Document:

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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

AGREEMENT made as of May 16, 2001 between Plumas Bank (hereinafter referred to
as the "Employer"), and William E. Elliott (hereinafter referred to as the
"Executive").

                                   WITNESSETH:

WHEREAS, Employer is desirous of employing Executive in the capacity hereinafter
stated, and Executive is desirous of entering into the employ of Employer in
such capacity, for the period and on the terms and conditions set forth herein:

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:

1.      EMPLOYMENT

        Employer hereby employs Executive as the President and Chief Executive
        Officer of Plumas Bank, and the Executive accepts the duties described
        herein, and agrees to discharge the same faithfully and to the best of
        his ability. Executive shall devote his full business time and attention
        to the business and affairs of Employer to which he may be elected and
        shall perform the duties thereof to the best of his ability. Executive
        shall perform such other duties as shall be from time to time prescribed
        by the Board of Directors of Employer.

        Executive shall have such responsibility and duties and such authority
        to transact business on behalf of Employer, as are customarily incident
        to the office of President and Chief Executive Officer of a banking
        institution.

2.      TERM

        Employer hereby employs Executive and Executive hereby accepts
        employment with Employer for the period from May 16, 2001 to July 1,
        2006 (the "Term"), commencing with the effective date, subject, however,
        to prior termination of this Employment Agreement as hereinafter
        provided. Where used herein, "Term" shall refer to the entire period of
        employment of Executive by Employer, whether for the period provided
        above, or whether terminated earlier as hereinafter provided, or
        extended by mutual agreement by the Employer and Executive.

3.      COMPENSATION

        In consideration for all services to be rendered by Executive to
        Employer, Employer agrees to pay Executive a base salary of One Hundred
        Fifty-Eight Thousand Dollars ($158,000 commencing April 1, 2001). Future
        base salary increases, which may be considered on an annual basis taking
        into consideration job performance and California Peer Group Salary
        Date, will be granted at the sole discretion of the Board of Directors.
        Employer shall deduct therefrom all taxes which may be required to be
        deducted or withheld under any provision of the law (including, but not
        limited to,

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        social security payments and income tax withholding) now in effect or
        which may become effective anytime during the term of this Employment
        Agreement.

        Employer also agrees to provide Executive with $100,000 life insurance
        benefits effective immediately, with Executive having absolute
        discretion to determine beneficiary of such insurance benefits, and
        $100,000 term life insurance with Plumas Bank as beneficiary.

        Executive shall be entitled to participate in any and all other employee
        benefits and plans that are existing or may be developed and adopted by
        the Employer.

4.      DISCRETIONARY COMPENSATION

        Based upon an evaluation to be prepared by the Board of Directors, not
        later than March 31 of each succeeding year, the Board of Directors, at
        their sole discretion, will approve additional compensation to be paid
        in the form of an annual bonus for the previous year. The evaluation
        will give consideration to total performance, to include the following
        attributes.

        -      Technical expertise

        -      Leadership and managerial skills

        -      Scope of duties

        -      Meeting or exceeding mutually agreed upon goals and objectives

        As part of the evaluation process, goals and objectives will be
        established for the current year. They are to be mutually agreed upon
        goals and objectives and will include the following:

        -      Goals and objectives identified in prior years evaluation

        -      Current financial model (budget)

        -      Specific objectives addressed by the Board of Directors for the
               current year

        Based upon the evaluation referred to above, the Board will have the
        option of giving a annual bonus as a percentage of base salary based on
        superior performance. The bonus consideration shall be for each calendar
        year ending December 31. Executive will have the option to receive
        discretionary compensation in cash or participate in a deferred
        compensation program that may be established by Employer.

5.      TERMINATION

        Employer shall have the right to terminate this Employment Agreement for
        any of the following reasons by serving written notice upon Executive:

        (a) Willful breach of or habitual neglect of or inability to perform
        Executive's duties and obligations as President and Chief Executive
        Officer;

        (b) Malfeasance or misfeasance in the performance of Executive's duties
        as President and Chief Executive Officer;

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        (c) Immoral or illegal conduct of a serious nature;

        (d) Physical or mental disability rendering Executive incapable of
        performing his duties for a consecutive period of 180 days, or by death;

        (e) Determination by Employer's Board of Directors that the continued
        employment of Executive is detrimental to the best interest of
        Employer's shareholders

        In the event this Employment Agreement is terminated for any of the
        reasons specified in the paragraphs (a), (b), (c), or (d) above,
        Executive will be paid the salary due him at the end of the month in
        which such termination occurred, plus any pay in lieu of vacation
        accrued to, but not taken as of the date of termination.

        In the event this Employment Agreement is terminated for the reason
        specified in paragraph (e) above, Executive shall be entitled to
        termination pay of one (1) year's salary or the balance due per this
        Employment Agreement, whichever is less, plus any pay in lieu of
        vacation which has been accrued.

        Executive shall have the right to terminate this Employment Agreement
        without cause upon 90 days written notice to Employer, and if Executive
        does so terminate, Executive further agrees to resign from Employer's
        Board of Directors.

6.      ACQUISITION OR DISSOLUTION OF EMPLOYER

        This employment Agreement shall not be terminated by (i) the voluntary
        or involuntary dissolution of Employer, except in a liquidation of
        Employer by an appropriate regulatory agency, (ii) any merger or
        consolidation where Employer is not the surviving or resulting
        corporation, (iii) any substantial transfer of assets by Employer, or
        (iv) the filing of an application with any appropriate regulatory agency
        for the acquisition of 25% of the Employer's common stock by a third
        party or group acting in concert, (any of which events shall be called a
        "Special Transaction"). The provisions of this Employment Agreement
        shall be binding upon and inure to the benefit of the surviving or
        resulting corporation or the corporation to which such assets shall be
        transferred or acquired by. Notwithstanding the foregoing, Executive
        will have the sole option to demand and receive two (2) years' salary
        pursuant to this Employment Agreement in the event of a Special
        Transaction occurring.

7.      INDEMNIFICATION

        To the extent permitted by law, Employer shall indemnify Executive who
        was or is a party or is threatened to be made a party in any action
        brought by a third party against the Executive (whether or not Employer
        is joined as a party defendant) against expenses, judgments, fines,
        settlements, and other amounts actually and reasonably incurred in
        connection with said action if Executive acted in good faith and in a
        manner Executive reasonably believed to be in the best interest of the
        Employer, all provided the alleged conduct of Executive arose out of and
        was within the course and scope of his employment as an officer and
        employee of Employer.

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8.      RETURN OF DOCUMENTS

        Executive expressly agrees that all manuals, documents, files, reports,
        studies, instruments or other materials used and/or developed by
        Executive during the Term are solely the property of Employer, and
        Executive has no right, title or interest therein. Upon termination of
        the Employment Agreement, Executive or Executive's representatives shall
        promptly deliver possession of all of said property to Employer in good
        condition.

9.      NOTICES

        Any notice, request, or demand, or other communication required or
        permitted hereunder shall be deemed to be properly given when personally
        served in writing, when deposited in the U. S. mail, postage prepaid, or
        when communicated to a public telegraph company for transmittal,
        addressed to the party at the address given at the beginning of this
        Employment Agreement or at any other address as Employer or Executive
        may designate to the other in writing.

10.     BENEFIT OF AGREEMENT

        This Employment Agreement shall inure to the benefit of and be binding
        upon the parties hereto and their respective executors, administrators,
        successors and assigns.

11.     APPLICABLE LAW

        Except to the extent governed by the laws of the United States, this
        Employment Agreement is to be governed by and construed under the laws
        of the State of California.

12.     CAPTIONS AND PARAGRAPH HEADINGS

        Captions and paragraph headings used herein are for convenience only and
        are not a part of this Employment Agreement and shall not be used in
        construing it.

13.     INVALID PROVISIONS

        Should any provisions of the Employment Agreement for any reason be
        declared invalid, void, or unenforceable by a court of competent
        jurisdiction, the validity and binding effect of any remaining portion
        shall not be affected and the remaining portions of this Employment
        Agreement shall remain in full force and effect as if this Employment
        Agreement had been executed with said provisions eliminated.

14.     ENTIRE AGREEMENT

        This Employment Agreement contains the entire agreement of the parties
        and it supersedes any and all other agreements, either oral or in
        writing, between the parties hereto with respect to the employment of
        Executive by Employer, except to the extent that it is contemplated that
        the parties have and will enter into Stock Option Agreements. The
        parties further agree that prior to or on the

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        expiration date of Executive's existing options, to negotiate the
        granting of new options to Executive on such terms and conditions as the
        parties shall determine. Each party to this Employment Agreement
        acknowledges that no representations, inducements, promises, or
        agreements, oral or otherwise, have been made by any party, or anyone
        acting on behalf of any party, which are not embodied herein, and that
        no other agreement, statement, or promise not contained in this
        Employment Agreement shall be valid or binding. This Employment
        Agreement may not be modified or amended by oral agreement, but only by
        an agreement in writing signed by Employer and Executive.

15.     ARBITRATION

        Any controversy or claim arising out of or relating to this Employment
        Agreement, or the breach thereof, shall be settled by arbitration in
        accordance with the rules of the American Arbitration Association, and
        judgment upon the award rendered by the arbitrator(s) may be entered
        into any court having jurisdiction thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the day and year first above written.

                                              EMPLOYER

DATED:  July 18, 2001                         SIGNED:  /s/ JERRY V. KEHR
        -------------                                --------------------------

DATED:  July 9, 2001                          SIGNED:  /s/ ROBERT SCHOENSEE
        ------------                                 --------------------------

                                              EMPLOYEE

DATED:  June 28, 2001                         SIGNED:  /s/ W. E. ELLIOTT
        -------------                                --------------------------

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                                                                    EXHIBIT 10.2

NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF THE BANK'S
STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE BANK'S 1991 STOCK OPTION PLAN
SHALL HAVE FIRST BEEN APPROVED BY THE SHAREHOLDERS OF THE BANK HOLDING NOT LESS
THAN A MAJORITY OF THE OUTSTANDING SHARES OF THE BANK'S COMMON STOCK REPRESENTED
AND VOTING AT A MEETING OF SHAREHOLDERS AND BY A MAJORITY OF THE DISINTERESTED
SHARES REPRESENTED AND VOTING AT THE MEETING.

                                   PLUMAS BANK
                        INCENTIVE STOCK OPTION AGREEMENT

        This Incentive Stock Option Agreement dated the 18th day of November,
1998, entered into by and between Plumas Bank (the "Bank"), and William E.
Elliott ("Optionee");

        WHEREAS, pursuant to the 1991 Stock Option Plan of the Bank (the
"Plan"), a copy of which is hereto attached, the Board of Directors of the Bank
(or the Stock Option Committee, if authorized by the Board of Directors) has
authorized granting to Optionee, an Incentive Stock Option to purchase all or
any part of Eight Thousand Six Hundred Forty (8,640) authorized but unissued
shares of the Bank's Common Stock for cash at the price of Sixteen Dollars and
Seventy-Three Cents ($16.73) per share, such option to be for the term AND upon
the terms and conditions hereinafter stated;

        NOW, THEREFORE, it is hereby agreed:

        1. Grant of Option. Pursuant to said action of the Board of Directors
(or the Stock Option Committee) and pursuant to authorizations granted by all
appropriate regulatory and governmental agencies, the Bank hereby grants to
Optionee the option to purchase, upon and subject to the terms and conditions of
the Plan, as amended, which is incorporated in full herein by this reference,
all or any part of Eight Thousand Six Hundred (8,640) shares of the Bank's
Common Stock (hereinafter called "stock") at the price of Sixteen Dollars and
Seventy-three Cents ($16.73) per share, which price is not less than 100% of the
fair market value of the stock (or not less than 110% of the fair market value
for Optionee-shareholders who possess more than 10% of the Bank's stock) as of
the date of action of the Board of Directors (or the Option Committee) granting
this option.

        2. Exercisability. This option shall be exercisable as to 1,728 on
November 18, 1999, 1,728 on November 18, 2000, 1,728 on November 18, 2001, 1,728
on November 18, 2002, 1,728 on November 18, 2003. This option shall remain
exercisable as to all of such shares until November 18, 2008 (but not later than
ten (10) years from the date this option is granted) unless this option has
expired or terminated

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earlier in accordance with the provisions hereof. Shares as to which this option
becomes exercisable pursuant to the foregoing provision may be purchased at any
time prior to expiration of this option.

        3. Exercise of Option. This option may be exercised by written notice
delivered to the Bank stating the number of shares with respect to which this
option is being exercised, together with cash in the amount of the purchase
price of such shares. Not less than ten (10) shares may be purchased at any one
time unless the number purchased is the total number which may be purchased
under this option and in no event may the option be exercised with respect to
fractional shares. Upon exercise, Optionee shall make appropriate arrangements
and shall be responsible for the withholding of any federal and state taxes then
due.

        4. Cessation of Employment. Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be employed by the Bank or a subsidiary
corporation for any reason other than Optionee's death or disability (as defined
in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended from time
to time), this option shall expire 90 days thereafter. During the three-month
period this option shall be exercisable only as to those installments, if any,
which had accrued as of the date when the Optionee ceased to be employed by the
Bank or the subsidiary corporation.

        5. Termination of Employment for Cause. If Optionee's employment by the
Bank or a subsidiary corporation is terminated for cause, this option shall
expire immediately, unless reinstated by the Board of Directors within thirty
days (30) days of such termination by given written notice of such reinstatement
to Optionee at his last known address. In the event of such reinstatement,
Optionee may exercise this option only to such extent, for such time, and upon
such terms and conditions as if Optionee had ceased to be employed by the Bank
or a subsidiary corporation upon the date of such termination for a reason other
than cause, death or disability. Termination for cause shall, include but not be
limited to, termination for malfeasance or gross misfeasance in the performance
of duties or conviction of illegal activity in connection therewith.

        6. Nontransferability; Death of Optionee. This option shall not be
transferable except by Will or by the laws of descent and distribution and shall
be exercisable during Optionee's lifetime only by Optionee. If Optionee dies
while employed by the Bank or a subsidiary corporation, or during the 90 day
period referred to in Paragraph 4 hereof, this option shall expire one (1) year
after the date of Optionee's

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death or on the day specified in Paragraph 2 hereof, whichever is earlier. After
Optionee's death but before such expiration, the persons to whom Optionee's
rights under this option shall have passed by Will or by the applicable laws of
descent and distribution or the executor or administrator of Optionee's estate
shall have the right to exercise this option as to those shares for which
installments had accrued under Paragraph 2 hereof as of the date on which
Optionee ceased to be employed by the Bank or a subsidiary corporation. If the
Optionee shall terminate employment because of disability (as defined in Section
105(d)(4) of the Internal Revenue Code of 1986, as amended from time to time),
the Optionee may exercise this option to the extent he or she is entitled to do
so at the date of termination, at any time Within one year of the date of
termination, but in no event later than the expiration date in paragraph 2.

        7. Employment. This Agreement shall not obligate the Bank or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bank or a subsidiary corporation to reduce
Optionee's compensation.

        8. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to the Bank's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.

        9. Modification and Termination by Board of Directors. The rights of
Optionee are subject to modification and termination upon the occurrence of
certain events as provided in Sections 13 and 14 of the Plan.

        10. Notification of Sale. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bank not more
than five (5) days after any sale or other disposition of such shares. No shares
issuable upon the exercise of this option shall be issued and delivered unless
and until all applicable requirements Of California and federal law pertaining
to the issuance and sale of such shares, and all applicable listing requirements
of the securities exchanges, if any, on which shares of the Bank of the same
class are then listed shall have been complied with.

        11. Notices. Any notice to the Bank provided for in this Agreement shall
be addressed to it in care of its President or Cashier at its main office and
any notice to Optionee shall be addressed to Optionee's address on file with the
Bank or a subsidiary corporation, or to such other address as either

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may designate to the other in writing. Any notice shall be deemed to be duly
given if and when enclosed in a properly sealed envelope and addressed as stated
above and deposited, postage prepaid, with the United States Postal Service. In
lieu of giving notice by mail as aforesaid, any written notice under this
Agreement may be given to Optionee in person, and to the Bank by personal
delivery to its President or Cashier.

        12. Incentive Stock Option. This Stock Option Agreement is intended to
be an Incentive Stock Option Agreement as defined in Section 422A of the
Internal Revenue Code of 1986, as amended from time to time.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OPTIONEE                                PLUMAS BANK

By  /s/ WILLIAM E. ELLIOTT              By  /s/ JERRY V. KEHR
    -------------------------              -------------------------------------
    William E. Elliott                      Jerry V. Kehr, Chairman of the Board

                                        By  /s/ ROBERT SCHOENSEE
                                           -------------------------------------
                                            Robert Schoensee, Vice Chairman
                                            Of the Board

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                       FIRST AMENDMENT TO THE PLUMAS BANK
                          1991 STOCK OPTION AGREEMENT

This First Amendment to the Plumas Bank 1991 Stock Option Agreement is entered
into by and between William E. Elliott ("Optionee") and Plumas Bank on December
5, 2000 for the purpose of amending the option agreement ("Option") by and
between Optionee and Plumas Bank entered into on August 21, 1991.

WHEREAS, the Plumas Bank 1991 Stock Option Plan ("1991 Plan") previously only
allowed for stock option exercises by the payment of cash, and has since been
amended to allow the exercise of stock options by the delivery of existing
shares of Plumas Bank stock held by the option.

NOW, THEREFORE, the Optionee and the Bank agree to the amendment of the Option
as follows:

1.   AMENDMENT OF SECTION 3. The first sentence in Section 3 shall be amended in
     the entirety to read as follows:

          This option may be exercised by written notice delivered to the
          Bank stating the number of shares with respect to which this option is
          being exercised, together with the purchase price in cash or subject
          to applicable law, with Bank common stock previously acquired by the
          optionee and held by the optionee for a period of at least six months.

2.   AMENDMENT OF SECTION 3. A new sentence shall be added after the sentence in
     the aforementioned amendment to read in the entirety as follows:

          The equivalent dollar value of shares used to effect a purchase
          shall be the fair market value of the shares on the date of the
          exercise.

PLUMAS BANK                                        OPTIONEE

/s/ DOUGLAS BIDDLE                                 /s/ W. E. ELLIOTT
------------------------------------               ----------------------------
Douglas N. Biddle, Executive Vice                  William E. Elliott
President & CAO

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