Exhibit 99.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into on December 27, 2018 to be effective as of January 1, 2019, by and between Sierra Bancorp, a California corporation (“ Bancorp ”), Bank of the Sierra, a California banking corporation (“ Bank ”), and Kevin McPhaill (“ Executive ”) on the following terms and conditions.

Executive shall be the Bank’s and Bancorp’s President and Chief Executive Officer (“ CEO ”). In that role, he shall have the duties set forth in this Agreement and in the By-Laws of the Bank and Bancorp, subject to the direction of the Board of Directors of the Bank or Bancorp, as applicable. In addition to such other duties as may be assigned to him, Executive shall be responsible for the overall, day-to-day operation and administration of the Bank and Bancorp and shall assume responsibility for and oversee the development and implementation of the policies and procedures for the operating functions of the Bank and Bancorp, and such other duties as are customarily performed by the Chief Executive Officer of a bank holding company and commercial bank. Executive shall be appointed to the board of directors of the Bank and Bancorp and, subject to the vote of the shareholders of Bancorp, shall be renominated to and remain on the Boards of Directors of both companies during the term of this Agreement and any extensions thereof.

E x ec utive sh a ll d e v o te substantially his f ull busin e ss tim e , a bili t y , a nd a tt e ntion to the busin e ss of the B a nk and Bancorp du r i n g the t e r m of E x ec utiv e’ s e mpl o y m e nt und e r this Ag ree m e nt a nd sh a ll not du r ing the t e r m of his e m pl o y m e nt e n g a g e in a n y oth e r busin e ss ac tiviti e s, duti e s, or pu r suits wh a tso e v er , or di r ec tl y or indi r e c t l y re nd e r a n y s e r vi ce s of a busin e ss, c omm erc i a l, or p r o fe ssion a l n a tu r e to a n y oth e r p er son or or g a ni z a tion which is competitive with the Bank or Bancorp, wh e th e r f o r c omp e ns a tion or oth er w i s e , without the p r ior w r itt e n c ons e nt of the B o a r d of Di rec to r s o f the Bank or Bancorp, as applicable . How e v e r , the e x p e nditu r e of r e a son a ble a mounts of time f or e du c a tion a l, c h ar it a bl e , or p r o fe ssion a l a c tiviti e s sh a ll not be d ee m e d a b r e a c h of this A g r ee m e nt if t h ose ac tiviti e s do not m a t er i a l l y int e rf e r e with the s er vi ce s re qui re d o f E x ec utive und e r this Ag ree m e nt. Nothing in this A g r e e m e nt sh a ll be int er p re t e d to p r ohibit E x ec utive fr om m a ki n g p a ssive p er son a l inv e stm e nts.  How e v er , E x ec utive sh a ll not di rec t l y o r indi rec t l y a c qui r e , hold, or re t a in a n y int ere st in a n y busin e ss c omp e ting with or simil a r in n a tu r e to the busin e ss of the B a nk or Bancorp, as applicable, e x ce pt p a ssive sh are hol d e r inv e stm e nts in oth e r f i n a n c i a l institutions a nd t h e ir re sp e c tive aff ili a t e s whi c h do not e x cee d two p e r ce nt (2% ) of the outst a nding voting s ec u r iti e s in the a gg r e g a t e of a n y si n g le f i n a n c i a l institution a nd its aff ili a t e s on a c onsolid a t e d b a sis.

(a) E x ec utive sh a ll not, du r ing the t e r m of E x ec u tiv e’ s e mpl o y m e nt un d er this A g r e e m e nt, di r e c t l y or indi rec t l y , e ith e r a s a n e mpl o y e e , e mpl o y er , c o n sult a nt, a g e nt, p r in c ip a l, sto c khold e r ( e x ce pt a s p er mitt e d in p a r a g ra ph 2 of this A g r e e m e nt ) , o ff i c er , di rec to r , or in a n y ot h e r i ndividu a l or re p re s e nt a t i ve ca p ac i t y , e n g a ge or p a r ti c ip a te in a n y c omp e titive b a nking o r f i n a n c i a l s er v i ce s busin e ss without the p r ior w r itt e n c ons e nt of the B o ar d of Di rec to r s o f the B a nk or Bancorp.

(b) Following t e rmination of this A g r e ement and E x ecutive’s empl o y ment hereund e r and f o r a p eri o d of twelve (1 2 ) months there a fter, E x ecutive shall not use a n y confidential, trade sec r et, or propriet a r y informat i on of the B ank or Bancorp, or their respective a f filiates and subsidiaries, including i n formation descri b ed in p ar a g r a ph 6 below, to solicit, encour a ge or assist, direct l y , indir e ct l y or in a n y m anner whats o ever, (i) a n y empl o y e es o f the B ank or Bancorp and their respective affiliates and subsidiaries to r esi g n o r t o app l y f or or ac c ept e m pl o y ment with a n y other competitive banki n g or financial s e rvices b u siness within the counties in C alifornia in which the B ank has lo c ated its headquar t ers or b r a nch offi c es; or (ii) a n y c u stomer, person or enti t y that has or has had a busi n ess relationship with the B a n k or Bancorp during t h e twelve ( 1 2) month period prior to E x ecutive’s termination of empl o y ment wi t h the B ank or Bancorp, to terminate or reduce such business relationship and e n gage in a business relationship with a n y ot h er competitive banki n g o r financial s e rvices busi n ess within the counties in C alifornia in which the B ank or Bancorp h as loca t ed its headquart e rs or bra n ch o f fices.

Employee’s employment under this Agreement shall commence as of January 1, 2019 (the “ Effective Date ”) and shall continue thereafter until December 31, 2021 (the “ Term ”), subject to prior termination or extension as set forth in this Agreement.  The Term of the Agreement shall be automatically extended for a subsequent period or periods of one (1) year each unless, not later than six (6) months prior to the expiration of the then current Term, either party shall have given written notice to the other that the Term shall not be so extended.  

To the e x t e nt p er mitt e d b y l a w a nd a ppli c a ble r e g ul a tions, the B a nk or Bancorp sh a ll ind e mni f y E x ec utive if he w a s or is a p ar t y or is th r e a t e n e d to be m a de a p ar t y in a n y a c tion b r ou g ht b y a thi r d p ar t y a g a inst E x ec utive ( w h e th e r or not t he B a nk or Bancorp is join e d a s a p ar t y d efe n d a nt) a g a inst e x p e ns e s, jud g m e nts, f in e s, s e ttl e m e nts a nd oth e r a mounts ac tu a l l y a nd rea so n a b l y in c u rre d in c on n ec tion w ith s a id ac tion if E x ec utive ac t e d in g ood fa ith a nd in a m a nn e r E x ec utive rea son a b l y b e l i e v e d to be in the b e st int ere sts of the B a nk or Bancorp

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(a nd with re sp e c t to a cr imin a l p r o c ee di n g if E x ec utive h a d no r ea son a ble ca use to b e li e v e his c ondu c t w as unl a w f ul ) , p r ovid e d th a t t he a ll e g e d c ondu c t of E x ec utive ar ose out of a nd w a s within the c ou r se a nd s c ope of his e mpl o y m e nt a s a n o ff i c e r or E x ec utive of the B a nk or Bancorp.

6. Dis c losu r e of I n f o r m a ti o n

E x ec utive sh a ll not, e ith e r b ef o r e or af t e r t er min a tion of E x ec utiv e’ s e mpl o y m e nt un d e r this Ag ree m e nt, without the p r ior w r itt e n c ons e nt of the B o ar d of D i rec to r s of the Bank or Bancorp, or e x ce pt a s re q ui re d b y l a w to c omp l y with l e g a l p r o ce ss in c ludin g , without limit a t ion, b y o r a l or w r itt e n t e s timo n y , d e positions, int err og a to r i e s, r e qu e sts f or in f o r m a tion or do c u m e nts, subpo e n a , c ivil inv e sti g a tive d e m a nd o r simil a r p r o c e ss, dis c lose to a n y o n e a n y f in a n c i a l i n f o r m a tion, t ra de o r busin e ss s ec r e ts, c ustom e r lists, c omput e r so f tw a r e or oth e r in f o r m a tion c o n cer ni n g the busin e ss or o p era tions of the B a nk or Bancorp, a nd th e ir re sp ec tive aff ili a t e s a nd s ubsidi ar i e s; p r ovid e d , th a t su c h in f o r m a tion sh a ll not in c lude in f o r m a tion ( i) in or whi c h e nt er s the public dom a i n ( oth e r th a n b y b r eac h o f E x ec utiv e’ s obli g a tions h e r e und e r ) ; ( ii) ac qui re d b y E x ec utive oth e r th a n in c onn e c tion with his e mpl o y m e nt; or ( iii) th a t is dis c los e d to E x ec utive b y a thi r d p ar t y not known to Executive to be o bli g a t e d to the B a nk or Bancorp, to k e e p su c h in f o r m a tion c on f id e nti a l.   I n t h e e v e nt E x ec utive is re qui re d b y l a w to dis c lose s u c h in f o r m a tion d e s cr ib e d in this p ar a g ra ph 6 , E x ec utive will p r ovide the B a nk and Bancorp, a nd their c ouns e l with imm e di a te noti c e of su c h re qu e s t so th a t th e y m a y c onsi d e r s ee ki n g a p r ot ec tive o r d er, provided that Executive shall not be required to incur any expense in connection therewith . I f , in t h e a bs e n c e of a p r ot ec tive o r d e r or the r e ce ipt of a w a iv e r h e re un d er , E x ec utive is non e th e l e ss, c omp e ll e d to dis c lose a n y o f su c h in f o r m a tion to a n y t r ibu n a l or a n y ot h e r p ar t y or e lse st a nd li a b le f or c ont e mpt or su ffe r oth e r m a t er i a l ce n s u r e or m a t e r i a l p e n a l t y , t h e n E x ec utive m a y dis c lose ( on a n “as n ee d e d ” b a sis on l y ) su c h in f o r m a tion to su c h t r ibun a l or oth e r p a r t y without li a bili t y h ere un d er . Notwithst a nding the f o r e g oi n g , E x ec utive m a y dis c lose su c h in f o r m a ti o n c on cer ni n g the busin e ss or op era tions of the B a nk or Bancorp, a nd their re sp ec tive aff ili a t e s a n d subsidi ar i e s a s m a y be re qui r e d b y the Federal Deposit Insurance Corporation (“ FDIC ”), California Department of Business Oversight (“ DBO ”) or the Federal Reserve Bank of San Francisco or Board of Governors of the Federal Reserve System (collectively, the “ FRB ”) or oth e r r e g ul a t or y a g e n c y h a vi n g ju r isdi c tion ov e r the op era tions of the B a nk or Bancorp, in c onn e c tion with a n e x a min a tion of the B a nk or Bancorp, o r oth e r p r o cee di n g c ondu c t e d b y su c h r e g ul a to r y a g e n c y .

All w r itt e n, p r int e d or e l e c t r onic m a t er i a l, not e books a nd r ec o r ds in c ludi n g , without limit a tion, c omput e r files us e d b y E x ec utive in p erf o r mi n g duti e s f or the Bank or Bancorp , oth e r th a n E x ec u tiv e ' s p e r son a l a dd r e ss lists, t e l e phone lists, not e s a nd di ar i e s, a r e a nd s h a ll re m a in the sole p r op e r ty of the Bank or Bancorp .  Upon t er min a tion of e mpl o y m e nt, E x ec utive sh a ll p r ompt l y

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re tu r n a ll su c h m a t er i a l ( in c luding a ll c op i e s, e x t rac ts a nd summ ar i e s th e r e o f ) and any other property of Bank or Bancorp in the possession or under the control of Executive to the Bank or Bancorp .

(a) Salary

The Bank or Bancorp shall pay Executive an annual minimum base salary (“ Base Salary ”) from the Effective Date of five hundred twenty-five thousand dollars ($525,000.00), less appropriate withholding, taxes and similar deductions, payable in equal installments on those days when the Bank normally pays its employees.  On or before December 31, 2019, and not less than once each twelve (12) months thereafter, the Board of Directors of the Bank and Bancorp shall review the Base Salary of Executive to evaluate the Base Salary based upon the performance of Executive, market conditions for salaries to individuals similarly employed, increases in the cost of living, and similar factors.  Any such increase will be in the sole discretion of the Boards of Directors of the Bank and Bancorp.

(b) Bonus

At the end of each calendar year or any partial calendar year period in the Term, the amount of bonus compensation (“ Bonus ”), if any, to be paid to Executive shall be determined in the sole discretion of the Boards of Directors of the Bank and Bancorp based upon the performance of Executive and the results of the Bank’s and Bancorp’s operations and the terms of any bonus or incentive compensation plan then in effect respecting the executives of the Bank or Bancorp.  The amount of any annual bonus shall be paid to Executive not later than March 15 of the following year. Executive’s aggregate Bonus for any period for which a bonus is calculated shall not exceed 75% of Executive’s Base Salary for such period and shall be based on criteria set forth by the compensation committee of the Boards of Directors of Bank and Bancorp.

(c) Business Expenses

In accordance with Bank and Bancorp policy as it may exist from time to time, and subject to the approval of all such expenses by the Board of Directors of the Bank or Bancorp or their designee, as applicable, Executive shall be entitled to reimbursement by the Bank for any ordinary, reasonable business expenses incurred by Executive in the performance of Executive’s duties and in acting for the Bank or Bancorp during the term of this Agreement, provided that Executive furnishes to the Bank or Bancorp substantially adequate records and other documentary evidence as required by the Bank’s or Bancorp's policies.

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(d) Benefits

During the term of his employment under this Agreement, Executive shall be entitled to receive the following benefits:

(a) Autom a tic T er min a tion

This A g r ee m e nt sh a ll t e r min a te a utom a ti ca l l y without f u r th e r ac t o f the p ar ti e s a nd imm e di a t e l y upon the o cc u r re n c e of a n y one o f the f ollowing e v e nts, subj ec t to e ith e r p ar t y 's r i g ht, w i thout a n y obl i g a tion wh a tso e v er , to w a ive a n e v e nt r e a son a b l y sus ce pt i ble of w a iv e r , a nd the ob l i g a tion of the B a nk or Bancorp to p a y the a mounts whi c h would oth er wise be p a y a ble to E x ec utive und e r this Ag ree m e nt th r o u g h the e nd of the month in whi c h the e v e nt o c c u r s.  On l y in the e v e nt of t er min a tion b a s e d upon a Change in Control of Bancorp as provided in paragraph 9 (a) (viii) , sh a ll E x ec utive be e ntitl e d to rece ive s e v e r a n c e b e n e f its b a s e d upon a utom a tic t e r min a tion pu r su a nt to p ar a g r a ph 9 (d ) (i) o f this Ag ree m e nt:

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(b) T er min a tion b y B a nk   

The B a nk and Bancorp m a y , a t their e l ec tion a nd in their sole dis cre tion, t er min a te E x ec utiv e’ s e mpl o y m e nt a nd this A g r e e m e nt a t a n y time a nd f or a n y r ea son or f or no r ea son, upon thi r t y ( 30) d a y s p r ior w r itt e n noti c e t o E x ec utiv e , without p re judi c e to a n y oth e r re m e d y to wh i c h the B a nk or Bancorp may be entitl e d e ith e r a t l a w, in e qui t y or und e r this A g r ee m e nt.  Unl e ss oth e r w ise a g r e e d in w r iting by B a nk and Bancorp, a t the effective time of su c h noti c e E x ec utive sh a ll continue p erf o r mi n g a nd dis c h a r g i ng the duti e s a nd re spon s ibiliti e s of his posi t ions for such thirty (30) day period a nd E x ec utive a g ree s to c on c u r r e nt l y re s i g n a s a di rec tor of the B a nk and Bancorp.  All r i g hts a n d obli g a tions a c cr ui n g to E x ec utive und e r this A g r ee m e nt sh a ll c ea se a t su c h t er min a tion, e x c e pt th a t su ch t er min a tion sh a ll not p re judi c e E x ec utiv e’ s r i ghts re g ar di n g e mpl o y m e n t b e n ef its whi c h sh a ll h a ve a ccr u e d p r ior to su c h t er min a tion, in c luding t he r i g ht to r e c e ive the s e v era n c e b e n ef its sp ec i f i e d in p a r a g r a ph 9 (d ) (ii) b e low.

(c) T er min a tion b y E x ec uti v e   

E x ec utive m a y t e r min a te his e mpl o y m e nt with the Bank and Bancorp a nd this A g r e e m e nt at a n y time a nd f or a n y r e a s on or no rea son, upon nine t y (9 0 ) d a y s p r ior w r itt e n noti c e to the B a nk and Bancorp.  Unl e ss oth e r w i se

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a g r e e d in w r iting by the B a nk and Bancorp , a t the effective time of su c h noti c e E x ec utive sh a ll continue p e r f o r mi n g a nd dis c h a r g i n g the duti e s a nd re sponsibiliti e s of his positions for such ninety (90) day period and Executive, upon the giving of such notice, shall c on c u r re nt l y r e si g n a s a d i rec tor o f the B a nk and Bancorp . All r i g hts a nd obl i g a tio n s accr ui n g to E x ec ut i ve und e r this Ag ree m e nt s h a ll cea s e a t su c h t er min a tion, e x ce pt th a t su c h t er min a tion sh a ll not p re judi c e E x ec utiv e ' s r i g hts r e g ar d i ng e mpl o y m e nt b e n ef its, including vested stock options or supplemental retirement or salary continuation plan benefits , whi c h sh a ll h a ve a c c r u e d and vested p r ior to su c h t er min a tion .

(d) S e v era n c e B e n e f its  

(i) Subj ec t to p ar a g r a phs 11 a nd 23 of this Ag r e e m e nt, in the e v e nt of a uto m a tic t er min a tion b a s e d u p on a Change in Control under paragraph 9 (a) (viii) , th e n E x ec utive sh a ll rece i v e Change in Control b e n ef its c onsisting of ( A) a ca sh p a y m e nt in a n a m ount e qu a l to 175% of E x ec utiv e ' s then current B a se S a l a r y du r i n g the y e a r the t er min a tion o cc u r s , l e ss a ppli ca ble withholding d e ductions ( in a ddition to accrued B a se Sa l a r y , in ce ntive c omp e ns a tion, or oth e r p a y m e nts, if a n y , due E x ec utiv e) , p a y a ble in l u mp sum p r ompt l y af t e r six t y ( 60) d a y s f ollowing su c h t er min a tion, but in no e v e nt l a t e r th a n M ar ch 15 f ollowing the e nd of the ca l e n d a r y e a r th a t i n c lud e s su c h t er min a tio n; and ( B) c ontinu a tion of g r oup health, vision and dental insu ra n c e c ove r a g e s s p ec i f i e d in p ar a g ra ph 8 (d ) (i) of this A g r e e m e nt f or E x ec utive and fifty percent (50%) of the costs of Executive’s dependents pu r su a nt to The Consolid a t e d Omnibus B u d g e t R ec o n c ili a tion A c t of 1985 (“ C O B R A ” ) , or und e r a pplic a ble C a l i f o r nia l a w pu r s u a nt to A s s e mb l y B ill No. 1401 (“ C a l - C O B R A ”) , with o ne hund re d pe r c e nt ( 10 0 % ) of p r e miums f or the insu ra n c e c ov e r a g e s pa y able b y the B a nk or Bancorp month l y to E x ec u tive f or a pe r iod of twelve ( 12) months fr om the d a te of t er min a t ion.  Notwithst a nding the f o r e g oi n g or a n y oth e r p r ovision in this Ag ree m e nt to the c ont ra r y , the obl i g a tion of the B a nk or Bancorp to p a y the p r e mium c osts re l a t e d to the CO B RA or C a l - C O B RA c ontinu a tion of i n su ra n c e c ov e r a g e s sh a ll t er min a te a t the ear lier of the e x pi ra tion of twelve (12 ) months fr om the d a te of te r min a tion or the d a te of c omm e n ce m e nt of c om p ara ble insu r a n c e c ove r ag e s f or E x ec utive b y anoth e r e mpl o y e r . A f t e r su c h e x pi ra tion d a t e , E x ec utive sh a ll have su c h r i g hts to c ontinue to p ar ti c ip a te un d e r the B a n k ’ s g r o up h ea lth b e n ef its pl a n a t E x ec utiv e’ s e x p e nse a s may b e a v a il a ble und e r CO B RA o r C a l CO B RA.  E x ec utive a g r ee s to noti f y the B a nk a s soon a s p rac ti ca b l e , but not l e ss th a n t e n ( 10) busin e ss d a y s in a dv a n c e o f the c o m m e n ce m e nt of s u c h c omp ara ble insu r a nce c o v er a g e s with a noth e r e m pl o y e r a nd to re p a y to the B a nk a n y a mounts p a id b y the B a n k to or f o r the ben ef it of E x ec utive that ov er l a p the c ov er ag e s p r ovid e d b y t h e oth e r e mpl o y e r .

(ii) Subject to paragraphs 11 and 23 of this Agreement, termination by the Bank and Bancorp of this Agreement and Executive’s

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employment under paragraph 9 (b) , other than in connection with an event constituting automatic termination; th e n E x ec utive sh a ll rece i v e s e v e ra n c e b e n ef its c onsisting of ( A ) a ca sh p a y m e nt in a n a m ount e qu a l to 100% of E x ec utiv e ' s then current B a se S a l a r y du r i n g the y e a r the t er min a tion o cc u r s , l e ss a ppli ca ble withholding d e du c tions ( in a ddition to accrued B a se Sa l a r y , in ce ntive c omp e ns a tion, or oth e r p a y m e nts, if a n y , due E x ec utiv e) , p a y a ble in l u mp sum p r ompt l y af t e r six t y ( 60) d a y s f ollowing su c h t er min a tion ( but in no e v e nt l a t e r th a n M ar c h 15 f ollowing the e nd of the ca l e n d a r y e a r th a t i n c lud e s su c h t er min a tio n ) calendar years preceding the termination and ( B ) c ontinu a tion of g r oup health, vision and dental insu ra n c e c ov e r a g e s s p ec i f i e d in p ar a g ra ph 8 ( d ) (i) of this A g r e e m e nt f or E x ec utive and fifty percent (50%) of the costs of Executive’s dependents pu r su a nt to The C onsolid a t e d Omnibus B u d g e t R ec o n c ili a tion A c t of 1985 (“ C O B R A ” ) , or und e r a ppli c a ble C a l i f o r nia l a w pu r s u a nt to A s s e mb l y B ill No. 1401 (“ C a l - C O B R A ”) , with o ne hund re d p e r c e nt ( 10 0 % ) of p r e miums f or the insu ra n c e c ov e r a g e s p a y a ble b y the B a nk or Bancorp month l y to E x ec u tive f or a p e r iod of twelve ( 12) months fr om the d a te of t er min a t ion.  Notwithst a nding the f o r e g oi n g or a n y oth e r p r ovision in this Ag ree m e nt to the c ont ra r y , the obl i g a tion of the B a nk or Bancorp to p a y the p r e mium c osts re l a t e d to the C O B R A or C a l - C O B R A c ontinu a tion of i n su ra n c e c ov e r a g e s sh a ll t er min a te a t the ear li e r of the e x pi ra tion of twelve (12 ) months fr om the d a te of t e r min a tion or the d a te of c omm e n ce m e nt of c om p ara ble insu r a n c e c ov e r a g e s f or E x ec utive b y a noth e r e mpl o y e r . A f t e r su c h e x pi ra tion d a t e , E x ec utive sh a ll h a ve su c h r i g hts to c ontinue to p ar ti c ip a te un d e r the B a n k ’ s g r o up h ea lth b e n ef its pl a n a t E x ec utiv e’ s e x p e nse a s m a y b e a v a il a ble und e r C O B R A o r C a l C O B R A.  E x ec utive a g r ee s to noti f y the B a nk a s soon a s p rac ti ca b l e , but not l e ss th a n t e n ( 10) busin e ss d a y s in a dv a n c e o f the c o m m e n ce m e nt of s u c h c omp ara ble insu r a n c e c o v er a g e s with a noth e r e m pl o y e r a nd to re p a y to the B a nk a n y a mounts p a id b y the B a n k to or f o r the b e n ef it of E x ec utive th a t ov er l a p the c ov er a g e s p r ovid e d b y t h e oth e r e mpl o y e r .   

(iii) E x ec utive ac know l e d g e s a nd a g r ee s th a t s e v e ra n c e b e n e f its pu r su a nt to this p ar a g r a ph 9 ( d) ar e in l i e u of a ll d a m a g e s, p a y m e nts a nd li a biliti e s on acc ount of the ear l y t er min a tion of E x ec utiv e’ s e mpl o y m e nt un d e r this Ag ree m e nt.  Any payment made under any subparagraph of paragraph 9 (d) shall preclude further payment under any other subparagraph of paragraph 9 (d).

(e) C h a n g e in C ont r ol

As contemplated by paragraph 9 (a) (viii) , E x e c utive sh a ll be e ntitl e d to rece ive severance in the e v e nt of a “ C h a nge in C ont r ol ”  under paragraph 9 (d) (1) occurring while Executive is employed by the Bank or Bancorp. Such event shall automatically terminate employment under this Agreement.

(i) “Change in Control” of the Bancorp or the Bank shall be deemed to have occurred (as of a particular day, as specified by the Board) upon the occurrence of any of the following events:

5022.003/1380657.2 8

( A ) Any one Person, or more than one Person acting as a group, acquires ownership of stock of the Bank or Bancorp that, together with stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stoc k of the Bancorp ; provided, however, that a Change of Control shall not be deemed to have occurred in the event of either:

(1) a reorganization in wh ich the shareholders of the Bancorp before the reorganization hold equity interests, directly or indirectly, in the reorganized company in substantially the same proportion as they held equity interests in Bancorp; or

(2) a change of control of the Bank where approval of the payment to Executive under Part 359 of the FDIC’s regulation is required and is not obtained; or

(3) a merger or acquisition by the Bancorp that is approved by the Bank's Board and in which the shareholders of the Bancorp immediately before completion of the transaction hold, directly or indirectly, more than 50% of the equity interests in the surviving corporation after completion of the transaction.

(B) one Person, or more than one Person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or group), assets from the Bank or Bancorp that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all assets of Bancorp immediately prior to such acquisition or acquisitions.  

(C) References to "group" within this definition of "Change of Control" will be determined in a manner provided for in Treasury Regulations promulgated under Internal Revenue Code section 409A, in particular Treasury Regulation Section 1.409A-3(i)(5)(v)(B) as applicable except to the extent modified or further limited above, and to the extent this definition serves as a payment event for nonqualified deferred compensation within the meaning of Code Section 409A, any transactions constituting a Change in Control under the above referenced definition will only constitute a payment event under this Agreement if, and to the extent, such definition does not violate Internal Revenue Code section 409A.

(ii) A Change in Control shall not be deemed to occur unless and until all regulatory  approvals required in order to effectuate a Change in Control of the Bank have been obtained and the transaction constituting the Change in Control has been consummated.

(f) R e l ea se of All C l a ims

5022.003/1380657.2 9

Notwithst a nding a n y ot h e r p r ovision of this Ag ree m e nt to the c ont ra r y , the B a nk a nd E x ec utive a g r e e it sh a ll be a n e x p re ss c ondition to E x ec uti v e’ s r e ce ipt of a n y s e v e r a n c e b e n ef its of any kind und e r paragraph 9 (d) , th a t E x ec utive e x ec ute a f ull a nd c ompl e te r e l ea s e , s u bst a nti a l l y in the f o r m a n d c ont e nt a tt ac h ed h ere to a s E x hibit A , of a n y a nd a ll c l a ims a g a inst the B a nk and Bancorp a nd their re sp e c tive aff ili a t e s, di r e c to r s, o ff i c er s, e mpl o y ee s, a g e nts, a t to r n e y s, insu r er s, a nd s u c ce sso r s in int ere st, ar ising f r om or in a n y w a y r e l a t e d to E x ec utiv e ’ s e mpl o y m e nt or t er mi n a tion of E x ec utiv e’ s e mpl o y m e nt pu r su a nt to this A g r ee m e nt a nd E x ec utive sh a ll not re voke su c h re l ea s e of c l a ims.

10. [RESERVED]

11. S ec tion 409A and 280G L imit a tions

(a) G e n e r a l

It is the int e ntion the B a nk, Bancorp a nd E x ec utive th a t this Ag ree m e nt s h a ll be int e r p re t e d a nd a dminist ere d c onsist e nt with S ec tion 409A of the Int e r n a l R e v e nue C ode of 1986, a s a m e nd e d ( “ S ec tion 40 9 A ” ) a nd th a t the s e v e r a n c e and other b e n ef its p a y a ble to E x ec utive und e r this Ag ree m e nt e ith e r be e x e mpt fr om, or oth er wise c omp l y with, S ec tion 409A.  Notwithst a nding a n y ot h e r t er m, p r ovisio n , or oth e r m a tt e r s e t f o r th e ls e wh e r e in this Ag ree m e nt, to the e x t e nt th a t a n y p r ovision of this Ag ree m e nt m a y b e d e t e r min e d b y the B a nk, with the a dv i c e of its ind e p e nd e nt acc ounti n g f i r m or oth e r t a x a dviso r s, to be subj ec t to a nd not in c ompli a n c e w i th S ec tion 409A, su c h p r ovisions sh a ll be int er p r e t e d in the m a nn e r re qui re d to c omp l y with S ec tion 409A.  The B a nk, Bancorp a nd Ex ec utive f u r th e r a c know l e dge a nd a g r e e th a t i f , in the jud g m e nt of the B a nk and Bancorp, with the a dv i c e of its ind e p e nd e nt acc ounti n g f i r m or oth e r t a x a dviso r s, a m e ndm e nt of t his A g r ee m e nt is n e c e ss a r y to c l ar i f y a n y o f the t e r ms of this Ag ree m e nt, o r to c omp l y with S ec tion 409A, the B a nk, Bancorp a nd E x e c utive will n e g oti a te rea son a b l y a nd in g ood f a ith to a m e nd the t er ms o f this A g r ee m e nt to the e x t e nt n ece ss a r y so th a t it c ompli e s ( with the most limit e d possible ec onomic eff e c t on the B a nk a nd E x ec utiv e ) with S ec tion 409A.  [If any payment under this Agreement fails to comply with or be exempt from Section 409A, neither the Bank nor Bancorp shall have liability for any taxes, penalties, interest or fees imposed on Executive and Executive shall have no claim against the Bank or Bancorp or any of its directors, officers, employees, stockholders, affiliates, managers, members, partners, agents, attorneys or representatives for any such taxes, penalties, interest or fees.]

(b) Pa y m e nts to S p ec i f i e d E mpl o y ee s

(i)   Notwithst a nding a n y p r ovision of this Ag ree m e nt to the c ont ra r y , if Ex ec utive is c onsid ere d a “ S p ec i f i e d Emplo y e e ” ( a s d ef in ed b e low ) , a n y dist r ibutions h ere und e r whi c h would oth er wise be m a de to Ex ec utive pu r su a nt to the t er ms of this Ag ree m e nt sh a ll not be m a de during the f i r st six ( 6) months f ollowing t er min a tion of e mplo y m e nt th a t c onstitut e s a s e p a r a tion fr om s er vi c e pu r su a nt to S ec tion 409A unl e ss Ex ec utive di e s p r ior to the e nd of su c h s ix ( 6) month p er iod.  Any dist r ibution whi c h would oth er wise be p a id to

5022.003/1380657.2 10

E x ec utive du r ing s u c h six ( 6) month p er iod sh a ll be acc umul a t ed a nd p a id to E x ec utive in a lump sum on the f i r st d a y of t h e s e v e nth ( 7 th ) month f ollowing su c h a s e p a ra tion fr om s e r vi ce .  All subs e qu e nt di s t r ibutions sh a ll be p a id in the m a nn e r oth er wise sp e c i f i e d in this A g r ee m e nt.

(ii) The t er m “ S p e c i f i e d E m pl o y e e ” sh a ll m ea n a n e mpl o y e e who a t the time of s e p ara tion f r om s er vi c e is a “ K e y Empl o y e e ” of the B a nk or Bancorp or a s u c c e ssor e nti t y o f e ith er , if a n y st o c k of the B a nk or Bancorp or a su c ce ssor e nti t y of e ith e r is publi c l y t r a d e d on a n e st a blish e d s ec u r iti e s m ar k e t or oth e r wis e .   F or p u r pos e s of th i s A g r ee m e nt, a n e mpl o y e e is a K e y Empl o y e e if the e mpl o y e e m e e ts the re qui r e m e nts of s ec tion 416 ( i )( 1 ) ( A )( i ) , ( ii ) , or ( i ii) of the I nt er n al R e v e nue C ode of 1986, a s a m e nd e d ( a ppli e d in a c c o r d a n c e with the r e g ul a t ions th ere und e r a nd dis re g ar di n g s e c tion 416 ( i )( 5) th e r e o f ) a t a n y time du r ing the t w e lve ( 12) m onth p er iod e nding on D ece m b e r 31 ( the " I d e nti f i ca tion P er iod " ) . I f t he e mpl o y e e is a K e y E mpl o y e e d u r ing a n I d e nti f i ca tion P er iod, the e mpl o y e e is t rea t e d a s a K e y Empl o y e e f o r pu r p o s e s of this Ag ree m e nt du r ing the t w e lve ( 12) m onth p er iod th a t b e g ins on the f i r st d a y of A p r il f ollowing the c lose o f the I d e nti f i ca tion P er iod.

(c) 280 G

If Executive’s severance or other compensation provided by the Bank or Bancorp under this Agreement or outside this Agreement would cause any such payment to be an “excess parachute payment” (as defined in Section 280G(b)(1) of the Internal Revenue Code), then the payments made under paragraph 9 hereof or made outside this Agreement, as applicable, will be reduced (pro rata in the case of installment payments) to the largest amount which may be paid without any portion of such amount being subject to the excise tax imposed by Section 4999 of the Internal Revenue Code.  In the event there is a dispute among the parties regarding the extent to which payments must be reduced pursuant to this paragraph 11 (c) , such dispute will be resolved by the good faith determination of the Board of Directors of the Bank or Bancorp or the Compensation Committee of the Board of Directors of the Bank or Bancorp.

12. Noti ce s

A n y noti ce s to be g i v e n h e r e und e r s h a ll be in w r iting a nd m a y be t ra nsmitt e d b y email with confirmation of receipt by the recipient or its counsel, p e r son a l d e liv e r y or b y U. S . m a il, r e g ist e re d or cer ti f i e d, po s t a ge p re p a id with re tu r n r e ce ipt r e qu e st e d. M a il e d noti ce s sh a ll be a dd re ss e d to E x ec utive a t the a dd r e ss list ed in E x ec utiv e’ s p er so n n e l f ile a nd to the B a nk a t its p r in c ip a l b u sin e ss o ff i c e lo c a t e d a t 86 N. Main Street, Porterville , C a li f o r ni a 93257 .  A p a r t y m a y c h a n g e the a dd re s s f or r e ce ipt of noti ces b y w r itt e n noti c e in a c c o r d a n c e with this p a r a g ra p h 12 .  Noti ce s d e liv e r e d p er son a l l y sh a ll be d ee m e d

5022.003/1380657.2 11

c ommuni c a t e d a s of the d a te of ac tu a l r e c e ipt; m a il e d noti ce s sh a ll be d ee m ed c ommuni ca t e d a s of th r e e ( 3) d a y s af t e r t h e d a te o f m a ilin g ; and emailed notices upon confirmation of receipt.

A r bit ra tion

All c l a ims, disput e s a nd oth e r m a tt e r s in qu e stion ar ising out of or re l a ting to E x ec utiv e ’ s e mpl o y m e nt a nd/or this Ag ree m e nt o r the b r e ac h or int er p re t a tion th ere o f , oth e r th a n those m a tt er s whi c h a r e to be d e t er min e d b y the B a nk or Bancorp, in th e ir re sp ec tive sole a nd a bso l ute dis cre tion, sh a ll be r e solv e d b y bindi n g ar bit r a tion b ef o r e a re p re s e nt a tive m e mb e r , s e l ec t e d b y the mutu a l a g r ee m e nt of the p ar ti e s, of t he American Arbitration Association (“ AAA ”) in acc o r d a n c e with the r ul e s a nd p r o c e du r e s of AAA th e n in effec t. Noti c e of t h e d e m a nd f or a r bit ra tion sh a ll be f il e d in w r iting with the oth e r p ar t y to this Ag ree m e nt a nd with AAA . I n no e v e nt s h a ll the d e m a nd f or ar bit ra tion be m a de a f t e r the d a te w h e n institution of l e g a l or e quit a ble p r o c ee di n g s b a s e d on su c h c l a im, dispute or oth e r m a tt e r in qu e stion would be b ar r e d b y the a ppli ca ble st a tu t e of limit a tions.  A n y a w ar d re nd e re d b y AAA sh a ll be in w r i ting a nd f in a l a nd binding upon the p ar ti e s, a nd a s a ppli ca bl e , th e i r re s p e c tive h e i r s, b e n ef i c i ar i e s, l e g a l re p r e s e nt a tiv e s, a g e nts, s u cce sso r s a nd a ssi g ns, a nd m a y be e nt e re d in a n y c o u r t h a vi n g ju r isdi c tion th ere of to the e x t e nt p er mitt e d b y a ppli ca ble l a w.  T h e obli g a tions a nd r i g hts of t h e p ar ti e s to ar bit ra te pu r su a nt to this c l a use sh a ll be sp ec i f i c a l l y e n f o r cea b le in acc o r d a n c e with, a n d sh a ll be a ppli e d, c onst r u e d a nd int er p r e t e d c onsist e nt l y with, the p r o visions of the Fe d e ra l A r bit ra tion A c t, 9 U. S . C . s ec tion 1, et s e q.  E x ec utive a g ree s to c on d u c t ar bit ra tion a s a n indi v idu a l sol e l y upon a nd re l a t e d to E x ec utiv e’ s own c l a ims a nd w a iv e s a n y r i g ht to pu r sue su c h c l a ims a s a c l a ss ac tion.  A n y ar bit ra tion h e r e und e r s h a ll be c ondu c t e d in Fresno , C a li f o r ni a , unl e ss ot h er wise a g ree d to b y the p ar ti e s.

Atto r n e y s ' F e e s a nd C os t s

In the e v e nt of litig a tion, ar bit ra tion or a n y ot h e r ac tion or p r o c ee di n g b e t w ee n the p ar ti e s to int er p re t or e n f o r c e this Ag re e m e nt or a n y p ar t th ere of or ot h er wise ar ising out of or re l a ti n g to this A g r ee m e nt, the p r e v a i l ing p ar t y s h a ll be e ntitl e d to rec ov e r its c osts re l a t e d to a n y su c h ac t i on or p r o c e e di n g a nd its rea son a b l e f e e s of a tto r n e y s, a c c ount a nts a n d e x p er t witn e ss e s in c u r r e d b y s u c h p ar t y in c on n ec tion with a n y su c h ac tion or p r o c ee di n g .  T h e p re v a ili n g p a r t y s h a ll be d ee m e d to b e the p ar t y whi c h obt a ins subst a nti a l l y the re li e f s o u g ht b y f in a l r e solution, c omp r omise or s e ttl e m e n t, or a s m a y oth er wise be d e t er min e d b y o r d e r o f a c ou r t of c omp e t e nt ju r isdi c tion in the e v e nt of liti g a tion, a n a w ar d or d ec ision of one or mo r e a r bit ra to r s in the e v e nt of ar bit ra tion, or a d ec ision of a c omp a ra ble o ff i c i a l in the e v e nt of a n y oth e r ac tion or p r o c e e d in g .  Ev e r y oblig a tion to ind e mni f y und e r this Ag ree m e nt in c lu d e s the obli g a tion to p a y r e a son a ble fee s of a tto r n e y s, a c c ount a nts a nd e x p er t witn e ss e s in c u r r e d b y the ind e mni f i e d p ar t y in c o n n ec tion with m a tt er s subj ec t to ind e mni f i ca tion.

5022.003/1380657.2 12

Enti r e A g r e e m e nt

.  

This Ag ree m e nt su p er s e d e s a n y a nd a ll oth e r a g ree m e nts, e ith e r o ra l or in w r itin g , b e tw ee n the p ar ti e s with re sp ec t to the e mpl o y m e nt of E x ec utive b y the B a nk a nd c ont a ins a ll of the c ov e n a nts a nd a g r e e m e nts b e t w ee n the p a r ti e s with re sp ec t to the e mpl o y m e nt of E x ec utive b y t h e B a nk or Bancorp; p r ovid e d, th a t, this Ag ree m e nt d o e s not sup e r s e de or re pl a c e the r i g h t s a nd b e n ef its und e r ( i) any supplemental retirement or salary continuation plan, or ( ii) a n y sto c k option or e qui t y a w ar d a g r e e m e nt b e tw ee n Bancorp a nd E x ec utive o f this Ag ree m e nt.   E ac h p ar t y to this A g r e e m e nt a c kn o wl e dg e s th a t no oth e r r e p re s e nt a tions, indu ce m e nts, p r omis e s, o r a g r e e m e nts, o ra l or ot h er wis e , h a v e b e e n m a de b y a n y p ar t y , or a n y o n e a c ting on b e h a lf of a n y p ar t y , wh i c h a r e n ot s e t f o r th h ere in, a nd th a t no oth e r a g r ee m e nt, st a t e m e nt, or p r omise not c ont a in e d in this Ag re e m e nt sh a ll be v a lid or binding on e ith e r p ar t y .

Modi f i ca tions

.  

A n y mo d i f i ca tion of this Ag ree m e nt will be eff e c tive on l y i f it is in w r iting a nd s i g n e d b y a p ar t y or its a utho r i z e d r e p re s e n t a tiv e.

W a iv er

The fa ilu r e of a p ar t y to insist on st r i c t c o mpli a n c e with a n y of the t er ms, p r ovisions, c ov e n a nts, or c onditions of this A g r ee m e nt b y a not h e r p a r t y s h a ll not be d ee m e d a w a iv e r of a n y t er m, p r ov i sion, c ov e n a nt, or c ondit i on, individu a l l y o r in the a gg r e g a t e , unl e ss su c h w a iv e r is in w r iti n g , nor sh a ll a n y w a iv e r or r e linquishm e nt of a n y r ight or pow e r a t a n y one time or tim e s be d ee m e d a w a iv e r o r re linquishm e nt of th a t r i g ht or po w e r f or a ll or a n y oth e r tim e s.