Document:

EXHIBIT 10.3
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                               GUARANTEE AGREEMENT

                                 BY AND BETWEEN

                            NICOLET BANKSHARES, INC.

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION

                            DATED AS OF JULY 21, 2004

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                               GUARANTEE AGREEMENT
                               -------------------

     This  GUARANTEE AGREEMENT (this "Guarantee"), dated as of July 21, 2004, is
executed and delivered by Nicolet Bankshares, Inc., a Wisconsin corporation (the
"Guarantor"),  and  U.S.  Bank  National  Association,  a  national  banking
association,  organized  under  the  laws  of  the  United States of America, as
trustee  (the  "Guarantee  Trustee"), for the benefit of the Holders (as defined
herein)  from  time  to  time  of  the Capital Securities (as defined herein) of
Nicoet  Bankshares  Statutory  Trust  I,  a  Connecticut  statutory  trust  (the
"Issuer").

     WHEREAS,  pursuant  to  an  Amended  and Restated Declaration of Trust (the
"Declaration"),  dated  as  of  the  date  hereof  among  U.S.  Bank  National
Association, not in its individual capacity but solely as institutional trustee,
the  administrators  of the Issuer named therein, the Guarantor, as sponsor, and
the holders from time to time of undivided beneficial interests in the assets of
the  Issuer,  the  Issuer is issuing those undivided beneficial interests in the
Issuer  described  therein  (the  "Capital  Securities");  and

     WHEREAS,  as  incentive for the Holders (as defined herein) to purchase the
Capital  Securities,  the  Guarantor  desires irrevocably and unconditionally to
agree,  to  the  extent  set  forth  in this Guarantee, to pay to the Holders of
Capital  Securities  the  Guarantee  Payments  (as  defined  herein) and to make
certain  other  payments  on  the  terms  and  conditions  set  forth  herein;

     NOW,  THEREFORE,  in  consideration  of  the purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the  Holders.

                                      ARTICLE I

                            DEFINITIONS AND INTERPRETATION

     SECTION  1.1.     DEFINITIONS AND INTERPRETATION. In this Guarantee, unless
                       ------------------------------
the  context  otherwise  requires:

     (a)     capitalized  terms  used  in  this Guarantee but not defined in the
preamble  above  have  the  respective meanings assigned to them in this Section
1.1;

     (b)     a  term  defined  anywhere  in  this Guarantee has the same meaning
throughout;

     (c)     all  references  to "the Guarantee" or "this Guarantee" are to this
Guarantee  as  modified,  supplemented  or  amended  from  time  to  time;

     (d)     all references in this Guarantee to "Articles" or "Sections" are to
Articles  or  Sections  of  this  Guarantee,  unless  otherwise  specified;

     (e)     terms defined in the Declaration as at the date of execution of
this Guarantee have the same meanings when used in this Guarantee, unless
otherwise defined in this Guarantee or unless the context otherwise requires;
and

     (f)     a  reference  to  the  singular includes the plural and vice versa.

     "Affiliate"  has  the same meaning as given to that term in Rule 405 of the
      ---------
Securities  Act  of  1933,  as  amended,  or  any  successor  rule  thereunder.

     "Beneficiaries" means any Person to whom the Issuer is or hereafter becomes
      -------------
indebted  or  liable.

     "Capital  Securities"  has  the  meaning  set forth in the recitals to this
      -------------------
Guarantee.

     "Common Securities" means the common securities issued by the Issuer to the
      -----------------
Guarantor  pursuant  to  the  Declaration.

     "Corporate Trust Office" means the office of the Guarantee Trustee at which
      ----------------------
the  corporate  trust business of the Guarantee Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Guarantee is located at 225 Asylum Street, Goodwin Square, Hartford, Connecticut
06103.

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     "Covered  Person"  means  any  Holder  of  Capital  Securities.
      ---------------

     "Debentures" means the debt securities of the Guarantor designated the 8.0%
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Junior  Subordinated  Deferrable  Interest  Debentures  due  2034  held  by  the
Institutional  Trustee  (as  defined  in  the  Declaration)  of  the  Issuer.

     "Declaration  Event  of  Default" means an "Event of Default" as defined in
      -------------------------------
the  Declaration.

     "Event  of  Default"  has  the  meaning  set  forth  in  Section  2.4(a).
      ------------------

     "Guarantee Payments" means the following payments or distributions, without
      ------------------
duplication,  with  respect to the Capital Securities, to the extent not paid or
made  by the Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration)  which  are  required  to be paid on such Capital Securities to the
extent the Issuer shall have funds available therefor, (ii) the Redemption Price
to  the  extent  the  Issuer  has  funds available therefor, with respect to any
Capital  Securities  called for redemption by the Issuer, (iii) upon a voluntary
or involuntary liquidation, dissolution, winding-up or termination of the Issuer
(other  than in connection with the distribution of Debentures to the Holders of
the Capital Securities in exchange therefor as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions  on  the  Capital Securities to the date of payment, to the extent
the  Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer  (in  either  case,  the  "Liquidation  Distribution").

     "Guarantee Trustee" means U.S. Bank National Association, until a Successor
      -----------------
Guarantee  Trustee has been appointed and has accepted such appointment pursuant
to  the  terms  of  this  Guarantee  and  thereafter  means  each such Successor
Guarantee  Trustee.

     "Guarantor"  means  Nicolet Bankshares, Inc. and each of its successors and
      ---------
assigns.

     "Holder"  means  any  holder, as registered on the books and records of the
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Issuer,  of  any  Capital  Securities;  provided,  however, that, in determining
                                        --------   --------
whether the Holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor  or  any  Affiliate  of  the  Guarantor.

     "Indemnified Person"  means  the  Guarantee  Trustee, any  Affiliate of the
      ------------------
Guarantee  Trustee, or any officers, directors, shareholders, members, partners,
employees,  representatives,  nominees,  custodians  or  agents of the Guarantee
Trustee.

     "Indenture"  means  the  Indenture  dated as of the date hereof between the
      ---------
Guarantor and U.S. Bank National Association, not in its individual capacity but
solely  as trustee, and any indenture supplemental thereto pursuant to which the
Debentures  are  to  be  issued  to  the  institutional  trustee  of the Issuer.

     "Issuer"  has  the  meaning  set  forth  in  the  opening paragraph to this
      ------
Guarantee.

     "Liquidation  Distribution"  has the meaning set forth in the definition of
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"Guarantee  Payments"  herein.

     "Majority  in liquidation amount of the Capital Securities" means Holder(s)
      ---------------------------------------------------------
of  outstanding  Capital  Securities, voting together as a class, but separately
from  the  holders  of  Common  Securities,  of  more  than 50% of the aggregate
liquidation  amount  (including  the  stated  amount  that  would  be  paid  on
redemption,  liquidation  or otherwise, plus accrued and unpaid Distributions to
the  date  upon  which  the  voting  percentages  are determined) of all Capital
Securities  then  outstanding.

     "Obligations"  means  any costs, expenses or liabilities (but not including
      -----------
liabilities related to taxes) of the Issuer other than obligations of the Issuer
to  pay to holders of any Trust Securities the amounts due such holders pursuant
to  the  terms  of  the  Trust  Securities.

     "Officer's  Certificate"  means,  with respect to any Person, a certificate
      ----------------------
signed  by  one  Authorized  Officer  of such Person.  Any Officer's Certificate
delivered  with  respect to compliance with a condition or covenant provided for
in  this  Guarantee  shall  include:

     (a)     a statement that each officer signing the Officer's Certificate has
read  the

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     covenant  or  condition  and  the  definitions  relating  thereto;

     (b)     a  brief  statement  of  the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officer's Certificate;

     (c)     a  statement  that  each  such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to  express  an informed opinion as to whether or not such covenant or condition
has  been  complied  with;  and

     (d)     a  statement  as  to  whether, in the opinion of each such officer,
such  condition  or  covenant  has  been  complied  with.

     "Person"  means  a  legal  person,  including  any individual, corporation,
      ------
estate,  partnership,  joint  venture, association, joint stock company, limited
liability  company,  trust,  unincorporated  association,  or  government or any
agency or political subdivision thereof, or any other entity of whatever nature.

     "Redemption  Price"  has  the  meaning  set  forth  in  the  Indenture.
      -----------------

     "Responsible  Officer"  means,  with  respect to the Guarantee Trustee, any
      --------------------
officer within the Corporate Trust Office of the Guarantee Trustee including any
Vice  President, Assistant Vice President, Secretary, Assistant Secretary or any
other  officer of the Guarantee Trustee customarily performing functions similar
to  those  performed  by  any  of  the  above designated officers and also, with
respect  to  a particular corporate trust matter, any other officer to whom such
matter  is  referred because of that officer's knowledge of and familiarity with
the  particular  subject.

     "Special  Event"  has  the  meaning  set  forth  in  the  Indenture.
      --------------

     "Successor  Guarantee  Trustee"  means  a  successor  Guarantee  Trustee
      -----------------------------
possessing  the  qualifications  to  act as Guarantee Trustee under Section 3.1.

     "Trust  Indenture  Act"  means  the Trust Indenture Act of 1939, as amended
      ---------------------
from  time  to  time,  or  any  successor  legislation.

     "Trust  Securities" means the Common Securities and the Capital Securities.
      -----------------

                                   ARTICLE II

                          POWERS, DUTIES AND RIGHTS OF

                                GUARANTEE TRUSTEE

     SECTION  2.1.     POWERS  AND  DUTIES  OF  THE  GUARANTEE  TRUSTEE.
                       ------------------------------------------------

     (a)     This  Guarantee  shall  be  held  by  the Guarantee Trustee for the
benefit  of  the  Holders  of  the Capital Securities, and the Guarantee Trustee
shall  not  transfer  this  Guarantee  to  any Person except a Holder of Capital
Securities  exercising  his  or  her  rights  pursuant to Section 4.4(b) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of
its  appointment  to  act  as Successor Guarantee Trustee.  The right, title and
interest  of  the  Guarantee  Trustee  shall automatically vest in any Successor
Guarantee  Trustee,  and  such vesting and cessation of title shall be effective
whether  or not conveyancing documents have been executed and delivered pursuant
to  the  appointment  of  such  Successor  Guarantee  Trustee.

     (b)     If  an  Event of Default actually known to a Responsible Officer of
the  Guarantee  Trustee  has  occurred  and is continuing, the Guarantee Trustee
shall  enforce  this  Guarantee  for  the  benefit of the Holders of the Capital
Securities.

     (c)     The  Guarantee  Trustee,  before  the  occurrence  of  any Event of
Default  and  after  curing  all Events of Default that may have occurred, shall
undertake  to  perform  only  such  duties as are specifically set forth in this
Guarantee,  and  no  implied covenants shall be read into this Guarantee against
the  Guarantee  Trustee.  In case an Event of Default has occurred (that has not
been  waived  pursuant  to  Section  2.4) and is actually known to a Responsible
Officer  of  the Guarantee Trustee, the Guarantee Trustee shall exercise such of
the  rights  and  powers  vested  in  it  by  this  Guarantee,  and

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use  the  same  degree  of  care and skill in its exercise thereof, as a prudent
person  would  exercise  or use under the circumstances in the conduct of his or
her  own  affairs.

     (d)     No  provision  of  this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure  to  act,  or  its  own  willful  misconduct,  except  that:

          (i)     prior  to the occurrence of any Event of Default and after the
curing  or  waiving  of  all  such  Events  of  Default  that may have occurred:

               (A)     the duties and obligations of the Guarantee Trustee shall
be  determined  solely  by  the  express  provisions  of this Guarantee, and the
Guarantee  Trustee shall not be liable except for the performance of such duties
and  obligations as are specifically set forth in this Guarantee, and no implied
covenants or obligations shall be read into this Guarantee against the Guarantee
Trustee;  and

               (B)     in  the absence of bad faith on the part of the Guarantee
Trustee,  the  Guarantee  Trustee  may conclusively rely, as to the truth of the
statements  and  the  correctness  of  the  opinions expressed therein, upon any
certificates  or  opinions  furnished to the Guarantee Trustee and conforming to
the  requirements of this Guarantee; but in the case of any such certificates or
opinions  that by any provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine
the  same  to  determine whether or not they conform to the requirements of this
Guarantee;

          (ii)     the  Guarantee  Trustee  shall not be liable for any error of
judgment  made  in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that such Responsible Officer of the Guarantee Trustee
or  the Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which  such  judgment  was  made;

          (iii)     the  Guarantee  Trustee  shall not be liable with respect to
any  action  taken or omitted to be taken by it in good faith in accordance with
the  written direction of the Holders of not less than a Majority in liquidation
amount  of  the  Capital  Securities  relating  to the time, method and place of
conducting  any proceeding for any remedy available to the Guarantee Trustee, or
exercising  any  trust  or power conferred upon the Guarantee Trustee under this
Guarantee;  and

          (iv)  no  provision  of  this  Guarantee  shall  require the Guarantee
Trustee  to  expend  or risk its own funds or otherwise incur personal financial
liability  in  the performance of any of its duties or in the exercise of any of
its rights or powers, if the Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds is not reasonably assured to it under
the  terms  of this Guarantee or security and indemnity, reasonably satisfactory
to  the  Guarantee  Trustee,  against  such  risk or liability is not reasonably
assured  to  it.

     SECTION  2.2.     CERTAIN  RIGHTS  OF  GUARANTEE  TRUSTEE.
                       ---------------------------------------

     (a)     Subject  to  the  provisions  of  Section  2.1:

          (i)     The  Guarantee  Trustee  may  conclusively  rely, and shall be
fully  protected  in  acting  or  refraining  from  acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent,  order,  bond, debenture, note, other evidence of indebtedness or other
paper  or document believed by it to be genuine and to have been signed, sent or
presented  by  the  proper  party  or  parties.

          (ii)     Any  direction  or  act of the Guarantor contemplated by this
Guarantee  shall  be  sufficiently  evidenced  by  an  Officer's  Certificate.

          (iii)     Whenever,  in  the  administration  of  this  Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad  faith  on  its  part,  request  and  conclusively  rely  upon  an Officer's
Certificate  of  the  Guarantor  which,  upon  receipt of such request, shall be
promptly  delivered  by  the  Guarantor.

          (iv)     The  Guarantee  Trustee  shall  have  no  duty  to see to any
recording,  filing  or  registration  of  any  instrument  (or any re-recording,
refiling  or  re-registration  thereof).

          (v)     The  Guarantee  Trustee  may  consult  with  counsel  of  its
selection,  and  the  advice  or  opinion  of such counsel with respect to legal
matters  shall  be  full and complete authorization and protection in respect of
any  action  taken,  suffered  or  omitted  by it hereunder in good faith and in
accordance  with  such  advice  or  opinion.  Such  counsel  may

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be  counsel to the Guarantor or any of its Affiliates and may include any of its
employees.  The  Guarantee  Trustee  shall  have  the  right at any time to seek
instructions  concerning  the administration of this Guarantee from any court of
competent  jurisdiction.

          (vi)     The  Guarantee  Trustee  shall  be  under  no  obligation  to
exercise  any  of  the  rights  or  powers vested in it by this Guarantee at the
request  or  direction  of any Holder, unless such Holder shall have provided to
the  Guarantee  Trustee  such security and indemnity, reasonably satisfactory to
the  Guarantee  Trustee,  against the costs, expenses (including attorneys' fees
and  expenses  and  the  expenses of the Guarantee Trustee's agents, nominees or
custodians)  and liabilities that might be incurred by it in complying with such
request  or direction, including such reasonable advances as may be requested by
the Guarantee Trustee; provided, however, that nothing contained in this Section
                       --------  -------
2.2(a)(vi)  shall relieve the Guarantee Trustee, upon the occurrence of an Event
of  Default, of its obligation to exercise the rights and powers vested in it by
this  Guarantee.

          (vii)     The Guarantee  Trustee  shall  not  be  bound  to  make  any
investigation  into  the facts or matters stated in any resolution, certificate,
statement,  instrument,  opinion,  report,  notice, request, direction, consent,
order,  bond,  debenture, note, other evidence of indebtedness or other paper or
document,  but  the  Guarantee Trustee, in its discretion, may make such further
inquiry  or  investigation  into  such  facts  or  matters  as  it  may see fit.

          (viii)     The  Guarantee  Trustee  may  execute  any of the trusts or
powers  hereunder  or  perform  any  duties  hereunder  either directly or by or
through  agents,  nominees,  custodians  or attorneys, and the Guarantee Trustee
shall  not  be  responsible  for any misconduct or negligence on the part of any
agent  or  attorney  appointed  with  due  care  by  it  hereunder.

          (ix)     Any  action  taken  by  the  Guarantee  Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the signature of
the  Guarantee  Trustee or its agents alone shall be sufficient and effective to
perform  any such action.  No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance with any of
the  terms and provisions of this Guarantee, both of which shall be conclusively
evidenced  by  the  Guarantee  Trustee's  or  its  agent's  taking  such action.

          (x)     Whenever in the administration of this Guarantee the Guarantee
Trustee  shall  deem  it  desirable  to  receive  instructions  with  respect to
enforcing  any  remedy  or  right  or  taking  any  other  action hereunder, the
Guarantee Trustee (i) may request instructions from the Holders of a Majority in
liquidation  amount  of  the Capital Securities, (ii) may refrain from enforcing
such  remedy  or  right  or taking such other action until such instructions are
received,  and  (iii) shall be protected in conclusively relying on or acting in
accordance  with  such  instructions.

          (xi)     The  Guarantee  Trustee  shall  not  be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without negligence,
and  reasonably  believed  by  it  to  be authorized or within the discretion or
rights  or  powers  conferred  upon  it  by  this  Guarantee.

     No  provision  of  this  Guarantee  shall  be  deemed to impose any duty or
obligation  on  the Guarantee Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in  which  it  shall  be  illegal  or  in  which  the Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law to perform any such
act  or  acts  or  to  exercise  any  such right, power, duty or obligation.  No
permissive  power  or  authority  available  to  the  Guarantee Trustee shall be
construed  to  be  a  duty.

     SECTION  2.3.     NOT  RESPONSIBLE  FOR  RECITALS OR ISSUANCE OF GUARANTEE.
                       --------------------------------------------------------
The recitals contained in this Guarantee shall be taken as the statements of the
Guarantor,  and  the  Guarantee  Trustee  does not assume any responsibility for
their  correctness.  The  Guarantee  Trustee  makes  no representation as to the
validity  or  sufficiency  of  this  Guarantee.

     SECTION  2.4.     EVENTS  OF  DEFAULT;  WAIVER.
                       ----------------------------

     (a)     An  Event  of  Default  under  this  Guarantee  will occur upon the
failure  of  the  Guarantor  to  perform any of its payment or other obligations
hereunder.

     (b)     The  Holders  of  a  Majority  in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Capital Securities, waive any past Event of Default and its consequences.
Upon  such  waiver, any such Event of Default shall cease to exist, and shall be
deemed  to  have  been  cured,  for every purpose of this Guarantee, but no such
waiver  shall  extend  to any subsequent or other default or Event of Default or
impair  any  right  consequent  thereon.

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     SECTION  2.5.     EVENTS  OF  DEFAULT;  NOTICE.
                       ----------------------------

     (a)     The Guarantee Trustee shall, within 90 days after the occurrence of
an  Event  of  Default,  transmit  by  mail, first class postage prepaid, to the
Holders  of  the  Capital Securities and the Guarantor, notices of all Events of
Default actually known to a Responsible Officer of the Guarantee Trustee, unless
such  defaults  have  been  cured  before  the  giving of such notice, provided,
                                                                       --------
however,  that  the  Guarantee  Trustee  shall  be protected in withholding such
-------
notice  if and so long as a Responsible Officer of the Guarantee Trustee in good
faith  determines that the withholding of such notice is in the interests of the
Holders  of  the  Capital  Securities.

     (b)     The  Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written notice
from  the Guarantor or a Holder of the Capital Securities (except in the case of
a  payment  default),  or a Responsible Officer of the Guarantee Trustee charged
with  the  administration of this Guarantee shall have obtained actual knowledge
thereof.

                                     ARTICLE III

                                  GUARANTEE TRUSTEE

     SECTION  3.1.     GUARANTEE  TRUSTEE;  ELIGIBILITY.
                       --------------------------------

     (a)     There  shall  at  all  times  be  a  Guarantee Trustee which shall:

          (i)     not  be  an  Affiliate  of  the  Guarantor,  and

          (ii)     be  a corporation organized and doing business under the laws
of  the  United  States  of  America or any State or Territory thereof or of the
District of Columbia, or Person authorized under such laws to exercise corporate
trust  powers, having a combined capital and surplus of at least 50 million U.S.
dollars  ($50,000,000),  and  subject  to supervision or examination by Federal,
State,  Territorial  or  District  of  Columbia  authority.  If such corporation
publishes  reports  of  condition  at  least annually, pursuant to law or to the
requirements  of the supervising or examining authority referred to above, then,
for the purposes of this Section 3.1(a)(ii), the combined capital and surplus of
such  corporation  shall be deemed to be its combined capital and surplus as set
forth  in  its  most  recent  report  of  condition  so  published.

     (b)     If  at any time the Guarantee Trustee shall cease to be eligible to
so  act  under Section 3.1(a), the Guarantee Trustee shall immediately resign in
the  manner  and  with  the  effect  set  out  in  Section  3.2(c).

     (c)     If  the  Guarantee  Trustee  has  or shall acquire any "conflicting
interest"  within  the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee  Trustee  shall either eliminate such interest or resign to the extent
and  in  the  manner  provided  by,  and  subject  to  this  Guarantee.

     SECTION 3.2.     APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
                      ---------------------------------------------------------

     (a)     Subject  to  Section 3.2(b), the Guarantee Trustee may be appointed
or  removed without cause at any time by the Guarantor except during an Event of
Default.

     (b)     The  Guarantee  Trustee  shall  not  be  removed in accordance with
Section  3.2(a)  until  a Successor Guarantee Trustee has been appointed and has
accepted  such  appointment  by  written  instrument  executed by such Successor
Guarantee  Trustee  and  delivered  to  the  Guarantor.

     (c)     The Guarantee Trustee appointed to office shall hold office until a
Successor  Guarantee  Trustee  shall have been appointed or until its removal or
resignation.  The  Guarantee  Trustee  may  resign from office (without need for
prior  or  subsequent  accounting)  by  an instrument in writing executed by the
Guarantee  Trustee  and  delivered to the Guarantor, which resignation shall not
take  effect  until  a  Successor  Guarantee  Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee  Trustee  and  delivered  to the Guarantor and the resigning Guarantee
Trustee.

     (d)     If  no  Successor  Guarantee  Trustee shall have been appointed and
accepted  appointment  as  provided  in  this  Section  3.2 within 60 days after
delivery  of  an  instrument  of  removal  or resignation, the Guarantee Trustee
resigning  or being removed may petition any court of competent jurisdiction for
appointment  of  a  Successor  Guarantee  Trustee.

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Such  court may thereupon, after prescribing such notice, if any, as it may deem
proper,  appoint  a  Successor  Guarantee  Trustee.

     (e)     No  Guarantee  Trustee shall be liable for the acts or omissions to
act  of  any  Successor  Guarantee  Trustee.

     (f)     Upon termination of this Guarantee or removal or resignation of the
Guarantee  Trustee  pursuant to this Section 3.2, the Guarantor shall pay to the
Guarantee  Trustee all amounts owing to the Guarantee Trustee under Sections 7.2
and  7.3  accrued  to  the  date  of  such  termination, removal or resignation.

                                   ARTICLE IV

                                    GUARANTEE

     SECTION  4.1.     GUARANTEE.
                       ---------

     (a)     The Guarantor irrevocably and unconditionally agrees to pay in full
to  the  Holders  the  Guarantee  Payments  (without  duplication  of  amounts
theretofore  paid  by  the  Issuer),  as and when due, regardless of any defense
(except  the defense of payment by the Issuer), right of set-off or counterclaim
that  the  Issuer  may  have  or  assert.  The  Guarantor's obligation to make a
Guarantee  Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.

     (b)     The  Guarantor hereby also agrees to assume any and all Obligations
of the Issuer and in the event any such Obligation is not so assumed, subject to
the  terms  and  conditions  hereof,  the  Guarantor  hereby  irrevocably  and
unconditionally  guarantees  to  each  Beneficiary the full payment, when and as
due,  of  any  and  all  Obligations  to  such Beneficiaries.  This Guarantee is
intended  to  be  for  the  benefit  of,  and  to  be  enforceable  by, all such
Beneficiaries,  whether  or  not such Beneficiaries have received notice hereof.

     SECTION  4.2.     WAIVER OF NOTICE AND DEMAND.  The Guarantor hereby waives
                       ---------------------------
notice  of acceptance of this Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first  against  the  Issuer  or  any  other Person before proceeding against the
Guarantor,  protest,  notice  of  nonpayment,  notice  of  dishonor,  notice  of
redemption  and  all  other  notices  and  demands.

     SECTION  4.3.     OBLIGATIONS  NOT  AFFECTED.  The  obligations, covenants,
                       --------------------------
agreements  and  duties of the Guarantor under this Guarantee shall in no way be
affected  or impaired by reason of the happening from time to time of any of the
following:

     (a)     the  release  or  waiver,  by operation of law or otherwise, of the
performance  or  observance  by  the Issuer of any express or implied agreement,
covenant,  term  or condition relating to the Capital Securities to be performed
or  observed  by  the  Issuer;

     (b)     the  extension  of time for the payment by the Issuer of all or any
portion  of  the  Distributions,  Redemption  Price,  Special  Redemption Price,
Liquidation  Distribution  or  any  other  sums  payable  under the terms of the
Capital  Securities  or  the  extension of time for the performance of any other
obligation  under,  arising out of or in connection with, the Capital Securities
(other than an extension of time for payment of Distributions, Redemption Price,
Special  Redemption  Price,  Liquidation  Distribution or other sum payable that
results  from  the extension of any interest payment period on the Debentures or
any  extension  of  the  maturity  date  of  the  Debentures  permitted  by  the
Indenture);

     (c)     any  failure,  omission,  delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action  on  the part of the Issuer granting indulgence or extension of any kind;

     (d)     the  voluntary or involuntary liquidation, dissolution, sale of any
collateral,  receivership, insolvency, bankruptcy, assignment for the benefit of
creditors,  reorganization, arrangement. composition or readjustment of debt of,
or  other  similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

     (e)     any  invalidity  of,  or  defect  or  deficiency  in,  the  Capital
Securities;

     (f)     the settlement or compromise of any obligation guaranteed hereby or
hereby  incurred;  or

                                        8
<PAGE>
     (g)     any other circumstance whatsoever that might otherwise constitute a
legal  or  equitable discharge or defense of a guarantor, it being the intent of
this  Section  4.3  that  the  obligations  of  the Guarantor hereunder shall be
absolute  and  unconditional  under  any  and  all  circumstances.

     There  shall  be  no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.

     SECTION  4.4.     RIGHTS  OF  HOLDERS.
                       -------------------

     (a)     The  Holders  of  a  Majority  in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting any
proceeding  for any remedy available to the Guarantee Trustee in respect of this
Guarantee  or  to  direct  the exercise of any trust or power conferred upon the
Guarantee  Trustee  under  this  Guarantee;  provided, however, that (subject to
                                             --------
Section 2.1) the Guarantee Trustee shall have the right to decline to follow any
such direction if the Guarantee Trustee being advised by counsel determines that
the  action  or  proceeding  so  directed  may  not  lawfully be taken or if the
Guarantee Trustee in good faith by its board of directors or trustees, executive
committees  or  a  trust  committee  of directors or trustees and/or Responsible
Officers  shall  determine  that  the  action  or  proceedings so directed would
involve  the  Guarantee  Trustee  in  personal  liability.

     (b)     Any  Holder  of Capital Securities may institute a legal proceeding
directly  against  the Guarantor to enforce the Guarantee Trustee's rights under
this Guarantee, without first instituting a legal proceeding against the Issuer,
the  Guarantee  Trustee  or any other Person.  The Guarantor waives any right or
remedy  to require that any such action be brought first against the Issuer, the
Guarantee  Trustee or any other Person before so proceeding directly against the
Guarantor.

     SECTION  4.5.     GUARANTEE OF PAYMENT.  This Guarantee creates a guarantee
                       --------------------
of  payment  and  not  of  collection.

     SECTION 4.6.     SUBROGATION.  The Guarantor shall be subrogated to all (if
                      -----------
any)  rights  of the Holders of Capital Securities against the Issuer in respect
of  any  amounts  paid  to  such  Holders by the Guarantor under this Guarantee;
provided,  however,  that the Guarantor shall not (except to the extent required
--------
by  mandatory  provisions  of  law) be entitled to enforce or exercise any right
that  it  may  acquire  by way of subrogation or any indemnity, reimbursement or
other  agreement,  in all cases as a result of payment under this Guarantee, if,
after  giving  effect  to any such payment, any amounts are due and unpaid under
this  Guarantee.  If  any  amount shall be paid to the Guarantor in violation of
the  preceding  sentence,  the Guarantor agrees to hold such amount in trust for
the  Holders  and  to  pay  over  such  amount  to  the  Holders.

     SECTION  4.7.     INDEPENDENT OBLIGATIONS.  The Guarantor acknowledges that
                       -----------------------
its  obligations hereunder are independent of the obligations of the Issuer with
respect  to  the  Capital  Securities  and that the Guarantor shall be liable as
principal  and  as  debtor  hereunder to make Guarantee Payments pursuant to the
terms  of this Guarantee notwithstanding the occurrence of any event referred to
in  subsections  (a)  through  (g),  inclusive,  of  Section  4.3  hereof.

     SECTION  4.8.     ENFORCEMENT  BY A BENEFICIARY.  A Beneficiary may enforce
                       -----------------------------
the  obligations  of  the Guarantor contained in Section 4.1(b) directly against
the  Guarantor  and the Guarantor waives any right or remedy to require that any
action  be  brought  against  the  Issuer  or  any other person or entity before
proceeding  against  the  Guarantor.  The  Guarantor  shall be subrogated to all
rights  (if any) of any Beneficiary against the Issuer in respect of any amounts
paid  to  the  Beneficiaries  by  the  Guarantor under this Guarantee, provided,
                                                                       --------
however,  that  the  Guarantor  shall  not  (except  to  the  extent required by
mandatory  provisions of law) be entitled to enforce or exercise any rights that
it  may  acquire  by way of subrogation or any indemnity, reimbursement or other
agreement,  in  all cases as a result of payment under this Guarantee, if at the
time  of  any such payment, and after giving effect to such payment, any amounts
are  due  and  unpaid  under  this  Guarantee.

                                        9
<PAGE>
                                    ARTICLE V

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

     SECTION  5.1.     LIMITATION  OF  TRANSACTIONS.  So  long  as  any  Capital
                       ----------------------------
Securities  remain  outstanding,  if  (a)  there  shall  have  occurred  and  be
continuing  an  Event  of  Default  or a Declaration Event of Default or (b) the
Guarantor shall have selected an Extension Period as provided in the Declaration
and  such  period,  or  any  extension  thereof,  shall  have  commenced  and be
continuing,  then  the Guarantor shall not and shall not permit any Affiliate to
(x)  declare  or  pay  any  dividends  or distributions on, or redeem, purchase,
acquire,  or  make a liquidation payment with respect to, any of the Guarantor's
or  such  Affiliate's  capital  stock  (other  than  payments  of  dividends  or
distributions  to  the Guarantor) or make any guarantee payments with respect to
the foregoing or (y) make any payment of principal of or interest or premium, if
any,  on  or repay, repurchase or redeem any debt securities of the Guarantor or
any Affiliate that rank pari passu in all respects with or junior in interest to
the  Debentures  (other  than,  with  respect  to clauses (x) and (y) above, (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor  in  connection  with  any  employment contract, benefit plan or other
similar  arrangement with or for the benefit of one or more employees, officers,
directors  or  consultants,  in  connection  with  a  dividend  reinvestment  or
stockholder  stock  purchase  plan or in connection with the issuance of capital
stock  of  the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to  the  occurrence  of  the  Event  of Default, Declaration Event of Default or
Extension  Period, as applicable, (ii) as a result of any exchange or conversion
of any class or series of the Guarantor's capital stock (or any capital stock of
a  subsidiary  of  the  Guarantor)  for  any  class or series of the Guarantor's
capital  stock or of any class or series of the Guarantor's indebtedness for any
class  or  series  of  the  Guarantor's  capital  stock,  (iii)  the purchase of
fractional  interests in shares of the Guarantor's capital stock pursuant to the
conversion  or  exchange  provisions of such capital stock or the security being
converted  or  exchanged,  (iv) any declaration of a dividend in connection with
any  stockholders'  rights  plan,  or  the  issuance  of  rights, stock or other
property under any stockholders' rights plan, or the redemption or repurchase of
rights  pursuant  thereto,  (v)  any  dividend  in  the form of stock, warrants,
options  or  other  rights  where  the dividend stock or the stock issuable upon
exercise  of such warrants, options or other rights is the same stock as that on
which  the  dividend  is  being  paid or ranks pari passu with or junior to such
stock  and  any  cash payments in lieu of fractional shares issued in connection
therewith,  or  (vi)  payments  under  this  Guarantee).

     SECTION  5.2.     RANKING.  This  Guarantee  will  constitute  an unsecured
                       -------
obligation  of  the  Guarantor  and will rank subordinate and junior in right of
payment  to  all  present  and  future  Senior  Indebtedness  (as defined in the
Indenture)  of  the  Guarantor.  By  their  acceptance  thereof,  each Holder of
Capital  Securities agrees to the foregoing provisions of this Guarantee and the
other  terms  set  forth  herein.

     The  right of the Guarantor to participate in any distribution of assets of
any of its subsidiaries upon any such subsidiary's liquidation or reorganization
or  otherwise  is  subject  to the prior claims of creditors of that subsidiary,
except  to  the  extent  the Guarantor may itself be recognized as a creditor of
that  subsidiary.  Accordingly, the Guarantor's obligations under this Guarantee
will  be  effectively subordinated to all existing and future liabilities of the
Guarantor's  subsidiaries,  and  claimants should look only to the assets of the
Guarantor  for payments hereunder.  This Guarantee does not limit the incurrence
or  issuance  of  other  secured  or  unsecured debt of the Guarantor, including
Senior Indebtedness of the Guarantor, under any indenture that the Guarantor may
enter  into  in  the  future  or  otherwise.

                                      ARTICLE VI

                                     TERMINATION

     SECTION  6.1.     TERMINATION.  This  Guarantee  shall  terminate  upon the
                       -----------
later of (i) full payment of the Redemption Price of all Capital Securities then
outstanding,  (ii) upon the distribution of all of the Debentures to the Holders
of  all  of  the  Capital Securities, and (iii) upon full payment of the amounts
payable in accordance with the Declaration upon dissolution of the Issuer.  This
Guarantee  will  continue to be effective or will be reinstated, as the case may
be,  if at any time any Holder of Capital Securities must restore payment of any
sums  paid  under  the  Capital  Securities  or  under  this  Guarantee.

                                       10
<PAGE>
                                     ARTICLE VII

                                   INDEMNIFICATION

     SECTION  7.1.     EXCULPATION.
                       -----------

     (a)     No  Indemnified  Person shall be liable, responsible or accountable
in  damages  or  otherwise  to the Guarantor or any Covered Person for any loss,
damage  or  claim incurred by reason of any act or omission performed or omitted
by  such  Indemnified Person in good faith in accordance with this Guarantee and
in  a  manner  that such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this Guarantee or
by  law,  except  that  an Indemnified Person shall be liable for any such loss,
damage  or  claim  incurred by reason of such Indemnified Person's negligence or
willful  misconduct  with  respect  to  such  acts  or  omissions.

     (b)     An  Indemnified  Person shall be fully protected in relying in good
faith upon the records of the Issuer or the Guarantor and upon such information,
opinions,  reports or statements presented to the Issuer or the Guarantor by any
Person  as to matters the Indemnified Person reasonably believes are within such
other  Person's  professional  or expert competence and who, if selected by such
Indemnified  Person,  has been selected with reasonable care by such Indemnified
Person,  including  information, opinions, reports or statements as to the value
and  amount  of  the  assets,  liabilities,  profits, losses, or any other facts
pertinent  to  the  existence  and  amount of assets from which Distributions to
Holders  of  Capital  Securities  might  properly  be  paid.

     SECTION  7.2.     INDEMNIFICATION.
                       ---------------

     (a)     The  Guarantor agrees to indemnify each Indemnified Person for, and
to  hold  each Indemnified Person harmless against, any and all loss, liability,
damage,  claim  or  expense incurred without negligence or willful misconduct on
the  part  of  the  Indemnified Person, arising out of or in connection with the
acceptance  or  administration  of the trust or trusts hereunder, including, but
not  limited  to,  the  costs  and expenses (including reasonable legal fees and
expenses)  of the Indemnified Person defending itself against, or investigating,
any  claim or liability in connection with the exercise or performance of any of
the  Indemnified  Person's  powers  or  duties  hereunder.  The  obligation  to
indemnify  as  set  forth  in  this Section 7.2 shall survive the resignation or
removal  of  the  Guarantee  Trustee  and  the  termination  of  this Guarantee.

     (b)     Promptly  after receipt by an Indemnified Person under this Section
7.2  of  notice of the commencement of any action, such Indemnified Person will,
if  a  claim  in  respect thereof is to be made against the Guarantor under this
Section  7.2,  notify  the Guarantor in writing of the commencement thereof, but
the  failure  so to notify the Guarantor (i) will not relieve the Guarantor from
liability  under paragraph (a) above unless and to the extent that the Guarantor
did  not  otherwise  learn  of  such  action  and  such  failure  results in the
forfeiture  by  the  Guarantor  of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to any Indemnified
Person other than the indemnification obligation provided in paragraph(a) above.
The  Guarantor shall be entitled to appoint counsel of the Guarantor's choice at
the  Guarantor's  expense  to represent the Indemnified Person in any action for
which  indemnification  is  sought  (in  which  case  the  Guarantor  shall  not
thereafter  be  responsible  for  the  fees and expenses of any separate counsel
retained  by  the  Indemnified  Person  or  Persons  except as set forth below);
provided,  however,  that  such  counsel shall be reasonably satisfactory to the
--------   -------
Indemnified Person.  Notwithstanding the Guarantor's election to appoint counsel
to  represent  the Guarantor in an action, the Indemnified Person shall have the
right  to  employ  separate counsel (including local counsel), and the Guarantor
shall  bear  the reasonable fees, costs and expenses of such separate counsel if
(i)  the  use  of  counsel  chosen by the Guarantor to represent the Indemnified
Person  would  present such counsel with a conflict of interest, (ii) the actual
or  potential  defendants  in,  or  targets of, any such action include both the
Indemnified  Person  and  the  Guarantor  and  the Indemnified Person shall have
reasonably  concluded  that  there  may be legal defenses available to it and/or
other  Indemnified  Person(s)  which  are  different from or additional to those
available  to the Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory  to  the  Indemnified  Person  to  represent the Indemnified Person
within  a reasonable time after notice of the institution of such action or (iv)
the  Guarantor shall authorize the Indemnified Person to employ separate counsel
at  the  expense  of  the  Guarantor.  The Guarantor will not, without the prior
written  consent  of the Indemnified Persons, settle or compromise or consent to
the  entry  of  any  judgment  with  respect to any pending or threatened claim,
action,  suit  or proceeding in respect of which indemnification or contribution
may  be  sought  hereunder (whether or not the Indemnified Persons are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent  includes  an  unconditional release of each Indemnified Person from all
liability  arising  out  of  such  claim,  action,  suit  or  proceeding.

     SECTION  7.3.     COMPENSATION,  REIMBURSEMENT  OF EXPENSES.  The Guarantor
                       -----------------------------------------
agrees:

     (a)     to pay to the Guarantee Trustee from time to time such compensation
for  all  services  rendered  by it hereunder as the parties shall agree to from
time to time (which compensation shall not be limited by any provision of law in
regard  to  the  compensation  of  a  trustee  of  an  express  trust);  and

     (b)     except  as  otherwise  expressly  provided herein, to reimburse the
Guarantee  Trustee  upon  request for all reasonable expenses, disbursements and
advances  incurred  or  made  by  it  in  accordance  with any provision of this

                                       11
<PAGE>
Guarantee  (including  the  reasonable  compensation  and  the  expenses  and
disbursements  of its agents and counsel), except any such expense, disbursement
or  advance  as  may  be  attributable  to its negligence or willful misconduct.

     The provisions of this Section 7.3 shall survive the resignation or removal
of  the  Guarantee  Trustee  and  the  termination  of  this  Guarantee.

                                     ARTICLE VIII

                                    MISCELLANEOUS

     SECTION  8.1.     SUCCESSORS  AND  ASSIGNS.  All  guarantees and agreements
                       ------------------------
contained  in  this  Guarantee  shall  bind  the successors, assigns, receivers,
trustees  and representatives of the Guarantor and shall inure to the benefit of
the  Holders  of  the Capital Securities then outstanding.  Except in connection
with any merger or consolidation of the Guarantor with or into another entity or
any sale, transfer or lease of the Guarantor's assets to another entity, in each
case,  to the extent permitted under the Indenture, the Guarantor may not assign
its  rights  or  delegate its obligations under this Guarantee without the prior
approval  of  the  Holders  of  at least a Majority in liquidation amount of the
Capital  Securities.

     SECTION  8.2.     AMENDMENTS.  Except  with  respect to any changes that do
                       ----------
not  adversely  affect  the  rights  of Holders of the Capital Securities in any
material  respect  (in  which case no consent of Holders will be required), this
Guarantee may be amended only with the prior approval of the Holders of not less
than a Majority in liquidation amount of the Capital Securities.  The provisions
of  the  Declaration  with  respect to amendments thereof apply to the giving of
such  approval.

     SECTION 8.3.     NOTICES.  All notices provided for in this Guarantee shall
                      -------
be  in  writing,  duly  signed  by  the  party  giving such notice, and shall be
delivered,  telecopied  or  mailed  by  first  class  mail,  as  follows:

     (a)     If  given  to  the  Guarantee  Trustee,  at the Guarantee Trustee's
mailing  address set forth below (or such other address as the Guarantee Trustee
may  give notice of to the Holders of the Capital Securities and the Guarantor):

     U.S. Bank National Association
     225 Asylum Street, Goodwin Square
     Hartford, Connecticut 06103
     Attention:    Corporate Trust Department
     Telecopy:     860-244-1889

     With a copy to:

     U.S. Bank National Association
     P.O. Box 960778
     Boston, Massachusetts 02196-0778
     Attention:    Earl W. Dennison, Jr., Corporate Trust Department
     Telecopy:     (617) 603-6567

     (b)     If  given  to the Guarantor, at the Guarantor's mailing address set
forth  below  (or  such other address as the Guarantor may give notice of to the
Holders  of  the  Capital  Securities  and  to  the  Guarantee  Trustee):

     Nicolet Bankshares, Inc.
     110 South Washington Street
     Green Bay, Wisconsin 54301
     Attention: President
     Telecopy: (920) 430-7580

     (c)     If  given  to  any Holder of the Capital Securities, at the address
set  forth  on  the  books  and  records  of  the  Issuer.

     All  such  notices  shall  be  deemed  to  have been given when received in
person,  telecopied  with  receipt  confirmed,  or  mailed  by first class mail,
postage  prepaid,  except that if a notice or other document is refused delivery
or  cannot  be  delivered  because  of  a changed address of which no notice was
given,  such  notice or other document shall be deemed to have been delivered on
the  date  of  such  refusal  or  inability  to  deliver.

                                       12
<PAGE>
     SECTION  8.4.     BENEFIT.  This Guarantee is solely for the benefit of the
                       -------
Holders  of  the  Capital  Securities  and,  subject  to  Section 2.1(a), is not
separately  transferable  from  the  Capital  Securities.

     SECTION  8.5.     GOVERNING LAWS.  THIS GUARANTEE SHALL BE GOVERNED BY, AND
                       --------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF, NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401
OF  THE  NEW  YORK  GENERAL  OBLIGATIONS  LAW).

     SECTION  8.6.     COUNTERPARTS.  This  Guarantee  may be executed in one or
                       ------------
more  counterparts,  each  of which shall be an original, but all of which taken
together  shall  constitute  one  and  the  same  instrument.

     SECTION  8.7.     SEPARABILITY.  In  case  one  or  more  of the provisions
                       ------------
contained  in this Guarantee shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall  not  affect  any  other  provisions of this Guarantee, but this Guarantee
shall  be construed as if such invalid or illegal or unenforceable provision had
never  been  contained  herein.

                     Signatures appear on the following page

                                       13
<PAGE>
     THIS GUARANTEE is executed as of the day and year first above written.

                                   NICOLET BANKSHARES, INC., as Guarantor

                                   By:     /s/ Robert B. Atwell
                                      --------------------- --------------------
                                           Robert B. Atwell
                                           President and Chief Executive Officer

                                   U.S. BANK NATIONAL ASSOCIATION,
                                   as Guarantee Trustee

                                   By:     /s/ Earl W. Dennison, Jr.
                                      --------------------- --------------------
                                           Earl W. Dennison, Jr.
                                           Vice President

                                       14
<PAGE>
                            NICOLET BANKSHARES, INC.

                                   SIGNATURES

     In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto  duly  authorized.

                                        NICOLET BANKSHARES, INC.

                                        By:    /s/ Robert B. Atwell
                                              ---------------------------------
                                              Robert B. Atwell, President/CEO
                                              (Principal Executive Officer)

                                        Date: November 11, 2004

                                        By:   /s/ Jacqui A. Engebos
                                             ----------------------------------
                                             Jacqui Engebos, CFO
                                             (Principal Financial and
                                             Accounting Officer)

                                        Date: November 11, 2004

                                       15
<PAGE>EXHIBIT 10.38

                          A SUMMARY PLAN DESCRIPTION OF

                            AMERICAN RIVER BANKSHARES

                                   401(K) PLAN

                                       35
<PAGE>

                                TABLE OF CONTENTS

INTRODUCTION..................................................................38
     Type of Plan.............................................................38
     Plan Sponsor.............................................................38
     Purpose of the Summary...................................................38

PLAN ADMINISTRATION...........................................................38
     Plan Trustees............................................................38
     Plan Administrator.......................................................38
     Other Information........................................................38

PLAN PARTICIPATION............................................................38
     Eligible Employees.......................................................38
     General Eligibility Requirements.........................................39
     Entry Date...............................................................39
     Participation by Employees Whose Status Changes..........................39
     Participant upon Re-employment...........................................39

SERVICE RULES.................................................................39
     Service Definitions......................................................39
     Termination and Return to Employment.....................................40
     Credit for Service with Other Employers..................................40

CONTRIBUTIONS AND ALLOCATIONS.................................................40
     Elective Deferrals.......................................................40
     Salary Deferral Election Forms...........................................41
     Matching Contributions...................................................41
     Maximum Contribution Allocation..........................................41
     Top Heavy Allocations....................................................41
     Rollover Contributions...................................................42

BENEFIT UPON RETIREMENT.......................................................42

BENEFIT UPON DISABILITY.......................................................42

BENEFIT UPON DEATH............................................................42

BENEFIT UPON TERMINATION OF EMPLOYMENT........................................42

DETERMINATION OF VESTED INTEREST..............................................43

PRE-RETIREMENT DISTRIBUTIONS..................................................43

HARDSHIP DISTRIBUTIONS........................................................43

PARTICIPANT LOANS.............................................................43

INVESTMENT OF ACCOUNTS........................................................43

                                       36
<PAGE>

TAX WITHHOLDING ON PLAN BENEFITS..............................................44

OTHER INFORMATION.............................................................45
     Claims for Benefits......................................................45
     Non-Alienation of Benefits...............................................46
     Amendment or Termination.................................................46
     Missing Payees or Beneficiaries..........................................46
     Payment of Plan Expenses.................................................46

STATEMENT OF ERISA RIGHTS.....................................................47

                                       37
<PAGE>

================================================================================

INTRODUCTION

         Type of Plan
         Effective January 1, 2004, American River Bankshares amended its 401(k)
         cash or deferred plan, which is named the American River Bankshares
         401(k) Plan and which will be referred to in this summary plan
         description as the "Plan". The Plan was originally effective January 1,
         1993.

         Plan Sponsor
         The sponsor of the Plan is American River Bankshares, and this summary
         will sometimes refer to American River Bankshares as the "Employer",
         "we", "us" or "our". Our address is 1545 River Park Drive, Suite 107,
         Sacramento, CA 95815; our telephone number is (916) 565-6100; and our
         employer identification number is 68-0352144.

         Purpose of the Summary
         This summary, which describes the important features of the Plan in
         non-technical language, is intended to answer most of your questions
         about the Plan and replaces all prior announcements we may have made
         about the Plan. It nevertheless is only a summary, and if there is any
         conflict between the description in this summary and the terms of the
         Plan, the terms of the Plan will control. If you have any questions
         about the Plan that are not addressed in this summary, you can contact
         the Administrator, whose name and address is set forth in the next
         section.

PLAN ADMINISTRATION

         Plan Trustees
         The Plan is administered by a written plan and trust agreement, and the
         trustees of that agreement are responsible for management of the Plan's
         assets. The Trustees are David T. Taber and Mitchell A. Derenzo, and
         their address is 1545 River Park Drive, Suite 107, Sacramento, CA
         95815.

         Plan Administrator
         All other matters concerning the operation of the Plan are the
         responsibility of the Administrator. The Administrator of the Plan is
         American River Bankshares, whose address is 1545 River Park Drive,
         Suite 107, Sacramento, CA 95815, and whose telephone number is (916)
         565-6100.

         Other Information
         We have assigned number 002 to the Plan. The accounting year of the
         Plan, called the Plan Year, begins January 1st and ends the following
         December 31st; and legal process can be served on either the
         Administrator, the Employer, or the Trustees.

PLAN PARTICIPATION

         Eligible Employees
         Any employee of American River Bankshares who is also considered an
         Eligible Employee will enter the Plan as a Participant on the Entry
         Date as of which he or she satisfies the eligibility requirements
         described below in General Eligibility Requirements.

         All employees are considered Eligible Employees except for the
         following ineligible classes of employees: (1) any employee whose
         employment is governed by the terms of a collective bargaining
         agreement in which retirement benefits were the subject of good faith
         bargaining, unless such agreement expressly provides for his or her
         inclusion in the Plan; (2) any employee who is a non-resident alien who
         does not receive any earned income from us which constitutes income
         from sources within the United States; and (3) Employees who are
         employed as Independent Contractors.

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         In addition, you will not be an Eligible Employee if we consider you to
         be an independent contractor on your date of hire or on the day you
         would have entered the Plan as a Participant had you been an Employee
         or on the first day of each subsequent Plan Year. You will also not be
         considered an Eligible Employee if you are leased and you are covered
         under a certain type of money purchase pension plan sponsored by the
         leasing company.

         Any employee who is otherwise eligible to participate can make a
         one-time irrevocable election to waive participation in the Plan,
         except that the Administrator may in its sole discretion elect not to
         make this option available to certain "non-highly compensated
         employees".

         General Eligibility Requirements
         If you are not already a Participant and you are an Eligible Employee,
         you will be eligible to enter the Plan as a Participant upon completing
         1 Hour of Service.

         See the section titled SERVICE RULES for an explanation of how
         eligibility computation periods and Years of Service for eligibility
         are determined.

         Entry Date
         After you have satisfied the eligibility requirements described above
         in General Eligibility Requirements, you will actually enter the Plan
         as a Participant on the first day of the month that coincides with or
         next follows the date on which you satisfy those requirements.

         Participation by Employees Whose Status Changes
         If you are not considered an Eligible Employee but later become one,
         you will participate in the Plan immediately if you otherwise satisfy
         the eligibility requirements. If you are a Participant and later become
         a member of an ineligible class, your Plan participation will be
         suspended but your Vested Interest percentage will continue to
         increase, and you will be entitled to an allocation for the Plan Year
         only to the extent of service you completed while an Eligible Employee.
         Upon returning to an eligible class of employees, you will immediately
         participate again in the Plan.

         Participant upon Re-employment
         If you terminate employment but you are subsequently re-employed by us,
         your Years of Service for purposes of eligibility, as well as for
         purposes of determining when you enter or re-enter the Plan as a
         Participant, will be determined as described in SERVICE RULES below.

SERVICE RULES

         Service Definitions
         Service for purposes of vesting and eligibility will be determined by
         your Years of Service. A Year of Service is a 12-month computation
         period during which you complete a certain number of Hours of Service.
         An Hour of Service is any hour for which you have a right to be paid by
         us or by any adopting Employer, including hours you are paid for
         vacation, holidays, illness, back pay and maternity leave. You will
         incur a Break in Service if you fail to perform more than 500 Hours of
         Service during any 12-consecutive month computation period described
         below. A Break in Service may affect your eligibility to receive an
         allocation of contributions and the computation of your Vested
         Interest. You will receive credit for a Year of Service as follows:

         (1)      To determine your eligibility to participate: In determining
                  your eligibility to participate in the Plan, you will be
                  credited with a Year of Service if you complete 1,000 Hours of
                  Service within a 12-consecutive month eligibility computation
                  period. Your initial eligibility computation period begins on
                  your date of hire. The second eligibility computation period
                  will begin on the first day of the Plan Year which begins
                  prior to the first anniversary of your date of hire. If you
                  complete 1,000 Hours of Service in both the initial
                  eligibility computation period and in the second eligibility
                  computation period, you will be credited with two Years of
                  Service for eligibility purposes.

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         (2)      To determine your Vested Interest: In determining the Vested
                  Interest in your Account, you will be credited with a Year of
                  Service if you complete 1,000 Hours of Service within a
                  12-consecutive month vesting computation period, which is the
                  Plan Year.

         Termination and Return to Employment
         If you terminate and return to employment with us before you incur a
         Break in Service, your Years of Service and Plan participation will not
         be deemed interrupted. If you return to employment with us after a
         Break in Service, your Breaks in Service will not be counted but your
         prior Years of Service will be counted (and if you were a Participant,
         your Plan participation will be reinstated) upon your re-employment,
         subject to the following rules:

         (1)      In determining your eligibility: In determining your
                  eligibility to participate in the Plan, your prior Years of
                  Service will not be counted if you did not have a Vested
                  Interest in your Account and if the number of your consecutive
                  Breaks in Service equals or exceeds the greater of five or
                  your aggregate number of Years of Service.

         (2)      In determining your Vested Interest: In determining the Vested
                  Interest in your Account, if you had five or more Breaks in
                  Service, your prior Years of Service will not be counted if
                  you did not have a Vested Interest before incurring five or
                  more Breaks in Service and the number of your consecutive
                  Breaks in Service equals or exceeds your aggregate number of
                  Years of Service before incurring five or more Breaks in
                  Service.

         Credit for Service with Other Employers
         For Plan purposes, your Service counts if it was completed with us,
         with another Employer that adopts the Plan, and with any direct
         predecessor business that is or would have been considered a part of
         the same group of affiliated employers with us or another adopting
         Employer.

CONTRIBUTIONS AND ALLOCATIONS

         Elective Deferrals
         Once you are eligible to make Elective Deferrals, you can file a Salary
         Deferral Election form with the Administrator authorizing us to
         withhold as an Elective Deferral from 1% of your Compensation up to the
         maximum amount of your Compensation as determined by the Administrator
         which will not cause the Plan to violate certain non-discrimination
         tests required by the IRS. Elective Deferrals can be made in whole
         percentages of Compensation or in specific dollar amounts, and your
         Elective Deferrals will be allocated to your Elective Deferral Account.

         Notwithstanding the preceding paragraph, your Elective Deferrals for
         any Plan Year cannot exceed the annual permissible dollar limit in
         effect for that Plan Year, which is $13,000 in 2004, $14,000 in 2005
         and $15,000 in 2006. Additional catch-up contributions can be made
         beginning in the calendar year in which you reach age 50. The maximum
         catch-up contribution is $3,000 in 2004, $4,000 in 2005 and $5,000 in
         2006.

         Beginning with the Plan Year which begins in 2002, the maximum Elective
         Deferral you can make for any Plan Year will be 100% of your
         Compensation.

         In any Plan Year in which you have not deferred at the maximum rate
         permitted by the Plan, you can elect to defer up to 100% of your
         Compensation for one or more pay periods to raise your deferral to the
         maximum rate permitted by the Plan. Should you terminate employment
         with us, you can also elect to defer up to 100% of any lump sum
         severance pay you might receive.

         For Elective Deferral purposes, your Compensation is the amount
         reported on Form W-2 during the Plan Year, excluding any amount in
         excess of the annual dollar limit. The annual limit is $205,000, and
         this dollar amount may be changed in future years to reflect the cost
         of living as permitted under federal regulations or to reflect changes
         in the law. Your Compensation for Elective Deferral purposes will also
         exclude any amount you receive while you are a member of an ineligible
         class of employees.

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         Elective Deferrals made by certain "highly compensated" employees (or
         HCEs) may be limited under IRS rules unless (a) there are no
         Participants who are not considered HCEs, or (b) there are Participants
         who are considered HCEs and the amount of Elective Deferrals for
         non-HCEs when compared to the amount of Elective Deferrals for HCEs is
         considered sufficient to pass special IRS non-discrimination testing.
         This test is intended to ensure that there is a fair level of
         participation by all Participants regardless of compensation level.

         To meet the non-discrimination test, we encourage participation from
         all Eligible Employees. Depending upon the results of the test, shortly
         after the end of each Plan Year, the Administrator may have to refund
         to certain HCEs a portion of their Elective Deferrals that have already
         been contributed to the Plan, as determined under IRS regulations. You
         will be notified by the Plan Administrator if any of your Elective
         Deferral contributions will be refunded to you.

         Salary Deferral Election Forms
         You can change your Salary Deferral Election form monthly on dates
         determined by the Administrator. You can also suspend or cancel your
         Salary Deferral Election form effective 30 days after giving written
         notice to the Administrator, in which case you cannot make a new
         election until the next monthly election date. If necessary to insure
         that the Plan satisfies the non-discrimination tests mentioned in the
         preceding section, we also have the right to reduce or suspend your
         Salary Deferral Election at any time.

         Matching Contributions
         We may elect to make a Matching Contribution to the Plan. For any Plan
         Year in which we do make a Matching Contribution, you will be notified
         of the amount allocated to your Matching Contribution Account.

         For certain Plan Years, we may elect to make a Qualified Matching
         Contribution to satisfy certain non-discrimination tests required by
         the IRS. This contribution may or may not be made for all Participants.
         If a contribution is made on your behalf, it will be allocated to your
         Qualified Matching Contribution Account, which will be 100% Vested at
         all times.

         For certain Plan Years, we may elect to make a "safe harbor" Matching
         Contribution to automatically satisfy certain non-discrimination tests
         required by the IRS. This contribution will be made for each
         Participant who is a "non-highly compensated employee" under IRS rules
         (or at our discretion, who is a "highly compensated employee" under IRS
         rules) and who made an Elective Deferral at any time during the Plan
         Year. In general, if you make an Elective Deferral of at least 5% of
         your Compensation, you will receive a "safe harbor" Matching
         Contribution equal to 4% of your Compensation. If you contribute less
         than 5% of Compensation, your "safe harbor" Matching Contribution will
         be a lesser amount as described in the safe harbor notice distributed
         before the beginning of each Plan Year in which we intend to make this
         contribution.

         Maximum Contribution Allocation
         The IRS limits the amount that can be allocated to your Account for any
         Plan Year, but this limit only applies to our contributions, your
         Elective Deferrals, and to any forfeited amounts from terminated
         Participants that may be allocated to your Account. The total amount of
         our contributions, your Elective Deferrals, and forfeitures that can be
         allocated to your Account for any Plan Year cannot exceed the lesser of
         100% of your Compensation for the Plan Year or $40,000 for 2003 and
         $41,000 for 2004. This dollar amount may be changed in future years to
         reflect the cost of living as permitted under federal regulations or to
         reflect changes in the law. This allocation limitation does not apply
         to the amount of earnings that can be allocated to your Account, to
         Rollover Contributions, or to any other funds transferred to this Plan
         on your behalf from another qualified plan.

         Top Heavy Allocations
         Under certain circumstances, you may be entitled to a minimum
         allocation for any Plan Year in which the Plan is considered top heavy.
         However, the Plan is exempt from providing this minimum allocation in
         any Plan Year in which we elect to satisfy this requirement by
         contributing on your behalf to another plan (if any) that we sponsor,
         or in which our contribution to this Plan consists solely of a "safe
         harbor" Matching Contribution.

         If the Plan is not exempt from this minimum allocation requirement,
         then for each Plan Year in which the Plan is considered top heavy and
         in which you are employed by us on the last day of the Plan Year, you

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         will receive a minimum allocation equal to the lesser of (a) 3% of your
         Compensation, or (b) the highest percentage of Compensation allocated
         for that Plan Year to the Accounts of Participants who are "key"
         employees.

         The Plan is considered top heavy for any Plan Year in which more than
         60% of Plan assets are allocated to the Accounts of Participants who
         are "key" employees. A "key" employee for top heavy purposes is any
         employee who satisfies certain ownership requirements and any employee
         who is an officer and whose Compensation for the Plan Year exceeds
         certain IRS limits.

         Rollover Contributions
         If you participated in another qualified retirement plan before you
         were employed by us, you can transfer (or rollover) any distribution
         made to you from that plan to this Plan provided that all legal
         requirements (and any requirements imposed by the Administrator) with
         respect to such a transfer are satisfied. Do not withdraw funds from
         any other plan or account until you have received written approval from
         the Administrator to roll those funds over into this Plan.

         If you do decide to make a rollover contribution and it is accepted by
         the Administrator, it will be kept in a separate Rollover Contribution
         Account established on your behalf. You will at all times have a 100%
         Vested Interest in all amounts credited to your Rollover Contribution
         Account.

         You may withdraw up to 100% of your Rollover Contribution Account at
         any time prior to becoming a Participant in the Plan, and thereafter
         upon the earlier of (a) the date you are entitled to a distribution of
         your Plan Account, or (b) within an administratively reasonable time
         after you terminate employment. Any amount withdrawn cannot be
         redeposited to your Rollover Contribution Account.

BENEFIT UPON RETIREMENT

         You will have a 100% Vested Interest in your Account if you reach
         Normal Retirement Age while you are still employed by us. Normal
         Retirement Age is the date you reach age 65. Your Account will be
         distributed within an administratively reasonable time after you
         terminate employment on or after Normal Retirement Age. However, if you
         continue working for us after Normal Retirement Age, you can elect to
         receive a distribution even though you remain employed. When your
         Account is distributed, payment will be made in a lump sum.

 BENEFIT UPON DISABILITY

         If you become disabled before your Account is distributed, you are
         entitled to your Vested Interest. To be considered disabled, you must
         suffer a physical or mental condition that qualifies you for Social
         Security disability benefits. Your Vested Interest will be distributed
         within an administratively reasonable time after you terminate
         employment because of the disability. When your Vested Interest is
         distributed, it will be in a lump sum.

BENEFIT UPON DEATH

         If you die before your Account is distributed, your beneficiary is
         entitled to your Vested Interest. If you are married, your spouse is
         designated by law to be the beneficiary of 100% of your Vested
         Interest. Your spouse can waive in writing his or her statutory death
         benefit, in which case you can name another beneficiary to receive 100%
         of your Vested Interest. Your death benefit will be distributed to your
         beneficiary in a lump sum.

BENEFIT UPON TERMINATION OF EMPLOYMENT

         If you terminate employment with us before Normal Retirement Age, or if
         you terminate employment with us before you die or become disabled, you
         will be entitled to receive the Vested Interest in your Account.
         Distribution will be made in a lump sum within an administratively
         reasonable time after the next valuation date that occurs after you
         terminate employment.

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DETERMINATION OF VESTED INTEREST

         The Vested Interest in your Account is the percentage of an Account to
         which you are entitled at any point in time. You will at all times have
         a 100% Vested Interest in your Elective Deferral Account. You will also
         have a 100% Vested Interest in all other Accounts maintained on your
         behalf upon reaching Normal Retirement Age prior to termination of
         employment, and also upon death or Disability prior to termination of
         employment.

         You will at all times have a 100% Vested Interest in your Safe Harbor
Matching Contribution Account.

         The Vested Interest in your pre-2004 Matching Contribution Account at
         any time prior to Normal Retirement Age, death or Disability will be
         determined by the vesting schedule which immediately follows this
         paragraph based on the number of your Years of Service. Any portion of
         your Matching Contribution Account which is not vested when you
         terminate employment will be forfeited.

                    Years of Service              Vested Interest
                            1 . . . . . . . . . . . . .   20%
                            2 . . . . . . . . . . . . .   40%
                            3 . . . . . . . . . . . . .   60%
                            4 . . . . . . . . . . . . .   80%
                            5 . . . . . . . . . . . . .  100%

PRE-RETIREMENT DISTRIBUTIONS

         At any time prior to reaching Normal Retirement Age, you may withdraw
         in a lump sum up to 100% of the Vested Interest in your Elective
         Deferral Account, Qualified Matching Contribution Account, Qualified
         Non-Elective Contribution Account and Matching Contribution Account.

         To be eligible for an in-service distribution from your Elective
         Deferral Account, Qualified Matching Contribution Account and Qualified
         Non-Elective Contribution Account, you must have reached age 59 1/2. To
         be eligible for an in-service distribution from your Matching
         Contribution Account, you must have reached age 59 1/2.

HARDSHIP DISTRIBUTIONS

         You may withdraw in a lump sum up to 100% of the Vested Interest in
         your Elective Deferral Account (excluding any investment earnings) and
         your Matching Contribution Account to pay for a financial hardship
         caused by (1) eligible medical expenses incurred by you or your family;
         (2) the purchase (excluding mortgage payments) of your principal
         residence; (3) tuition for the next 12 months of college for you or
         your family; or (4) payments needed to prevent your eviction from your
         principal residence or payments needed to prevent foreclosure on the
         mortgage of your principal residence.

         A hardship distribution cannot exceed the amount required to relieve
         the financial need, and you cannot make any Elective Deferrals for 6
         months after the date you receive the distribution.

PARTICIPANT LOANS

         Under certain conditions, you will be permitted to borrow from the
         Plan. All loans will be made in accordance with the Participant Loan
         Policy established by the Administrator. If the Participant Loan Policy
         is not attached to this summary, you can obtain a copy from the
         Administrator.

INVESTMENT OF ACCOUNTS

         You are permitted to direct how your Elective Deferral Account,
         Matching Contribution Account and Rollover Contribution Account will be
         invested. Subject to any rules or procedures established by the
         Administrator, you can choose from any investment alternatives approved
         by the Trustees, including but not limited to savings and/or money

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         market funds, stocks, bonds and mutual funds. You can switch between
         investment alternatives as often as is permitted under the investment
         alternatives you choose.

         All earnings and losses on your directed investments will be credited
         directly to your Account. At the appropriate time, the Employer will
         provide you with more detailed information about the directed
         investment alternatives permitted under the terms of the Plan's
         investment policy.

         Investment results will reflect any fees or other investment expenses
         for the alternative investments that you select. You may request more
         information on fees associated with an Account from the Plan
         Administrator. Fees and expenses can fall into three basic categories:

         (a)      Investment fees are generally assessed as a percentage of
                  assets invested, and are deducted directly from your
                  investment returns. Investment fees can be in the form of
                  sales charges, loads, commissions, "12b-1" fees, or management
                  fees. You can obtain more information about investment fees
                  from the documents (such as a prospectus) that describe the
                  types of investments that are available to you under this
                  Plan.

         (b)      Administration fees cover day-to-day expenses for Plan record
                  keeping, accounting, legal and trustee services, as well as
                  additional services that may be available such as daily
                  valuation, telephone response systems, internet access,
                  retirement planning tools, and educational materials. In some
                  cases, these costs are covered by investment fees that are
                  deducted directly from investment returns. In other cases,
                  these administrative fees are either paid directly by us as
                  your Employer, or are passed through to the participants in
                  the Plan, in which case a record keeping fee will be deducted
                  from your Account.

         (c)      Transaction-based fees are associated with optional services
                  offered under the Plan, and are charged directly to your
                  Account if you take advantage of a particular plan feature
                  that may be available (now or in the future), such as a Plan
                  loan.

         Please Note: Any portion of an Account that is self-directed is
         intended to comply with Section 404(c) of the Employee Retirement
         Income Security Act of 1974. This means that if you are permitted to
         exercise independent control over the investment of an Account, the
         fiduciaries of the Plan, including the trustees, the Administrator, and
         we as the Employer, may be relieved of certain legal liabilities for
         losses which can result from your exercise of such control.

TAX WITHHOLDING ON PLAN BENEFITS

         Due to the complexity and frequency of changes in the federal laws that
         govern benefit distributions, penalties, and taxes, the following is
         only a brief explanation of the applicable law and IRS rules and
         regulations as of the date this summary is issued. You will receive
         additional information from us at the time of any benefit distribution,
         and you should consult your tax advisor to determine your personal tax
         situation before taking any distribution from the Plan.

         Any distribution from this Plan that is eligible to be rolled over and
         that is directly transferred to another qualified retirement plan or to
         an individual retirement account (IRA) is not subject to income tax
         withholding. Generally, any part of a distribution from this Plan can
         be rolled over to another qualified plan or to an IRA unless the
         distribution (1) is part of a series of equal periodic payments made
         over your lifetime, over the lifetime of you and your beneficiary, or
         over a period of 10 years or more; or (2) is a minimum benefit payment
         that must be paid to you because you have reached age 70 1/2. There are
         other distributions that cannot be rolled over, and you should contact
         the Administrator if you have questions about whether a distribution
         can be rolled over.

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         If you choose to have your benefit paid to you and the benefit is
         eligible to be rolled over, you only receive 80% of the payment. The
         Administrator is required by law to withhold 20% of the payment and to
         remit that amount to the IRS as income tax withholding to be credited
         against your taxes. If you receive the distribution before you reach
         age 59 1/2, you may also have to pay an additional 10% tax. You can
         still roll over all or a part of the 80% distribution that is paid to
         you by putting it into an IRA or into another qualified retirement plan
         within 60 days of receiving it. If you want to roll over 100% of the
         eligible distribution to an IRA or to another qualified retirement
         plan, you must find other money to replace the 20% that was withheld.

         You cannot elect out of the 20% withholding (1) unless you are
         permitted (and elect) to leave your benefit in this Plan, or (2) unless
         you have 100% of an eligible distribution transferred directly to an
         IRA or to another qualified retirement plan that accepts rollover
         contributions.

OTHER INFORMATION

         Claims for Benefits
         To make a claim for benefits, you must use the procedures described
         below. If you feel you are not receiving benefits to which you are
         entitled, you must file a written claim for benefits with the Plan
         Administrator. You may authorize someone (such as a family member or an
         attorney) to make a claim on your behalf. The Administrator will review
         your claim and determine whether your claim should be granted. The
         Administrator will notify you of its decision within 90 days after
         receiving your written claim. In certain cases, the Administrator may
         take up to an additional 90 days (for a total of 180 days) to review
         your claim. If the Administrator needs additional time to review your
         claim, you will be notified in writing within the initial 90-day
         period. If your claim is denied, you will receive a written or
         electronic notice explaining why your claim was denied. If additional
         information is needed, the notice will describe the information that is
         needed and will explain why it is needed. The notice will explain your
         right to request a review of the claim denial and your right to request
         arbitration if you request a review and your claim continues to be
         denied on review.

         If your claim is denied, you can request a review of the denial. If you
         do not request a review, the denial will be final, binding, and
         non-appealable. Your request for a review must be made in writing to
         the Administrator (or if we have appointed a separate Committee to
         oversee the Plan, to the Committee) within 60 days after you receive
         the Administrator's written or electronic notice of denial. If you
         request a review within this time period, the Administrator/Committee
         will review the claim and denial and, after a full and fair review,
         determine whether your claim should continue to be denied. As part of
         the review, you have the right to submit written comments, documents,
         records, and other information relating to your claim. You also have
         the right to request copies of any records or other information
         relevant to your claim. These copies will be provided to you free of
         charge. In reviewing your claim and its denial by the Administrator,
         the Administrator/Committee will consider all information that you have
         provided, regardless of whether the Administrator reviewed the
         information in deciding your claim.

         The Administrator/Committee will notify you of its decision. Generally,
         you will receive a written or electronic notice within 60 days after
         the Administrator/Committee receives your written request for review.
         However, in certain cases, the Administrator/Committee may need
         additional time to review your claim. If additional time is needed, the
         Administrator/Committee may take up to an additional 60 days (for a
         total of 120 days) to review your claim. If the Administrator/Committee
         needs additional time to review your claim, you will be notified in
         writing within the initial 60-day period. Also, if the
         Administrator/Committee meets once every calendar quarter (or more
         often), it may wait until its next regularly scheduled meeting (or the
         regularly scheduled meeting following the next regularly scheduled
         meeting, if your request is not received more than 30 days prior to the
         next regularly scheduled meeting) to review your claim.

         If special circumstances require an extension, you will receive a
         written notice within the initial period. If the extension is needed
         because you have not given the Administrator/Committee information it
         needs to review your claim, then the time period for the
         Administrator/Committee to review your claim may be suspended (i.e.,
         not run) until you provide the requested information. If your claim is
         denied on review, you will receive a written or electronic notice
         explaining why your claim was denied. The notice will explain your
         right to receive, upon request and free of charge, copies of any

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         documents and other information relevant to your claim. The notice also
         will explain your right to request arbitration. If your claim is denied
         on review by the Administrator/Committee, you can request arbitration
         as described below. If you do not request arbitration, the
         Administrator/Committee's decision will be final, binding, and
         non-appealable.

         A written request for arbitration must be filed with the
         Administrator/Committee within 15 days after you receive the
         Administrator/Committee's decision. If a request for arbitration is
         timely filed, you and the Administrator/Committee will each name an
         arbitrator within 20 days after the Administrator/Committee receives
         your written request for arbitration. The two arbitrators will jointly
         name a third arbitrator within 15 days after their appointment. If
         either party fails to select an arbitrator within the 20 day period, or
         if the two arbitrators fail to select a third arbitrator within 15 days
         after their appointment, then the presiding judge of the county court
         (or its equivalent) in the county in which the principal office of the
         Sponsor is located will appoint such other arbitrator or arbitrators.
         The arbitrators must render a decision within 60 days after their
         appointment. The losing party must pay all costs of arbitration unless
         the decision is not clearly in favor of one party or the other, in
         which case the costs would be allocated as the arbitrators decide. The
         decision of the arbitrators is final, binding, and non-appealable.

         Non-Alienation of Benefits
         In general, your creditors cannot garnish or levy upon your Account,
         and you cannot sell, transfer, assign, or pledge your Account. There
         are two exceptions: (1) your Account must be pledged as collateral for
         a loan from the Plan; and (2) if you and your spouse separate or
         divorce, a court can direct through a qualified domestic relations
         order that up to 100% of your Account be transferred to another person
         (usually your ex-spouse or your children). The Plan has a procedure for
         processing domestic relations orders, which you can obtain from the
         Administrator free of charge.

         Amendment or Termination
         The Plan is intended to be permanent, but the Employer can amend or
         terminate it at any time. Upon termination, all Participants will have
         a 100% Vested Interest in their Accounts as of the date of termination,
         and all Accounts will be distributed. If the Plan is amended or
         terminated, each Participant and each beneficiary receiving benefits
         will be notified in writing.

         Your Account is not insured by the Pension Benefit Guaranty Corporation
         (PBGC) because the insurance provisions of the Employee Retirement
         Income Security Act do not apply to this plan. For more information on
         PBGC coverage, ask the Administrator or the PBGC. Written inquiries to
         the PBGC should be addressed to the Technical Assistance Division,
         PBGC, 1200 K Street NW, Suite 930, Washington, D.C. 20005-4026, or you
         can call (202) 326-4000.

         Missing Payees or Beneficiaries
         If the Administrator notifies a Participant or beneficiary that he or
         she is entitled to receive a benefit and the Participant or beneficiary
         fails to make his or her whereabouts known in writing to the Trustee or
         Administrator or otherwise fails to claim the benefit, the benefit will
         be (1) treated as a forfeiture; or (2) directly rolled to an IRA
         established by the Administrator on behalf of the missing Participant
         or beneficiary; or (3) escheated to the State of California.

         Payment of Plan Expenses
         The Plan routinely incurs expenses for services rendered by lawyers,
         actuaries, accountants, third party administrators, and other Plan
         advisors. Some of these expenses may be paid by us directly on behalf
         of the Plan while others may be paid from Plan assets. The expenses
         that are paid from Plan assets will either be shared by all
         Participants or will be charged directly to the Account of the
         Participant on whose sole behalf the expense is incurred.

         Expenses shared by all Participants will be paid either on a pro-rata
         basis or on an equal dollar basis. If the expense is paid on a pro-rata
         basis, an amount will be deducted from your Account based on its value
         as compared to the total value of all Participants' Accounts. For
         example, if the Plan pays $1,000 of expenses and your Account
         constitutes 5% of the total value of all Accounts, $50 would be

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         deducted from your Account ($1,000 x 5%) for its share of the expense.
         On the other hand, if the expense is paid on an equal dollar basis, the
         expense is divided by the number of Participants and then the same
         dollar amount is deducted from each Participant's Account.

         The following expenses will be paid directly from your Account (rather
         than be shared by all Participants) because they are incurred to
         perform a function solely related to your Account:

         >$75 to process the paperwork required if you take a loan.

STATEMENT OF ERISA RIGHTS

         As a Participant in the American River Bankshares 401(k) Plan (the
         "Plan"), you are entitled to certain rights and protections under the
         Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides
         that all Plan participants are entitled to:

         (1)      Examine, without charge, at the Plan Administrator's office
                  and at other specified locations, such as work-sites and union
                  halls, all Plan documents, including insurance contracts,
                  collective bargaining agreements and copies of all documents
                  filed by the Plan with the U.S. Department of Labor, such as
                  detailed annual reports and Plan descriptions.

         (2)      Obtain copies of all Plan documents and other Plan information
                  upon written request to the Plan Administrator. The
                  Administrator may make a reasonable charge for the copies.

         (3)      Receive a summary of the Plan's annual financial report. The
                  Plan Administrator is required by law to furnish each
                  Participant with a copy of this summary annual report.

         (4)      Obtain a statement telling you whether you have a right to
                  receive a pension at Normal Retirement Age and if so, what
                  your benefits would be at Normal Retirement Age if you stop
                  working under the Plan now. If you do not have a right to a
                  pension, the statement will tell you how many more years you
                  have to work to get a right to a pension. This statement must
                  be requested in writing and is not required to be given more
                  than once a year. The Plan must provide the statement free of
                  charge.

         In addition to creating rights for Plan Participants, ERISA imposes
         duties upon the people who are responsible for the operation of the
         Plan. The people who operate your Plan, who are called "fiduciaries" of
         the Plan, have a duty to do so prudently and in the interest of you and
         other Plan Participants and beneficiaries. No one, including your
         employer, your union, or any other person, may fire you or otherwise
         discriminate against you in any way to prevent you from obtaining a
         pension benefit or exercising your rights under ERISA.

         If your claim for a pension benefit is denied in whole or in part, you
         must receive a written explanation of the reason for the denial. You
         have the right to have the Plan review and reconsider your claim. Under
         ERISA, there are steps you can take to enforce the above rights. For
         instance, if you request materials from the Plan and do not receive
         them within 30 days, you may file suit in a Federal court. In such a
         case, the court may require the Administrator to provide the materials
         and pay you up to $110 a day until you receive the materials, unless
         the materials were not sent because of reasons beyond the control of
         the Administrator. If you have a claim for benefits that is denied, in
         whole or in part, you have the right to use the Plan's claim procedures
         to request review of the claim and to request arbitration if your claim
         continues to be denied, in whole or in part, on review. If your claim
         for benefits is ignored, you may file suit in a state or Federal court.

         If it should happen that Plan fiduciaries misuse the Plan's money, or
         if you are discriminated against for asserting your rights, you may
         seek assistance from the U.S. Department of Labor, or you may file suit
         in a Federal court. The court will decide who should pay court costs
         and legal fees. If you are successful, the court may order the person
         you have sued to pay these costs and fees. If you lose, the court may
         order you to pay these costs and fees, for example, if it finds your
         claim is frivolous.

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         If you have any questions about your Plan, you should contact the
         Administrator. If you have any questions about this statement or your
         rights under ERISA, you should contact the nearest office of the
         Employee Benefits Security Administration, U.S. Department of Labor,
         listed in your telephone directory or the Division of Technical
         Assistance and Inquiries, Employee Benefits Security Administration,
         U.S. Department of Labor, 200 Constitution Avenue N.W., Washington,
         D.C. 20210.

         For even more information, you can also contact the U.S. Department of
         Labor at its internet website at
         http://www.dol.gov/ebsa/publications/wyskapr.html where you can review
         a publication called "WHAT YOU SHOULD KNOW ...about your pension
         rights". If you would like a copy of that publication, you can call the
         Department of Labor toll free at (866) 444-3272.

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