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 June 30, 2005 and will be effective July 1, 2005.

# 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,                     Skagit County, Whatcom County, and Wahkiakum County,
Washington.
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|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.
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|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.
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# 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 Chief Executive Officer for the Bank.
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| | 2. | Effective
Date and Term.
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| | (a) | Effective
Date. This Agreement is effective as of the 1st day of July                2005.
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| | (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).
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| | 3. | Duties. The
Executive will serve as the Chief Executive Officer                and faithfully and
diligently perform the duties assigned to the Executive by                The Banks
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:
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| | (a) | Company
Performance. The Executive will be responsible for all aspects of                The
Banks performance, including, without limitation, directing so 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.
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| | (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s Chief Executive Officer, and shall not include
immoral or unlawful                acts.
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| | 4. | Compensation.
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| | (a) | Salary. Initially,
the employee will receive a salary of $181,900.00 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).
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| | (b) | Director
Fees. As a Company Director, Executive will receive director                fees
including annual retainer and regular meeting attendance.
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| | (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.
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| | (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.
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| | (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.
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| | (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.
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| | 5. | Termination.
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| | (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.
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| | (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
paragraph 5(a), 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 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.
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| | (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.
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| | (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.
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| | (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.
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| | (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.
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| | 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.
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| | 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
ordinary payroll policies and procedures, unless the parties mutually
agree to a different payment schedule.
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| | 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 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.
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| | iv. | Limitations
on Payments Related to Change in Control. The following apply
               notwithstanding any other provision of this agreement:
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| | (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
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| | (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.
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| | 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.
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| | 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, Skagit, Whatcom, 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                     limitation, any
existing or newly formed financial institution or trust company.
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| | 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:
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| |  | a.              for
a breach of paragraph 5(a), the sum of $25,000;
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| |  | b.               for
a breach of paragraph 6, the sum of $100,000;
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| |  | c.               for
a breach of paragraph 7, the sum of $250,000.
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| |  | 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.
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| |  | 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.
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| | 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.
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| | 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, Washington Superior Court.
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# Signed as of June ___,
2005:

|                          |                   
|------------------------- | ------------------
|THE BANK OF THE PACIFIC   | EXECUTIVE         
|/s/ Joseph A. Malik       | /s/ Dennis A. Long
|Joseph A. Malik, Chairman | Dennis A. Long