Document:

EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made and entered into as of May __, 1996 by and
between AMERICAN RIVER BANK, a California banking corporation ("Employer"), and
William L. Young ("Employee").

                                    RECITALS

         WHEREAS, Employer and Employee desire to enter into an agreement for
the purposes of engaging the services of Employee by reason of his experience,
training and ability in the commercial banking industry;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Employer and Employee agree as follows:

                                    AGREEMENT

         1.  TERM OF EMPLOYMENT. Employer employs Employee and Employee hereby
accepts employment with Employer, upon the terms and conditions hereinafter set
forth, for a period of two (2) years from the date hereof. Upon the occurrence
of the second annual anniversary date of this Agreement, the term of this
Agreement shall be automatically extended for an additional two (2) year term,
and on each anniversary date thereafter, the term of this Agreement shall be
deemed extended for an additional one (1) year term upon the affirmative vote of
a majority of the Board of Directors of Employer, subject to the termination
provisions of paragraph 16.

         2.  DUTIES AND OBLIGATIONS OF EMPLOYEE. Employee shall serve as the
President and Chief Executive Officer of Employer and shall perform the
customary duties of such office in the commercial banking industry as may from
time to time be reasonably requested of him by the Board of Directors of
Employer in addition to the following:

                  (a) Acting as a member of the Board of Directors and all other
board committees to which Employee may be appointed or elected;

                  (b) Participating in community affairs which are beneficial to
the Employer;

                  (c) Maintaining a good relationship with Employer's Board of
Directors and shareholders;

                  (d) Maintaining a good relationship with regulatory agencies
and governmental authorities having jurisdiction over Employer;

                  (e) Providing leadership in planning and implementing the
conduct of business and the affairs of the Employer; and
<PAGE>

                  (f) Hiring and firing of all employees, except Executive Vice
Presidents, subject at all times to the policies and directives set by the
Employer's Board of Directors.

         3.  DEVOTION TO EMPLOYER'S BUSINESS.

                  (a) Employee shall devote his full business time, ability, and
attention to the business of Employer during the term of this Agreement and
shall not during the term of this Agreement, without the prior written consent
of Employer's Board of Directors, engage in any other business activities,
duties, or pursuits whatsoever, or directly or indirectly render any services of
a business, commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, which are in conflict with
Employer's business. However, the expenditure of reasonable amounts of time for
educational, charitable, or professional activities shall not be deemed a breach
of this Agreement if those activities do not materially interfere with the
services required of Employee under this Agreement. Nothing in this Agreement
shall be interpreted to prohibit Employee from making passive personal
investments. However, Employee shall not directly or indirectly acquire, hold,
or retain any material interest in any business competing with or similar in
nature to the business of Employer.

                  (b) Employee agrees to conduct himself at all times with due
regard to public conventions and morals. Employee further agrees not to do or
commit any act that will reasonably tend to shock or offend the community, or to
prejudice Employer or the banking industry in general.

                  (c) Employee hereby represents and agrees that the services to
be performed under the terms of this Agreement are of a special, unique,
unusual, extraordinary, and intellectual character that gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law. Employee therefore expressly agrees that Employer,
in addition to any other rights or remedies that Employer may possess, shall be
entitled to injunctive and other equitable relief to prevent or remedy a breach
of this Agreement by Employee.

         4.  NONCOMPETITION BY EMPLOYEE. Employee shall not, during the term of
this Agreement, directly or indirectly, either as an employee, employer,
consultant, agent, principal, stockholder, officer, director, or in any other
individual or representative capacity, engage or participate in any competitive
banking or financial services business.

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<PAGE>

         5.  INDEMNIFICATION FOR NEGLIGENCE OR MISCONDUCT. Employee shall
indemnify and hold Employer harmless from all liability for loss, damage, or
injury to persons or property resulting from the gross negligence or intentional
misconduct of the Employee.

         6.  DISCLOSURE OF INFORMATION. Employee shall not, either before or
after termination of this Agreement, disclose to anyone any information relating
to Employer or any financial information, trade or business secrets, customer
lists, computer software or other information not otherwise publicly available
concerning the business or operations of Employer. Employee recognizes and
acknowledges that any financial information concerning any of Employer's
customers, as it may exist from time to time, is strictly confidential and is a
valuable, special and unique asset of Employer's business. Employee shall not,
either before or after termination of this Agreement, disclose to anyone said
financial information or any part thereof, for any reason or purpose whatsoever.
This paragraph 6 shall survive the expiration or termination of this Agreement.

         7.  WRITTEN OR PRINTED MATERIAL. All written or printed materials,
notebooks and records used by Employee in performing duties for Employer, other
than Employee's personal notes and diaries, are and shall remain the sole
property of Employer. Upon termination of employment, Employee shall promptly
return all such material (including all copies) to Employer. This paragraph 7
shall survive expiration or termination of this Agreement.

         8.  SURETY BOND. Employee agrees that he will furnish all information
and take any other steps necessary from time to time to enable Employer to
obtain or maintain a fidelity bond conditional on the rendering of a true
account by Employee of all monies, goods, or other property which may come into
the custody, charge, or possession of Employee during the term of his
employment. The surety company issuing the bond and the amount of the bond must
be acceptable to Employer. All premiums on the bond shall be paid by Employer.
If Employee cannot qualify for a surety bond at any time during the term of this
Agreement, Employer shall have the option to terminate this Agreement
immediately without any obligation to pay severance benefits to Employee in
accordance with paragraph 16 (d) of this Agreement.

         9.  BASE SALARY. In consideration for the services to be performed
hereunder, Employee shall receive a salary at the rate of One Hundred Fifteen
Thousand Dollars ($115,000) per annum, payable in installments during the term
of this Agreement of approximately Four Thousand Seven Hundred Ninety-One
Dollars and Sixty-Six Cents ($4,791.66) on the first and fifteenth days of each
month, subject to applicable adjustments for withholding taxes and prorations
for any partial employment period. Employee shall receive such annual
adjustments in salary, if any, as may be determined by Employer's Board of
Directors, in its sole discretion, resulting from the

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<PAGE>

Board of Directors annual review of Employee's compensation each year during the
term of this Agreement.

         10. SALARY CONTINUATION DURING DISABILITY. If Employee for any reason
(except as expressly provided below) becomes temporarily or permanently disabled
so that he is unable to perform the duties under this Agreement, Employer agrees
to pay Employee the base salary otherwise payable to Employee pursuant to
paragraph 9 of this Agreement, reduced by the amounts received by Employee from
state disability insurance, or worker's compensation or other similar insurance
benefits through policies provided by Employer, for a period of six (6) months
from the date of disability.

         For purposes of this paragraph 10, "disability" shall be defined as
provided in Employer's disability insurance program. Notwithstanding anything
herein to the contrary, Employer shall have no obligation to make payments for a
disability resulting from the deliberate, intentional actions of Employee, such
as, but not limited to, attempted suicide or chemical dependence of Employee.

         11. INCENTIVE COMPENSATION. Employee shall be entitled to participate
in Employer's Incentive Compensation Plan (the "Plan"), a copy of which is
attached hereto as Exhibit A and incorporated herein by reference, and receive
incentive compensation in accordance with the Plan, subject to the right of the
Board of Directors in its sole discretion to modify the terms and provisions of
the Plan each year during the term of this Agreement in connection with its
review of Employee's performance and Employer's results of operations. Under no
circumstance shall a right to receive incentive compensation exist in favor of
or accrue to or for the benefit of Employee prior to actual receipt of a
distribution, if any, under the Plan.

         12. STOCK OPTIONS. Employer has previously granted stock options to
Employee evidenced by one or more stock option agreements attached hereto as
Exhibit B and incorporated herein by this reference. Employer may, but is not
obligated to, grant additional stock options to Employee in the future which
grants, if any, shall be within the sole discretion of the Board of Directors of
Employer and subject to the terms and provisions of Employer's stock option plan
pursuant to which such grants are effected. Any such grants shall be evidenced
by a stock option agreement entered into between Employer and Employee pursuant
to such stock option plan and a copy of each such stock option agreement shall
be attached to this Agreement as an exhibit. Notwithstanding any provision of
any such stock option plan or any such stock option agreement to the contrary,
no rights of employment shall be conferred upon Employee or result from any such
stock option plan or any stock option agreement entered into between Employer
and Employee. Any employment rights and corresponding duties of Employee
pursuant to his employment by Employer shall be limited to

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<PAGE>

and interpreted solely in accordance with the terms and provisions of this
Agreement.

         13. OTHER BENEFITS. Employee shall be entitled to those employee
benefits adopted by Employer for all employees of Employer, subject to
applicable qualification requirements and regulatory approval requirements, if
any. Employee shall be further entitled to the following additional benefits
which shall supplement or replace, to the extent duplicative of any part or all
of the general employee benefits, the benefits otherwise provided to Employee:

                  (a) VACATION. Employee shall be entitled to four (4) weeks
annual vacation leave at his then existing rate of base salary each year during
the term of this Agreement. Employee may be absent from his employment for
vacation as long as such leave is reasonable and does not jeopardize his
responsibilities and duties specified in this Agreement. The length of vacation
should not exceed two (2) weeks without the approval of Employer's executive
committee of the Board of Directors. Employee shall take at least two (2)
consecutive weeks of vacation as required by the California Superintendent of
Banks. Accrual of vacation time, if any, shall be determined in accordance with
Employer's personnel policies.

                  (b) AUTOMOBILE ALLOWANCE AND INSURANCE. Employer shall acquire
or otherwise make available to Employee for his business and incidental personal
use an automobile, suitable to his position, and (i) maintain it in good
condition and repair; and (ii) provide public liability insurance and property
damage insurance policies with insurer(s) acceptable to Employer and with
coverages in such amounts as may be acceptable to Employer from time to time.

         14. ANNUAL PHYSICAL EXAMINATION. Employer shall pay or reimburse
Employee for the cost of an annual physical examination conducted by a
California licensed physician selected by Employee and reasonably acceptable to
Employer.

         15. BUSINESS EXPENSES. Employee shall be reimbursed for all ordinary
and necessary expenses incurred by Employee in connection with his employment.
Employee shall also be reimbursed for reasonable expenses incurred in activities
associated with promoting the business of Employer, including expenses for
entertainment, travel, conventions, educational programs and similar items, and
with the prior approval of Employer's Executive Committee, expenses for club
memberships. Employer will pay for or will reimburse Employee for such expenses
upon presentation by Employee from time to time of receipts or other appropriate
evidence of such expenditures.

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         16. TERMINATION OF AGREEMENT.

                  (a) AUTOMATIC TERMINATION. This Agreement shall terminate
automatically without further act of the parties and immediately upon the
occurrence of any one of the following events, subject to either party's right,
without any obligation whatsoever, to waive an event reasonably susceptible of
waiver, and the obligation of Employer to pay the amounts which would otherwise
be payable to Employee under this Agreement through the end of the month in
which the event occurs, except that only in the event of termination based upon
subparagraphs (1), (4) or (12, to the extent of Employer's breach) below shall
Employee be entitled to receive severance payments based upon automatic
termination pursuant to paragraph 16 (d) of this Agreement:

                      (1)  The occurrence of circumstances that make it
                           impossible or impractical for Employer to conduct or
                           continue its business.

                      (2)  The death of Employee.

                      (3)  The loss by Employee of legal capacity.

                      (4)  The loss by Employer of legal capacity to contract.

                      (5)  The willful, intentional and material breach of duty
                           by Employee in the course of his employment.

                      (6)  The habitual and continued neglect by Employee of his
                           employment duties and obligations under this
                           Agreement.

                      (7)  The continuous mental or physical incapacity of
                           Employee, subject to Employee's rights under
                           paragraph 10 of this Agreement.

                      (8)  Employee's willful and intentional violation of any
                           State of California or federal banking laws, or of
                           the Bylaws, rules, policies or resolutions of
                           Employer or its parent holding company, or of the
                           rules or regulations of the California Superintendent
                           of Banks or the Federal Deposit Insurance
                           Corporation, or other regulatory agency or
                           governmental authority having jurisdiction over
                           Employer or its parent holding company.

                      (9)  The determination by a state or federal banking
                           agency or governmental authority having jurisdiction
                           over Employer that

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<PAGE>

                           Employee is not suitable to act in the capacity for
                           which he is employed by Employer.

                      (10) Employee is convicted of any felony or a crime
                           involving moral turpitude or commits a fraudulent or
                           dishonest act.

                      (11) Employee discloses without authority any secret or
                           confidential information concerning Employer or takes
                           any action which Employer's Board of Directors
                           determines, in its sole discretion and subject to
                           good faith, fair dealing and reasonableness,
                           constitutes unfair competition with or induces any
                           customer to breach any contract with Employer.

                      (12) Either party breaches the terms or provisions of this
                           Agreement.

                  (b) TERMINATION BY EMPLOYER. Employer may, at its election and
in its sole discretion, terminate this Agreement for any reason, or for no
reason, by giving not less than thirty (30) days' prior written notice of
termination to Employee, without prejudice to any other remedy to which Employer
may be entitled either at law, in equity or under this Agreement. Upon such
termination, Employee shall be entitled to receive any employment benefits which
shall have accrued prior to such termination and the severance pay specified in
paragraph 16 (d) below.

                  (c) TERMINATION BY EMPLOYEE. This Agreement may be terminated
by Employee for any reason, or no reason, by giving not less than thirty (30)
days' prior written notice of termination to Employer. Upon such termination,
all rights and obligations accruing to Employee under this Agreement shall
cease, except that such termination shall not prejudice Employee's rights
regarding employment benefits which shall have accrued prior to such termination
and any other remedy which Employee may have at law, in equity or under this
Agreement, which remedy accrued prior to such termination.

                  (d) SEVERANCE PAY - TERMINATION BY EMPLOYER. In the event of
termination by Employer pursuant to paragraph 16 (b) or automatic termination
based upon paragraph 16 (a) (1), (4) or (12, to the extent of Employer's breach)
of this Agreement, Employee shall be entitled to receive severance pay at
Employee's rate of salary immediately preceding such termination equal to six
(6) months' salary (in addition to incentive compensation or bonus payments due
Employee, if any), payable in lump sum. Notwithstanding the foregoing, in the
event of a "change in control" as defined in subparagraph (e) below, Employee
shall not be entitled to severance pay pursuant to this subparagraph (d) and any
rights of Employee to severance pay shall be limited to such

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<PAGE>

rights as are specified in subparagraph (e) below. Employee acknowledges and
agrees that severance pay pursuant to this subparagraph (d) is in lieu of all
damages, payments and liabilities on account of the early termination of this
Agreement and the sole and exclusive remedy for Employee terminated at the will
of Employer pursuant to paragraph 16(b) or pursuant to certain provisions of
paragraph 16 (a) described herein.

                  (e) SEVERANCE PAY - CHANGE IN CONTROL. In the event of a
"change in control" as defined herein and within a period of two (2) years
following consummation of such a change in control (i) Employee's employment is
terminated; or (ii) without Employee's consent there occurs (A) any adverse
change in the nature and scope of Employee's position, responsibilities, duties,
salary, benefits or location of employment, or (B) any event which reasonably
constitutes a demotion, significant diminution or constructive termination (by
resignation or otherwise) of Employee's employment, then Employee shall be
entitled to receive severance pay in addition to any bonus or incentive
compensation payments due Employee. Any such severance pay due Employee shall be
in an amount equal to one and one-half (1 1/2) times Employee's average annual
compensation for the five (5) years immediately preceding the change in control.
Employee's average annual compensation shall be the average of the aggregate
compensation paid by Employer to Employee which was includable in Employee's
gross income for federal income tax purposes for the five (5) tax years ending
immediately prior to the change in control divided by the number five (5).

                  If all or any portion of the amounts payable to Employee
pursuant to this paragraph 16 (e) alone or together with other payments which
Employee has the right to receive from Employer, constitute "excess parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), that are subject to the excise tax imposed by
Section 4999 of the Code (or similar tax and/or assessment), such amounts
payable hereunder shall be reduced to the extent necessary, after first applying
any similar reduction in payments to be received from any other plan or program
sponsored by Employer from which Employee has a right to receive payments
subject to Sections 280G and 4999 of the Code, including without limitation any
Salary Continuation Agreement made between Employer and Employee, so as to cause
a reduction of any excise tax pursuant to Section 4999 of the Code to equal
"zero".

                  Any such severance shall be payable in lump sum. Such
severance payment, if any, shall be in lieu of all damages, payments and
liabilities on account of the events described above for which such severance
payment, if any, may be due Employee and any severance payment rights of
Employee under paragraph 16 (d) of this Agreement. This subparagraph (e) shall
be binding upon and

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<PAGE>

inure to the benefit of the parties and any successors or assigns or employer or
any "person" as defined herein.

                  Notwithstanding the foregoing, Employee shall not be entitled
to receive nor shall Employer, its successors, assigns or any "person" as
defined herein be obligated to pay severance payments pursuant to this
subparagraph (e) in the event of an occurrence described in paragraph 16,
subparagraphs (5), (6), (8), (10), (11) or (12, to the extent of an Employee
breach), or in the event of a determination pursuant to subparagraph (9)
thereof, or in the event Employee terminates employment in accordance with
paragraph 16 (c) and the termination is not a result of or based upon the
occurrence of any event described in paragraph 16 (e)(ii).

                  A "change in control" of Employer for purposes of this
Agreement and subparagraph (e) shall mean the occurrence of any of the following
events with respect to Employer (with the term "Employer" being defined for such
a change in control to include any parent holding company): (i) a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or in response to any other form
or report to the regulatory agencies or governmental authorities having
jurisdiction over Employer or any stock exchange on which Employer's shares are
listed which requires the reporting of a change in control; (ii) any merger,
consolidation or reorganization of Employer in which Employer does not survive;
(iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
(in one transaction or a series of transactions) of any assets of Employer
having an aggregate fair market value of more than fifty percent (50%) of the
total value of the assets of Employer, reflected in the most recent balance
sheet of Employer; (iv) a transaction whereby any "person" (as such term is used
in the Exchange Act or any individual, corporation, partnership, trust or any
other entity) is or becomes the beneficial owner, directly or indirectly, of
securities of Employer representing more than 50% of the combined voting power
of Employer's then outstanding securities; (v) if in any one year period,
individuals who at the beginning of such period constitute the Board of
Directors of Employer cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by Employer's
shareholders, of each new director is approved by a vote of a least
three-quarters of the directors then still in office who were directors at the
beginning of the period; (iv) a majority of the members of the Board of
Directors of Employer in office prior to the happening of any event determines
in its sole discretion that as a result of such event there has been a change in
control.

         17. NOTICES. Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by U.S.
mail, registered or certified, postage

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<PAGE>

prepaid with return receipt requested. Mailed notices shall be addressed to the
parties at the addresses listed as follows:

         Employer:         Principal place of business

         Employee:         Principal place of business as shown in Employer's
                           Personnel  Records and  Employee's personal file.

Each party may change the address for receipt of notices by written notice in
accordance with this paragraph 17. Notices delivered personally shall be deemed
communicated as of the date of actual receipt; mailed notices shall be deemed
communicated as of three (3) days after the date of mailing.

         18. ARBITRATION. 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 first by resort to
non-binding mediation with such mediation service or mediator as the parties may
mutually agree upon. If the parties cannot agree upon such mediation service or
mediator and submit the matter to mediation within thirty (30) days of notice of
demand to mediate given by a party to the other party, or if the matter is not
resolved in a manner satisfactory to the parties within sixty (60) days of
submission of the matter to the mediation service or mediator, then in that
event, the matter 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 accordance with the
rules and procedures of JAMS then in effect. In the event JAMS is unable or
unwilling to conduct such arbitration, 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 such
binding arbitration in accordance with the rules and procedures of the AAA then
in effect. 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. 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

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<PAGE>

shall be conducted in Sacramento, California, unless otherwise agreed to by the
parties.

         19. ATTORNEYS' FEES AND COSTS. In the event of litigation, arbitration
or any other action or proceeding between the parties to interpret or enforce
this Agreement or any part thereof or otherwise arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover its costs
related to any such action or proceeding and its reasonable fees of attorneys,
accountants and expert witnesses incurred by such party in connection with any
such action or proceeding. The prevailing party shall be deemed to be the party
which obtains substantially the relief sought by final resolution, compromise or
settlement, or as may otherwise be determined by order of a court of competent
jurisdiction in the event of litigation, an award or decision of one or more
arbitrators in the event of arbitration, or a decision of a comparable official
in the event of any other action or proceeding. Every obligation to indemnify
under this Agreement includes the obligation to pay reasonable fees of
attorneys, accountants and expert witnesses incurred by the indemnified party in
connection with matters subject to indemnification.

         20. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to the employment of Employee by
Employer. 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.

         21. MODIFICATIONS. Any modification of this Agreement will be effective
only if it is in writing and signed by a party or its authorized representative.

         22. WAIVER. The failure of either party to insist on strict compliance
with any of the terms, provisions, covenants, or conditions of this Agreement by
the other party shall not be deemed a waiver of any term, provision, covenant,
or condition, individually or in the aggregate, unless such waiver is in
writing, nor shall any waiver or relinquishment of any right or power at any one
time or times be deemed a waiver or relinquishment of that right or power for
all or any other times.

         23. PARTIAL INVALIDITY. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.

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<PAGE>

         24. INTERPRETATION. This Agreement shall be construed without regard to
the party responsible for the preparation of the Agreement and shall be deemed
to have been prepared jointly by the parties. Any ambiguity or uncertainty
existing in this Agreement shall not be interpreted against either party, but
according to the application of other rules of contract interpretation, if an
ambiguity or uncertainty exists.

         25. GOVERNING LAW AND VENUE. The laws of the State of California, other
than those laws denominated choice of law rules, shall govern the validity,
construction and effect of this Agreement. Any action which in any way involves
the rights, duties and obligations of the parties hereunder shall be brought in
the courts of the State of California and venue for any action or proceeding
shall be in Sacramento County or in the United States District Court for the
Eastern District of California, and the parties hereby submit to the personal
jurisdiction of said courts.

         26. PAYMENTS DUE DECEASED EMPLOYEE. If Employee dies prior to the
expiration of the term of his employment, any payments that may be due Employee
from Employer under this Agreement as of the date of death shall be paid to
Employee's executors, administrators, heirs, personal representatives,
successors, or assigns.

         IN WITNESS WHEREOF, the parties have executed this Agreement consisting
of twelve pages in the City of Sacramento, County of Sacramento, State of
California as of the date set forth above.

EMPLOYER:                                EMPLOYEE:

AMERICAN RIVER BANK

By: /s/ SAM J. GALLINA                   /s/ WILLIAM L. YOUNG
    --------------------------           ------------------------------
    Sam J. Gallina                       William  L. Young
    Chairman of the Board

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                         [ADD NOTARIAL ACKNOWLEDGEMENT]

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<PAGE>

AMERICAN RIVER BANK

                        AMENDMENT TO EMPLOYMENT AGREEMENT
                                     7/18/96

Pursuant to the Board of Directors meeting held July 17, 1996, attached is the
Incentive Compensation Plan for Executive Management which has been updated per
decisions made at the stated Board of Directors meeting.

This constitutes the first amendment to the Employment Agreement made between
American River Bank and William L. Young, duly executed on May 29, 1996.

This document and the Incentive Compensation Plan for Executive Management
hereto attached supersedes the plan outlined on page 4, paragraph 11 of the
Employment Agreement which is entitled "Incentive Compensation".

Furthermore, the last sentence in paragraph 11 which reads as follows: "Under no
circumstance shall a right to receive incentive compensation exist in favor of
or accrue to or for the benefit of Employee prior to actual receipt of a
distribution, if any, under the Plan" shall be superseded by the Payout
conditions stipulated in the Incentive Compensation Plan for Executive
Management hereto attached.

EMPLOYER:                                   EMPLOYEE:

AMERICAN RIVER BANK

By /s/ SAM J. GALLINA                    /s/ WILLIAM L. YOUNG
   ---------------------------           -------------------------------
   Sam J. Gallina                        William L. Young
   Chairman of the Board

                                      -14-AMERICAN RIVER BANK
7/96

                         INCENTIVE COMPENSATION PLAN FOR
                              EXECUTIVE MANAGEMENT

PURPOSE

American River Bank ("Bank") is desirous of establishing an incentive
compensation plan to reward executive management for productivity and high
performance. The program is also a tool to assure that the bank will meet ROE
and ROA goals for the subject year and for future years.

WHO IS ELIGIBLE?

The program is available to two members of Executive Management. The composition
of the Executive Management grouping shall be determined by the Executive
Committee of the Board of Directors, with ratification by the entire Board of
Directors. At this present date, the Executive Management group consists of
William L. Young, President & C.E.O. of American River Bank and David T. Taber,
President & C.E.O. of American River Holdings.

HOW DOES THE PLAN WORK?

The program is an incentive compensation program that shares rewards between
shareholders and plan participants. Plan participants would not be rewarded with
additional compensation unless the bank achieves a minimum level of performance.
Under the program, no incentive compensation would be provided until the Bank
achieved twelve percent (12%) net shareholder return on beginning equity for
each year the program is in effect. The amounts shall be adjusted as net
shareholders' return increases. For net shareholder return in excess of twelve
percent (12%) of beginning equity, such excess would be divided as follows:

          Net Shareholder Return                        12% to 14%
                   Shareholders                         80.50%
                   Executive Management                 19.50%

          Net Shareholder Return                        14% to 16%
                   Shareholders                         77.25%
                   Executive Management                 22.75%

          Net Shareholders Return                       16% plus
                   Shareholders                         74.00%
                   Executive Management                 26.00%

For purposes of calculating additional compensation, the following definitions
apply:

         BEGINNING EQUITY - shareholders equity from audited financial
         statements as of December 31st of the year prior to the performance
         year in question, adjusted for unrealized gain or loss on securities.

<PAGE>
AMERICAN RIVER BANK
ICP - 7/96

         EQUITY RETURN - determined by adding net addition to beginning equity,
         plus cash dividends, minus additional capital stock sold or converted.
         Joint venture income or loss will not be included in calculation of
         pre-incentive income. Income will be imputed on average funds invested
         in a project at a rate equal to the overall yield of earning assets for
         the period.

The calculation of additional compensation will be based upon audited financial
statements as performed by the certified public accountants for the Bank.

ADDITIONAL CRITERIA

In addition to the Bank achieving net shareholder return of 12% on beginning
equity for the incentive compensation program to become effective, the following
additional criteria must be met for any additional compensation to be paid to
plan participants:

         LOAN QUALITY - Loan quality for the Bank must remain satisfactory, with
         loan delinquency on an average basis for the entire year to be less
         than 2.5% of average gross loans.

         LOAN LOSSES - Loan losses for the Bank for the subject year shall not
         exceed 0.80% of beginning loans for that year.

         NET INCOME - Net income before loan loss reserves and taxes as a
         percentage of average assets shall be in excess of 1.50%

         REGULATORY EXAMINATIONS - The Bank shall receive a CAMEL rating from
         the Federal Deposit Insurance Corporation of a "1" or "2" for the
         condition of the entire Bank and the same, or better, rating from the
         State Banking Department.

PAYOUT

To assure the continued performance of the Bank, a portion of the payout shall
be deferred. The payment of the additional compensation to plan participants is
as follows:

         o  60% payment within five days of receipt of audited financial
            statements.

         o  40% payment within five days of receipt of audited financial
            statements for the following year.

The Bank shall accrue for the additional compensation on a monthly basis.

PAYOUT CONDITIONS

The payout for the deferred portions in the second year is subject to the
following conditions:

         o  Attainment of twelve percent (12%) net shareholder return on
            beginning equity for the second year.

                                       2
<PAGE>
AMERICAN RIVER BANK
ICP - 7/96

         o        Maintenance of the additional criteria standards previously
                  specified for each of the subsequent years.

Failure to achieve these criteria will return the deferred portions of the
additional compensation to the Bank.

The payout of the deferred portion to individual plan participants in the
Executive Management grouping is conditioned upon the continued employment with
the Bank. If an individual plan participant in the Executive Management grouping
is terminated for cause or resigns voluntarily from the Bank, such individual
plan participant shall lose all interest in the deferred portion of the
additional compensation.

If such individual plan participant in the Executive Management grouping is
terminated without cause, such individual shall be entitled to the deferred
portion of the additional compensation subject to attainment of the additional
criteria and payout conditions previously described.

However, in the event of the sale of the Bank, or a merger where the Bank is not
the surviving entity, the deferred portions shall be paid immediately upon the
occurrence of such an event.

PARTICIPANTS' DISTRIBUTION

The distribution of the additional compensation within the Executive Management
grouping is subject to review by the Board of Directors of the Bank. This
distribution will be broken down as follows:

                                                      PERCENTAGE

              William L. Young                            50%
              David T. Taber                              50%

              Total                                      100%

This Incentive Compensation Plan has been approved by The Board of Directors at
their regular Board Meeting on July 17, 1996.

                                       3

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