Document:

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                                                                    Exhibit 10.3

                     EXECUTIVE SALARY CONTINUATION AGREEMENT

        This Agreement is made and entered into this 13 day of October, 1993, by
and between Plumas Bank, a corporation organized under the laws of the state of
California (the "Employer"), and William E. Elliott, an individual residing in
the state of California (hereinafter referred to as the "Executive").

                                    RECITALS

WHEREAS, the Executive is an employee of the Employer and is serving as its
President and Chief Executive Officer;

WHEREAS, the Executive's experience and knowledge of the affairs of the Employer
and the banking industry are extensive and valuable;

WHEREAS, it is deemed to be in the best interests of the Employer to provide the
Executive with certain salary continuation benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Employer's employment; and

WHEREAS, the Executive and the Employer wish to specify in writing the terms and
conditions upon which this additional compensatory incentive will be provided to
the Executive, or to the Executive's spouse or the Executive's designated
beneficiaries, as the case may be;

NOW, THEREFORE, in consideration of the services to be performed in the future,
as well as the mutual promises and covenants contained herein, the Executive and
the Employer agree as follows:

                                    AGREEMENT

1. TERMS AND DEFINITIONS.

1.1. ADMINISTRATOR. The Employer shall be the "Administrator" and, solely for
the purposes of ERISA, the "fiduciary" of this Agreement where a fiduciary is
required by ERISA.

1.2. ANNUAL BENEFIT. The term "Annual Benefit" shall mean an annual sum of
Seventy-Five Thousand Dollars ($75,000) multiplied by the Applicable Percentage
(defined below) and then reduced to the extent required: (i) under the other
provisions of this Agreement; (ii) by reason of the lawful order of any
regulatory agency or body having jurisdiction over the Employer; and (iii) in
order for the Employer to properly comply with any and all applicable state and
federal laws, including, but not limited to, income, employment and disability
income tax laws (e.g., FICA, FUTA, SDI).

<PAGE>

1.3. APPLICABLE PERCENTAGE. The term "Applicable Percentage" shall mean that
percentage listed on Schedule "A" attached hereto which is adjacent to the
number of complete years (with a "year" being the performance of personal
services for or on behalf of the Employer as an employee for a period of 365
days) which have elapsed starting from the Effective Date of this Agreement and
ending on the date payments are to first begin under the terms of this
Agreement. In the event that Executive's employment with Employer is terminated
other than by reason of death, disability, Retirement or voluntary termination
on the part of Executive, Executive shall be deemed for purposes of determining
the number of complete years to have completed a year of service in its entirety
for any partial year of service after the last anniversary date of the Effective
Date during which the Executive's employment is terminated.

1.4. BENEFICIARY. The term "beneficiary" or "designated beneficiary" shall mean
the person or persons whom the Executive shall designate in a valid Beneficiary
Designation, a copy of which is attached hereto as Exhibit "B", to receive the
benefits provided hereunder. A Beneficiary Designation shall be valid only if it
is in the form attached hereto and made a part hereof and is received by the
Administrator prior to the Executive's death.

1.5 THE CODE. The "Code" shall mean the Internal Revenue code of 1986, as
amended ( the "Code").

1.6. DISABILITY/DISABLED. The term "Disability" or "Disabled" shall have the
same meaning given such term in the principal disability insurance policy
covering the Executive, which is incorporated herein by reference. In the event
the Executive is not covered by a disability policy containing a definition of
"Disability" or "Disabled," these terms shall mean an illness or incapacity
which, having continued for a period of one hundred and eighty (180) consecutive
days, prevents the Executive from adequately performing the Executive's regular
employment duties. The determination of whether the Executive is Disabled shall
be made by an independent physician selected by mutual agreement of the parties.

1.7. EARLY RETIREMENT DATE. The term "Early Retirement Date" shall mean the
Retirement (as defined below) of the Executive on a date which occurs after the
date upon which the Executive has, measured in the aggregate and from the date
of this Agreement to the date of the Executive's Retirement, been employed by
the Employer for no less than ten (10) years.

1.8. EFFECTIVE DATE. The term "Effective Date" shall mean the date upon which
this Agreement was entered into by the parties, as first written above.

1.9. ERISA. The term "ERISA" shall mean the Retirement Income-security Act of
1974, as amended.

1.10. PLAN YEAR. The term "Plan Year" shall mean the Employer's calendar year.

<PAGE>

1.11. RETIREMENT. The term "Retirement" or "Retires" shall refer to the date
which the Executive acknowledges -in writing to Employer to be the last day he
will provide any significant personal services, whether as an employee, director
or independent consultant or contractor, to Employer or to, for, or on behalf
of, any other business entity conducting, performing or making available to any
person or entity banking or other financial services of any kind. For purposes
of this Agreement, the phrase "significant personal services" shall mean more
than ten (10) hours of personal services rendered to one or more individuals or
entities in any thirty (30) day period.

1.12. SURVIVING SPOUSE. The term "Surviving Spouse" shall mean the person, if
any, who shall be legally married to the Executive on the date of the
Executive's death.

2. SCOPE. PURPOSE AND EFFECT.

2.1. CONTRACT OF EMPLOYMENT. Although this Agreement is intended to provide the
Executive with an additional incentive to remain in the employ of the Employer,
this Agreement shall not be deemed to constitute a contract of employment
between the Executive and the Employer nor shall any provision of this Agreement
restrict or expand the right of the Employer to terminate the Executive's
employment. This Agreement shall have no impact or effect upon any separate
written Employment Agreement which the Executive may have with the Employer, it
being the parties' intention and agreement that unless this Agreement is
specifically referenced in said Employment Agreement (or any modification
thereto), this Agreement (and the Employer's obligations hereunder) shall stand
separate and apart and shall have no effect upon, nor be affected by, the terms
and provisions of said Employment Agreement.

2.2. FRINGE BENEFIT. The benefits provided by this Agreement are granted by the
Employer as a fringe benefit to the Executive and are not a part of any salary
reduction plan or any arrangement deferring a bonus or a salary increase. The
Executive has no option to take any current payments or bonus in lieu of the
benefits provided by this Agreement.

3. PAYMENTS UPON OR AFTER RETIREMENT.

3.1. PAYMENTS UPON RETIREMENT. If the Executive shall remain in the continuous
employment of the Employer until attaining sixty-five (65) years of age, the
Executive shall be entitled to be paid the Annual Benefit, as defined above, for
a period of fifteen (15) years, in One Hundred Eighty (180) equal monthly
installments, with each installment to be paid on the first day of each month,
beginning with the month following the month in which the Executive Retires or
upon such later date as may be mutually agreed upon by the Executive and the
Employer in advance of said Retirement date. At the Employer's sole and absolute
discretion, the Employer may increase the Annual Benefit as and when the
Employer determines the same to be appropriate in order to reflect a substantial
change in the cost of living. Notwithstanding anything contained herein to the
contrary, the Employer shall have no obligation hereunder to make any such
cost-of-living adjustment.

<PAGE>

3.2. PAYMENTS IN THE EVENT OF DEATH AFTER RETIREMENT. The Employer agrees that
if the Executive Retires, but shall die before receiving all of the One Hundred
Eighty (180) monthly payments described in paragraph 3.1 above, the Employer
will make the remaining monthly payments, undiminished and on the same schedule
as if the Executive had not died, to the Executive's designated beneficiary. If
a valid Beneficiary Designation is not in effect, then the remaining amounts due
to the Executive under the term of this Agreement shall be paid to the
Executive's Surviving Spouse. If the Executive leaves no Surviving Spouse, the
remaining amounts due to the Executive under the terms of this Agreement shall
be paid to the duly qualified personal representative, executor or administrator
of the Executive's estate.

4. PAYMENTS IN THE EVENT DEATH OR DISABILITY OCCURS PRIOR TO RETIREMENT.

4.1 PAYMENTS IN THE EVENT OF DEATH PRIOR TO RETIREMENT. In the event the
Executive should die while actively employed by the Employer at any time after
the Effective Date of this Agreement, but prior to attaining sixty-three (63)
years of age or if the Executive chooses to work after attaining Sixty-Three
(63) years of age, but dies before Retirement, the Employer agrees to pay the
Annual Benefit for a period of fifteen (15) years in One Hundred Eighty (180)
equal monthly installments, with each installment to be paid on the first of
each month beginning with the month following Executive's death, to the
Executive's designated beneficiary with the Applicable Percentage determined by
the applicable years of service, including years of service with Employer prior
to execution of this Agreement, at the time of death, as set forth on Schedule
"A". If a valid Beneficiary Designation is not in effect, then the amounts due
to the Executive under the terms of this Agreement shall be paid to the
Executive's Surviving Spouse as set forth above. If the Executive leaves no
Surviving Spouse, the amounts due to the Executive under the terms of this
Agreement shall be paid to the duly qualified personal representative, executor
or administrator of the Executive's estate as set forth above.

4.2. PAYMENTS IN THE EVENT OF DISABILITY PRIOR TO RETIREMENT. In the event the
Executive becomes Disabled while actively employed by the Employer at any time
after the date of this Agreement but prior to Retirement, the Executive shall:
(i) continue to be treated during such period of Disability as being gainfully
employed by the Employer but shall not add applicable years of service for the
purpose of determining the Annual Benefit; and (ii) be entitled to be paid the
Annual Benefit, as set forth on Schedule "A", for fifteen (15) years, as
determined by the applicable years of service at the time of disability, as
defined above, in One Hundred Eighty (180) equal monthly installments, with each
installment to be paid on the first day of each month, beginning with the month
following the earlier of (1) the month in which the Executive attains sixty-five
(65) years of age; or (2) the date upon which the Executive is no longer
entitled to receive Disability benefits under the Executive's principal
Disability insurance policy and does not, at such time, return to and thereafter
fulfill the responsibilities associated with the employment position held

<PAGE>

4.2. PAYMENTS IN THE EVENT OF DISABILITY PRIOR TO RETIREMENT. (CONTINUED) with
the Employer prior to becoming Disabled by reason of such Disability continuing.
Notwithstanding the foregoing, in the event Executive should die while actively
or gainfully employed by the Employer at any time after the Effective Date of
this Agreement and prior to attaining the age of sixty-five (65) years of age,
the payments provided in Paragraph 4.1 shall be paid in lieu of the payments
provided in this Paragraph 4.2, provided that Executive or his legal
representative shall have not elected to take the benefits provided by Paragraph
5.

5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED OTHER THAN BY DEATH,
DISABILITY, OR RETIREMENT. As indicated in Paragraph 2 above, the Employer
reserves the right to terminate the Executive's employment, with or without
cause but subject to any written employment agreement which may then exist, at
any time prior to the Executive's Retirement. In the event that the employment
of the Executive shall be terminated, for any reason, including voluntary
termination by the Executive, but other than by reason of Disability except as
provided in Paragraph 4.2, death or Retirement, the Executive or his legal
representative shall be entitled to be paid the Annual Benefit for a period of
fifteen (15) years, as determined by the applicable years of service at the time
of the Executive's termination of employment with the Employer, in One Hundred
Eighty (180) equal monthly installments, with each installment to be paid on the
first day of each month, beginning with the month following the month in which
the Executive attains sixty-five (65) years of age or, if earlier, beginning
with the month following the Executive's death.

6. PAYMENTS IN THE EXECUTIVE ELECTS EARLY RETIREMENT. The Executive shall have
the right to elect to receive the Annual Benefit prior to attaining sixty-five
(65) years of age if he chooses to Retire on a date which constitutes an Early
Retirement Date as defined in subparagraph 1.7 above. In the event the Executive
elects to Retire on a date which constitutes an Early Retirement Date, the
Executive shall be entitled to be paid the Annual Benefit for a period of
fifteen (15) years, as set forth on Schedule "A" and determined by the
applicable years of service at the time of early retirement, as defined above,
in One Hundred Eighty (180) equal monthly installments, with each installment to
be paid on the first day of each month, beginning with the month following the
month in which the Early Retirement Date occurs.

7. RIGHT TO DETERMINE FUNDING METHODS. The Employer reserves the right to
determine, in its sole and absolute discretion, whether, to what extent and by
what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement. In the event that the Employer
elects to fund this Agreement, in whole or in part, through the use of life
insurance or annuities, or both, the Employer shall determine the ownership and
beneficial interests of any such policy of life insurance or annuity. The
Employer further reserves the right, in its sole and absolute discretion, to
terminate any such policy, and any other device used to fund its obligations
under this Agreement, at any time, in whole or in part. Consistent with
Paragraph 9 below, neither

<PAGE>

7. RIGHT TO DETERMINE FUNDING METHODS. (CONTINUED)

the Executive, the Executive's spouse nor the Executive's beneficiaries shall
have any right, title or interest in or to any funding source or amount utilized
by the Employer pursuant to this Agreement, and any such funding source or
amount shall not, constitute security for the performance of the Employer's
obligations pursuant to this Agreement. In connection with the foregoing, the
Executive agrees to execute such documents and undergo such medical examinations
or tests which the Employer may request and which may be reasonably necessary to
facilitate any funding for this Agreement including, without limitation the
Employer's acquisition of any policy of insurance or annuity. Furthermore, a
refusal by the Executive to consent to participate in and undergo any such
medical examinations or tests shall result in the immediate termination of this
Agreement and the immediate forfeiture by the Executive, the Executive's spouse
and the Executive's beneficiaries of any and all rights to payment hereunder.

8. CLAIMS PROCEDURE. The Employer shall, but only to the extent necessary to
comply with ERISA, be designated as the named fiduciary under this Agreement and
shall have authority to control and manage the operation and administration of
this Agreement. Consistent therewith, the Employer shall make all determinations
as to the rights to benefits under this Agreement. Any decision by the Employer
denying a claim by the Executive, the Executive's spouse, or the Executive's
beneficiary for benefits under this Agreement shall be stated in writing and
delivered or mailed, via registered or certified mail, to the Executive, the
Executive's spouse or the Executive's beneficiary, as the case may be. Such
decision shall set forth the specific reasons for the denial of a claim. In
addition, the Employer shall provide the Executive, the Executive's spouse or
the Executive's beneficiary with a reasonable opportunity for a full and fair
review of the decision denying such claim.

9. STATUS OF AN UNSECURED GENERAL CREDITOR. Notwithstanding anything contained
herein to the contrary: (i) neither the Executive, the Executive's spouse and
the Executive's beneficiary shall have any legal or equitable rights, interests
or claims in or to any specific property or assets of the Employer; (ii) none of
the Employer's assets shall be held in or under any trust for the benefit of the
Executive, the Executive's spouse or the Executive's beneficiary or held in any
way as security for the fulfillment of the obligations of the Employer under
this Agreement; (iii) all of the Employer's assets shall be and remain the
general unpledged and unrestricted assets of the Employer; (iv) the Employer's
obligation under this Agreement shall be that of an unfunded and unsecured
promise by the Employer to pay money in the future; and (v) the Executive, the
Executive's spouse and the Executive's beneficiary shall be unsecured general
creditors with respect to any benefits which may be payable under the terms of
this Agreement.

10. COVENANT NOT TO INTERFERE. The Executive agrees not to take any action which
prevents the Employer from collecting the proceeds of any life insurance policy
which the Employer may happen to own at the time of the Executive's death and of
which the Employer is the designated beneficiary.

<PAGE>

11. MISCELLANEOUS.

11.1 OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL. The Executive acknowledges
that he has been afforded the opportunity to consult with independent counsel of
his choosing regarding both the benefits granted to him under the terms of this
Agreement and the terms and conditions which may affect the Executive's right to
these benefits. The Executive further acknowledges that he has read, understands
and consents to all of the terms and conditions of this Agreement, and that he
enters into this Agreement with a full understanding of its terms and
conditions.

11.2. ARBITRATION OF DISPUTES. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
presently located at 111 pine Street, suite 710, in San Francisco, California.
In the event JAMS is unable or unwilling to conduct the arbitration provided for
under the terms of this Paragraph, or has discontinued its business, the parties
agree that a representative member, selected by the mutual agreement of the
parties, of the American Arbitration Association ("AAA"), presently located at
417 Montgomery Street, in San Francisco, California, shall conduct the binding
arbitration referred to in this Paragraph. Notice of the demand for arbitration
shall be filed in writing with the other party to this Agreement and with JAMS
(or AAA, if necessary). In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statute of limitations. The arbitration shall be subject to such rules of
procedure used or established by JAMS, or if there are none, the rules of
procedure used or established by AAA. Any award rendered by JAMS or AAA shall be
final and binding upon the parties, and as applicable, their respective heirs,
beneficiaries, legal representatives, agents, successors and assigns, and may be
entered in any court having jurisdiction thereof. The obligation of the parties
to arbitrate pursuant to this clause shall be specifically enforceable in
accordance with, and shall be conducted consistently with, the provisions of
Title 9 of Part 3 of the California Code of Civil Procedure. Any arbitration
hereunder shall be conducted in Quincy, California, unless otherwise agreed to
by the parties.

11.3. ATTORNEYS' FEES. In the event of any arbitration or litigation concerning
any controversy, claim or dispute between the parties hereto, arising out of or
relating to this Agreement or the breach hereof, or the interpretation hereof,
the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.

<PAGE>

11.4. NOTICE. Any notice required or permitted of either the Executive or the
Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery upon the date received by the party or its authorized
representative. If by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission. and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

If to the Employer:

        Plumas Bank
        P.O. Box 10150 Quincy, California 95971
        Attn: Mr. Jerry V. Kehr

If to the Executive:

        William E. Elliott
        P.O. Box 1971
        Quincy, California 95971

11.5. ASSIGNMENT. Neither the Executive, the Executive's spouse, nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, hypothecate, modify or otherwise encumber any part or all of the amounts
payable hereunder, nor, prior to payment in accordance with the terms of this
Agreement, shall any portion of such amounts be: (i) subject to seizure by any
creditor of any such beneficiary, by a proceeding at law or in equity, for the
payment of any debts, judgments, alimony or separate maintenance obligations
which may be owed by the Executive, the Executive's spouse, or any designated
beneficiary; or (ii) transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. Any such attempted assignment or transfer
shall be void and shall terminate this Agreement, and the Employer shall
thereupon have no further liability hereunder.

11.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement shall be binding
upon and inure to the benefit of the Executive and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement. Upon
the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such surviving or successor firm, person, entity or
corporation.

11.7. NONWAIVER. The failure of either party to enforce at any time or for any
period of time anyone or more of the terms or conditions of this Agreement shall
not be a waiver of such term(s) or condition(s) or of that party's right
thereafter to enforce each and every term and condition of this Agreement.

<PAGE>

11.8. PARTIAL INVALIDITY. If any term, provision covenant or condition of this
Agreement is determined by a~ arbitrator or a court, as the case may be, to be
invalid, void, or unenforceable, such determination shall not render any other
term, provision, covenant or condition invalid, void or unenforceable, and the
Agreement shall remain in full force and effect notwithstanding such partial
invalidity.

11.9. ENTIRE AGREEMENT. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties with respect to the subject
matter of this Agreement and contains all of the covenants and agreements
between the parties with respect thereto. Each party to this Agreement
acknowledges that no other representations, inducements, promises or agreements,
oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not set forth herein, and that no other agreement,
statement or promise not contained in this Agreement shall be valid or binding
on either party.

11.10. MODIFICATIONS. Any modification of this Agreement shall be effective only
if it is in writing and signed by each party or such party's authorized
representative.

11.11. PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are
included solely for the convenience of the parties and shall not affect or be
used in connection with the interpretation of this Agreement.

11.12. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction, will be applied against any person.

11.13. GOVERNING LAW. The laws of the state of California, other than those laws
denominated choice of law rules, and, where applicable, the rules and
regulations of: (i) the California Superintendent of Banks; (ii) the Board of
Governors of the Federal Reserve System; (iii) the Federal Deposit Insurance
corporation; or (iv) any other regulatory agency or governmental authority
having jurisdiction over the Employer, shall govern the validity,
interpretation, construction and effect of this Agreement.

IN WITNESS WHEREOF, the Employer and the Executive have executed this Agreement
on the date first above-written in the City of Quincy, Plumas County,
California.

THE EMPLOYER:                                     THE EXECUTIVE:

PLUMAS BANK, a California Corporation

By:  s/s JERRY V. KEHR                            s/s WILLIAM E. ELLIOTT
     -----------------                            ------------------------

JERRY V. KEHR, Chairman                           WILLIAM E. ELLIOTT

<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
NUMBER OF COMPLETE
YEARS WHICH HAVE ELAPSED                  APPLICABLE PERCENTAGE
------------------------                  ---------------------
<S>                                       <C>
1 ............................................            5.00%

2 ............................................           10.00%

3 ............................................           15.00%

4 ............................................           20.00%

5 ............................................           30.00%

6 ............................................           40.00%

7 ............................................           50.00%

8 ............................................           60.00%

9 ............................................           75.00%

10. (early retirement age 63).................           90.00%

11............................................           95.00%

12 or More....................................          100.00%
</TABLE>

<PAGE>

AMENDMENT TO EXECUTIVE SALARY CONTINUATION AGREEMENT

This agreement ("Agreement") is made and entered into this 29 day of September,
1995, by and between Plumas Bank, a California banking corporation ("Employer")
and William E. Elliott, an individual residing in the State of California
("Executive").

WHEREAS, Employer and Executive entered into an executive salary continuation
agreement dated October 13, 1993 ("Executive Agreement"), and it is the desire
of the parties to amend the Executive Agreement to provide Executive with
additional benefits in the event of a change in control of the Employer;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
Employer and Executive agree to amend the Executive Agreement with respect to
the following sections.

1. Section 5 of the Executive Agreement is hereby amended to read in the
   entirety as follows:

        5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED OTHER THAN BY DEATH,
        DISABILITY, RETIREMENT OR A CHANGE OF CONTROL OF THE EMPLOYER.

As indicated in Paragraph 2 above, the Employer reserves the right to terminate
the Executive's employment, with or without cause but subject to any written
employment agreement which may then exist, at any time prior to the Executive's
Retirement. In the event that the employment of the Executive shall be
terminated, for any reason, including voluntary termination by the Executive,
but other than by reason of Disability except as provided in Paragraph 4.2,
death, Retirement or a change of control of the Employer as set forth in
Paragraph 5.1, the Executive or his legal representative shall be entitled to be
paid the Annual Benefit, as set forth in Schedule "A" for a period of fifteen
(15) years, as determined by the applicable years of service at the time of the
Executive's termination of employment with the Employer, in One Hundred Eighty
(180) equal monthly installments, with each installment to be paid on the first
day of each month, beginning with the month following the month in which the
Executive terminates employment and attains sixty-five (65) years of age or, if
earlier, beginning with the month following the Executive's death.

2. A new Section 5.1 is added to the Executive Agreement to read in the entirety
   as follows:

        5.1 TERMINATION OF EMPLOYMENT IN THE EVENT OF A CHANGE OF CONTROL.

A "Terminating Event" shall be defined as anyone of the following events: (i)
merger or consolidation of the Employer where the Employer's shareholders
immediately

<PAGE>

prior to the merger or consolidation will not own at least a majority of the
outstanding voting shares of the Employer (or Employer's successor, if the
Employer is not the surviving entity in the merger or consolidation) immediately
after such merger or consolidation, (ii) a transfer of a controlling interest of
the Employer (consisting of at least a majority of the outstanding voting shares
of the Employer) to another corporation, individual or individuals acting in
concert, or (iii) a sale or transfer of substantially all of the assets of the
Employer to another entity. In the event the Executive's employment terminates
with the Employer or Employer's successor within five years of a Terminating
Event and the Executive gives written notice to the Employer or Employer's
successor within 30 calendar days of such termination of employment that the
termination is for the reason that a Terminating Event has occurred, the
Executive shall be entitled to be paid the Annual Benefit with the Applicable
Percentage equal to 100%, for a period of fifteen (15) years, in One Hundred
Eighty (180) equal monthly installments, with each installment to be paid on the
first day of each month, beginning with the month following the month in which
the Executive's employment is terminated.

The Executive and Employer acknowledge that limitations on deductibility of the
Annual Benefit for federal income tax purposes may be imposed under, but not
limited to Section 280G of the Internal Revenue Code of 1986, as amended
("Code"), and any successor to Section 280G of the Code. The increase in the
Applicable Percentage pursuant to the application of this Paragraph 5.1 shall be
limited to such increase in the Applicable Percentage (which increase shall not
result in the Applicable Percentage being greater than 100%) that results in the
greatest amount of the Annual Benefit that is deductible by the Employer for
federal income tax purposes after taking into account all other compensation
payments to or for the benefit of the Executive that are included in determining
the deductibility of such payments under Section 280G of the Code or any
successor to Section 280G of the Code. In the event that prior to the
application of this Paragraph 5.1, all other compensation payments to or for the
benefit of Executive results in the limitation of the deductibility by Employer
of such payments under Section 280G or any successor to Section 280G of the
Code, then this Paragraph 5.1 shall not be applicable.

PLUMAS BANK                                        WILLIAM E. ELLIOTT

S/S JERRY V. KEHR                                  s/s WILLIAM E. ELLIOTT

                                                   2
<PAGE>

                                SECOND AMENDMENT
                                     TO THE
                   EXECUTIVE SALARY CONTINUATION AGREEMENT FOR
                               WILLIAM E. ELLIOTT

      THIS AMENDMENT is made this 16th day of February, 2000, by and between
PLUMAS BANK, a corporation organized under the laws of the State of California
(the "Employer") and WILLIAM E. ELLIOTT (the "Executive").

      On October 13, 1993, the Employer and the Executive executed an Executive
Salary Continuation Agreement, Which was Amended on September 29, 1995 (the
"Agreement"). The undersigned hereby amends, in part, said Agreement to provide
the Executive with an increase the Annual Benefit from $75,000 to $110,000.
Therefore, it is necessary to amend the following sections:

      Article 1.2 shall be deleted in its entirety and the following new Article
1.2 shall be added to the Agreement as follows:

      1.2 Annual Benefit. The term "Annual Benefit" shall mean an annual sum of
One Hundred Ten Thousand Dollars ($110,000) multiplied by the Applicable
Percentage (defined below) and then reduced to the extent required: (i) under
the other provisions of this Agreement; (ii) by reason of the lawful order of
any regulatory agency or body having jurisdiction over the Employer; and (iii)
in order for the Employer to properly comply with any and all applicable state
and federal laws, including, but not limited to, income, employment and
disability income tax laws (e.g., FICA, FUTA, SDI).

                                        1
<PAGE>
In Witness whereof, the Executive and the Employer have signed this Agreement.

          EXECUTIVE:                               EMPLOYER:

                                                   PLUMAS BANK

          s/s  WILLIAM E. ELLIOTT                  By  s/s JERRY V. KEHR
          -----------------------                      -----------------
               William E. Elliott                  Title Chairman of Board

                                        2<PAGE>
                                                                    EXHIBIT 10.4

                                   ADDENDUM A

                                   PLUMAS BANK

                             SPLIT DOLLAR AGREEMENT

THIS AGREEMENT is made and entered into this 23rd day of January, 2002, by and
between PLUMAS BANK, a corporation organized under the laws of the State of
California located in Quincy, California (the "Employer"), and WILLIAM E.
ELLIOTT (the "Executive"). This Agreement shall append the Split Dollar
Endorsement entered into on even date herewith, or as subsequently amended, by
and between the aforementioned parties.

                                  INTRODUCTION

To encourage the Executive to remain an employee of the Employer, the Employer
is willing to divide the death proceeds of a life insurance policy on the
Executive's life. The Employer will pay life insurance premiums from its general
assets.

                                    ARTICLE 1

                               GENERAL DEFINITIONS

The following terms shall have the meanings specified:

1.1 "Insurer" means Chubb Life Insurance Company.

1.2 "Policy" means insurance policy no. 2107021 issued by the Insurer.

1.3 "Insured" means the Executive.

1.4 "Normal Retirement Age" means the Executive's 65th birthday.

1.5 "Termination of Employment" means the Executive ceasing to be employed by
the Employer for any reason whatsoever, other than by reason of an approved
leave of absence. For purposes of this Agreement, if there is a dispute over the
employment status of the Executive or the date of the Executive's Termination of
Employment, the Employer shall have the sole and absolute right to determine the
termination date.

                                    ARTICLE 2
                           POLICY OWNERSHIP/INTERESTS

2.1 Employer Ownership. The Employer is the sole owner of the Policy and shall
have the right to exercise all incidents of ownership. The Employer shall be the
beneficiary of the death proceeds remaining after the Executive's interest has
been paid pursuant to Article 2.2 below.
<PAGE>

2.2 Executive's Interest. The Executive shall have the right to designate the
beneficiary of death proceeds of the Policy in the amount of $232,516. The
Executive shall also have the right to elect and change settlement options that
may be permitted. However, the Executive, the Executive's transferee or the
Executive's beneficiary shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in this section 2.2 if
the Executive ceases to be employed by the Employer for any reason whatsoever
prior to Normal Retirement Age (other than by reason of a leave of absence which
is approved by the Employer) and has received or had the opportunity to receive
any benefit under the Executive Salary Continuation Agreement dated October 13,
1993, and a first Amendment thereto dated September 29, 1995, and a Second
Amendment of even date herewith, between the Employer and the Executive
(collectively the "Salary Continuation Agreement").

2.3 Option to Purchase. The Employer shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
the Executive or the Executive's transferee the option to purchase the Policy
for a period of 60 days from written notice of such intention. The purchase
price shall be an amount equal to the cash surrender value of the Policy. This
provision shall not impair the right of the Employer to terminate this
Agreement.

                                    ARTICLE 3
                                    PREMIUMS

3.1 Premium Payment. The Employer shall pay any premiums due on the Policy.

3.2 Imputed Income. The Employer shall impute income to the Executive in an
amount equal to the current term rate for the Executive's age multiplied by the
aggregate death benefit payable to the Executive's beneficiary. The "current
term rate" is the minimum amount required to be imputed under Revenue Rulings
64-328 and 66-110, or any subsequent applicable authority.

3.3 Cash Payment. The Employer shall annually pay to the Executive an amount
necessary to pay the federal and state income taxes attributable to the imputed
income and to the additional cash payments under this section. In calculating
the cash payments due from the Employer, the Employer shall use the Executive's
actual marginal income tax bracket for the calendar year immediately preceding
the payment to the Executive. In the event the Executive retires prior to the
Normal Retirement Age or ceases to be employed by the Employer prior to such
age, the cash payments shall cease as of the date of such occurrence.

                                    ARTICLE 4
                                   ASSIGNMENT

The Executive may assign without consideration all interests in the Policy and
in this Agreement to any person, entity or trust. In the event the Executive
transfers all of the Executive's interest in the Policy, then all of the
Executive's interest in the Policy and in the Agreement shall be vested in the
Executive's transferee, who shall be substituted as a party hereunder and the
Executive shall have no further interest in the Policy or in this Agreement.

                                    ARTICLE 5
                                     INSURER

The Insurer shall be bound only by the terms of the Policy. Any payments the
Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and

<PAGE>

demands of all entities or persons. The Insurer shall not be bound by or be
deemed to have notice of the provisions of this Agreement.

                                   ARTICLE 6
                                CLAIMS PROCEDURE

6.1 Claims Procedure. The Employer shall notify any person or entity that makes
a claim under this Agreement (the "Claimant") in writing, within 90 days of
Claimant's written application for benefits, of his or her eligibility or
ineligibility for benefits under this Agreement. If the Employer determines that
the Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of this Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or her claim, and a description of why it is needed, and (4) an explanation of
this Agreement's claims review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed. If the
Employer determines that there are special circumstances requiring additional
time to make a decision, the Employer shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional 90 days.

6.2 Review Procedure. If the Claimant is determined by the Employer not to be
eligible for benefits, or if the Claimant believes that he or she is entitled to
greater or different benefits, the Claimant shall have the opportunity to have
such claim reviewed by the Employer by filing a petition for review with the
Employer within 60 days after receipt of the notice issued by the Employer. Said
petition shall state the specific reasons which the Claimant believes entitle
him or her to benefits or to greater or different benefits. Within 60 days after
receipt by the Employer of the petition, the Employer shall afford the Claimant
(and counsel, if any) an opportunity to present his or her position to the
Employer verbally or in writing, and the Claimant (or counsel) shall have the
right to review the pertinent documents. The Employer shall notify the Claimant
of its decision in writing within the sixty-day period, stating specifically the
basis of its decision, written in a manner to be understood by the Claimant and
the specific provisions of this Agreement on which the decision is based. If,
because of the need for a hearing, the 60-day period is not sufficient, the
decision may be deferred for up to another 60-day period at the election of the
Employer, but notice of this deferral shall be given to the Claimant.

                                    ARTICLE 7
                           AMENDMENTS AND TERMINATION

This Agreement may be amended or terminated only by a written agreement signed
by the Employer and the Executive. However, unless otherwise agreed to by the
Employer and the Executive, this Agreement will automatically terminate if the
Executive ceases to be employed by the Employer for any reason whatsoever (other
than by reason of a leave of absence which is approved by the Employer) and has
received or had the opportunity to receive any benefit under the Salary
Continuation Agreement.

                                    ARTICLE 8
                                  MISCELLANEOUS

8.1 Binding Effect. This Agreement shall bind the Executive and the Employer and
their beneficiaries, survivors, executors, administrators and transferees, and
any Policy beneficiary.

8.2 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the
Employer, nor does it interfere with the Employer's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

<PAGE>

8.3 Applicable Law. The Agreement and all rights hereunder shall be governed by
and construed according to the laws of California, except to the extent
preempted by the laws of the United States of America.

8.4 Reorganization. The Employer shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Employer.

8.5 Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Split Dollar Agreement by one party to another
shall be in writing, shall be signed by the party giving or making the same, and
may be given either by delivering the same to such other party personally, or by
mailing the same, by United States certified mail, postage prepaid, to such
party, addressed to his or her last known address as shown on the records of the
Employer. The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

8.6 Entire Agreement. This Agreement constitutes the entire agreement between
the Employer and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

8.7 Administration. The Employer shall have powers which are necessary to
administer this Agreement, including but not limited to:

     (a)  Interpreting the provisions of the Agreement;

     (b)  Establishing and revising the method of accounting for the Agreement;

     (c)  Maintaining a record of benefit payments; and

     (d)  Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

8.8 Named Fiduciary. The Employer shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

EXECUTIVE:                                 EMPLOYER:

                                           PLUMAS BANK

/S/ WILLIAM E. ELLIOTT                     BY  /S/ JERRY V. KEHR
------------------------                      ---------------------------
  WILLIAM E. ELLIOTT                       TITLE CHAIRMAN OF BOARD

<PAGE>

                                   ADDENDUM B

                                   PLUMAS BANK

                             SPLIT DOLLAR AGREEMENT

THIS AGREEMENT is made and entered into this 23rd day of January, 2002, by and
between PLUMAS BANK, a corporation organized under the laws of the State of
California located in Quincy, California (the "Employer"), and WILLIAM E.
ELLIOTT (the "Executive"). This Agreement shall append the Split Dollar
Endorsement entered into on even date herewith, or as subsequently amended, by
and between the aforementioned parties.

                                  INTRODUCTION

To encourage the Executive to remain an employee of the Employer, the Employer
is willing to divide the death proceeds of a life insurance policy on the
Executive's life. The Employer will pay life insurance premiums from its general
assets.

                                    ARTICLE 1

                               GENERAL DEFINITIONS

The following terms shall have the meanings specified:

1.1 "Insurer" means Mutual Group Life Insurance Company.

1.2 "Policy" means insurance policy no. 545023 issued by the Insurer.

1.3 "Insured" means the Executive.

1.4 "Normal Retirement Age" means the Executive's 65th birthday.

1.5 "Termination of Employment" means the Executive ceasing to be employed by
the Employer for any reason whatsoever, other than by reason of an approved
leave of absence. For purposes of this Agreement, if there is a dispute over the
employment status of the Executive or the date of the Executive's Termination of
Employment, the Employer shall have the sole and absolute right to determine the
termination date.

                                    ARTICLE 2
                           POLICY OWNERSHIP/INTERESTS

2.1 Employer Ownership. The Employer is the sole owner of the Policy and shall
have the right to exercise all incidents of ownership. The Employer shall be the
beneficiary of the death proceeds remaining after the Executive's interest has
been paid pursuant to Article 2.2 below.
<PAGE>

2.2 Executive's Interest. The Executive shall have the right to designate the
beneficiary of death proceeds of the Policy in the amount of $243,977. The
Executive shall also have the right to elect and change settlement options that
may be permitted. However, the Executive, the Executive's transferee or the
Executive's beneficiary shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in this section 2.2 if
the Executive ceases to be employed by the Employer for any reason whatsoever
prior to Normal Retirement Age (other than by reason of a leave of absence which
is approved by the Employer) and has received or had the opportunity to receive
any benefit under the Executive Salary Continuation Agreement dated October 13,
1993, and a first Amendment thereto dated September 29, 1995, and a Second
Amendment of even date herewith, between the Employer and the Executive
(collectively the "Salary Continuation Agreement").

2.3 Option to Purchase. The Employer shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
the Executive or the Executive's transferee the option to purchase the Policy
for a period of 60 days from written notice of such intention. The purchase
price shall be an amount equal to the cash surrender value of the Policy. This
provision shall not impair the right of the Employer to terminate this
Agreement.

                                   ARTICLE 3
                                    PREMIUMS

3.1 Premium Payment. The Employer shall pay any premiums due on the Policy.

3.2 Imputed Income. The Employer shall impute income to the Executive in an
amount equal to the current term rate for the Executive's age multiplied by the
aggregate death benefit payable to the Executive's beneficiary. The "current
term rate" is the minimum amount required to be imputed under Revenue Rulings
64-328 and 66-110, or any subsequent applicable authority.

3.3 Cash Payment. The Employer shall annually pay to the Executive an amount
necessary to pay the federal and state income taxes attributable to the imputed
income and to the additional cash payments under this section. In calculating
the cash payments due from the Employer, the Employer shall use the Executive's
actual marginal income tax bracket for the calendar year immediately preceding
the payment to the Executive. In the event the Executive retires prior to the
Normal Retirement Age or ceases to be employed by the Employer prior to such
age, the cash payments shall cease as of the date of such occurrence.

                                   ARTICLE 4
                                   ASSIGNMENT

The Executive may assign without consideration all interests in the Policy and
in this Agreement to any person, entity or trust. In the event the Executive
transfers all of the Executive's interest in the Policy, then all of the
Executive's interest in the Policy and in the Agreement shall be vested in the
Executive's transferee, who shall be substituted as a party hereunder and the
Executive shall have no further interest in the Policy or in this Agreement.

                                   ARTICLE 5
                                    INSURER

The Insurer shall be bound only by the terms of the Policy. Any payments the
Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and

<PAGE>

demands of all entities or persons. The Insurer shall not be bound by or be
deemed to have notice of the provisions of this Agreement.

                                   ARTICLE 6
                                CLAIMS PROCEDURE

6.1 Claims Procedure. The Employer shall notify any person or entity that makes
a claim under this Agreement (the "Claimant") in writing, within 90 days of
Claimant's written application for benefits, of his or her eligibility or
ineligibility for benefits under this Agreement. If the Employer determines that
the Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of this Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or her claim, and a description of why it is needed, and (4) an explanation of
this Agreement's claims review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed. If the
Employer determines that there are special circumstances requiring additional
time to make a decision, the Employer shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional 90 days.

6.2 Review Procedure. If the Claimant is determined by the Employer not to be
eligible for benefits, or if the Claimant believes that he or she is entitled to
greater or different benefits, the Claimant shall have the opportunity to have
such claim reviewed by the Employer by filing a petition for review with the
Employer within 60 days after receipt of the notice issued by the Employer. Said
petition shall state the specific reasons which the Claimant believes entitle
him or her to benefits or to greater or different benefits. Within 60 days after
receipt by the Employer of the petition, the Employer shall afford the Claimant
(and counsel, if any) an opportunity to present his or her position to the
Employer verbally or in writing, and the Claimant (or counsel) shall have the
right to review the pertinent documents. The Employer shall notify the Claimant
of its decision in writing within the sixty-day period, stating specifically the
basis of its decision, written in a manner to be understood by the Claimant and
the specific provisions of this Agreement on which the decision is based. If,
because of the need for a hearing, the 60-day period is not sufficient, the
decision may be deferred for up to another 60-day period at the election of the
Employer, but notice of this deferral shall be given to the Claimant.

                                   ARTICLE 7
                           AMENDMENTS AND TERMINATION

This Agreement may be amended or terminated only by a written agreement signed
by the Employer and the Executive. However, unless otherwise agreed to by the
Employer and the Executive, this Agreement will automatically terminate if the
Executive ceases to be employed by the Employer for any reason whatsoever (other
than by reason of a leave of absence which is approved by the Employer) and has
received or had the opportunity to receive any benefit under the Salary
Continuation Agreement.

                                   ARTICLE 8
                                 MISCELLANEOUS

8.1 Binding Effect. This Agreement shall bind the Executive and the Employer and
their beneficiaries, survivors, executors, administrators and transferees, and
any Policy beneficiary.

8.2 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the
Employer, nor does it interfere with the Employer's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

<PAGE>
8.3 Applicable Law. The Agreement and all rights hereunder shall be governed by
and construed according to the laws of California, except to the extent
preempted by the laws of the United States of America.

8.4 Reorganization. The Employer shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Employer.

8.5 Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Split Dollar Agreement by one party to another
shall be in writing, shall be signed by the party giving or making the same, and
may be given either by delivering the same to such other party personally, or by
mailing the same, by United States certified mail, postage prepaid, to such
party, addressed to his or her last known address as shown on the records of the
Employer. The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

8.6 Entire Agreement. This Agreement constitutes the entire agreement between
the Employer and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

8.7 Administration. The Employer shall have powers which are necessary to
administer this Agreement, including but not limited to:

     (a) Interpreting the provisions of the Agreement;

     (b) Establishing and revising the method of accounting for the Agreement;

     (c) Maintaining a record of benefit payments; and

     (d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

8.8 Named Fiduciary. The Employer shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

EXECUTIVE:                                    EMPLOYER:

                                              PLUMAS BANK

/S/ WILLIAM E. ELLIOTT                        BY  /S/ JERRY V. KEHR
----------------------                           -------------------------
  WILLIAM E. ELLIOTT                          TITLE  CHAIRMAN OF BOARD

<PAGE>

                                   ADDENDUM C

                                   PLUMAS BANK

                             SPLIT DOLLAR AGREEMENT

THIS AGREEMENT is made and entered into this 23rd day of January, 2002, by and
between PLUMAS BANK, a corporation organized under the laws of the State of
California located in Quincy, California (the "Employer"), and WILLIAM E.
ELLIOTT (the "Executive"). This Agreement shall append the Split Dollar
Endorsement entered into on even date herewith, or as subsequently amended, by
and between the aforementioned parties.

                                  INTRODUCTION

To encourage the Executive to remain an employee of the Employer, the Employer
is willing to divide the death proceeds of a life insurance policy on the
Executive's life. The Employer will pay life insurance premiums from its general
assets.

                                   ARTICLE 1

                              GENERAL DEFINITIONS

The following terms shall have the meanings specified:

1.1 "Insurer" means Great-West Life & Annuity Insurance Company.

1.2 "Policy" means insurance policy no. 86000747 issued by the Insurer.

1.3 "Insured" means the Executive.

1.4 "Normal Retirement Age" means the Executive's 65th birthday.

1.5 "Termination of Employment" means the Executive ceasing to be employed by
the Employer for any reason whatsoever, other than by reason of an approved
leave of absence. For purposes of this Agreement, if there is a dispute over the
employment status of the Executive or the date of the Executive's Termination of
Employment, the Employer shall have the sole and absolute right to determine the
termination date.

                                   ARTICLE 2
                           POLICY OWNERSHIP/INTERESTS

2.1 Employer Ownership. The Employer is the sole owner of the Policy and shall
have the right to exercise all incidents of ownership. The Employer shall be the
beneficiary of the death proceeds remaining after the Executive's interest has
been paid pursuant to Article 2.2 below.
<PAGE>

2.2 Executive's Interest. The Executive shall have the right to designate the
beneficiary of death proceeds of the Policy in the amount of $512,347. The
Executive shall also have the right to elect and change settlement options that
may be permitted. However, the Executive, the Executive's transferee or the
Executive's beneficiary shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in this section 2.2 if
the Executive ceases to be employed by the Employer for any reason whatsoever
prior to Normal Retirement Age (other than by reason of a leave of absence which
is approved by the Employer) and has received or had the opportunity to receive
any benefit under the Executive Salary Continuation Agreement dated October 13,
1993, and a first Amendment thereto dated September 29, 1995, and a Second
Amendment of even date herewith, between the Employer and the Executive
(collectively the "Salary Continuation Agreement").

2.3 Option to Purchase. The Employer shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
the Executive or the Executive's transferee the option to purchase the Policy
for a period of 60 days from written notice of such intention. The purchase
price shall be an amount equal to the cash surrender value of the Policy. This
provision shall not impair the right of the Employer to terminate this
Agreement.

                                   ARTICLE 3
                                    PREMIUMS

3.1 Premium Payment. The Employer shall pay any premiums due on the Policy.

3.2 Imputed Income. The Employer shall impute income to the Executive in an
amount equal to the current term rate for the Executive's age multiplied by the
aggregate death benefit payable to the Executive's beneficiary. The "current
term rate" is the minimum amount required to be imputed under Revenue Rulings
64-328 and 66-110, or any subsequent applicable authority.

3.3 Cash Payment. The Employer shall annually pay to the Executive an amount
necessary to pay the federal and state income taxes attributable to the imputed
income and to the additional cash payments under this section. In calculating
the cash payments due from the Employer, the Employer shall use the Executive's
actual marginal income tax bracket for the calendar year immediately preceding
the payment to the Executive. In the event the Executive retires prior to the
Normal Retirement Age or ceases to be employed by the Employer prior to such
age, the cash payments shall cease as of the date of such occurrence.

                                   ARTICLE 4
                                   ASSIGNMENT

The Executive may assign without consideration all interests in the Policy and
in this Agreement to any person, entity or trust. In the event the Executive
transfers all of the Executive's interest in the Policy, then all of the
Executive's interest in the Policy and in the Agreement shall be vested in the
Executive's transferee, who shall be substituted as a party hereunder and the
Executive shall have no further interest in the Policy or in this Agreement.

                                   ARTICLE 5
                                    INSURER

The Insurer shall be bound only by the terms of the Policy. Any payments the
Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and

<PAGE>

demands of all entities or persons. The Insurer shall not be bound by or be
deemed to have notice of the provisions of this Agreement.

                                   ARTICLE 6
                                CLAIMS PROCEDURE

6.1 Claims Procedure. The Employer shall notify any person or entity that makes
a claim under this Agreement (the "Claimant") in writing, within 90 days of
Claimant's written application for benefits, of his or her eligibility or
ineligibility for benefits under this Agreement. If the Employer determines that
the Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of this Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or her claim, and a description of why it is needed, and (4) an explanation of
this Agreement's claims review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed. If the
Employer determines that there are special circumstances requiring additional
time to make a decision, the Employer shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional 90 days.

6.2 Review Procedure. If the Claimant is determined by the Employer not to be
eligible for benefits, or if the Claimant believes that he or she is entitled to
greater or different benefits, the Claimant shall have the opportunity to have
such claim reviewed by the Employer by filing a petition for review with the
Employer within 60 days after receipt of the notice issued by the Employer. Said
petition shall state the specific reasons which the Claimant believes entitle
him or her to benefits or to greater or different benefits. Within 60 days after
receipt by the Employer of the petition, the Employer shall afford the Claimant
(and counsel, if any) an opportunity to present his or her position to the
Employer verbally or in writing, and the Claimant (or counsel) shall have the
right to review the pertinent documents. The Employer shall notify the Claimant
of its decision in writing within the sixty-day period, stating specifically the
basis of its decision, written in a manner to be understood by the Claimant and
the specific provisions of this Agreement on which the decision is based. If,
because of the need for a hearing, the 60-day period is not sufficient, the
decision may be deferred for up to another 60-day period at the election of the
Employer, but notice of this deferral shall be given to the Claimant.

                                   ARTICLE 7
                           AMENDMENTS AND TERMINATION

This Agreement may be amended or terminated only by a written agreement signed
by the Employer and the Executive. However, unless otherwise agreed to by the
Employer and the Executive, this Agreement will automatically terminate if the
Executive ceases to be employed by the Employer for any reason whatsoever (other
than by reason of a leave of absence which is approved by the Employer) and has
received or had the opportunity to receive any benefit under the Salary
Continuation Agreement.

                                   ARTICLE 8
                                 MISCELLANEOUS

8.1 Binding Effect. This Agreement shall bind the Executive and the Employer and
their beneficiaries, survivors, executors, administrators and transferees, and
any Policy beneficiary.

8.2 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the
Employer, nor does it interfere with the Employer's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

<PAGE>

8.3 Applicable Law. The Agreement and all rights hereunder shall be governed by
and construed according to the laws of California, except to the extent
preempted by the laws of the United States of America.

8.4 Reorganization. The Employer shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Employer.

8.5 Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Split Dollar Agreement by one party to another
shall be in writing, shall be signed by the party giving or making the same, and
may be given either by delivering the same to such other party personally, or by
mailing the same, by United States certified mail, postage prepaid, to such
party, addressed to his or her last known address as shown on the records of the
Employer. The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

8.6 Entire Agreement. This Agreement constitutes the entire agreement between
the Employer and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

8.7 Administration. The Employer shall have powers which are necessary to
administer this Agreement, including but not limited to:

     (a) Interpreting the provisions of the Agreement;

     (b) Establishing and revising the method of accounting for the Agreement;

     (c) Maintaining a record of benefit payments; and

     (d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

8.8 Named Fiduciary. The Employer shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

EXECUTIVE:                                    EMPLOYER:

                                              PLUMAS BANK

/S/ WILLIAM E. ELLIOTT                        BY  /S/ JERRY V. KEHR
----------------------                            ---------------------------
  WILLIAM E. ELLIOTT                          TITLE  CHAIRMAN OF BOARD

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