans and policies.  The
          Executive will also be entitled to  participate  in retirement  plans,
          including 401(K) plans and deferred  compensation plans, and including
          any  supplements  or  additions  to such  plans,  which are  generally
          available to senior executives of the Bank.

     (e)  Automobile.  The Bank will  provide the  Executive  with the use of an
          automobile,  of a model  typically  appropriate for the performance of
          the services by a similarly situated executive.

     (f)  Expenses.  The Bank will  reimburse the  Executive for all  reasonable
          expenses that the Executive may incur in the performance of his duties
          including  monthly  country  club dues.  The  Executive  will  request
          reimbursement  and provide  documentation  of such  expenses  within a
          reasonable  time, but no later than 90 days after the expense has been
          incurred.

     (g)  Annual Review and  Adjustment.  The Executive's  compensation,  as set
          forth in this  Section  4(a),  will be  subject  to annual  review and
          adjustment  by  a  disinterested  majority  of  the  Bank's  Board  of
          Directors  or  Executive  Committee.  In no  case,  however,  will the
          Executive's salary,  vacation,  and expense reimbursement be less than
          the amounts set forth in this Section 4.

5.   Termination.

     (a)  Notice of  Termination or  Nonrenewal.  Either party may  unilaterally
          terminate  or  decline  to renew  this  Agreement  for any  reason  by
          providing the other party with written  notice of the  termination  or
          nonrenewal no less than ninety (90) days prior to the termination date
          or the final date of the then current Term of this Agreement.

     (b)  Termination  or  Nonrenewal  by The Bank:  In the event  that the Bank
          provides the Executive with a notice of  termination  without cause or
          nonrenewal  under this  paragraph,  The Bank will pay to the Executive
          his salary  from the date of the  notice  for the  balance of the then
          current  Term or for twelve  (12)  months from the date of the notice,
          whichever is greater,  and in its discretion will
<PAGE>

          advise the Executive of those duties and responsibilities,  if any, it
          wants him to perform  during  this  time.  All  forfeiture  provisions
          regarding   restricted  stock  awards  and  all  vesting  requirements
          regarding stock options shall lapse or be deemed fully completed.

     (c)  Termination  or  Nonrenewal  by the  Executive:  In the event that the
          Executive seeks to terminate or refuse to renew this Agreement without
          providing  at least  ninety  (90) days'  written  notice  prior to the
          termination date of final date of the then current Term, the Executive
          shall pay to the Bank liquidated damages as follows:  (A) in the event
          the Executive  provides notice of termination or nonrenewal 29 days or
          less prior to the  termination  date of the  Agreement,  the Executive
          shall pay the Bank  $25,000 in  liquidated  damages;  (B) in the event
          that the Executive  provides  notice of  termination  or nonrenewal at
          least 30 days but not more than 59 days prior to the termination  date
          of the  Agreement,  the  Executive  shall pay to the Bank  $20,000  in
          liquidated  damages;  (C) in the  event  that the  Executive  provides
          notice of termination or nonrenewal at least 60 days but not more than
          89 days prior to termination of this  Agreement,  the Executive  shall
          pay to the Bank $15,000 in liquidated damages.

     (d)  Termination by The Bank for Cause. Notwithstanding paragraph 4(a), The
          Bank may  immediately  terminate this Agreement with no advance notice
          if termination is for cause.  For purposes of this Agreement,  "cause"
          means  dishonesty;  fraud;  commission  of a  felony  or  of  a  crime
          involving   moral   turpitude;   deliberate   violation  of  statutes,
          regulations,   or  orders  pertaining  to  financial  institutions  or
          reckless   disregard  of  such  statutes,   regulations,   or  orders;
          destruction  or theft of Bank  property or assets of  customers of The
          Bank; physical attack of a fellow employee or a customer; intoxication
          at work;  use of  narcotics  or alcohol to an extent  that  materially
          impairs Executive's  performance of his duties; willful malfeasance or
          gross negligence in the performance of Executive's  duties;  violation
          of law in the course of employment that has a material  adverse impact
          on The Bank, its employees,  or its customers;  Executive's refusal to
          perform Executive's  duties;  Executive's refusal to follow reasonable
          instructions  or directions;  misconduct  materially  injurious to The
          Bank;   significant  neglect  of  duty;  or  any  material  breach  of
          Executive's duties or obligations to The Bank that results in material
          harm to The Bank.  If  termination  occurs under this  paragraph,  the
          Executive  will be entitled to receive only the salary earned  through
          the date this Agreement is terminated and shall not be entitled to any
          payment  pursuant to paragraph 4(a), and except as otherwise  provided
          by law, participation in benefit plans ceases upon termination of this
          Agreement.
<PAGE>

     (e)  Death or Disability.  Notwithstanding  paragraph  4(a), this Agreement
          will terminate immediately upon the Executive's death. Notwithstanding
          paragraph  4(a),  if the Executive is unable to perform his duties and
          obligations  under this  Agreement for a period of 90 days as a result
          of a  disability  that  substantially  limits one or more of his major
          life  activities,  this  Agreement  will  terminate  immediately  upon
          expiration of such 90 day period unless  Executive is thereafter  able
          to perform the  essential  functions  of the  position  referenced  in
          paragraph 3 with or without a reasonable accommodation. If termination
          occurs  under this  paragraph,  the  Executive  or his estate  will be
          entitled  to receive  only the  salary  earned  through  the date this
          Agreement  is  terminated  and shall not be  entitled  to any  payment
          pursuant to paragraph  5(b), and except as otherwise  provided by law,
          participation  in  benefit  plans  ceases  upon  termination  of  this
          Agreement,  except  that  as of such  termination  date,  all  vesting
          requirements  regarding then currently  pending stock options shall be
          deemed fully completed.

     (f)  Termination Related to a Change in Control.  This paragraph will apply
          to any  termination  related  to a Change  in  Control,  as set  forth
          herein.

          i.   "Change in Control" means a change "in the ownership or effective
               control" or "in the  ownership  of a  substantial  portion of the
               assets" of The Bank,  within the  meaning of Section  280G of the
               Internal  Revenue  Code. An initial  public  offering by The Bank
               will not, however, be deemed to be a Change in Control under this
               Agreement.

          ii.  Termination  by  The  Bank.  Notwithstanding  the  provisions  of
               paragraph  5(a),  if The Bank or its  successors  in  interest by
               merger,  or their  transferees  in the  event of a  purchase  and
               assumption transaction, and for reasons other than the provisions
               in paragraphs 5(d) and 5(e), terminates this Agreement within two
               (2) years  following  a Change in  Control,  or  terminates  this
               Agreement  before a Change in  Control  and a Change  in  Control
               occurs  within nine (9) months  after the  termination,  The Bank
               will pay the Executive  three (3) times the highest amount of W-2
               compensation  received by the  Executive  during any of the three
               most recent  calendar  years ending on or prior to the  effective
               date of termination, less statutory payroll deductions, and as of
               such date, all forfeiture  provisions  regarding restricted stock
               awards and all  vesting  requirements  regarding  then  currently
               pending stock options  shall be deemed fully  completed.  Payment
               under this paragraph  shall be made in accordance with The Bank's
<PAGE>

               ordinary  payroll  policies  and  procedures,  unless the parties
               mutually agree to a different payment schedule.

          iii. Executive  Assignment  Related  to  Change  in  Control.  If  the
               assignment  to the  Executive  by The Bank or its  successors  in
               interest  by  merger,  or  their  transferees  in the  event of a
               purchase and assumption  transaction,  is other than the position
               of President and CEO of The Bank and its Holding  Company without
               the Executive's  express written consent,  then the provisions of
               paragraph 5(f)(ii) shall apply.

          iv.  Limitations  on  Payments  Related  to  Change  in  Control.  The
               following  apply  notwithstanding  any  other  provision  of this
               agreement:

               (1)  The payment described in Section 5(f)(ii) shall be less than
                    the amount that would cause it to be a  "parachute  payment"
                    within the meaning of Section 280G (b)(2)(A) of the Internal
                    Revenue Code; and

               (2)  The  executive's  right to receive the payment  described in
                    Section  5(f)(ii)  terminates (a)  immediately if before the
                    Change  in  Control   transaction   closes,   the  Executive
                    terminates his employment without good reason or the Company
                    terminates the Executive's  employment for cause, or (b) two
                    years after a Change in Control occurs.

6.   Confidentiality.  The Executive  will not,  after  signing this  Agreement,
     including during and after its Term, disclose to any other person or entity
     any confidential information concerning The Bank or its business operations
     or customers, or use for his own purposes or permit or assist in the use of
     such confidential  information by third parties unless The Bank consents to
     the use or disclosures of their  respective  information,  or disclosure is
     required by law or court order.  The provisions of this  paragraph  survive
     the termination of the Executives employment by The Bank.

7.   Noncompetition. During the Term and for two (2) years after the Executive's
     employment  with The Bank ends, the Executive will not become involved with
     a Competing Business or serve, directly or indirectly, a Competing Business
     in any matter. "Competing Business" means any company that competes with or
     will compete with The Bank in Grays Harbor, Pacific and Wahkiakum Counties,
     or any other  Washington  or Oregon  county in which The Bank  maintains  a
     banking  office(s)  at the  time  of the  termination  of  this  Agreement.
     "Competing Business" includes,  without limitiation,  any existing or newly
     formed financial institution or trust company.
<PAGE>

8.   Enforcement.  The Bank and the Executive agree that, in light of all of the
     facts and  circumstances of the  relationship  between the The Bank and the
     Executive,  the agreements referred to in paragraphs 5(a), 6 and 7 are fair
     and  reasonably  necessary for the  protection  of The Bank's  confidential
     information,   goodwill  and  other  protectible  interests.   The  parties
     acknowledge and agree that the time and expense  involved in proving in any
     forum the actual  damage or loss  suffered by The Bank if there is a breach
     of  paragraphs  5(a),  6 or 7 make this  case  appropriate  for  liquidated
     damages.  Accordingly,  The Bank and the Executive agree that the following
     schedule of  liquidated  damages is reasonable  and fair,  and shall be the
     amount  of  damages  which  the  Executive  shall pay to The Bank for each,
     separate breach of paragraphs 5(a), 6 or 7 by the Executive:

     a.   for a breach of paragraph 5(a), the sum of $25,000;

     b.   for a breach of paragraph 6, the sum of $100,000;

     c.   for a breach of paragraph 7, the sum of $250,000.

          For purposes of paragraph  7, a "separate  breach"  shall be deemed to
          have  occurred with each  Competing  Business with which the Executive
          becomes involved or serves in violation of paragraph 7.

          Neither  the breach of  paragraphs  5(a),  6 or 7, nor the  payment of
          liquidated  damages by the  Executive,  shall  affect  the  continuing
          validity or enforceability  of this Agreement,  or The Bank's right to
          seek  and  obtain   injunctive   relief.   If  a  court  of  competent
          jurisdiction  should  decline to enforce  any of these  covenants  and
          agreements, the Executive and the Bank hereby stipulate that the Court
          shall  reform these  provisions  to restrict  the  Executive's  use of
          confidential  information and the Executive's  ability to compete with
          The Bank to the maximum  extent,  in time,  scope of  activities,  and
          geography, as the court finds enforceable.

9.   Adequate Consideration. The Executive specifically acknowledges the receipt
     of adequate  consideration for the covenants contained in paragraph 5(a), 6
     and 7 and that The Bank is  entitled  to require  him to comply  with these
     paragraphs.  These  paragraphs will survive  termination of this Agreement.
     The Executive  represents  that if his  employment is  terminated,  whether
     voluntarily or involuntarily, the Executive has experience and capabilities
     sufficient to enable the  Executive to obtain  employment in areas which do
     not violate this  Agreement and that the Bank's  enforcement of a remedy by
     way of injunction will not prevent the Executive from earning a livelihood.
<PAGE>

10.  Miscellaneous   Provisions.   This   Agreement   constitutes   the   entire
     understanding  between the parties  concerning  its  subject  matter.  This
     Agreement  will  bind  and  inure  to the  benefit  of The  Bank's  and the
     Executive's  heirs,  legal  representatives,  successors and assigns.  This
     Agreement may be modified only through a written  instrument signed by both
     parties.  This Agreement will be governed and construed in accordance  with
     Washington law, except that certain matters may be governed by federal law.
     Jurisdiction and venue for enforcement of any terms of this Agreement shall
     be in Grays Harbor County Superior Court.






Signed as of January 27, 2004:


THE BANK OF THE PACIFIC                       EXECUTIVE



/s/ Joseph A. Malik                           /s/ Dennis A. Long
----------------------------                  ----------------------------
Joseph A. Malik, Chairman                     Dennis A. Long