Document:

AMERICAN RIVER BANK

                             DEFERRED FEE AGREEMENT

     THIS AGREEMENT is made as of April 1, 1998, by and between AMERICAN RIVER
BANK (the "Bank"), and ______________ (the "Director").

                                    RECITALS

     WHEREAS, to encourage the Director to remain a member of the Bank's Board
of Directors, the Bank desires to provide to the Director an opportunity to
defer fees and obtain certain benefits related thereto.

     NOW, THEREFORE, in consideration of the services to be rendered by the
Director to the Bank in the future and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties agree as
follows:

                                    AGREEMENT

ARTICLE 1.  DEFINITIONS.

     1.1 DEFINITIONS. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:

         1.1.1 CHANGE IN CONTROL. The term "Change in Control" shall mean (i)
when any "person", as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") (other than the
Bank, a subsidiary thereof or an employee benefit plan of the Bank, including
any trustee of such plan acting as trustee) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Bank representing fifty percent (50%) or more of the combined
voting power of the Bank's then outstanding securities, where such person's
beneficial ownership of the Bank's securities was not initiated by the Bank or
approved by the Bank's Board of Directors; or (ii) the occurrence of a
transaction requiring shareholder approval, and involving the sale of all or
substantially all of the assets of the Bank or the merger of the Bank with or
into another corporation, where such merger was not initiated by the Bank and in
which Bank is not the surviving entity; or (iii) a change in the composition of
the Board of Directors of the Bank, as a result of which fewer than a majority
of the directors are Incumbent Directors (which "Incumbent Directors" shall mean
directors who either (A) are directors of the Bank as of the date hereof, or (B)
are elected, or nominated for election, to the Board of Directors of the Bank
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination (but shall not include an individual
whose

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election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Bank)); or (iv) any
liquidation or dissolution of the Bank. As used in this subparagraph 1.1.1, the
term "Bank" shall include its parent holding company, American River Holdings.

         1.1.2 CODE. The term "Code" shall mean the Internal Revenue Code of
1986, as amended. References to a Code section shall be deemed to be to that
section as it now exists and to any successor provision.

         1.1.3 DISTRIBUTION DATE. The term "Distribution Date" means the earlier
of five (5) years after the date of this Agreement or upon the Director's
Termination of Service as defined below.

         1.1.4 DEFERRAL ACCOUNT. The term "Deferral Account" means the account
established by the Bank on its books to record the amount of fees deferred by
the Director and interest accrued thereon.

         1.1.5 DEFERRAL PERIOD. The term "Deferral Period" means the period of
time beginning with the date of this Agreement and ending with the earlier of
the Distribution Date or the Director's Termination of Service.

         1.1.6 BENEFIT PERIOD. The term "Benefit Period" means the period of
time beginning with the earlier of the Distribution Date or the Director's
Termination of Service and ending with payment in full of the Director's
Deferral Account balance.

         1.1.7 ELECTION FORM. The term "Election Form" means the Form attached
as Exhibit A.

         1.1.8 FEES. The term "Fees" means the total fees payable to the
Director.

         1.1.9 TERMINATION OF SERVICE. The term "Termination of Service" means
the Director's ceasing to be a member of the Bank's Board of Directors for any
reason whatsoever.

ARTICLE 2.  DEFERRAL ELECTION.

     2.1 INITIAL DEFERRAL ELECTION. The Director shall make an initial deferral
election under this Agreement by completion and delivery to the Bank of the
Election Form attached hereto as Exhibit A. The Election Form shall set forth
the amount of Fees to be deferred, the form of benefit payment and designation
of beneficiary. The Election Form shall be delivered to the Bank not later than
April 30, 1998 and effective to defer only those Fees earned for services
performed after April 30, 1998.

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<PAGE>

     2.2 DEFERRED ELECTION CHANGES.

         2.2.1 GENERALLY. The Director may modify the amount of Fees to be
deferred and/or form of benefit payment under Section 2.1 by filing a subsequent
signed Election Form with the Bank within twenty (20) days prior to the end of a
calendar year preceding the calendar year in which the Fees are to be deferred
and/or the change in benefit payment is to apply and in each case by obtaining
written approval of the Board of Directors of the Bank. Such modified deferrals
and/or form of benefit payment shall not be effective until the calendar year
following the year in which the subsequent Election Form is received by the
Bank.

         2.2.2 HARDSHIP. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Bank may reduce and/or cease future deferrals under this
Agreement.

ARTICLE 3.  DEFERRAL ACCOUNT.

     3.1 DEFERRAL ACCOUNT. The Bank shall establish a Deferral Account on its
books for the Director, and shall credit to the Deferral Account the following
amounts:

         3.1.1 DEFERRALS. The Fees deferred by the Director on the first day of
the month following the month in which the Fees were earned.

         3.1.2 INTEREST. On the last day of each calendar month during the
Deferral Period only, and immediately prior to the payment of any benefits, the
Deferral Account will be credited with interest earned during that month.
Interest shall accrue at the rate equal to four percent (4%) greater than the
yield on a five (5) year United States Treasury Bond per annum through December
31, 1998, and, thereafter, at the same rate per annum until changed by
resolution of the Bank's Board of Directors, in its sole discretion. Interest
earned will be calculated by taking the applicable rate of interest multiplied
by the principal balance on the last day of each month, divided by 365 days,
multiplied by the number of days in the month. At the end of each calendar year,
the interest earned during the year will be posted to the account and only then
become principal and entitled to future interest accrual.

     3.2 STATEMENT OF ACCOUNTS. The Bank shall provide to the Director as soon
as practicable following the end of each year, a statement setting forth the
Deferral Account balance.

     3.3 UNSECURED CREDITOR STATUS. The Deferral Account is solely an accounting
device for measuring amounts to be paid under this Agreement. The Deferral
Account is not a trust fund of any kind and the director has no rights greater
than those of a general unsecured creditor of the Bank for purposes of the
payment of benefits under this Agreement. The

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Director's rights are not subject in any manner to the anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
the Director or the Director's creditors or beneficiaries.

ARTICLE 4.  DEFERRAL BENEFITS.

     4.1 TERMINATION OF SERVICE BENEFIT. Upon the earlier of the Director's
Termination of Service at the Normal Termination Date or the Distribution Date,
the Bank shall pay to the Director the balance in the Deferral Account in the
form elected by the Director on the Election Form.

     4.2 CHANGE IN CONTROL BENEFIT. Upon termination of the Director's service
in connection with and either prior to or following a Change in Control, the
Bank shall pay to the Director the balance in the Deferral Account within thirty
(30) days after such occurrence.

     4.3 HARDSHIP DISTRIBUTION. Upon the Bank's determination (following
petition by the Director) that the Director has suffered an unforeseeable
financial emergency as described in Section 2.2.2., the Bank shall distribute to
the Director all or a portion of the Deferral Account balance as determined by
the Bank, but in no event shall the distribution be greater than is necessary to
relieve the financial hardship.

     4.4 DEATH DURING DEFERRAL PERIOD. If the Director dies during the Deferral
Period, the Bank shall pay to the Director's beneficiary the balance in the
Deferral Account and any death benefits under any insurance policy(ies)
applicable to the Director at the same time and in the same amounts that would
have been paid to the Director had the Director survived.

     4.5 DEATH DURING BENEFIT PERIOD. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Bank shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts that would have been paid
to the Director had the Director survived.

ARTICLE 5.  BENEFICIARIES.

     5.1 BENEFICIARY DESIGNATIONS. The Director shall designate a beneficiary by
filing a written designation with the Bank in the form attached as Exhibit A.
The Director may revoke or modify the designation at any time by filing a new
designation. However, designations will only be effective if signed by the
Director and accepted by the Bank during the Director's lifetime. The Director's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Director, or if the Director names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Director dies without a valid
beneficiary designation, all payments shall be made to the Director's surviving
spouse, if any, and if none,

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<PAGE>

to the Director's surviving children and the descendants of any deceased child
by right of representation, and if no children or descendants survive, to the
Director's estate.

     5.2 FACILITY OF PAYMENT. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Bank may require proof of incompetency, minority
or guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Bank from all liability with
respect to such benefit.

ARTICLE 6.  CLAIMS AND REVIEW PROCEDURES.

     6.1 CLAIMS PROCEDURE. The Bank shall notify the Director's beneficiary in
writing, within ninety (90) days of his or her written application for benefits,
of his or her eligibility or non-eligibility for benefits under the Agreement.
If the Bank determines that the beneficiary is not eligible for benefits or full
benefits, the notice shall set forth (i) the specific reasons for such denial,
(ii) a specific reference to the provisions of the Agreement on which the denial
is based, (iii) 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 (v) an explanation of the Agreement's claims review procedure
and other appropriate information as to the steps to be taken if the beneficiary
wishes to have the claim reviewed. If the Bank determines that there are special
circumstances requiring additional time to make a decision, the Bank shall
notify the beneficiary 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
ninety (90) day period.

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

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<PAGE>

ARTICLE 7.  AMENDMENT AND TERMINATION.

     The Bank may amend or terminate this Agreement at any time prior to the
Director's Termination of Service by written notice to the Director. In no event
shall this Agreement be terminated without payment to the Director of the
balance in the Deferral Account attributable to the Director's deferrals and
interest credited on such amounts.

ARTICLE 8.  MISCELLANEOUS.

     8.1 BINDING EFFECT. This Agreement shall be binding upon the Director and
the Bank, and their beneficiaries, survivors, executors, administrators and
transferees.

     8.2 NO GUARANTY OF EMPLOYMENT. This Agreement is not a contract for
services. It does not (i) give the Director the right to remain a director of
the Bank, (ii) require the Director to remain a director, (iii) interfere with
the shareholders' rights to replace the Director, or (iv) interfere with the
Director's rights to terminate services at any time.

     8.3 NON-TRANSFERABILITY. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

     8.4 TAX WITHHOLDING. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.

     8.5 GOVERNING LAW. The Agreement and all rights hereunder shall be governed
by the laws of California, except to the extent preempted by federal law.

     8.6 UNFUNDED ARRANGEMENT. The Director and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject to any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors or beneficiaries of the Director. Any insurance on the
Director's life is a general asset of the Bank to which the Director and
beneficiary have no preferred or secured claim.

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<PAGE>

     IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have
signed this Agreement as of the above written date.

AMERICAN RIVER BANK                               DIRECTOR

By
  -------------------------------                 ------------------------------
    Sam J. Gallina
    Chairman of the
    Board of Directors

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<PAGE>

                                    EXHIBIT A

                                       TO

                             DEFERRED FEE AGREEMENT

                                DEFERRAL ELECTION

I elect to defer fees under my Deferred Fee Agreement with the American River
Bank, as follows:

================================================================================
Amount of Deferral          Frequency of Deferral    Duration
--------------------------------------------------------------------------------
[Initial and Complete One]  [Initial One]            [Initial and Complete One]

    I elect to defer            Beginning of Year         This Year Only
--- __________% of Fees     ---                       ---

    I elect to defer            Each fee period           For _____ years (not
--- $__________ of Fees     ---                       --- to exceed 5 years)from
                                                          the date of the
    I elect not to              End of Year               Agreement
--- defer Fees              ---
================================================================================

I understand that I may change the amount, frequency and duration of my
deferrals by filing a new election form with American River Bank and obtaining
written approval of the Board of Directors of the Bank; provided, however, that
any subsequent election will not be effective until the calendar year following
the year in which the new election is received by the Bank.

                                 FORM OF BENEFIT

I elect to receive benefits under the Agreement in the following form: [Initial
One]

     Lump sum
---

     Substantially equal monthly installments for:

     thirty-six (36) monthly installments with the amount of each installment
---  determined as of each installment date by dividing the entire amount in my
     Deferral Account by the number of installments then remaining to be paid,
     with the final installment to be the entire remaining balance in the
     Deferral Account.

     sixty (60) monthly installments with the amount of each installment
---  determined as of each installment date by dividing the entire amount in my
     Deferral Account by the number of installments then remaining to be paid,
     with the final installment to be the entire remaining balance in the
     Deferral Account.

     one hundred twenty (120) monthly installments with the amount of each
---  installment determined as of each installment date by dividing the entire
     amount in my Deferral Account by the number of installments then remaining
     to be paid, with the final installment to be the entire remaining balance
     in the Deferral Account.

     one hundred eighty (180) monthly installments with the amount of each
---  installment determined as of each installment date by dividing the entire
     amount in my Deferral Account by the number of installments then remaining
     to be paid, with the final installment to be the entire remaining balance
     in the Deferral Account.

I understand that I may not change the form of benefit elected, even if I later
change the amount of my deferrals under the Agreement without written approval
of the Board of Directors of American River Bank.

<PAGE>

                             BENEFICIARY DESIGNATION

I designate the following as beneficiary of benefits under the Deferred Fee
Agreement payable following my death:

          Primary:
                  -----------------------------------------

          Contingent:
                     --------------------------------------

          NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE
          TRUSTEE AND THE EXACT DATE OF THE TRUST AGREEMENT.

I understand that I may change these beneficiary designations by filing a new
written designation with American River Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me,
or, if I have named my spouse as beneficiary, in the event of the dissolution of
our marriage.

Signature:
          -----------------------------

As of April ____, 1998

Accepted by the American River Bank as of April ____, 1998.

AMERICAN RIVER BANK

By:
   -----------------------------
            Sam J. Gallina
            Chairman of the
            Board of DirectorsEMPLOYMENT AGREEMENT

         THIS AGREEMENT is made and entered into as of May __, 1996 by and
between AMERICAN RIVER BANK, a California banking corporation ("Employer"), and
David T. Taber ("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
Executive Vice President and Chief Operating Officer of Employer and President
and Chief Executive Officer of American River Holdings, the parent holding
company of Employer, and shall perform the customary duties of such offices 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;

<PAGE>

                  (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;

                  (f) Performing ongoing strategic planning and implementation
for Employer and its parent holding company;

                  (g) Evaluating potential merger and acquisition candidates for
Employer and its parent holding company;

                  (h) Working directly with Employer's Executive Committee on
strategic planning for mergers and acquisitions; and

                  (i) Actively soliciting merger and acquisition opportunities
for Employer and its parent holding company.

         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

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<PAGE>

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.

         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

                                       3
<PAGE>

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 Seven
Thousand Five Hundred Dollars ($107,500) per annum, payable in installments
during the term of this Agreement of approximately Four Thousand Four Hundred
Seventy-Nine Dollars and Seventeen Cents ($4,479.17) 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 Board of Directors annual
review of Employee's compensation on or about January 1 of 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

                                       4
<PAGE>

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 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.

                                       5
<PAGE>

         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, 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.

         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.

                                       6
<PAGE>

                      (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 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

                                       7
<PAGE>

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 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),

                                       8
<PAGE>

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 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

                                       9
<PAGE>

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 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

                                       10
<PAGE>

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 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.

                                       11
<PAGE>

         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.

         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.

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement consisting
of thirteen 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/ DAVID T. TABER
    -----------------------------               --------------------------------
    Sam J. Gallina                              David T. Taber
    Chairman of the Board

                         [ADD NOTARIAL ACKNOWLEDGEMENT]

                                       13
<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 David T. Taber, 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/ DAVID T. TABER
   -----------------------------                --------------------------------
   Sam J. Gallina                               David T. Taber
   Chairman of the Board

                                       14

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