Document:

EX-10.05

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) by and between Plumas Bank (“Bank”) and Douglas
N. Biddle (“Executive”), is dated January 1, 2006. (the “Effective Date)

	1.	 	PURPOSE OF AGREEMENT. This Agreement sets forth the terms of Executive’s employment with
Bank and provides Executive with severance benefits in certain circumstances as set forth in
the Agreement.

	2.	 	TERM OF AGREEMENT. This Agreement starts on the Effective Date and expires on the third
anniversary of the Effective Date.

	3.	 	NO TERM OF EMPLOYMENT. Notwithstanding the term of this Agreement, Bank may terminate
Executive’s employment at any time for any lawful reason or for no reason at all, subject to
the provisions of this Agreement. Executive’s employment with Bank is “at will.”

	4.	 	DUTIES AND EXECUTIVE POSITION. As of the Effective Date, Executive shall be employed as
President/Chief Executive Officer, and will perform such duties as may be designated by Bank’s
board of directors (the “Board”) to whom Executive will directly report.

Executive agrees that to the best of Executive’s ability and experience, Executive will at
all times loyally and conscientiously perform all of the duties and obligations required of
Executive pursuant to the express and implicit terms of this Agreement and as directed by
the Board. Executive shall devote Executive’s entire working time, attention and efforts to
Bank’s and Plumas Bancorp’s (“Bancorp’s”) business and affairs, shall faithfully and
diligently serve Bank’s and Bancorp’s interests and shall not engage in any business or
employment activity that is not on Bank’s or Bancorp’s behalf (whether or not pursued for
gain or profit) except for (i) activities approved in writing in advance by the Board and
(ii) passive investments that do not involve Executive providing any advice or services to
the businesses in which the investments are made.

	5.	 	COMPENSATION. For all services performed under this Agreement, Bank agrees to pay the
following compensation and benefits:

Base Salary. Executive’s base salary is $19,583.33 per month ($235,000 on an
annualized basis) (the “Base Salary”). The Executive’s base salary may be increased during
the term of the Agreement at the discretion of the Board.

Bonus. Executive shall be entitled to bonuses at the discretion of the Board.

Paid Time Off and Special Sick Time Off. Executive shall be entitled to days paid
time off per year for vacation, personal time off and short-term illnesses in accordance
with the Bank’s Employee Handbook.

Automobile. Executive shall be entitled to the use of a Bank automobile.
Executive’s personal use of the Bank automobile shall be considered additional executive
compensation, and Executive shall be responsible for the income taxes associated with the
value of the personal use of the Bank automobile.

Additional Life Insurance. The Bank agrees to purchase and maintain during the term
of this Agreement, a life insurance policy with Executive as the insured and with a death
benefit of $100,000 for the benefit of Executive’s designated beneficiary, provided that the
Executive qualifies for such life insurance policy under normal underwriting conditions.
The Executive shall be responsible for the income taxes associated with the value of such
insurance benefit.

Other Benefits. Executive is entitled to participate, under the terms of the
respective plans, in other benefit plans and perquisites generally available to Bank’s
employees in accordance with the Bank’s Employee Handbook.

	6.	 	TERMINATION. Executive’s employment may be terminated before the expiration of this
Agreement as described in this Section, in which event Executive’s compensation and benefits
shall terminate except as otherwise provided in this Agreement.

For Cause. Upon Bank’s termination of Executive for Cause. For Cause shall mean

	 	(a)	 	Dishonest or fraudulent conduct by Executive with respect to the performance of
Executive’s duties with Bank;

	 	(b)	 	Conduct by Executive that materially discredits Bank, Bancorp or any of
Bancorp’s subsidiaries or is materially detrimental to the reputation of Bank, Bancorp
or any of Bancorp’s subsidiaries, including but not limited to conviction or a plea of
nolo contendere of Executive of a felony or crime involving moral turpitude;

	 	(c)	 	Executive’s willful misconduct or gross negligence in performance of
Executive’s duties under this Agreement, including but not limited to Executive’s
refusal to comply in any material respect with the legal directives of the Board, if
such misconduct or negligence has not been remedied or is not being remedied to the
Board’s reasonable satisfaction within thirty (30) days after written notice, including
a detailed description of the misconduct or negligence, has been delivered by the Board
to Executive;

	 	(d)	 	An order or directive from a state or federal banking regulatory agency
requesting or requiring removal of Executive or a finding by any such agency that
Executive’s performance threatens the safety or soundness of Bank, Bancorp or any of
Bancorp’s subsidiaries; or

	 	(e)	 	Material breach of Executive’s fiduciary duties to Bank or Bancorp if such
breach has not been remedied or is not being remedied to the Board’s reasonable
satisfaction within thirty (30) days after written notice, including a detailed
description of the breach, has been delivered by the Board to Executive.

Without Cause. Upon Bank’s termination of Executive without Cause, with or without
notice, at any time in Bank’s sole discretion, for any reason other than for Cause. A
Change in Control does not in itself constitute Termination Without Cause.

Death or Disability. For purposes of this Agreement, disability (“Disability”)
shall mean either that the Executive is (i) unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less
than twelve (12) months, or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income replacement benefits
for a period of not less than three (3) months under an accident and health plan sponsored
by the Bank.

Resignation. Upon Executive’s voluntary resignation, written notice of which
Executive must give Bank and Bancorp at least 60 days in advance of his resignation. In
addition, Executive agrees to provide a letter of resignation to and resign immediately from
each of the Board of Directors of the Bank and the Board of Directors of the Bancorp in the
event Executive terminates employment with the Bank, if either Board of Directors notifies
Executive of such Board’s request for Executive’s resignation.

Change in Control. For purposes of this Agreement, a “Change in Control” shall be
deemed to have occurred when any of the following events take place:

	 	(a)	 	A Change In Ownership Of The Bancorp. A change in ownership of the
Bancorp occurs on the date that any person (or group of persons) acquires ownership of
stock of the Bancorp that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market value or total
voting power of the stock of the Bancorp.

	 	(b)	 	A Change in Effective Control of the Bancorp. A change in effective
control of the Bancorp occurs on the date that:

	 	1.	 	Any person (or group of persons) acquires (or has acquired
during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Bancorp
possessing thirty-five percent (35%) or more of the total voting power of the
stock of the Bancorp; or

	 	2.	 	A majority of members of the Bancorp’s Board is replaced during
any twelve (12) month period by directors whose appointment or election is not
endorsed by a majority of the members of the Bancorp’s Board prior to the date
of the appointment or election.

	 	(c)	 	A Change in Ownership of a Substantial Portion of the Bancorp’s Assets.
A change in the ownership of a substantial portion of the Bancorp’s assets occurs on
the date that any person (or group of persons) acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent acquisition by such
person or persons) assets from the Bancorp that have a total gross fair market value
equal to, or more than, forty percent (40%) of the total gross fair market value of all
of the assets of the Bancorp immediately prior to such acquisition or acquisitions.

	7.	 	PAYMENT UPON TERMINATION. Upon termination of Executive’s employment for any of the reasons
set forth in Section 6 above, Executive will receive payment for all Base Salary and paid time
off and other benefits accrued as of the date of Executive’s termination (“Earned
Compensation”), which shall be paid no later than the end of the business day of such
termination unless an earlier time is required by applicable law, in which case it shall be
paid at such earlier time. In the event of termination for death or Disability, Executive’s
estate or Executive, respectively shall receive in addition to Earned Compensation, accrued
paid time off and medical insurance coverage for Executive and/or Executive’s dependents, as
applicable for three months following the date of death or Disability at Bank’s expense. In
the event of Executive’s resignation with proper notice, Executive shall receive in addition
to Earned Compensation, accrued paid time off and medical insurance coverage for Executive and
Executive’s dependents for three months following the date of resignation at Bank’s expense.
In the event of Executive’s termination of employment for Cause or resignation without proper
notice, Executive shall receive Earned Compensation and any accrued paid time off to the date
of resignation.

	8.	 	SEVERANCE BENEFIT. In the event of Executive’s termination Without Cause prior to the third
anniversary of this Agreement, in addition to receiving Earned Compensation, Executive will
receive a severance benefit equal to 18 months of Base Salary plus 1 1/2 times the average
annual bonus paid to Executive over the most recent previous two complete calendar years,
based on Executive’s Base Salary just prior to termination (the “Severance Benefit”). Receipt
of the Severance Benefit is conditioned on Executive having executed the Separation Agreement
in substantially the form attached hereto as Exhibit A and the revocation period having
expired without Executive having revoked the Separation Agreement. The Severance Benefit
shall be paid in a lump sum no later than 8 calendar days after the Executive signs such
Separation Agreement. Executive shall not be required to mitigate the amount of any payments
under this Section (whether by seeking new employment or otherwise), and the amount of
Severance Benefits shall not be reduced by any income or funds that Executive may receive from
another party. In no event will this lump-sum benefit paid under this section exceed an
amount that is $1 less than 3 times the Executive’s average annual salary and cash bonus over
the previous five years threshold as allowed under Internal Revenue Code Section 280G. In
addition to any Severance Benefit paid by the Bank, the Executive shall receive medical
insurance coverage for Executive and Executive’s dependents for eighteen months following the
date of termination without Cause at Bank’s expense. Receipt of the benefits provided in this
section are conditioned on Executive having executed the Separation Agreement in substantially
the form attached hereto as Exhibit A and the revocation period having expired without
Executive having revoked the Separation Agreement.

	9.	 	CHANGE IN CONTROL BENEFIT. After a Change in Control, if either (i) the Executive is not
retained by the resulting corporation for a period of 24 months in a position comparable to
that of an executive vice president of the resulting corporation or a position with the
resulting corporation that is acceptable to Executive, or (ii) the resulting company reduces
Executive’s Base Salary from Executive’s Base Salary immediately prior to the Change in
Control at any time during the 24 month period immediately following the consummation of the
Change in Control (either event shall constitute a “Triggering Event”), then Executive shall
be paid the 24 months of Executive’s Base Salary, based on Executive’s Base Salary just prior
to the Change in Control (“Change in Control Benefit”) plus 2 times the average annual bonus
paid to Executive over the most recent previous two complete calendar years. Executive shall
also be entitled to any Earned Compensation in addition to the Change in Control Benefit upon
a Triggering Event. The Change in Control Benefit and Earned Compensation shall be paid to
Executive in a lump sum within 5 calendar days following the Triggering Event. In no event
will this lump-sum benefit paid under this section exceed an amount that is $1 less than 3
times the Executive’s average annual salary and cash bonus over the previous five years
threshold as allowed under Internal Revenue Code Section 280G. In addition to any benefit paid
by the Bank under this section, the Executive shall receive medical insurance coverage for
Executive and Executive’s dependents for twenty four months following the date of a Triggering
Event at Bank’s expense. Receipt of the benefits provided in this section are conditioned on
Executive having executed the Separation Agreement in substantially the form attached hereto
as Exhibit B and the revocation period having expired without Executive having revoked the
Separation Agreement.

	10.	 	CONFIDENTIAL INFORMATION. The parties acknowledge that in the course of Executive’s duties,
Executive will have access to and become knowledgeable with certain proprietary and
confidential information of the Bank, Bancorp and Bancorp’s subsidiaries not known by its
existing or potential competitors. Executive acknowledges that such information constitutes
valuable, special, and unique assets of the business of Bank, Bancorp and Bancorp’s
subsidiaries. Executive agrees to hold in a fiduciary capacity, not use for Executive’s
benefit, and not disclose, communicate, or divulge in any manner during the period of
Executive’s employment with Bank or at any time thereafter, any such data and confidential
information of any kind, nature, or description concerning any matters affecting or relating
to Bancorp’s business, its customers, or its services. Executive agrees that all memoranda,
notes, records, papers, customer files, other documents, and all copies thereof relating to
Bank or Bancorp’s operations or business or matters related to any of Bank’s or Bancorp’s
customers, some of which may be prepared by Executive along with all media, electronic or
otherwise associated therewith containing such confidential information held by or in the
control of Executive, shall be Bank’s or Bancorp’s property, respectively (collectively
referred to as “Property”). Upon termination of employment, Executive shall promptly return
all Property to the Bank or Bancorp, as appropriate.

	11.	 	DISPUTE RESOLUTION. Except where such matters are deemed governed by ERISA, the parties
agree to submit any dispute arising under this Agreement to final, binding, private
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction in Sacramento, California. This includes not only disputes about the
meaning or performance of the Agreement, but disputes about its negotiation, drafting, or
execution. Judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction. There shall be three arbitrators, one to be chosen directly by each
party, and the third arbitrator to be selected by the two arbitrators so chosen. If any
arbitration proceeding is brought for the enforcement of this Agreement or because of an
alleged dispute, breach or default in connection with this Agreement, (i) the nonprevailing
party shall pay the fees of the arbitrators and all other costs of the arbitration, including
the cost of any record or transcripts of the arbitrations and administrative fees; and (ii)
the prevailing party shall be entitled to recover reasonable attorney’s fees and any other
costs and expenses incurred in that action or proceeding, in addition to any other relief to
which it or he may be entitled.

	12.	 	NOTICES. All notices, requests, demands, and other communications provided for by this
Agreement will be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by a nationally-recognized delivery service (such as Federal Express), or three
(3) business days after being deposited in the U.S. mail as certified mail, return receipt
requested, with postage prepaid, if such notice is addressed to the party to be notified at
such party’s address as set forth below or as subsequently modified by written notice.

	 	 	 
	To Bank:

	 	Plumas Bank

35 S. Linden Avenue

Quincy, California 95971

Attention: Chairman
	 
	 	 
	To Executive:

	 	Douglas N. Biddle

	13.	 	GENERAL PROVISIONS.

Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by federal ERISA, as applicable, and otherwise by the laws of
the State of California.

Saving Provision. If any part of this Agreement is held to be unenforceable, it
shall not affect any other part. If any part of this Agreement is held to be unenforceable
as written, it shall be enforced to the maximum extent allowed by applicable law.

Survival Provision. The confidential information and dispute resolution provisions
of this Agreement shall survive after termination of this Agreement, and shall be
enforceable regardless of any claim Employee may have against Bank. Also, if any benefits
provided in Section 8 of this Agreement are still owed, or obligations or claims pursuant to
Section 10 or 11 are still pending, at the time of termination of this Agreement, this
Agreement shall continue in force, with respect to those obligations or claims, until such
benefits are paid in full or claims are resolved in full. The obligation in Section 10
shall survive this Agreement for an indefinite period.

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

Entire Agreement. This Agreement constitutes the sole agreement of the parties
regarding Executive’s benefits in the event of termination or Change in Control and together
with Bank’s employee handbook governs the terms of Executive’s employment. Where there is a
conflict between the employee handbook and this Agreement, the terms of this Agreement shall
govern.

Previous Agreements. This Agreement replaces and supersedes all prior oral and
written agreements between the Executive and Bank, or any affiliates or representatives of
Bank regarding the subject matters set forth herein.

Waiver. No waiver of any provision of this Agreement shall be valid unless in
writing, signed by the party against whom the waiver is sought to be enforced. The waiver
of any breach of this Agreement or failure to enforce any provision of this Agreement shall
not waive any later breach.

Assignment. Executive shall not assign or transfer any of Executive’s rights
pursuant to this Agreement, wholly or partially, to any other person or to delegate the
performance of its duties under the terms of this Agreement. The rights and obligations of
Bank under this Agreement shall inure to the benefit of and be binding in each and every
respect upon the direct and indirect successors and assigns of Bank, regardless of the
manner in which the successors or assigns succeed to the interests or assets of Bank. This
Agreement shall not be terminated by the voluntary or involuntary dissolution of Bank, by
any merger, consolidation or acquisition where Bank is not the surviving corporation, by any
transfer of all or substantially all of Bank’s assets, or by any other change in Bank’s
structure or the manner in which Bank’s business or assets are held. Executive’s employment
shall not be deemed terminated upon the occurrence of one of the foregoing events. In the
event of any merger, consolidation or transfer of assets, this Agreement shall be binding
upon and shall inure to the benefit of the surviving corporation or the corporation to which
the assets are transferred.

Attorneys’ Fees. If either party institutes a proceeding to enforce its rights
under, or to recover damages for breach of, this Agreement, the prevailing party shall be
awarded all costs and expenses of the proceeding, including, but not limited to, attorneys’
fees, filing and service fees, witness fees, and arbitrator’s fees. If arbitration is
commenced, the arbitrator will have full authority and complete discretion to determine the
“prevailing party” and the amount of costs and expenses to be awarded under this paragraph.

	14.	 	ADVICE OF COUNSEL. TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE
CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

	 	 	 
	PLUMAS BANCORP	 	EXECUTIVE
	By:/s/ Daniel West

	 	/s/ D. N. Biddle
	 

	 	 
	Daniel West, Chairman

	 	Douglas N. Biddle

1

EXHIBIT A

EMPLOYMENT SEPARATION AGREEMENT

AND RELEASE OF CLAIMS

This is a confidential agreement between you, Douglas N. Biddle, and us, Plumas Bank (“Bank”).
This agreement is dated for reference purposes      , 20     , which is the date we
delivered this agreement to you for your consideration. For purposes of this Agreement Plumas
Bancorp together with each of its subsidiaries or affiliates is referred to as “Bancorp.”

	1.	 	TERMINATION OF EMPLOYMENT. Your employment terminates [or was terminated] on
     , 20     (the “Separation Date”).

	2.	 	PAYMENTS. In exchange for your agreeing to the release of claims and other terms in this
agreement, we will pay you the Severance Benefit specified in Section 8 of the Employment
Agreement between you and Bank dated January 1, 2006 (the “Employment Agreement”). You
acknowledge that we are not obligated to make this payment to you unless you agree to comply
with the terms of this agreement.

	3.	 	COBRA CONTINUATION COVERAGE. Unless provided as stipulated in Section 8 of the Employment
Agreement, your normal employee participation in Bank’s group health coverage will terminate
three months following your termination (“Separation Date”). Continuation of group health
coverage thereafter will be made available to you and your dependents pursuant to federal law
(COBRA). As long as you timely elect COBRA continuation coverage, Bank will waive the
requirement that you pay for the cost of continuation coverage through the Separation Date.
Continuation of group health coverage thereafter is entirely at your expense, as provided
under COBRA.

	4.	 	TERMINATION OF BENEFITS. Except as provided in paragraph 3 above, your participation in all
employee benefit plans and programs ended on the Separation Date. Your rights under any
pension benefit or other plans in which you may have participated will be determined in
accordance with the written plan documents governing those plans.

	5.	 	FULL PAYMENT. You acknowledge having received full payment of all compensation of any kind
(including wages, salary, vacation, sick leave, commissions, bonuses and incentive
compensation) that you earned as a result of your employment by Bank.

	6.	 	NO FURTHER COMPENSATION. Any and all agreements to pay you bonuses or other incentive
compensation are terminated, except for any payments earned during active employment as
determined in accordance with the written plan documents governing those plans. You
understand and agree that you have no right to receive any further payments for bonuses or
other incentive compensation. Bank owes no further compensation or benefits of any kind,
except as described above.

	7.	 	RELEASE OF CLAIMS.

	 	(a)	 	You hereby release (i) Bancorp, its subsidiaries, affiliates, and benefit
plans, (ii) each of Bancorp’s past and present shareholders, Executives, directors,
agents, employees, representatives, administrators, fiduciaries and attorneys, and
(iii) the predecessors, successors, transferees and assigns of each of the persons and
entities described in this sentence, from any and all claims of any kind, known or
unknown, that arose on or before the date you signed this agreement.

	 	(b)	 	The claims you are releasing include, without limitation, claims of wrongful
termination, claims of constructive discharge, claims arising out of employment
agreements, representations or policies related to your employment, claims arising
under federal, state or local laws or ordinances prohibiting discrimination or
harassment or requiring accommodation on the basis of age, race, color, national
origin, religion, sex, disability, marital status, sexual orientation or any other
status, claims of failure to accommodate a disability or religious practice, claims for
violation of public policy, claims of retaliation, claims of failure to assist you in
applying for future position openings, claims of failure to hire you for future
position openings, claims for wages or compensation of any kind (including overtime
claims), claims of tortious interference with contract or expectancy, claims of fraud
or negligent misrepresentation, claims of breach of privacy, defamation claims, claims
of intentional or negligent infliction of emotional distress, claims of unfair labor
practices, claims arising out of any claimed right to stock or stock options, claims
for attorneys’ fees or costs, and any other claims that are based on any legal
obligations that arise out of or are related to your employment relationship with us.

	 	(c)	 	You specifically waive any rights or claims that you may have under the
California Labor Code, the Civil Rights Act of 1964 (including Title VII of that Act),
the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967 (ADEA), the
Americans with Disabilities Act of 1990 (ADA), the Fair Labor Standards Act of 1938
(FLSA), the Family and Medical Leave Act of 1993 (FMLA), the Worker Adjustment and
Retraining Notification Act (WARN), the Employee Retirement Income Security Act of 1974
(ERISA), the National Labor Relations Act (NLRA), and all similar federal, state and
local laws.

	 	(d)	 	You agree not to seek any personal recovery (of money damages, injunctive
relief or otherwise) for the claims you are releasing in this agreement, either through
any complaint to any governmental agency or otherwise. You agree not to start any
lawsuit or arbitration asserting any of the claims you are releasing in this agreement.
You represent and warrant that you have not initiated any complaint, charge, lawsuit
or arbitration involving any of the claims you are releasing in this agreement. You
agree not to apply for future employment with Bank and that Bank has no obligation to
consider you for future employment.

	 	(e)	 	You represent and warrant that you have all necessary authority to enter into
this agreement (including, if you are married, on behalf of your marital community) and
that you have not transferred any interest in any claims to your spouse or to any third
party.

	 	(f)	 	This agreement does not affect your rights, if any, to receive pension plan
benefits, medical plan benefits, unemployment compensation benefits or workers’
compensation benefits. This agreement also does not affect your rights, if any, under
agreements, bylaw provisions, insurance or otherwise, to be indemnified, defended or
held harmless in connection with claims that may be asserted against you by third
parties.

	 	(g)	 	You understand that you are releasing potentially unknown claims, and that you
have limited knowledge with respect to some of the claims being released. You
acknowledge that there is a risk that, after signing this agreement, you may learn
information that might have affected your decision to enter into this agreement. You
assume this risk and all other risks of any mistake in entering into this agreement.
You agree that this release is fairly and knowingly made.

	 	(h)	 	You are giving up all rights and claims of any kind, known or unknown, except
for the rights specifically given to you in this agreement.

	8.	 	NO ADMISSION OF LIABILITY. Neither this agreement nor the payments made under this agreement
are an admission of liability or wrongdoing by Bank.

	9.	 	BANK AND BANCORP MATERIALS. You represent and warrant that you have, or no later than the
Separation Date will have, returned all keys, credit cards, documents and other materials that
belong to us.

	10.	 	NONDISCLOSURE AGREEMENT. You will comply with the covenant regarding confidential
information in Section 10 of the Employment Agreement.

	11.	 	NO DISPARAGEMENT. You may not disparage Bank or Bank’s business or products, and may not
encourage any third parties to sue Bank.

	12.	 	COOPERATION REGARDING OTHER CLAIMS. If any claim is asserted by or against Bank as to which
you have relevant knowledge, you will reasonably cooperate with us in the prosecution or
defense of that claim, including by providing truthful information and testimony as reasonably
requested by us.

	13.	 	NO INTERFERENCE. You will not, apart from good faith competition, interfere with Bank’s
relationships with customers, employees, vendors, or others.

	14.	 	INDEPENDENT LEGAL COUNSEL. You are advised and encouraged to consult with an attorney before
signing this agreement. You acknowledge that you have had an adequate opportunity to do so.

	15.	 	CONSIDERATION PERIOD. You have 21 days from the date this agreement is given to you to
consider this agreement before signing it. You may use as much or as little of this 21-day
period as you wish before signing. If you do not sign and return this agreement within this
21-day period, you will not be eligible to receive the benefits described in this agreement.

	16.	 	REVOCATION PERIOD AND EFFECTIVE DATE. You have 7 calendar days after signing this agreement
to revoke it. To revoke this agreement after signing it, you must deliver a written notice of
revocation to Bank’s Chairman before the 7-day period expires. This agreement shall not become
effective until the 8th calendar day after you sign it. If you revoke this
agreement it will not become effective or enforceable and you will not be entitled to the
benefits described in this agreement.

	17.	 	GOVERNING LAW. This agreement is governed by the laws of the State of California that apply
to contracts executed and to be performed entirely within the State of California.

	18.	 	DISPUTE RESOLUTION. Except where such matters are deemed governed by ERISA, the parties
agree to submit any dispute arising under this agreement to final, binding, private
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction in Sacramento, California. This includes not only disputes about the
meaning or performance of the agreement, but disputes about its negotiation, drafting, or
execution. Judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction. There shall be three arbitrators, one to be chosen directly by each
party, and the third arbitrator to be selected by the two arbitrators so chosen. If any
arbitration proceeding is brought for the enforcement of this agreement or because of an
alleged dispute, breach or default in connection with this agreement, (i) the nonprevailing
party shall pay the fees of the arbitrators and all other costs of the arbitration, including
the cost of any record or transcripts of the arbitrations and administrative fees; and (ii)
the prevailing party shall be entitled to recover reasonable attorney’s fees and any other
costs and expenses incurred in that action or proceeding, in addition to any other relief to
which it or he may be entitled.

	19.	 	ATTORNEYS’ FEES. If either party institutes a proceeding to enforce its rights under, or to
recover damages for breach of, this agreement, the prevailing party shall be awarded all costs
and expenses of the proceeding, including, but not limited to, attorneys’ fees, filing and
service fees, witness fees, and arbitrator’s fees. If arbitration is commenced, the
arbitrator will have full authority and complete discretion to determine the “prevailing
party” and the amount of costs and expenses to be awarded under this paragraph.

	20.	 	FINAL AND COMPLETE AGREEMENT. This agreement is the final and complete expression of all
agreements between us on all subjects and supersedes and replaces all prior discussions,
representations, agreements, policies and practices. You acknowledge you are not signing this
agreement relying on anything not set out herein.

PLUMAS BANCORP

By:      

Daniel West, Chairman

I, THE UNDERSIGNED, HAVING BEEN ADVISED TO CONSULT WITH AN ATTORNEY, HEREBY AGREE TO BE BOUND BY
THIS AGREEMENT AND CONFIRM THAT I HAVE READ AND UNDERSTOOD EACH PART OF IT.

     

Douglas N. Biddle

     

Date

EXHIBIT B

EMPLOYMENT SEPARATION AGREEMENT

AND RELEASE OF CLAIMS

This is a confidential agreement between you, Douglas N. Biddle, and us, Plumas Bank (“Bank”).
This agreement is dated for reference purposes      , 20     , which is the date we
delivered this agreement to you for your consideration. For purposes of this Agreement Plumas
Bancorp together with each of its subsidiaries or affiliates is referred to as “Bancorp.”

	1.	 	TERMINATION OF EMPLOYMENT. Your employment terminates [or was terminated] on
     , 20     (the “Separation Date”).

	2.	 	PAYMENTS. In exchange for your agreeing to the release of claims and other terms in this
agreement, we will pay you the Severance Benefit specified in the Change in Control Benefit
specified in Section 9 of the Employment Agreement between you and Bank dated January 1, 2006
(the “Employment Agreement”). You acknowledge that we are not obligated to make this payment
to you unless you agree to comply with the terms of this agreement.

	3.	 	COBRA CONTINUATION COVERAGE. Unless provided as stipulated in Section 9 of the Employment
Agreement, your normal employee participation in Bank’s group health coverage will terminate
three months following your termination (“Separation Date”). Continuation of group health
coverage thereafter will be made available to you and your dependents pursuant to federal law
(COBRA). As long as you timely elect COBRA continuation coverage, Bank will waive the
requirement that you pay for the cost of continuation coverage through the Separation Date.
Continuation of group health coverage thereafter is entirely at your expense, as provided
under COBRA.

	4.	 	TERMINATION OF BENEFITS. Except as provided in paragraph 3 above, your participation in all
employee benefit plans and programs ended on the Separation Date. Your rights under any
pension benefit or other plans in which you may have participated will be determined in
accordance with the written plan documents governing those plans.

	5.	 	FULL PAYMENT. You acknowledge having received full payment of all compensation of any kind
(including wages, salary, vacation, sick leave, commissions, bonuses and incentive
compensation) that you earned as a result of your employment by Bank.

	6.	 	NO FURTHER COMPENSATION. Any and all agreements to pay you bonuses or other incentive
compensation are terminated, except for any payments earned during active employment as
determined in accordance with the written plan documents governing those plans. You
understand and agree that you have no right to receive any further payments for bonuses or
other incentive compensation. Bank owes no further compensation or benefits of any kind,
except as described above.

	7.	 	RELEASE OF CLAIMS.

	 	(a)	 	You hereby release (i) Bancorp, its subsidiaries, affiliates, and benefit
plans, (ii) each of Bancorp’s past and present shareholders, Executives, directors,
agents, employees, representatives, administrators, fiduciaries and attorneys, and
(iii) the predecessors, successors, transferees and assigns of each of the persons and
entities described in this sentence, from any and all claims of any kind, known or
unknown, that arose on or before the date you signed this agreement.

	 	(b)	 	The claims you are releasing include, without limitation, claims of wrongful
termination, claims of constructive discharge, claims arising out of employment
agreements, representations or policies related to your employment, claims arising
under federal, state or local laws or ordinances prohibiting discrimination or
harassment or requiring accommodation on the basis of age, race, color, national
origin, religion, sex, disability, marital status, sexual orientation or any other
status, claims of failure to accommodate a disability or religious practice, claims for
violation of public policy, claims of retaliation, claims of failure to assist you in
applying for future position openings, claims of failure to hire you for future
position openings, claims for wages or compensation of any kind (including overtime
claims), claims of tortious interference with contract or expectancy, claims of fraud
or negligent misrepresentation, claims of breach of privacy, defamation claims, claims
of intentional or negligent infliction of emotional distress, claims of unfair labor
practices, claims arising out of any claimed right to stock or stock options, claims
for attorneys’ fees or costs, and any other claims that are based on any legal
obligations that arise out of or are related to your employment relationship with us.

	 	(c)	 	You specifically waive any rights or claims that you may have under the
California Labor Code, the Civil Rights Act of 1964 (including Title VII of that Act),
the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967 (ADEA), the
Americans with Disabilities Act of 1990 (ADA), the Fair Labor Standards Act of 1938
(FLSA), the Family and Medical Leave Act of 1993 (FMLA), the Worker Adjustment and
Retraining Notification Act (WARN), the Employee Retirement Income Security Act of 1974
(ERISA), the National Labor Relations Act (NLRA), and all similar federal, state and
local laws.

	 	(d)	 	You agree not to seek any personal recovery (of money damages, injunctive
relief or otherwise) for the claims you are releasing in this agreement, either through
any complaint to any governmental agency or otherwise. You agree not to start any
lawsuit or arbitration asserting any of the claims you are releasing in this agreement.
You represent and warrant that you have not initiated any complaint, charge, lawsuit
or arbitration involving any of the claims you are releasing in this agreement. You
agree not to apply for future employment with Bank and that Bank has no obligation to
consider you for future employment.

	 	(e)	 	You represent and warrant that you have all necessary authority to enter into
this agreement (including, if you are married, on behalf of your marital community) and
that you have not transferred any interest in any claims to your spouse or to any third
party.

	 	(f)	 	This agreement does not affect your rights, if any, to receive pension plan
benefits, medical plan benefits, unemployment compensation benefits or workers’
compensation benefits. This agreement also does not affect your rights, if any, under
agreements, bylaw provisions, insurance or otherwise, to be indemnified, defended or
held harmless in connection with claims that may be asserted against you by third
parties.

	 	(g)	 	You understand that you are releasing potentially unknown claims, and that you
have limited knowledge with respect to some of the claims being released. You
acknowledge that there is a risk that, after signing this agreement, you may learn
information that might have affected your decision to enter into this agreement. You
assume this risk and all other risks of any mistake in entering into this agreement.
You agree that this release is fairly and knowingly made.

	 	(h)	 	You are giving up all rights and claims of any kind, known or unknown, except
for the rights specifically given to you in this agreement.

	8.	 	NO ADMISSION OF LIABILITY. Neither this agreement nor the payments made under this agreement
are an admission of liability or wrongdoing by Bank.

	9.	 	BANK AND BANCORP MATERIALS. You represent and warrant that you have, or no later than the
Separation Date will have, returned all keys, credit cards, documents and other materials that
belong to us.

	10.	 	NONDISCLOSURE AGREEMENT. You will comply with the covenant regarding confidential
information in Section 10 of the Employment Agreement.

	11.	 	NO DISPARAGEMENT. You may not disparage Bank or Bank’s business or products, and may not
encourage any third parties to sue Bank.

	12.	 	COOPERATION REGARDING OTHER CLAIMS. If any claim is asserted by or against Bank as to which
you have relevant knowledge, you will reasonably cooperate with us in the prosecution or
defense of that claim, including by providing truthful information and testimony as reasonably
requested by us.

	13.	 	NO INTERFERENCE. You will not, apart from good faith competition, interfere with Bank’s
relationships with customers, employees, vendors, or others.

	14.	 	INDEPENDENT LEGAL COUNSEL. You are advised and encouraged to consult with an attorney before
signing this agreement. You acknowledge that you have had an adequate opportunity to do so.

	15.	 	CONSIDERATION PERIOD. You have 21 days from the date this agreement is given to you to
consider this agreement before signing it. You may use as much or as little of this 21-day
period as you wish before signing. If you do not sign and return this agreement within this
21-day period, you will not be eligible to receive the benefits described in this agreement.

	16.	 	REVOCATION PERIOD AND EFFECTIVE DATE. You have 7 calendar days after signing this agreement
to revoke it. To revoke this agreement after signing it, you must deliver a written notice of
revocation to Bank’s Chairman before the 7-day period expires. This agreement shall not become
effective until the 8th calendar day after you sign it. If you revoke this
agreement it will not become effective or enforceable and you will not be entitled to the
benefits described in this agreement.

	17.	 	GOVERNING LAW. This agreement is governed by the laws of the State of California that apply
to contracts executed and to be performed entirely within the State of California.

	18.	 	DISPUTE RESOLUTION. Except where such matters are deemed governed by ERISA, the parties
agree to submit any dispute arising under this agreement to final, binding, private
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction in Sacramento, California. This includes not only disputes about the
meaning or performance of the agreement, but disputes about its negotiation, drafting, or
execution. Judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction. There shall be three arbitrators, one to be chosen directly by each
party, and the third arbitrator to be selected by the two arbitrators so chosen. If any
arbitration proceeding is brought for the enforcement of this agreement or because of an
alleged dispute, breach or default in connection with this agreement, (i) the nonprevailing
party shall pay the fees of the arbitrators and all other costs of the arbitration, including
the cost of any record or transcripts of the arbitrations and administrative fees; and (ii)
the prevailing party shall be entitled to recover reasonable attorney’s fees and any other
costs and expenses incurred in that action or proceeding, in addition to any other relief to
which it or he may be entitled.

	19.	 	ATTORNEYS’ FEES. If either party institutes a proceeding to enforce its rights under, or to
recover damages for breach of, this agreement, the prevailing party shall be awarded all costs
and expenses of the proceeding, including, but not limited to, attorneys’ fees, filing and
service fees, witness fees, and arbitrator’s fees. If arbitration is commenced, the
arbitrator will have full authority and complete discretion to determine the “prevailing
party” and the amount of costs and expenses to be awarded under this paragraph.

	20.	 	FINAL AND COMPLETE AGREEMENT. This agreement is the final and complete expression of all
agreements between us on all subjects and supersedes and replaces all prior discussions,
representations, agreements, policies and practices. You acknowledge you are not signing this
agreement relying on anything not set out herein.

PLUMAS BANCORP

By:      

Daniel West, Chairman

I, THE UNDERSIGNED, HAVING BEEN ADVISED TO CONSULT WITH AN ATTORNEY, HEREBY AGREE TO BE BOUND BY
THIS AGREEMENT AND CONFIRM THAT I HAVE READ AND UNDERSTOOD EACH PART OF IT.

     

Douglas N. Biddle

     

Date

2EX-10.16

PLUMAS BANK

DEFERRED FEE AGREEMENT

THIS AGREEMENT is made this 21st day of December, 2005 by and between Plumas Bank (the
“Bank”), and Jerry V. Kehr (the “Director”).

INTRODUCTION

To encourage the Director to remain a member of the Bank’s Board of Directors, the Bank is willing
to provide to the Director a deferred fee opportunity. The Bank will pay the benefits from its
general assets.

AGREEMENT

The Director and the Bank agree as follows:

ARTICLE 1

Definitions

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

1.1.1 “Change of Control” means the transfer of shares of the Bank’s voting common stock such
that one person or a group of persons acting in concert acquires (or is deemed to acquire under
Section 318 of the Code) 51% or more of the Bank’s outstanding voting common stock.

1.1.2 “Code” means the Internal Revenue Code of 1986, as amended. References to a Code
section shall be deemed to be to that section as it now exists and to any successor provision.

1.1.3 “Disability” means the Director’s inability to perform substantially all normal duties
of a director, as determined by the Bank’s Board of Directors in its sole discretion. As a
condition to any benefits, the Bank may require the Director to submit to such physical or mental
evaluations and tests as the Board of Directors deems appropriate.

1.1.4 “Election Form” means the Form attached as Exhibit 1.

1.1.5 “Fees” means the total directors fees payable to the Director.

1.1.6 “Normal Termination Date” means the Director completing 15 Years of Service.

1.1.7 “Termination of Service” means the Director’s ceasing to be a member of the Bank’s Board
of Directors for any reason whatsoever.

1.1.8 “Years of Service” means the total number of twelve-month periods during which the
Director serves as a member of the Bank’s Board of Directors beginning from the date of this
Agreement.

ARTICLE 2

Deferral Election

2.1 Initial Election. The Director shall make an initial deferral election under this
Agreement by filing with the Bank a signed Election Form within 15 days after the date of this
Agreement. The Election Form shall set forth the amount of Fees to be deferred and the form of
benefit payment. The Election Form shall be effective to defer only Fees earned after the date the
Election Form is received by the Bank.

2.2 Election Changes

2.2.1 Generally. The Director may modify the amount of Fees to be deferred by filing
a subsequent signed Election Form with the Bank. The modified deferral shall not be effective
until the calendar year following the year in which the subsequent Election Form is received by the
Bank. The Director may not change the form of benefit payment without the prior written approval
of the Board of Directors of the Bank.

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

ARTICLE 3

Deferral Account

3.1 Establishing and Crediting. The Bank shall establish a deferral account
(“Deferral Account”) on its books for the Director, and shall credit to the Deferral Account the
following amounts:

3.1.1 Deferrals. The Fees deferred by the Director as of the time the Fees would have
otherwise been paid to the Director.

3.1.2 Interest. On a quarterly basis and immediately prior to the payment of any
benefits, interest shall be credited to the Deferral Account with an annual interest rate equal to
the floating Wall Street Journal Prime Rate as of the first business day of the month for such
month or part thereof that interest is to be credited minus 1% per annum. Interest on the Deferral
Account shall be compounded quarterly. Interest shall continue to accrue on the Deferral Account
until all benefits have been paid.

3.2 Statement of Accounts. The Bank shall provide to the Director, within one hundred
twenty (120) days after each anniversary of this Agreement, a statement setting forth the Deferral
Account balance.

3.3 Accounting Device Only. The Deferral Account is solely a device for measuring
amounts to be paid under this Agreement. The Deferral Account is not a trust fund of any kind.
The Director is a general unsecured creditor of the Bank for the payment of benefits. The benefits
represent the mere Bank promise to pay such benefits. The Director’s rights to such benefits are
not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director’s creditors.

ARTICLE 4

Lifetime Benefits

4.1 Normal Termination Benefit. Upon the Director’s Termination of Service, the Bank
shall pay to the Director the benefit described in this Section 4.1.

4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the Deferral Account
balance at the date of the Director’s Termination of Service including interest to the time of
payment as provided in Section 3.1.2.

4.1.2 Payment of Benefit. The Bank shall pay the benefit to the Director in 60
monthly installments as nearly equal as possible commencing on the first day of the month following
the Director’s Termination of Service.

4.2 Disability Benefit. If the Director terminates service as a director for
Disability prior to the Normal Termination Date, the Bank shall pay to the Director the benefit
described in this Section 4.2.

4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the Deferral Account
balance at the Director’s Termination of Service including interest to the time of payment as
provided in Section 3.1.2.

4.2.2 Payment of Benefit. The Bank shall pay the benefit to the Director in a lump
sum within 15 days after the Director’s Termination of Service.

4.3 Change of Control Benefit. Upon a Change of Control while the Director is in the
active service of the Bank and prior to the Normal Termination Date, the Bank shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit under this
Agreement.

4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the Deferral Account
balance at the date of the Change of Control including interest to the time of payment as provided
in Section 3.1.2.

4.3.2 Payment of Benefit. The Bank shall pay the benefit to the Director in a lump
sum within 15 days after the date of the Change of Control.

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

ARTICLE 5

Death Benefits

5.1 Death During Active Service. If the Director dies while in the active service of
the Bank and prior to the Normal Termination Date, the Bank shall pay to the Director’s beneficiary
the benefit described in this Section 5.1 and such benefit shall be in lieu of any other benefit in
this Agreement.

5.1.1 Amount of Benefit. The benefit under Section 5.1 is the Deferral Account
balance at the time of the Director’s death including interest to the time of payment as provided
in Section 5.1.2.

5.1.2 Payment of Benefit. The Bank shall pay the benefit in 120 equal installments
to the beneficiary beginning on the first day of the month following the Director’s death.

ARTICLE 6

Beneficiaries

6.1 Beneficiary Designations. The Director shall designate a beneficiary by filing a
written designation with the Bank. The Director may revoke or modify the designation at any time
by filing a new designation. However, designations will only be effective if signed by the
Director and accepted by the Bank during the Director’s lifetime. The Director’s beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases the Director, or
if the Director names a spouse as beneficiary and the marriage is subsequently dissolved. If the
Director dies without a valid beneficiary designation, all payments shall be made to the Director’s
surviving spouse, if any, and if none, to the Director’s surviving children and the descendants of
any deceased child by right of representation, and if no children or descendants survive, to the
Director’s estate.

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

ARTICLE 7

Claims and Review Procedures

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

7.2 Review Procedure. If the beneficiary is determined by the Bank not to be eligible
for benefits, or if the beneficiary believes that he or she is entitled to greater or different
benefits, the beneficiary shall have the opportunity to have such claim reviewed by the Bank by
filing a petition for review with the Bank within sixty (60) days after receipt of the notice
issued by the Bank. Said petition shall state the specific reasons which the beneficiary believes
entitle him or her to benefits or to greater or different benefits.

Within sixty (60) days after receipt by the Bank of the petition, the Bank shall afford the
beneficiary (and counsel, if any) an opportunity to present his or her position to the Bank orally
or in writing, and the beneficiary (or counsel) shall have the right to review the pertinent
documents. The Bank shall notify the beneficiary of its decision in writing within the sixty-day
period, stating specifically the basis of its decision, written in a manner calculated to be
understood by the beneficiary and the specific provisions of the Agreement on which the decision is
based. If, because of the need for a hearing, the sixty-day period is not sufficient, the decision
may be deferred for up to another sixty-day period at the election of the Bank, but notice of this
deferral shall be given to the beneficiary.

ARTICLE 8

Amendments and Termination

The Bank may amend or terminate this Agreement at any time if, pursuant to legislative,
judicial or regulatory action, continuation of the Agreement would (i) cause benefits to be taxable
to the Director prior to actual receipt, or (ii) result in significant financial penalties or other
significantly detrimental ramifications to the Bank (other than the financial impact of paying the
benefits). In no event shall this Agreement be terminated without payment to the Director of the
Deferral Account balance attributable to the Director’s deferrals and interest credited on such
amounts.

ARTICLE 9

Miscellaneous

9.1 Binding Effect. This Agreement shall bind the Director and the Bank, and their
beneficiaries, survivors, executors, administrators and transferees.

9.2 No Guaranty of Employment. This Agreement is not a contract for services. It
does not give the Director the right to remain a director of the Bank, nor does it interfere with
the shareholders’ rights to replace the Director. It also does not require the Director to remain
a director nor interfere with the Director’s right to terminate services at any time.

9.3 Non-Transferability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

9.4 Tax Withholding. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Agreement.

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

9.6 Unfunded Arrangement. The Director and beneficiary are general unsecured
creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the
mere promise by the Bank to pay such benefits. The rights to benefits are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Director. Any insurance on the Director’s life is a general
unpledged, unrestricted asset of the Bank to which the Director and beneficiary have no preferred
or secured claim. Furthermore, such insurance shall not be deemed to be held under any trust for
the benefit of the Director or his or her beneficiaries or to be security for the performance of
the obligation of Bank under this Agreement.

IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have signed this Agreement.

	 	 	 
	DIRECTOR	 	PLUMAS BANK
	/s/ JERRY V. KEHR

	 	By: /s/ ANDREW RYBACK
	 

	 	 
	 
	 	 
	
 
	 	Title: Executive Vice President & CFO
	
 
	 	 
	 
	 	 

1

EXHIBIT I

DEFERRED FEE AGREEMENT

Deferral Election

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

	 	 	 	 	 
	Amount of Deferral	 	Frequency of Deferral	 	Duration
	[Initial and Complete one]

	 	

	 	

	 
	 	 	 	 
	X I elect to defer 100% of Fees

	 	Each fee payment
	 	The Year 2006 only
	 

	 	

	 	

	 
	 	 	 	 
	I elect to defer $ of Fees

	 	

	 	

	 

	 	

	 	

	 
	 	 	 	 
	I elect not to defer Fees

	 	

	 	

	 

	 	

	 	

I understand that I may change the amount, frequency and duration of my deferrals by filing a new
election form with the Company; provided, however, that any subsequent election as to the amount of
deferral or duration of deferral will not be effective until the calendar year following the year
in which the new election is received by the Company. I understand that my deferrals are subject
to Section 409A of the Internal Revenue Code of 1986, as amended.

Form of Benefit

The benefits under the Agreement will be paid to me or my proper beneficiary as provided in
the deferred fee agreement associated with this election form.

I understand that the form of benefit may not be changed even if I later change the amount of my
deferrals under the Agreement.

2

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