Employment Agreement, Dated January 1, 2005.

Exhibit 10.1


EMPLOYMENT AGREEMENT

THIS AGREEMENT (the " Agreement" ) is made and entered into as of January 1, 2005 (the " Effective Date" ) by and between PLACER SIERRA BANK, a California banking corporation (" Bank" ) and MARSHALL V. LAITSCH (" Employee" ) (collectively sometimes referred to as the " Parties" ):


WHEREAS , the Parties desire to enter into an agreement for the purpose of retaining Employee' s services as President Southern California Division;


NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:


1. Employment and Duties . Employee is hereby employed by Bank as President-Southern California Division of Bank. Employee shall be responsible for performing such duties as are customarily and ordinarily performed by a Division President of a bank, including the duties described on Exhibit " A" hereto. Employee will also perform such duties as he may, from time to time, be called upon to assist companies affiliated with Bank, and such other attendant duties as he may, from time to time, be reasonably requested to perform by the Board of Directors of Bank (the " Board" ).

2. Extent of Services .

(a) Exclusive Employment . Employee shall devote his full time, ability and attention to the business of Bank and its parent companies, subsidiaries, divisions and affiliates, during the Employment Term, and shall neither directly nor indirectly render any services of a business, commercial or professional nature to any other person, firm, corporation or organization for compensation without the prior written consent of the Board.


(b) Employee Investment Activities . Nothing contained herein shall be construed as preventing Employee from (i) investing his personal assets in businesses which do not compete with Bank in such form or manner as will not require any services on the part of Employee in the operation or the affairs of the companies in which such investments are made and in which his participation is solely that of an investor, (ii) purchasing securities in any corporation whose securities are regularly traded provided that such purchase shall not result in Employee collectively owning beneficially at any time five percent or more of the equity securities of any corporation engaged in a business competitive to that of Bank, and (iii) participating in conferences, preparing or publishing papers or books or teaching so long as Bank approves of such activities prior to Employee' s engaging in them.


3. Term of Employment . Subject to prior termination of this Agreement as hereinafter provided in section 5, Bank hereby employs Employee, and Employee hereby accepts employment with Bank, for a period of three (3) years beginning on the Effective Date and ending on the third anniversary of the Effective Date (the " Employment Term" ).

4. Compensation and Benefits . In consideration of Employee' s services to Bank during the Employment Term, Bank agrees to compensate Employee, subject to such limitations as may exist under any federal or state banking law or regulation, as follows:


(a) Base Compensation . Bank shall pay or cause to be paid to Employee a base compensation of $210,000 per year for the first twelve (12) months of the Employment Term (hereinafter the " Base Salary" ), less payroll taxes and withholding required by federal, state or local law and any additional withholding to which Employee agrees in writing. Said Base Salary shall be payable in semi-monthly installments in accordance with Bank' s normal payroll procedures. The Board shall review the Base Salary not less than sixty (60) days prior to the first and each subsequent anniversary date of the Effective Date and shall determine, in its sole, absolute and unreviewable discretion, whether to increase the Base Salary for the subsequent twelve (12) months of the Employment Term. Any increase in Base Salary so determined by the Board shall become effective as of such anniversary date. The Base Salary shall be prorated for any partial year in which this Agreement is in effect.

(b) Executive Incentive Bonus . In addition, Employee shall be eligible to participate in the Bank' s Executive Incentive Plan, in accordance with the terms and conditions of said plan, as the Bank, in its sole and absolute discretion, may establish from time to time.

(c) Deferred Compensation . In the event the Bank should establish a deferred compensation plan, Employee shall be eligible to participate in said plan, in accordance with the terms and conditions of said plan, as the Bank, in its sole and absolute discretion, may establish from time to time.

(d) General Expenses . Bank shall, upon submission and approval of written statements and bills in accordance with the then regular procedures of Bank, reimburse Employee for any and all reasonable necessary, customary and usual expenses incurred by him while traveling for or on behalf of Bank, and any and all other necessary, customary or usual expenses (including entertainment) incurred by Employee for or on behalf of Bank in the normal course of business, as determined to be appropriate by Bank.

(e) Health, Life and Disability Insurance . Bank shall provide for Employee' s participation in group medical, dental, vision, life and disability insurance benefits available under the group insurance programs maintained by Bank for its employees. The amount paid by Bank for such group medical, dental, vision, life and disability insurance for Employee shall be an amount equal to that portion paid by Bank for each of its employees in accordance with its usual and customary practices. Employee shall have the right, in Employee' s discretion, to designate the beneficiary or beneficiaries of any such insurance. Bank reserves the right to modify and amend such benefits from time to time. As provided under the Consolidated Omnibus Budget Reconciliation Act of 1985 (" COBRA" ) respecting continuation of any insurance coverage, Employee shall, upon a loss of any such coverage for himself under Bank' s health, dental, and/or vision plans (if any) resulting from (1) termination of Employee' s employment (for any reason other than for gross misconduct) or (2) a reduction in his hours, be entitled to exercise his COBRA rights. Employee shall pay all premiums for any such continuation coverage(s) elected by Employee.

(f) Automobile Allowance . During the Employment Term, Employee shall be entitled to an automobile allowance in the amount of $900 per month (less payroll taxes and withholding required by federal, state or local law). In addition, Bank shall pay the amounts charged by Employee for fuel for business related travel on a credit card provided by Bank to Employee. Except for this automobile allowance and payment of fuel charges, Bank shall not be obligated to pay any other expenditure with respect to the ownership or operation of Employee' s automobile, and Employee will be responsible for all out-of-pocket automobile expenses, including, but not limited to, registration, insurance, repairs, and maintenance. Employee shall procure and maintain an automobile liability insurance policy on the automobile, with coverage including Employee for at least $100,000 for bodily injury or death to any one person, $300,000 for bodily injury or death in any one accident, and $50,000 for property damage in any one accident. The Bank shall be named as an additional insured and Employee shall provide Bank with copies of policies evidencing insurance and Bank' s inclusion as an additional insured.

(g) Vacation . Employee shall be entitled to four weeks (20 days) paid vacation leave per year, which shall accrue on a daily basis. Such vacation leave shall be taken at such time or times as are mutually agreed upon by Employee and the Board and in accordance with Bank' s vacation leave policy, provided, that at least two (2) weeks of such vacation shall be taken consecutively. Employee acknowledges that the requirement of two (2) consecutive weeks of vacation is required by sound banking practice. For each calendar year, the Board shall decide, in its discretion, either (1) to pay Employee for any unused vacation time for such calendar year or (2) to carry over any unused vacation time for such calendar year to the next calendar year, provided, however, that Employee shall not accrue additional vacation time at any time that the Employee has accrued any unused vacation time of seven (7) weeks.


(h) Stock Options . As an inducement to Employee to execute this Agreement and become an employee of Bank, Bank shall use its best efforts to cause Placer Sierra Bancshares to grant to Employee the option to purchase 25,000 shares of Placer Sierra Bancshares common stock. The terms and conditions of such grant shall be governed by the terms and conditions of the Placer Sierra Bancshares 2004 Stock Option Plan and the stock option agreement thereunder to be entered into between Employee and Bank.


(i) Country Club Membership . PSB shall pay Employee' s monthly country club dues in an amount up to $6,000 per year


(j) Other Benefits . Employee shall be entitled to participate during the Employment Term in all employee benefit, welfare and other plans, practices, policies and programs generally applicable to similarly situated employees of Bank as are in effect from time to time, in accordance with the applicable terms and conditions thereof. Bank reserves the right to modify and amend such benefits, plans, practices, policies and programs from time to time.


5. Termination of Agreement . This Agreement may be terminated with or without cause during the Employment Term in accordance with this section 5.

(a) Termination for Good Reason . Employee may terminate this Agreement for " Good Reason" . " Good Reason" shall mean the occurrence (without Employee' s express written consent) of any one of the following acts by Bank or its successor:


(i) The assignment to Employee of duties inconsistent with Employee' s status as President-Southern California Division or a substantial adverse alteration in the nature or stature of Employee' s responsibilities from those described herein, which is not cured by Bank within seven (7) business days after Employee delivers written notice to Bank of such assignment or alteration;


(ii) A reduction by Bank of Employee' s then current Base Salary;


(iii) Any material breach by Bank of any provisions of this Agreement, which breach is not cured by Bank within seven (7) business days after Employee delivers written notice of such breach to Bank.

In the event that Employee terminates this Agreement for Good Reason, Employee shall be eligible to receive a single sum severance payment equal to twelve (12) months of his then current Base Salary, as defined in section 4(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to which Employee has agreed, and any outstanding obligations owed by the Employee to Bank), provided that the Bank shall be obligated to pay Employee' s incentive bonus under the Bank' s Executive Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of the Bank under such plan and shall not be obligated to make such payment to Employee at any earlier time. No portion of such severance pay shall be payable until eight days after delivery to Bank of a duly executed release in the form of Exhibit " B" hereto (" Release" ). Employee shall not deliver the executed Release to Bank prior to the date his employment with Bank terminates.


Such severance pay shall constitute liquidated damages in lieu of any and all claims by Employee against Bank and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship between Employee and Bank, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy hereunder, and is expressly conditioned upon receipt by Bank of an executed, unconditional Release from Employee in the form of Exhibit " B" .

In the event that Employee terminates this Agreement for Good Reason, Employee also shall be entitled to receive (i) those benefits, if any, that have vested by operation of state or federal law or under any written term of a plan (" Vested Benefits" ), and (ii) health care coverage continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (" COBRA Rights" ).

(b) Termination Upon Change in Control . " Change in Control" shall mean the occurrence of any of the following events:


(i) The consummation of a plan of dissolution or liquidation of Bank;


(ii) The consummation of a plan of reorganization, merger or consolidation involving Bank, except for a reorganization, merger or consolidation where (A) the shareholders of Bank immediately prior to such reorganization, merger or consolidation own directly or indirectly more than 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation (the " Surviving Corporation" ) and the individuals who were members of the Board immediately prior to the execution of the agreement providing for such reorganization, merger or consolidation constitute at least 50% of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, or (B) Bank is reorganized, merged or consolidated with a corporation in which any shareholder owning at least 50% of the combined voting power of the outstanding voting securities of Bank immediately prior to such reorganization, merger or consolidation, owns at least 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation;


(iii) The sale of all or substantially all of the assets of Bank to another person or entity;


(iv) The acquisition of beneficial ownership of stock representing more than fifty percent (50%) of the voting power of Bank then outstanding by another person or entity.

In the event of a Change in Control and, during the twelve month period following such Change in Control, Employee terminates employment with Bank (pursuant to section 5(e) below) following a reduction in the Employee' s duties or title, Employee shall be eligible to receive a single sum severance payment equal to twelve (12) months of his then current Base Salary, as defined in section 4(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to which Employee has agreed, and any outstanding obligations owed by the Employee to Bank), provided that the Bank shall be obligated to pay Employee' s incentive bonus under the Bank' s Executive Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of the Bank under such plan and shall not be obligated to make such payment to Employee at any earlier time. No portion of such severance pay shall be payable until eight days after delivery to Bank of a duly executed Release in the form of Exhibit " B" hereto.

Such severance pay shall constitute liquidated damages in lieu of any and all claims by Employee against Bank and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship between Employee and Bank, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy hereunder, and is expressly conditioned upon receipt by Bank of an executed, unconditional Release from Employee in the form of Exhibit " B" .

Notwithstanding anything to the contrary provided herein, in the event the amounts payable to Employee in the event of a Change in Control would, if they included such termination payments to be made pursuant to this section 5(b), constitute Excess Parachute Payments for purposes of Sections 280G(b) and 4999 of the Internal Revenue Code of 1986, as amended, (" IRC" ) or any successor statute) (after application of IRC section 280G(b)(4)), the amount payable under this section 5(b) shall be reduced by the amount necessary to cause Employee to receive no Excess Parachute Payments.


In the event that Employee is terminated pursuant to this section 5(b), Employee shall be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove.

(c) Early Termination by Bank Without Cause . This Agreement and Employee' s employment may be terminated by Bank without cause, for any reason whatsoever or for no reason at all, in the sole, absolute and unreviewable discretion of Bank, upon written notice by Bank to Employee.

In the event that Employee is terminated by Bank without cause, Employee shall be eligible to receive a single sum severance payment equal to twelve (12) months of his then current Base Salary, as defined in section 4(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to which Employee has agreed, and any outstanding obligations owed by the Employee to Bank), provided that the Bank shall be obligated to pay Employee' s incentive bonus under the Bank' s 2005 Executive Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of the Bank under such plan and shall not be obligated to make such payment to Employee at any earlier time. No portion of such severance pay shall be payable until eight days after delivery to Bank of a duly executed Release in the form of Exhibit " B" hereto.

Such severance pay shall constitute liquidated damages in lieu of any and all claims by Employee against Bank and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship ...