Document:

<PAGE>

                 SEVENTH AMENDMENT TO REVOLVING CREDIT AGREEMENT

            This Seventh Amendment to Revolving Credit Agreement (the "Seventh
Amendment") is dated as of July 21, 2000, among Mid-America Apartment
Communities, Inc. ("MAAC"), Mid-America Apartments, L.P. ("Mid-America"), the
financial institutions listed on Schedule 1, as amended or supplemented from
time to time (the "Lenders"), AmSouth Bank, an Alabama banking corporation, as
Administrative Agent for the Lenders, its successors and assigns (in such
capacity, the "Administrative Agent"), and Commerzbank AG, New York and Grand
Cayman Branches, as Co-Arranger and Syndication Agent.

                                    RECITALS

            A. MAAC, Mid-America, certain Lenders and the Administrative Agent
entered into that certain Revolving Credit Agreement dated as of March 16, 1998,
executed in amendment and restatement of that certain Revolving Credit Agreement
among MAAC, Mid-America, the Administrative Agent and certain lenders, dated
November 20, 1997, as amended by First Amendment to Revolving Credit Agreement
dated as of May 15, 1998, by Second Amendment to Revolving Credit Agreement
dated as of October 1, 1998, by Third Amendment to Revolving Credit Agreement
dated as of November 12, 1998, by Fourth Amendment to Revolving Credit Agreement
dated as of March 31, 1999, by Fifth Amendment to Revolving Credit Agreement
dated as of May 28, 1999, and by Sixth Amendment to Revolving Credit Agreement
dated as of November 12, 1999 (as it may be amended further from time to time,
the "Agreement"). Unless otherwise defined in this Seventh Amendment,
capitalized terms shall the meaning assigned to them in the Agreement.

            B. The Borrowers have requested that the Agreement be amended to
extend the Maturity Date and to modify certain other provisions of the
Agreement.

            C. The parties to the Agreement desire to execute this Seventh
Amendment to evidence the extension of the Maturity Date and the other
modifications.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the above Recitals, the parties
hereby agree as follows:

      1.    Section 1.1, The Loans, is hereby amended by deleting the amount of
            "$150,000,000" and replacing it with the amount of "$85,000,000".

      2.    Section 1.3, Commitments, is hereby amended by deleting the amount
            of "$150,000,000.00" and replacing it with the amount of
            "$85,000,000.00".

      3.    Section 1.11(a), Letter of Credit Fees, is hereby amended by
            replacing the percentage of one and fifty hundredths of one percent
            (1.50%) with one and thirty-five

                                       1
<PAGE>

            hundredths of one percent (1.35%), to be effective for any letters
            of credit issued or renewed after January 1, 2001. 1.

      4.    Section 1.11(c), Facility Fees, is hereby amended by adding to the
            end of the current definition the following provision:

                  Effective for the quarter commencing on January 1, 2001, the
            Facility Fee shall be determined based upon either (i) the then
            applicable ratio of the average for the prior 6-month period of
            advances under the Swing Line Facility and the Notes plus the sum of
            all Letters of Credit outstanding as of the last day of the
            applicable quarter to the sum of Development Project Costs as of the
            last day of the applicable quarter and the value of all Stabilized
            Properties as of said day (based on the Adjusted NOI of said
            Stabilized Properties, as may be adjusted pursuant to subparagraphs
            (d) and (e) of the definition of "Advance Rate" set forth in Section
            11.1 hereof) or (ii) the then applicable ratio of Adjusted NOI for
            all Mortgaged Properties (based on the prior three months
            annualized) to Assumed Debt Service, as follows:

<TABLE>
<CAPTION>
Advances under Swing Line Facility plus
Notes plus Letters of Credit/Development               Adjusted NOI/Assumed
Project Costs plus value of Stabilized Properties      Debt Service                 Facility Fee
-------------------------------------------------      ------------                 ------------
<S>        <C>                                         <C>                          <C>
           > =$57.5% but < 60%                         > =$1.5 but < 1.6            20 basis points
           > =$55% but < 57.5%                         > =$1.6 but < 1.7            15 basis points
           > =$52.5% but < 55%                         > =$1.7 but < 1.85           15 basis points
           > =$50% but < 52.5%                         > =$1.85 but < 2.0           15 basis points
           < 50%                                       > =$2.0                      15 basis points
</TABLE>

            If the calculation of the two covenants used to determine the
            Facility Fee after January 1, 2001, would result in two different
            Facility Fees, the higher Facility Fee shall be deemed the
            applicable Facility Fee.

      5.    Section 6.8, Other Financial Covenants, is hereby amended as
            follows:

            (a) Subsection (a) is hereby amended by replacing "sixty-two percent
            (62%)" with "sixty-five percent (65%)".

            (b) Subsection (c) is hereby amended by replacing "1.70" with
            "1.65".

            (c) Subsection (f) is hereby deleted in its entirety and replaced
            with the following:

                                       2
<PAGE>

                  (f)   Through the quarter ended June 30, 2000, permit the
                        ratio of Adjusted NOI for all Mortgaged Properties
                        (based on the prior three (3) months, annualized) to
                        Assumed Debt Service to be less than 1.25 to 1.0. For
                        the quarter ended September 30, 2000, permit such ratio
                        to be less than 1.35 to 1.0. From the quarter ended
                        December 31, 2000, through the quarter ended September
                        30, 2001, permit such ratio to be less than 1.50 to 1.0.
                        Thereafter, permit such ratio to be less than 1.75 to
                        1.0.

            (d)   Subsection (h) is hereby deleted in its entirety and replaced
                  with the following:

                  (h)   Through the quarter ended September 30, 2001, fail to
                        maintain as of the end of each fiscal quarter a ratio of
                        Adjusted NOI from Stabilized Properties only (based on
                        the prior three (3) months, annualized) to Assumed Debt
                        Service for the same period (utilizing a 30-year assumed
                        amortization period instead of a 25-year period) of at
                        least 1.25 to 1.0. Thereafter, permit such ratio to be
                        less than 1.50 to 1.0.

      4.    Section 11.1, Definitions, is hereby amended as follows:

            (a) The definition of "Advance Rate" is hereby amended by replacing
            the current Advance Rate for Development Projects of "50%" (in
            subparagraph (c) thereof) with the new Advance Rate of "40%".
            Notwithstanding the preceding sentence, the Advance Rate for the
            Katy, Texas property, until it becomes a Stabilized Property, shall
            be 37%.

            (b) The definition of "Borrowing Base" is hereby amended by
            replacing "$41,250,000" (in both places where such figure appears)
            with "$30,000,000".

            (c) The definition of "Margin" is hereby deleted in its entirety and
            replaced with the following:

                  Margin, through December 31, 2000, shall be determined based
            upon the then applicable ratio of Total Liabilities to Total Market
            Value of Assets, as follows:

Total Liabilities/Total
Market Value of Assets                      LIBOR Margin
----------------------                      ------------
         < 55%                              145 basis points
         >= 55% but < 60%                   165 basis points
         >=60% but < 62.50%                 175 basis points
         >=62.50%                           185 basis points

                                       3
<PAGE>

                  Effective January 1, 2001, Margin shall be determined based
            upon either (i) the then applicable ratio of the average for the
            prior 6-month period of advances under the Swing Line Facility and
            the Notes plus the sum of all Letters of Credit outstanding as of
            the last day of the applicable quarter to the sum of Development
            Project Costs as of the last day of the applicable quarter and the
            value of all Stabilized Properties as of said day (based on the
            Adjusted NOI of said Stabilized Properties, as may be adjusted
            pursuant to subparagraphs (d) and (e) of the definition of "Advance
            Rate" set forth Section 11.1 hereof) or (ii) the then applicable
            ratio of Adjusted NOI for all Mortgaged Properties (based on the
            prior three months annualized) to Assumed Debt Service, as follows:

<TABLE>
<CAPTION>
Advances under Swing Line Facility and
Notes plus Letters of Credit/Development               Adjusted NOI/Assumed
Project Costs plus value of Stabilized Properties      Debt Service                 LIBOR Margin
-------------------------------------------------      ------------                 ------------
<S>        <C>                                         <C>                          <C>
           > =$57.5% but < 60%                         > =$1.5 but < 1.6            175 basis points
           > =$55% but < 57.5%                         > =$1.6 but < 1.7            165 basis points
           > =$52.5% but < 55%                         > =$1.7 but < 1.85           155 basis points
           > =$50% but < 52.5%                         > =$1.85 but < 2.0           145 basis points
           < 50%                                       > =$2.0                      135 basis points
</TABLE>

            If the calculation of the two covenants used to determine the Margin
            after January 1, 2001, would result in two different Margins, the
            higher Margin shall be deemed the applicable Margin.

            (d) The definition of "Maturity Date" is hereby amended by replacing
            "November 24, 2001" with "May 23, 2002".

      5.    Fees. In consideration of this Seventh Amendment, the Borrowers
            shall pay to the Lenders on the date hereof an extension fee equal
            to 12.5 basis points of the Commitments ($106,250.00). An additional
            extension fee shall be payable by the Borrowers to the
            Administrative Agent on the date hereof pursuant to a separate
            letter agreement between the Administrative Agent and the Borrowers.
            The Borrowers shall pay the Administrative Agent such other fees as
            required by the Administrative Agent in a separate letter agreement
            between the Administrative Agent and the Borrowers.

      6.    Schedule 1 is hereby deleted in its entirety and replaced with
            Schedule 1 attached hereto and made a part hereof.

      7.    Schedule 2 is hereby deleted in its entirety and replaced with
            Schedule 2 attached hereto and made a part hereof.

                                       4
<PAGE>

      8.    Schedule 3 is hereby deleted in its entirety and replaced with
            Schedule 3 attached hereto and made a part hereof.

      9.    Schedule 4 is hereby deleted in its entirety and replaced with
            Schedule 4 attached hereto and made a part hereof.

      10.   Exhibit J is hereby amended by replacing the Debt Covenant Worksheet
            for Compliance Certificate with the Worksheet attached hereto and
            made a part hereof.

      11.   This Seventh Amendment shall not be effective until the following
            conditions have been fulfilled:

            a.    The Administrative Agent has received a fully executed
                  original of this Seventh Amendment;

            b.    The Administrative Agent has received an original Note
                  executed to the order of each Lender, in the principal amount
                  of such Lender's commitment and evidencing such Lender's
                  Loans;

            c.    The fees required herein have been received by the
                  Administrative Agent;

            d.    The Administrative Agent has received appropriate resolutions
                  of the Borrowers and the Subsidiaries authorizing the
                  transactions contemplated herein;

            e.    The Administrative Agent has received an opinion of counsel to
                  each of the Borrowers, which opinion shall be satisfactory to
                  the Administrative Agent in all respects; and

            f.    The Administrative Agent has received a confirmation from each
                  Subsidiary that is a Mortgagor that its Subsidiary Guaranty is
                  in full force and effect.

      12.   The parties hereto acknowledge that since the inception of the
            Loans, AmSouth Bank has served as the Administrative Agent for the
            Lenders and that in such capacity, AmSouth Bank has also served as
            the sole Arranger and the Syndication Agent under the Agreement. The
            Lenders, the Administrative Agent and the Borrowers hereby appoint
            Commerzbank AG, New York and Grand Cayman Branches as a Co-Arranger
            and the Syndication Agent under the Agreement (the "Co-Arranger").
            The parties, specifically including the Co-Arranger, acknowledge
            that the Co-Arranger shall not receive any additional fees as a
            Co-Arranger and the Syndication Agent under the Agreement.

                                       5
<PAGE>

            Except as expressly amended hereby, the Agreement shall remain in
full force and effect in accordance with its terms.

            Each Borrower represents and warrants that no Event of Default has
occurred and is continuing under the Agreement, nor does any event that upon
notice or lapse of time or both would constitute such an Event of Default exist.

            IN WITNESS WHEREOF, the parties have executed this Seventh Amendment
as of the date first set forth above.

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        MID-AMERICA APARTMENT
                                        COMMUNITIES, INC.

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

<PAGE>

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        MID-AMERICA APARTMENTS, L.P.

                                        By Mid-America Apartment
                                        Communities, Inc.
                                         Its Sole General Partner

                                          By ___________________________________
                                          Name__________________________________
                                          Title_________________________________

<PAGE>

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        AMSOUTH BANK,
                                        in its individual capacity as Lender
                                        and as Administrative Agent

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

<PAGE>

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        HIBERNIA NATIONAL BANK

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

<PAGE>

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        COMMERZBANK AG,
                                        NEW YORK AND GRAND CAYMAN
                                        BRANCHES, in its individual capacity as
                                        Lender and as Co-Arranger and
                                        Syndication Agent

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

<PAGE>

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        FIRST TENNESSEE BANK, N.A.

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

<PAGE>

                                      Signature page to
                          Seventh Amendment to Revolving Credit Agreement

                                        NATIONAL BANK OF COMMERCE OF
                                        BIRMINGHAM

                                        By _____________________________________
                                        Name____________________________________
                                        Title___________________________________

<PAGE>

                                   SCHEDULE 1

List of Lenders                                                       Percentage
---------------                                                       ----------

AmSouth Bank                                                            29.41%

Hibernia National Bank                                                  10.0%

National Bank of Commerce                                               10.0%
of Birmingham

First Tennessee Bank, N.A                                               23.53%

Commerzbank AG, New York
and Grand Cayman Branches                                               27.06%

                                                                        =====
TOTAL                                                                   100.0%

<PAGE>

                                   SCHEDULE 2

                          [Current List of Properties]

                                                                    Availability
Property                             Advance Rate                  as of 7/21/00
--------                             ------------                  -------------

I.   Stabilized Properties:

1.   Reflection Pointe (MS)               60%                      $  7,048,503
2.   Anatole (FL)                         60%                         5,427,657
3.   Township (VA)                        60%                         7,741,459
4.   Sterling Ridge (GA)                  60%                         4,582,333
5.   Courtyards at Campbell (TX)          60%                         6,002,703
6.   Deer Run (TX)                        60%                         5,665,952
7.   Reserve at Dexter I (TN)             60%                         9,630,000
8.   Paddock Club Gainesville (FL)        60%                        10,440,000
9.   Paddock Club Panama City (FL)        60%                        10,740,000

II.  Development Projects:

1.   Grande View Nashville (TN)           40% of cost              $  9,488,006
2.   Grand Reserve Lexington (KY)         40% of cost                11,613,890
3.   Reserve at Dexter II (TN)            40% of cost                 5,708,175
4.   Kenwood Club Katy (TX)               37% of cost                 5,942,089

<PAGE>

                                   SCHEDULE 3

                               [Notice Addresses]

AmSouth Bank
Real Estate Department
9th Floor
AmSouth/Sonat Building
1900 5th Avenue North
Birmingham, Alabama 35203
Attention: Mr. Lawrence B. Clark

Hibernia National Bank
313 Carondolet Street
Suite 1400
New Orleans, Louisiana 70130
Attn: Ms. Yancey Jones

First Tennessee Bank, N.A.
1st Floor-Real Estate
165 Madison Avenue
Memphis, Tennessee 38103
Attn: Ms. Jennifer Andrews

Commerzbank AG, New York
and Grand Cayman Branches
Two World Financial Center
225 Liberty Street, 34th Floor
New York, New York 10281
Attn: Mr. Marcus Perry

National Bank of Commerce of Birmingham
1927 1st Avenue North
Birmingham, AL 35203
Attn: Mr. J. Cotten Volman

Mid-America Apartment Communities, Inc.
6584 Poplar
Suite 340
Memphis, Tennessee 38138
Attention: Mr. Simon R.C. Wadsworth

Mid-America Apartments, L.P.
6584 Poplar
Suite 340
Memphis, Tennessee 38138
Attention: Mr. Simon R.C. Wadsworth

<PAGE>

                                   SCHEDULE 4

                           [Subsidiaries & Ownership]

Mid-America Apartments of Texas, L.P., a Texas limited partnership

<PAGE>

                        Mid-America Apartment Communities
                           Revolving Credit Agreement
                             Debt Covenant Worksheet
                           for Compliance Certificate

================================================================================
                                               Quarter    Quarter
                                               Ending     Ending      Annualized

                                               ------     ------      ----------
--------------------------------------------------------------------------------
Total Liabilities
--------------------------------------------------------------------------------
EBITDA-MAA
--------------------------------------------------------------------------------
EBITDA-FDC
--------------------------------------------------------------------------------
EBITDA-Combined
--------------------------------------------------------------------------------
Total Market Value
--------------------------------------------------------------------------------
Total Liabilities/Total Market Value
--------------------------------------------------------------------------------
Total Development and JV Investment
As % of Total Market Value
--------------------------------------------------------------------------------
Total Annualized Fixed Charges
--------------------------------------------------------------------------------
Preferred Dividend
--------------------------------------------------------------------------------
Principal (from below)
--------------------------------------------------------------------------------
Interest
--------------------------------------------------------------------------------
Total Annualized Fixed Charges
--------------------------------------------------------------------------------
EBITDA/ANNUALIZED FIXED
CHARGES:
--------------------------------------------------------------------------------
Principal
--------------------------------------------------------------------------------
From Mac Schedule
--------------------------------------------------------------------------------
Westside Creek II
--------------------------------------------------------------------------------
FDC
--------------------------------------------------------------------------------
Total Principal
================================================================================

Total Annualized Debt Service:
--------------------------------------------------------------------------------
Principal
--------------------------------------------------------------------------------
Interest
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
Total Debt Service
--------------------------------------------------------------------------------
EBITDA/DEBT SERVICE

--------------------------------------------------------------------------------
Tangible Net Worth
--------------------------------------------------------------------------------
Equity
--------------------------------------------------------------------------------
Less Intangibles
--------------------------------------------------------------------------------
Tangible Net Worth

--------------------------------------------------------------------------------
AmSouth Properties only
--------------------------------------------------------------------------------
Adjusted NOI of Mortgaged Properties
--------------------------------------------------------------------------------
Assumed Debt Service
--------------------------------------------------------------------------------
Adjusted NOI/Assumed Debt Service
--------------------------------------------------------------------------------
Dividend Payments
--------------------------------------------------------------------------------
Common Dividend Payment
--------------------------------------------------------------------------------
Preferred Divident Payment
--------------------------------------------------------------------------------
Total Dividend Payment
--------------------------------------------------------------------------------
FFO
--------------------------------------------------------------------------------
FFO + Preferred Dividend
--------------------------------------------------------------------------------
Total Dividends/FFO+Preferred
================================================================================

<PAGE>

<TABLE>
<CAPTION>
=========================================================================================
                                                                                [Quarter]
-----------------------------------------------------------------------------------------
<S>                                        <C>                                  <C>
              > 2.00:1.0                   Debt Service Ratio
-----------------------------------------------------------------------------------------
              > 1.65:1.0                   Fixed Charge Ratio
-----------------------------------------------------------------------------------------
       > 1.25:1.0 (through 6/30/00)        Adjusted NOI Ratio
-----------------------------------------------------------------------------------------
        > 1.35:1.0 (quarter ended          Adjusted NOI Ratio
               9/30/00)
-----------------------------------------------------------------------------------------
> 1.50:1.0 (quarter ended 12/31/00 through Adjusted NOI Ratio
        quarter ended 9/30/01)
-----------------------------------------------------------------------------------------
         > 1.75:1.0 thereafter             Adjusted NOI Ratio
-----------------------------------------------------------------------------------------
> $550MM with accumulated depreciation     Net Worth
added back
-----------------------------------------------------------------------------------------
              < 7.5% MVA                   Development & Construction Debt
-----------------------------------------------------------------------------------------
              < 90% FFO                    Dividend payout
-----------------------------------------------------------------------------------------
                < 65%                      Debt/Total Market Value of Assets
-----------------------------------------------------------------------------------------
                < 10%                      Development Project Costs/
                                           Total Market Value of Assets
-----------------------------------------------------------------------------------------
      > 1.25:1.0 (through 9/30/01)         Adjusted NOI Ratio
                                           (Stabilized Properties)
-----------------------------------------------------------------------------------------
        > 1.50:1.0 thereafter              Adjusted NOI Ratio
                                           (Stabilized Properties)
=========================================================================================
</TABLE>Prepared by MERRILL CORPORATION www.edgaradvantage.com

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Exhibit 10.12  Change in Control Agreement for James W. Lokey  

 
 

CHANGE IN CONTROL AGREEMENT    
  

April
12, 2000 

Dear
James W. Lokey: 

    Mid-State
Bank, a California corporation (the "Company"), considers the establishment and maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its shareholders. In this connection, the Company recognizes that, as is the case with many publicly held corporations, the possibility of a change in
control may arise and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment
of the Company and its shareholders. Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's management to their assigned duties without distraction in circumstances arising from the possibility of a change in control of the Company. In
particular, the Board believes it important, should the Company or its shareholders receive a proposal for transfer of control of the Company, that you be able to assess and advise the Board whether
such proposal would be in the best interests of the Company and its shareholders and to take such other action regarding such proposal as the Board might determine to be appropriate, without being
influenced by the uncertainties of your own situation. 

    In
order to induce you to remain in the employ of the Company, this letter agreement, which has been approved by the Board, sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company is terminated subsequent to a "change in control" of the Company under the circumstances described below. 

    1.  Agreement to Provide Services; Right to Terminate.  

    (i)
Except as otherwise provided in paragraph (ii) below, the Company or you may terminate your employment at any time, subject to the Company's providing the benefits
hereinafter specified in accordance with the terms hereof. 

    (ii)
In the event a tender offer or exchange offer is made by a Person (as hereinafter defined) for more than 25% of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of directors ("Voting Securities"), including shares of the Common Stock, no par value, of the Company (the "Company Shares"), you agree that you will
not leave the employ of the Company (other than as a result of Disability or upon Retirement, as such terms are hereinafter defined) and will render the services contemplated in the recitals to this
Agreement until such tender offer or exchange offer has been abandoned or terminated or a change in control of the Company, as defined in Section 3 hereof, has occurred. For purposes of this
Agreement, the term "Person" shall mean and include any individual, corporation, partnership, group, association or other "person", as such term is used in Section 14(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), other than the Company, a wholly owned subsidiary of the Company or any employee benefit plan(s) sponsored by the Company or a subsidiary of the Company. 

    2.  Term of Agreement.  This Agreement shall commence on the date hereof and
shall continue in effect until December 31, 2000; provided, however, that commencing on January 1, 2001, and each January 1 thereafter, the term of this Agreement shall
automatically be extended for one additional year unless at least 90 days prior to such January 1st date, the Company or you shall have given notice that this Agreement shall not be
extended; and provided, further, that this Agreement shall continue in effect for a period of twenty-four (24) months beyond the term provided herein if a change in control of the
Company, as defined in Section 3 hereof, shall have occurred during such term. Notwithstanding 

anything in this Section 2 to the contrary, this Agreement shall terminate if you or the Company terminate your employment prior to a change in control of the Company. 

    3.  Change in Control.  Change in Control means a change, after January 1,
2000, in Control of the Bank of a nature that would be required to be the subject of prior approval by the Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as amended as of the
date hereof, the Federal Deposit Insurance Corporation ("FDIC") under the Change in Bank Control Act, pursuant to the California Financial Code as in effect on this date; provided that, without
limitation, and without consideration of regulatory exemptions from prior approval, such a Change in Control will be deemed to have occurred if and when any of the following occur: (i) there is
a transfer, voluntarily or by hostile takeover or proxy contest, operation of law, or otherwise, of Control of the Bank, (ii) the individuals who were members of the Board of Directors of the
Bank immediately prior to a meeting of the shareholders of the Bank which meeting involves a contest for the election of directors, do not constitute a majority of the Board of Directors of the Bank
following such meeting or election, (iii) an acquisition, directly or indirectly, of more than 25% of the outstanding shares of any class of voting securities of the Bank by any Person,
(iv) a merger, consolidation or sale of all or substantially all of the assets of the Bank, or (v) there is a change, during any period of two consecutive years of a majority of the
Board of Directors of the Bank as constituted as of the beginning of such period, unless the election of each director who is not a director at the beginning of such period was approved by a vote of
at least two-thirds of the directors then in office who were directors at the beginning of such period. 

    4.  Termination Following Change in Control.  If any of the events described in
Section 3 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 5 hereof upon the termination of your
employment with the Company within twenty-four (24) months after such event, unless such termination is (a) because of your death or Retirement, (b) by the Company for
Cause or Disability or (c) by you other than for Good Reason (as all such capitalized terms are hereinafter defined). 

    (i)  Disability.  Termination by the Company of your employment based on
"Disability" shall mean termination because of your absence from your duties with the Company on a full time basis for one hundred eighty (180) consecutive days as a result of your incapacity
due to physical or mental illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given to you following such absence you shall have returned to the full
time performance of your duties. 

    (ii)  Retirement.  Termination by you of your employment based on "Retirement"
shall mean the voluntary termination of active employment with the Company or a subsidiary on or about 65 years of age or at such later age as such employee desires to discontinue his active
employment with the Company or a subsidiary. 

    (iii)  Cause.  Termination by the Company of your employment for "Cause" shall
mean termination upon (a) the willful and continued failure by you to perform substantially your duties with the Company (other than any such failure resulting from your incapacity due to
physical or mental illness) after a demand for substantial performance is delivered to you by the Chairman of the Board or the Vice Chairman of the Board or the President of the Company which
specifically identifies the manner in which such executive believes that you have not substantially performed your duties, or (b) the willful engaging by you in illegal conduct which is
materially and demonstrably injurious to the Company. For purposes of this paragraph (iii), no act, or failure to act, on your part shall be considered "willful" unless done, or omitted to be
done, by you in bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and
in the best interests of the Company. It is also expressly understood that your attention to matters not directly related to the business of the Company shall not provide a basis for termination for
Cause so long as the Board has approved your engagement in such activities. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause 

unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith
opinion of the Board you were guilty of the conduct set forth above in (a) or (b) of this paragraph (iii) and specifying the particulars thereof in detail. 

    (iv)  Good Reason.  Termination by you of your employment for "Good Reason" shall
mean termination based on: 

    (A) an
adverse change in your status or position(s) as an executive officer of the Company as in effect immediately prior to the change in control, including, without
limitation, any adverse change in your status or position as a result of a material diminution in your duties or responsibilities (other than, if applicable, any such change directly attributable to
the fact that the Company is no longer publicly owned) or the assignment to you of any duties or responsibilities which, in your reasonable judgment, are inconsistent with such status or position(s),
or any removal of you from or any failure to reappoint or reelect you to such position(s) (except in connection with the termination of your employment for Cause, Disability or Retirement or as a
result of your death or by you other than for Good Reason); 

    (B) a
reduction by the Company in your base salary as in effect immediately prior to the change in control; 

    (C) the
failure by the Company to continue in effect any Plan (as hereinafter defined) in which you are participating at the time of the change in control of the
Company (or Plans providing you with at least substantially similar benefits) other than as a result of the normal expiration of any such Plan in accordance with its terms as in effect at the time of
the change in control, or the taking of any action, or the failure to act, by the Company which would adversely affect your continued participation in any of such Plans on at least as favorable a
basis to you as is the case on the date of the change in control or which would materially reduce your benefits in the future under any of such Plans or deprive you of any material benefit under any
Plan enjoyed by you at the time of the change in control. 

    (D) the
failure by the Company to provide and credit you with the number of paid vacation days to which you are then entitled in accordance with the Company's normal
vacation policy as in effect immediately prior to the change in control; 

    (E) the
Company's requiring you to be based at an office that is greater than 25 miles from where your office is located immediately prior to the change in control
except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which you undertook on behalf of the Company prior to the change in
control; 

    (F) the
failure by the Company to obtain from any Successor (as hereinafter defined) the assent to this Agreement contemplated by Section 6 hereof; or 

    (G) any
purported termination by the Company of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of
paragraph (v) below (and, if applicable,
paragraph (iii) above); and for purposes of this Agreement, no such purported termination shall be effective. 

For
purposes of this Agreement, "Plan" shall mean any compensation plan such as an incentive, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit
sharing, medical, disability, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees. 

    (v)  Notice of Termination.  Any purported termination by the Company or by you
following a change in control shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon. 

    (vi)  Date of Termination.  "Date of Termination" following a change in control
shall mean (a) if your employment is to be terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance
of your duties on a full-time basis during such thirty (30) day period), (b) if your employment is to be terminated by the Company for Cause or by you pursuant to Sections
4(iv) (F) and 6 hereof or for any other Good Reason, the date specified in the Notice of Termination, or (c) if your employment is to be terminated by the Company for any reason
other than Cause, the date specified in the Notice of Termination, which in no event shall be a date earlier than ninety (90) days after the date on which a Notice of Termination is given,
unless an earlier date has been expressly agreed to by you in writing either in advance of, or after, receiving such Notice of Termination. In the case of termination by the Company of your employment
for Cause, if you have not previously expressly agreed in writing to the termination, then within thirty (30) days after receipt by you of the Notice of Termination with respect thereto, you
may notify the Company that a dispute exists concerning the termination, in which event the Date of Termination shall be the date set either by mutual written agreement of the parties or by the
arbitrators in a proceeding as provided in Section 13 hereof. During the pendency of any such dispute, the Company will continue to pay you your full compensation in effect just prior to the
time the Notice of Termination is given and until the dispute is resolved in accordance with Section 13. 

    5.  Compensation Upon Termination or During Disability; Other Agreements.  

    (i)
During any period following a change in control of the Company that you fail to perform your duties as a result of incapacity due to physical or mental illness, you shall continue
to receive your salary at the rate then in effect and any benefits or awards under any Plans shall continue to accrue during such period, to the extent not inconsistent with such Plans, until your
employment is terminated pursuant to and in accordance with paragraphs 4(i) and 4(vi) hereof. Thereafter, your benefits shall be determined in accordance with the Plans then in effect. 

    (ii)
If your employment shall be terminated for Cause following a change in control of the Company, the Company shall pay you your salary through the Date of Termination is given plus
any benefits or awards (including both the cash and stock components) which pursuant to the terms of any Plan have been earned or become payable, but which have not yet been paid to you. Thereupon the
Company shall have no further obligations to you under this Agreement. 

    (iii)
Subject to Section 8 hereof, if, within twenty-four (24) months after a change in control of the Company, as defined in Section 3 above, shall
have occurred, your employment by the Company shall be terminated (a) by the Company other than for Cause, Disability or Retirement or (b) by you for Good Reason, then the Company shall
pay to you, no later than the fifth day following the Date of Termination, without regard to any contrary provisions of any Plan, the following: 

    (A) your
salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given plus any benefits or awards (including
both the cash and stock components) which pursuant to the terms of any Plans have been earned or become payable, but which have not yet been paid to you (including amounts which previously had been
deferred at your request); and 

    (B) as
severance pay and in lieu of any further salary for periods subsequent to the Date of Termination, an amount in cash equal to one and one-half
(11/2) times your annual salary and bonus, such salary to be at the rate of salary in effect immediately prior to the Date of Termination (or, if greater, immediately prior to the
change in control of the Company) and such bonus to be equal to the total bonus paid to you during the twelve-month period immediately preceding the Date of Termination (or, if greater, during the
twelve-month period immediately preceding the change in control of the Company); provided, however, that in no event shall such amount exceed 2.99 times your "annualized includible compensation for
the base period" (as defined in Section 280G(d) (1) of the Internal Revenue Code of 1986 (the "Code")). 

    (iv)
If, within twenty-four (24) months after a change in control of the Company, as defined in Section 3 above, shall have occurred, your employment by the
Company shall be terminated (a) by the 

Company other than for Cause, Disability or Retirement or (b) by you for Good Reason, then the Company shall maintain in full force and effect, for the continued benefit of you and your
dependents for a period terminating on the earliest of (a) three years after the Date of Termination, (b) the commencement date of equivalent benefits from a new employer or
(c) your normal retirement date under the terms of any retirement plan, all insured and self-insured employee welfare benefit Plans in which you were entitled to participate
immediately prior to the Date of Termination, provided that your continued participation is possible under the general terms and provisions of such Plans (and any applicable funding media) and you
continue to pay an amount equal to your regular contribution under such plans for such participation. If, at the end of three years after the Termination Date, you have not reached your normal
retirement date and you have not previously received or are not then receiving equivalent benefits from a new employer, the Company shall arrange, at its sole cost and expense, to enable you to
convert your and your dependents' coverage under such Plans to individual policies or
programs upon the same terms as employees of the Company may apply for such conversions. In the event that your participation in any such Plan is barred, the Company, at its sole cost and expense,
shall arrange to have issued for the benefit of you and your dependents individual policies of insurance providing benefits substantially similar (on an after-tax basis) to those which you
otherwise would have been entitled to receive under such Plans pursuant to this paragraph (iv) or, if such insurance is not available at a reasonable cost to the Company, the Company shall
otherwise provide you and your dependents with equivalent benefits (on an after-tax basis). You shall not be required to pay any premiums or other charges in an amount greater than that
which you would have paid in order to participate in such Plans. 

    (v)
Except as specifically provided in paragraph (iv) above, the amount of any payment provided for in this Section 5 shall not be reduced, offset or subject to recovery
by the Company by reason of any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise. 

    6.  Successors; Binding Agreement.  

    (i)
The Company will seek, by written request at least five (5) business days prior to the time a Person becomes a Successor (as hereinafter defined), to have such Person by
agreement in form and substance satisfactory to you, assent to the fulfillment of the Company's obligations under this Agreement. Failure of such Person to furnish such assent by the later of
(A) three (3) business days prior to the time such Person becomes a Successor or (B) two (2) business days after such Person receives a written request to so assent shall
constitute Good Reason for termination by you of your employment if a change in control of the Company occurs or has occurred. For purposes of this Agreement, "Successor" shall mean any Person that
succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Company's business directly, by merger or consolidation, or indirectly, by purchase of the
Company's Voting Securities or otherwise. 

    (ii)
This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees
and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate. 

    (iii)
For purposes of this Agreement, the "Company" shall include any corporation or other entity which is the surviving or continuing entity in respect of any merger, consolidation
or form of business combination in which the Company ceases to exist. 

    7.  Fees and Expenses; Mitigation.  

    (i)
The Company shall pay all reasonable legal fees and related expenses incurred by you in connection with the Agreement following a change in control of the Company, including,
without limitation, (a) all such fees and expenses, if any, incurred in contesting or disputing any termination of your employment or incurred by you in seeking advice with respect to the
matters set forth in Section 8 hereof or (b) your seeking to obtain or enforce any right or benefit provided by this Agreement; 

provided, however, you shall be required to repay any such amounts to the Company to the extent that a court issues a final and non-appealable order setting forth the determination that
the position taken by you was frivolous or advanced by you in bad faith. 

    (ii)
You shall not be required to mitigate the amount of any payment the Company becomes obligated to make to you in connection with this Agreement, by seeking other employment or
otherwise. 

    8.  Taxes.  

    (i)
All payments to be made to you under this Agreement will be subject to required withholding of federal, state and local income and employment taxes. 

    (ii)
Notwithstanding anything in the foregoing to the contrary, if any of the payments provided for in this Agreement, together with any other payments which you have the right to
receive from the Company or any corporation which is a member of an "affiliated group" (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which
the Company is a member, would constitute a "parachute payment" (as defined in Section 280G(b) (2) of the Code), the payments pursuant to this Agreement shall be reduced (reducing first
the payments under Section 5(iii) (B)) to the largest amount as will result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code;
provided, however, that the determination as to whether any reduction in the payments under this Agreement pursuant to this proviso is necessary shall be made by you in good faith, and such
determination shall be conclusive and binding on the Company with respect to its treatment of the payment for tax reporting purposes. 

    9.  Survival.  The respective obligations of, and benefits afforded to, the
Company and you as provided in Sections 5, 6(ii), 7, 8, 13 and 14 of this Agreement shall survive termination of this Agreement. 

    10.  Notice.  For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested,
postage prepaid and addressed, in the case of the Company, to the address set forth on the first page of this Agreement or, in the case of the undersigned employee, to the address set forth below his
signature, provided that all notices to the Company shall be directed to the attention of the Chairman of the Board or President of the
Company, with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt. 

    11.  Miscellaneous.  No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and approved by the Board of Directors of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of
California. 

    12.  Validity.  The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

    13.  Arbitration.  Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in San Luis Obispo County, California, by three (3) arbitrators in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrators' award in any court having jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the 

pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant
to this Section 13. 

    14.  Employee's Commitment.  You agree that subsequent to your period of
employment with the Company, you will not at any time communicate or disclose to any unauthorized person, without the written consent of the Company, any proprietary processes of the Company or any
subsidiary or other confidential information concerning their business, affairs, products, suppliers or customers which, if disclosed, would have a material adverse effect upon the business or
operations of the Company and its subsidiaries, taken as a whole; it being understood, however, that the obligations of this Section 14 shall not apply to the extent that the aforesaid matters
(a) are disclosed in circumstances where you are legally required to do so or (b) become generally known to and available for use by the public otherwise than by your wrongful act or
omission. 

    15.  Counterparts.  This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 

    If
this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our
agreement on this subject. 

	 	 	Sincerely,
	

 	
 	
MID-STATE BANK
	

 	
 	
By:	

/s/ CARROL R. PRUETT   
 CARROL R. PRUETT
 Chairman of the Board

Agreed
to this 12th day

of April, 2000. 

	 
	 	 

	/s/ JAMES W. LOKEY   
 James W. Lokey	 	 
	

 	
 	

 

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CHANGE IN CONTROL AGREEMENT

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