EXHIBIT 10.2 OREGON PACIFIC
BANKING COMPANY AMENDED AND RESTATED DEFERRED COMPENSATION PLAN Effective Date:
March 1, 2004 Oregon
Pacific Banking Company hereby establishes this Amended and Restated Deferred
Compensation Plan (the Plan) effective March 1, 2004 to provide a select
group of management and highly compensated employees (as defined in ERISA) with
a capital accumulation opportunity by deferring compensation on a pre-tax
basis.  The Plan amends and restates the
Oregon Pacific Banking Co. Deferred Compensation and Incentive Plan
established July 1, 1995. ARTICLE I TITLE AND
DEFINITIONS 1.1
TITLE. This Plan shall be known as the Oregon Pacific Banking Company Deferred
Compensation Plan. 1.2
DEFINITIONS. Whenever the following words and phrases are used in this Plan,
with the first letter capitalized, they shall have the meanings specified
below. Accounts
shall mean a Participants Deferral Account and, if applicable, Company
Contribution Account. Administrative
Committee or Committee shall mean the Compensation Committee of the Board of
Directors. Affiliate
shall mean (a) any corporation that is a member of a controlled group of
corporations (within the meaning of Code Section 1563(a), determined without
regard to Code Sections 1563(a)(4) and (e)(3)(C), and with the phrase more
than 50% substituted for the phrase at least 80% each place it appears in
Code Section 1563(a)), of which Oregon Pacific Banking Company is a component
member, or (b) any entity (whether or not incorporated) that is under common
control with Oregon Pacific Banking Company (as defined in Code Section 414(c)
and the Treasury Regulations thereunder, and with the phrase more than 50%
substituted for the phrase at least 80% each place it appears in the Treasury
Regulations under Code Section 414(c)). Beneficiary
or Beneficiaries shall mean the person or persons, including a trustee,
personal representative or other fiduciary, last designated in writing by a
Participant in accordance with procedures established by the Committee to
receive the benefits specified hereunder in the event of the Participants
death. No beneficiary designation shall become effective until it is filed with
the Committee, and no beneficiary designation of someone other than the
Participants spouse shall be effective unless such designation is consented to
by the Participants spouse on a form provided by and in accordance with
procedures established by the Committee. If there is no Beneficiary designation
in effect, or if there is no surviving designated Beneficiary, then the
Participants surviving spouse shall be the Beneficiary. If there is no
surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the duly appointed and currently acting personal
representative of the Participants estate (which shall include either the
Participants probate estate or living trust) shall be the Beneficiary. In any
case where there is no such personal representative of the Participants estate
duly appointed and acting in that capacity within 90 days after the
Participants death (or such extended period as the Committee determines is
reasonably necessary to allow such personal representative to be appointed, but
not to exceed 180 days after the Participants death), then Beneficiary shall
mean the person or persons who can verify by affidavit or court order to the
satisfaction of the Committee that they are legally entitled to receive the
benefits specified hereunder. Board
of Directors or Board shall mean the board of directors of the Company. Bonus
shall mean any cash bonus payable to a Participant. Change
of Control shall mean any of the following: 20  (a)
The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act) (a Person) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the then outstanding shares of common stock of the Company (the Outstanding
Company Common Stock) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the Outstanding Company Voting Securities); provided,
however, that for purposes of this paragraph (a), the following acquisitions
shall not constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (iv) any acquisition by any
entity pursuant to a transaction that satisfies the conditions of clauses (i),
(ii) and (iii) of paragraph (c) below.
(b)
Individuals who, as of January 1, 2004, constitute the Board (the Incumbent
Board) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to
January 1, 2004 whose election, or nomination for election by the Companys
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, except that any such
individual whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board shall not be considered a member
of the Incumbent Board.
(c)
Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of  assets of another entity
(a Business Combination), in each case, unless, following such Business
Combination: (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to the
Business Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity resulting
from such Business Combination (or, without limitation, an entity which as a
result of such transaction owns the Company or all or substantially all of the
Companys assets either directly or through one or more subsidiaries (a
resulting parent)) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any resulting entity or resulting parent in such
Business Combination or any employee benefit plan (or related trust) of the
Company or such resulting entity or resulting parent) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding shares
of common stock of the entity resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such entity,
except to the extent that such ownership existed prior to the Business
Combination; and (iii) at least a majority of the members of the board of
directors of the resulting entity from such Business Combination or resulting
parent were members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such Business
Combination.
(d)
Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
Code
shall mean the Internal Revenue Code of 1986, as amended.
Company
shall mean Oregon Pacific Banking Company.
Company
Contribution Account shall mean the bookkeeping account maintained by the
Administrative Committee for each Participant that is credited with an amount
equal to the Company Discretionary Contribution Amount, if any, and interest on
such amounts pursuant to the Plan.
Company
Discretionary Contribution Amount shall mean such amount, if any, determined
by the Administrative Committee, in its sole discretion, with respect to any
Participant.
Compensation
shall mean the Salary and/or Bonus that the Participant is entitled to for
services rendered to the Employer.
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Deferral
Account shall mean the bookkeeping account maintained by the Administrative
Committee for each Participant that is credited with amounts equal to (a) the
portion of the Participants Salary that he or she defers, (b) the portion of
the Participants Bonus that he or she defers, and (c) interest or earnings or
losses pursuant to the Plan.
Disability
shall mean the Participants suffering a sickness, accident or injury which has
been determined by the carrier of any individual or group disability insurance
policy covering the Participant, or by the Social Security Administration, to be
a disability rendering the Participant totally and permanently disabled.  The Participant shall submit proof to the
Company of the carriers or Social Security Administrations determination upon
the request of the Company.
Effective
Date shall mean March 1, 2004.
Eligible
Employee shall mean an Employee who is a full-time employee of the Company or
any of its Affiliates and who is selected by the Administrative Committee to be
eligible for participation in the Plan.
Eligible
Retirement shall mean the date on which the Participant elects to terminate
his or her employment by the Company and its Affiliates by reason of the
occurrence of  a date which is the
earlier of (i) the date on which Participant attains the age of 65, or (ii) the
date which is ten (10) years from the date on which Participant became an
Eligible Employee.
Employee
shall mean an employee of Oregon Pacific Banking Company or any of its
Affiliates.
Employer
shall mean Oregon Pacific Banking Company or any of its Affiliates.
ERISA
shall mean the Employee Retirement Income Securities Act of 1974, as amended.
Initial
Election Period for an Eligible Employee shall mean the latest of (a) the
period beginning upon notification to the Participants of this Plan and ending
December 31, 2004, (b) the thirty-day period following the Eligible Employees
date of hire or (c) the thirty-day period following the date on which an
individual becomes an Eligible Employee.
Investment
Option or Investment Options shall mean one or more of the Company
Investment Return Option, and any other investment option the Company may
establish from time to time.
Participant
shall mean any Eligible Employee who elects to defer Compensation in accordance
with Section 3.1.
Payment
Eligibility Date shall mean the last day of the calendar quarter in which a
Participant ceases to be employed by the Company, the Employer and all other
Affiliates, incurs a Disability or dies.
Plan
shall mean the Oregon Pacific Banking Company Amended and Restated Deferred
Compensation Plan set forth herein and as amended from time to time.
Plan
Year shall mean the 12 consecutive month period beginning on January 1 and
ending the following December 31.
Plan
Year Subaccounts shall mean subaccounts of a Participants Deferral Account
established to separately account for Compensation deferred (and interest or
earnings or losses thereon) for each Plan Year in which a Participant
participates in the Plan.
Company
Investment Return Option shall mean, for each Plan Year, the annual rate that
is equal to the net return on average equity of the Company for the Plan Year,
determined as of the last calendar day of each Plan Year.
Salary
shall mean the Participants base salary, excluding bonus, commissions,
incentive and all other remuneration for services rendered to the Employer and
prior to a reduction for any salary contributions to a plan established
pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of
the Code.
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Subsidiary
shall mean any corporation of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Company.
ARTICLE II
PARTICIPATION
2.1
PARTICIPATION.  An Eligible Employee
shall become a Participant in the Plan by electing to defer Compensation in
accordance with Section 3.1.
2.2
DURATION OF PARTICIPATION.  Any deferral
election of a Participant who ceases to be an Eligible Employee shall terminate
effective as the next pay period beginning after the date such cessation occurs
and shall not apply to any Bonus that becomes payable subsequent to such date.
2.3
PART-TIME EMPLOYEES.  An Eligible
Employee who is a Participant in the Plan and who becomes a part-time employee
may continue to be a Participant in the Plan at the discretion of the Company
on such terms and conditions as the Company may establish.
ARTICLE III
ELECTIONS
3.1
ELECTIONS TO DEFER COMPENSATION.
(a)
Initial Election Period. Each Eligible Employee may elect to defer Compensation
by filing with the Committee an election that conforms to the requirements of
this Section 3.1, on a form provided and in a manner specified by the
Committee, no later than the last day of his or her Initial Election Period.
(b)
General Rule. Subject to the minimum deferral provisions of Section 3.1(c) below,
the amount of Compensation that an Eligible Employee may elect to defer is as
follows: (i) Any percentage or dollar amount of Salary up to 50%; and/or (ii)
Any percentage or dollar amount of Bonus up to 100%; provided, however, that no
election shall be effective to reduce the Compensation paid to an Eligible
Employee for a calendar year to an amount that is less than the sum of: (i) the
amount that the Company is required to withhold from such Eligible Employees
Compensation for such calendar year for purposes of federal, state and local
(if any) income tax and employment tax (including Federal Insurance
Contributions Act (FICA) tax withholding); (ii) the amount that the Company is
required to withhold from such Eligible Employees Compensation for such
calendar year for contributions to any employee benefit plan (other than this
Plan); and (iii) the amount, if any, that the Company is required to withhold
from such Eligible Employees Compensation for such calendar year for purposes
of any other legally required deductions including, but not limited to,
deductions for support orders or garnishment.
(c)
Minimum Deferrals. For each Plan Year during which an Eligible Employee is a
Participant, the minimum amount that may be elected under Section 3.1(b) is
$5,000. This $5,000 minimum deferral for any Plan Year may be met by a
combination of deferrals of Salary and/or Bonus, determined on the basis of the
Participants target Bonus to be paid in such Plan Year. If the sum of (i) the
amount of Salary that the Participant has elected to defer for a Plan Year and
(ii) the amount of the Bonus earned in the prior Plan Year and payable in such
Plan Year that the Participant has elected to defer (assuming for this purpose
that the Bonus earned in the prior Plan Year and payable in such Plan Year is
equal to the Participants target Bonus for the prior Plan Year) is less than
$5,000, then the Participants deferral elections for the Salary and the Bonus
payable in such Plan Year shall not be effective.
(d)
Effect of Initial Election. An election to defer Compensation during an Initial
Election Period shall first be effective with respect to (i) Salary earned
during the first pay period beginning after the Initial Election Period and
(ii) the Bonus paid with respect to services performed in the Plan Year
following the Plan Year in which the election is made.
(e)
Elections other than Elections during the Initial Election Period. Subject to
the requirements of Section 2.1, any Eligible Employee who fails to elect to
defer Compensation during his or her Initial Election Period may subsequently
become a Participant, and any Eligible Employee who has terminated a prior
deferral election may elect to again defer Compensation, by filing an election,
on a form provided and in a manner specified by the Committee, to defer
Compensation as described in paragraph (b) above. An election to defer
Compensation for a Plan Year must be filed on or before December 15 of the
preceding Plan Year (or such later date as the Committee designates, but in all
events no later than December 31 of the preceding Plan Year), and will first be
effective for Salary and/or Bonus earned during pay periods beginning on or
after January 1 of the Plan Year following the Plan Year in which the election
is made.
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(f)
Duration of Deferral Elections. Any election made under this Plan to defer
Compensation shall be effective with respect to Compensation payable with
respect to services performed during each Plan Year during which a Participant
remains an Eligible Employee. A Participant may increase, decrease or terminate
a deferral election with respect to Compensation for any subsequent Plan Year
by filing a new election no later than December 15 of the preceding Plan Year
(or such later date as the Committee designates, but in all events no later
than December 31 of the preceding Plan Year), subject to the limitations set
forth in this Section 3.1, which election shall be effective for the first pay
period beginning on or after January 1 of the next following Plan Year.
(g)
Irrevocable Elections. Except as provided in Section 3.1(f), any deferral
election under this Section 3.1 shall be irrevocable.
3.2
INVESTMENT ELECTIONS.
(a)
At the time of making an initial deferral election described in Section 3.1,
the Participant shall elect one or more Investment Options for the deemed
investment of his or her deferred Compensation. Such election shall be made on
a form provided and in a manner specified by the Committee and shall apply
solely for purposes of determining the amount of interest and/or earnings or
losses to be credited or debited to his or her Plan Year Subaccounts that the
Administrative Committee establishes pursuant to Article IV. In making the
election pursuant to this Section 3.2, the Participant must specify, in whole
percentages, the percentage of his or her corresponding Plan Year Subaccounts
that he or she wishes to be deemed to be invested in one or more Investment
Options. Any Participant who fails to make an investment election under this
Section 3.2 shall be deemed to have elected the Company Investment Return
Option.
(b)
A Participants initial election under this Section 3.2 shall remain in effect
until changed. A Participant may make a new election with respect to
Compensation deferred in any subsequent Plan Year by filing a new election on
or before December 15 of the preceding Plan Year (or such later date as the
Committee designates, but in all events no later than December 31 of the
preceding Plan Year). Any election filed subsequent to the initial election
under this Section 3.2 shall remain in effect until a new election is filed.
(c)
The portion of the Plan Year Subaccount that is originally deemed to be
invested in the Company Investment Return Option shall continue to be deemed to
be invested in the Company Investment Return Option until distributed. The
deemed investment of the portion of any Plan Year Subaccount that is originally
deemed to be invested in any other Investment Option may be changed to the
Company Investment Return Option at the election of the Participant. The
election to change the deemed investment of all or a portion of a Plan Year
Subaccount may be made as of the end of any business day by filing an election
on a form provided by and in a manner specified by the Committee.
(d)
As of the Effective Date of the Plan, the only Investment Option offered under
the Plan is the Company Investment Return Option. The Company reserves the
right to change the Investment Options, and to increase or decrease the number
of Investment Options for purposes of this Plan, including, without limitation,
the designation of indices, mutual funds or investment portfolios.
(e)
Notwithstanding the Participants ability to designate the Investment Options
in which the Plan Year Subaccounts of his or her Deferred Account shall be
deemed to be invested, the Company shall have no obligation to invest any funds
in accordance with any Participants election. A Participants Accounts shall
merely be bookkeeping entries on the Companys books, and no Participant shall
obtain any interest in any of the Investment Options.
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3.3
DISTRIBUTION ELECTIONS.


(a)
In-Service Distributions. At the time of making an initial election to defer
Compensation pursuant to Section 3.1, a Participant may elect (in the manner
specified by the Committee) to receive an in-service distribution of the amount
deferred during the first full or partial Plan Year to which such election
applies, together with interest or earnings or losses credited with respect to
such amounts pursuant to Article IV, in a lump sum payment or in annual
installments over 2, 3, 4 or 5 years in any January that occurs after the fifth
anniversary of the last day of the Plan Year in which the amount deferred was
earned. Thereafter, a Participant may elect to receive an in-service
distribution of the amount deferred during any Plan Year, together with
interest or earnings or losses, in a lump payment or in annual installments
over 2, 3, 4 or 5 years in any January that occurs after the fifth anniversary
of the last day of such Plan Year by filing an election, on a form provided and
in a manner specified by the Committee no later than December 15 of the
preceding Plan Year (or such later date as the Committee designates, but in all
events no later than December 31 of the preceding Plan Year). A Participant may
not elect an in-service distribution for any amounts deferred during a Plan
Year after December 15 of the preceding Plan Year (or such later date as the
Committee designates, but in all events no later than December 31 of the
preceding Plan Year). If a Participant fails to make a distribution election
under this Section 3.3(a) for a Plan Year, the Compensation deferred for that
Plan Year shall be distributed as set forth in Section 6.1(b).
(b)
Elections for Alternative Form of Distribution Upon Eligible Retirement or
Disability. Section 6.1(b) provides that the normal form of benefit
distribution upon an Eligible Retirement or Disability is a lump sum. At the
time of making his or her initial election to defer Compensation pursuant to
Section 3.1, a Participant may elect (in the manner specified by the Committee)
an alternative form of benefit for distribution of the Compensation deferred
under the Plan in the event that his or her employment terminates due to
Eligible Retirement or Disability pursuant to Section 6.1(b). Subject to the
provisions of Section 6.1(b), the most recent effective election filed under
this Section 3.3(b) will apply to the Compensation deferred by the Participant
for each Plan Year for which (i) the Participant does not elect an in-service
distribution pursuant to Section 3.3(a) or (ii) the Participant elects an
in-service distribution but has an Eligible Retirement or becomes Disabled
prior to the commencement of such in-service distribution.
(c)
Elections for Accelerated Distribution upon a Change of Control. At the time of
making an initial election to defer Compensation pursuant to Section 3.1, a
Participant may elect (in the manner specified by the Committee) that, if a
Change of Control occurs, then, notwithstanding any distribution election
previously made under Sections 3.3(a) and/or 3.3(b), all vested amounts
credited to the Participants Accounts as of the date of the Change of Control
shall be paid in a lump sum within five days following such Change of Control.
A Participant who fails to make an election under this Section 3.3(c) at the
time of his or her initial election may make such an election at any time
thereafter; provided, however, that any such election made after his or her
initial election to defer shall not be effective until 12 months after it is
received by the Committee and, therefore, will not apply in the event that a
Change of Control occurs within the 12-month period after the Committee
receives the election. A Participant who makes an election under this Section
3.3(c) may revoke such election at any time (in the manner specified by the
Committee); provided, however, that any revocation shall not be effective until
twelve months after the revocation is received by the Committee and, therefore,
will not be effective in the event that a Change of Control occurs within the
12-month period after the Committee receives the election.
ARTICLE IV
ACCOUNTS
4.1
DEFERRAL ACCOUNT. The Administrative Committee shall establish and maintain a
Deferral Account for each Participant under the Plan. The Deferral Account
shall be divided into Plan Year Subaccounts to the extent necessary to
separately account for deferred Compensation subject to in-service distribution
elections pursuant to Section 3.3(a). A Participants Plan Year Subaccounts
shall be divided into separate subaccounts (investment subaccounts), each of
which corresponds to an Investment Option elected by the Participant pursuant
to Section 3.2. A Participants Plan Year Subaccount for a Plan Year shall be
credited as follows:
(a)
The Administrative Committee shall credit the investment subaccounts of the
Plan Year Subaccount of the Participants Deferral Account with an amount equal
to Salary deferred by the Participant during each pay period that begins in the
Plan Year for which the Plan Year Subaccount is established on or before the
fifth business day after the end of the pay period, in accordance with the
Participants elections under Section 3.2; that is, the portion of the
Participants deferred Salary that the Participant has elected to be deemed to
be invested in an Investment Option shall be credited to the investment
subaccount corresponding to the particular Investment Option;
(b)
The Administrative Committee shall credit the investment subaccounts of the
Plan Year Subaccount of the Participants Deferral Account with an amount equal
to the portion of the Bonus deferred by the Participant for the Plan Year for
which the Plan Year Subaccount is established on or before the fifth business
day after the Bonus or partial Bonus would have been paid, in accordance with
the Participants elections under Section 3.2; that is, the portion of the
Participants deferred Bonus that the Participant has elected to be deemed to
be invested in an Investment Option shall be credited to the investment
subaccount corresponding to the particular Investment Option
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4.2
COMPANY CONTRIBUTION ACCOUNT. The Administrative Committee shall establish and
maintain a Company Contribution Account for each Participant under the Plan for
whom it determines that a Company Discretionary Contribution Amount is to be
credited. The Company Contribution Account shall be divided into vesting
subaccounts if necessary to separately account for different vesting schedules
for different Company Discretionary Contribution Amounts. A Participants
Company Contribution Account shall be deemed to be invested in the Company
Investment Return Option. As of the date that the Administrative Committee, in
its sole discretion decides to credit a Participant with a Company
Discretionary Contribution amount, the Administrative Committee shall credit a
Participants Company Contribution Account with an amount equal to the Company
Discretionary Contribution Amount for such Participant.
ARTICLE V
VESTING
5.1
DEFERRAL ACCOUNT. A Participants Deferral Account shall be 100% vested at all
times.
5.2
COMPANY CONTRIBUTION ACCOUNT. A Participants interest in any Company
Discretionary Contribution Amount credited to his or her Company Contribution
Account shall vest according to the vesting schedule that the Administrative
Committee shall determine at the time that such Company Discretionary
Contribution Amount is credited.
ARTICLE VI
DISTRIBUTIONS
6.1
DISTRIBUTION OF DEFERRED COMPENSATION AND DISCRETIONARY COMPANY CONTRIBUTIONS.
(a)
Scheduled In-Service Distribution.
(i)
The amounts credited to each of the Participants Plan Year Subaccounts that
are subject to an in-service distribution election made by the Participant
pursuant to Section 3.3(a) above shall be distributed (A) in January of the
year elected by the Participant if the Participant elected a lump sum
distribution or (B) within 30 days of the end of each calendar quarter
commencing in the year elected by the Participant if the Participant elected
installment distributions, provided in each case that the Participant is
employed by the Company, the Employer or an Affiliate on the date that the
distribution is scheduled to commence. Notwithstanding the foregoing, if the
amounts credited to the Participants Plan Year Subaccount as of the end of the
month immediately preceding the date that distributions are scheduled to
commence is $25,000 or less or, if distributions from two or more Plan Year Subaccounts
are scheduled to commence in the same calendar year for the same number of
installments, if the sum of the amounts credited to such Plan Year Subaccounts
is $25,000 or less, payment will be made in the form of a single lump sum
rather than quarterly installments.
(ii)
If the Participants employment with the Company, the Employer and all
Affiliates is terminated for any reason prior to the commencement of a
scheduled in-service distribution for a Plan Year Subaccount pursuant to subsection
(i) above, the Participants in-service distribution election for such Plan
Year Subaccount shall no longer be effective and all of the amounts credited to
such Plan Year Subaccount shall be distributed as set forth in the following
subsections of this Section 6.1 in accordance with any applicable election by
the Participant. If the Participant terminates employment while receiving an
in-service distribution from one or more Plan Year Subaccounts, the
Participants in-service distribution election for such Plan Year Subaccounts
shall no longer be effective and the remaining installments shall be
distributed as set forth in the following subsections of this Section 6.1 in
accordance with any applicable election by the Participant.

26

(b)
Alternative Form of Distribution.



(i)
Distribution upon Eligible Retirement. In the event a Participants employment
terminates on account of an Eligible Retirement, the amounts credited to his or
her Plan Year Subaccounts of his or her Deferral Account that are not then in
pay status pursuant to in-service distribution elections and the vested amounts
credited to his or her Company Contribution Account shall be distributed in a
single lump sum payment as soon as practicable following his or her Payment
Eligibility Date. Notwithstanding the foregoing, a Participant may elect to
receive such distribution in substantially equal quarterly installments over
one to 15 years beginning either (A) as soon as practicable following the
Participants Payment Eligibility Date or (B) a date certain that occurs both
after the Participants Eligible Retirement and on or before the Participants
65th birthday, provided that his or her election is filed with the Committee
either (A) at the time of making his or her initial election to defer
Compensation under Section 3.1 (as described in Section 3.3(b)) or (B) at least
one year prior to his or her termination of employment on a form provided and
in a manner specified by the Committee. A Participant may change the form of
distribution, provided that his or her change election is made on a form and in
a manner specified by the Committee and such election is received by the
Committee at least one year prior to the date distribution is to be made (or
installments are to commence). Notwithstanding anything contained herein to the
contrary, in the event that the sum of the amounts credited to a Participants
Deferral Account and the vested portion of the amounts credited to his or her
Company Contribution Account is less than $50,000 as of the end of the month in
which his or her employment terminates, such amount shall be paid in a cash
lump sum payment as soon as practicable following his or her Payment
Eligibility Date. Any unvested amounts credited to a Participants Company
Contribution Account as of the time of a Participants Eligible Retirement
shall be forfeited.

(ii)
Distribution upon Termination for other than a Participants Eligible
Retirement, Disability or Death. In the event a Participant terminates
employment with the Company, the Employer and all Affiliates for any reason
other than the Participants Eligible Retirement, Disability or death, of the
sum of amount then credited to his or her Deferral Account and the vested
portion of the amount credited to his or her Company Contribution Account shall
be distributed in a lump sum within 60 days following such termination of
employment. Any unvested amounts credited to a Participants Company
Contribution Account at the time of his or her termination of employment as
described in this Section 6.1(b)(ii) shall be forfeited.
(iii)
Distribution upon Disability. In the event that a Participants employment
terminates as a result of the Participants Disability, the amounts then
credited to his or her Deferral Account and the vested portion of the amounts
credited to his or her Company Contribution Account shall be paid to the
Participant in the form and at the time that such amounts would have been paid
to the Participant if his or her termination had been an Eligible Retirement.
Any unvested amounts credited to a Participants Company Contribution Account
at the time of his or her termination of employment as described in this
Section 6.1(b)(iii) shall be forfeited.
(iv)
Distribution upon Death. In the event that a Participants employment
terminates as a result of his or her death, all amounts in the Participants
Deferral Account and Company Contribution Account (including both vested and
unvested amounts) will be paid to the Participants Beneficiary in a lump sum
as soon as administratively practicable following such termination. If a
Participant dies after termination of employment but while receiving
installment payments under this Plan, any remaining installments shall be paid
to the Participants Beneficiary in a lump sum as soon as administratively
practicable following the Participants death. Notwithstanding the foregoing, a
Participants Beneficiary may elect to receive such distribution in
substantially equal quarterly installments over one to 15 years beginning as
soon as practicable following the Participants death.  A Participants Beneficiary may thereafter
change the form of distribution from installments to a lump sum, provided that
his or her change election is made on a form and in a manner specified by the
Committee and such election is received by the Committee at least one year
prior to the date final distribution is to be made.  Notwithstanding anything contained herein to the contrary, in the
event that the sum of the amounts in the Participants Deferral Account and
Company Contribution Account (including both vested and unvested amounts) is
less than $50,000 as of the date of the Participants death, such amount shall
be paid in a cash lump sum payment to the Participants Beneficiary as soon as
practicable following the date of death.
(c)
The Participants Plan Year Subaccounts shall continue to be credited with
earnings pursuant to Sections 4.1 and 4.2 of the Plan until all amounts
credited to his or her Plan Year Subaccounts under the Plan and all vested
amounts credited to his or her Company Contributions Account have been
distributed.
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6.2
NONSCHEDULED WITHDRAWALS. A Participant may elect to withdraw an amount not in
excess of the amounts credited to his or her Plan Year Subaccounts, reduced by
the withdrawal penalty described below. The Participant may make such an
election by filing a written notice with the Committee on a form provided and
in the manner specified by the Committee. Within 10 days following the
Committees receipt of such notice, an amount equal to 90% of the amount that
the Participant has elected to withdraw from his or her Plan Year Subaccounts
shall be paid to the Participant in a cash lump sum payment. Upon the payment
of such withdrawal, (a) an amount equal to 10% of the amount the Participant
has elected to withdraw from the Participants Plan Year Subaccounts shall be
forfeited, (b) the Participant shall cease to participate in the Plan for the
remainder of the Plan Year in which the withdrawal occurs and shall be
ineligible to participate during the Plan Year immediately following the Plan
Year in which the withdrawal occurs, and (c) any deferral elections made by the
Participant for such periods shall terminate. A Participant may not make more
than a total of two withdrawals under this Section 6.2 during the entire term
of the Plan. The amount of any such payments and forfeitures shall be deducted
from the amounts credited to the Participants Plan Year Subaccounts in such
order and in such proportions as the Committee may determine in its sole
discretion. The remaining amounts credited to a Participants Plan Year
Subaccounts shall be distributed in accordance with the Participants elections
with respect to such Plan Year Subaccounts.
6.3
HARDSHIP WITHDRAWALS. Upon written request of a Participant, the Committee may,
in its sole discretion, make a lump sum payment to a Participant and/or
accelerate the payment of installment payments due to the Participant in order
to meet a severe financial hardship to the Participant resulting from (a) a
sudden and unexpected illness or accident of the Participant or a dependent of
the Participant, (b) loss of the Participants property due to casualty or (c)
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant. However, no payment shall be
made under this Section 6.3 to the extent that a hardship is or may be relieved
(a) through reimbursement or compensation by insurance or otherwise, (b) by
liquidation of the Participants assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship or (c) by cessation of
deferrals under the Plan effective for the next Plan Year. If requested by the
Committee, the written request by the Participant shall include documentation
of such hardship and proof that the hardship may not be relieved by any of the
means listed in the preceding sentence. The amount of any hardship lump sum
payment and/or accelerated amount under this Section 6.3 shall not exceed the
lesser of (a) the amount required to meet the immediate financial need created
by such hardship or (b) the entire vested amounts credited to the Participants
Accounts. The amount of any such payments shall be deducted from the amounts
credited to the Participants Accounts in such order and in such proportions as
the Committee may determine in its sole discretion. The remaining amounts
credited to a Participants Accounts shall be distributed in accordance with
the Participants elections with respect to such Accounts.
6.4
INABILITY TO LOCATE PARTICIPANT. In the event that the Committee is unable to
locate a Participant or Beneficiary within two years following the
Participants termination of employment with the Company, the Employer and all
Affiliates or, if later, the first date that installment payments to such
person are due to commence, the amounts allocated to the Participants Accounts
shall be forfeited. If, after such forfeiture, the Participant or Beneficiary
later claims such benefits, such amounts shall be reinstated without interest
or earnings and the portions of such Accounts that were vested at the time the
Participants employment terminated shall be paid in accordance with Section
6.1(b) and any applicable election of the Participant.
6.5
EFFECT OF A CHANGE OF CONTROL ON DISTRIBUTIONS OF PARTICIPANT ACCOUNTS. Unless
the Participant has elected otherwise pursuant to Section 3.3(c), the
occurrence of a Change of Control shall not accelerate the distribution of
amounts credited to Participants Accounts. Notwithstanding the preceding
sentence, if the Investment Options in effect under the Plan prior to a Change
of Control are substantially changed or eliminated following the Change of
Control, then a Participant may elect to receive all vested amounts credited to
the Participants Accounts in a cash lump sum payment within five days
following the Committees receipt of such election; provided, however, that
immediately prior to the payment of such distribution, 6% of the amount subject
to the distribution shall be permanently forfeited and the remainder shall be
paid to the Participant.
ARTICLE VII
ADMINISTRATION
7.1
ADMINISTRATIVE COMMITTEE ACTION. The Committee shall act at meetings by
affirmative vote of a majority of the members of the Committee. Any action
permitted to be taken at a meeting may be taken without a meeting if, prior to
such action, a written consent to the action is signed by all members of the
Committee and such written consent is filed with the minutes of the proceedings
of the Committee. A member of the Committee shall not vote or act upon any
matter which relates solely to himself or herself as a Participant. The
Chairman or any other member or members of the Committee designated by the
Chairman may execute any certificate or other written direction on behalf of
the Committee.
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7.2
POWERS AND DUTIES OF THE COMMITTEE. The Committee, on behalf of the
Participants and their Beneficiaries, shall enforce the Plan in accordance with
its terms, shall be charged with the general administration of the Plan, and
shall have all powers necessary to accomplish its purposes, including, but not
limited to, the following: (i) To select the funds or portfolios to be the
Variable Investment Options and to establish the Variable Investment Limit for
each Plan Year as set forth in Section 3.2 hereof; (ii) To determine the amount
of any Company Discretionary Contribution Amounts and the applicable vesting
schedule for each Company Discretionary Contribution Amount; (iii) To construe
and interpret the terms and provisions of this Plan; (iv) To compute and
certify to the amount and kind of benefits payable to Participants and their
Beneficiaries; (v) To maintain all records that may be necessary for the
administration of the Plan; (vi) To provide for the disclosure of all
information and the filing or provision of all reports and statements to
Participants, Beneficiaries or governmental agencies as shall be required by
law; (vii) To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan as are not inconsistent with the
terms hereof; and (viii) To appoint a plan administrator or any other agent,
and to delegate to them such powers and duties in connection with the
administration of the Plan as the Committee may from time to time prescribe.
7.3
CONSTRUCTION AND INTERPRETATION. The Committee shall have full discretion to
construe and interpret the terms and provisions of this Plan, which
interpretation or construction shall be final and binding on all parties,
including but not limited to the Company and any Participant or Beneficiary.
The Committee shall administer such terms and provisions in a uniform and
nondiscriminatory manner and in full accordance with any and all laws
applicable to the Plan.
7.4
INFORMATION. To enable the Committee to perform its functions, the Company
shall supply full and timely information to the Committee on all matters
relating to the Compensation of all Participants, their death or other cause of
termination, and such other pertinent facts as the Committee may require.
7.5
COMPENSATION, EXPENSES AND INDEMNITY.
(a)
The members of the Committee shall serve without compensation for their
services hereunder.
(b)
The Committee is authorized at the expense of the Company to employ such legal
counsel as it may deem advisable to assist in the performance of its duties
hereunder. Expenses and fees in connection with the administration of the Plan
shall be paid by the Company.
(c)
To the extent permitted by applicable state law, the Company shall indemnify
and save harmless the Committee and each member thereof, the Board of Directors
and each member thereof, and delegates of the Committee who are employees of
the Company against any and all expenses, liabilities and claims, including
legal fees to defend against such liabilities and claims arising out of their
discharge in good faith of responsibilities under or incident to the Plan,
other than expenses and liabilities arising out of willful misconduct. This
indemnity shall not preclude such further indemnities as may be available under
insurance purchased by the Company or provided by the Company under any bylaw,
agreement or otherwise, as such indemnities are permitted under state law.
7.6
ANNUAL STATEMENTS. Under procedures established by the Committee, a Participant
shall receive a statement with respect to such Participants Accounts as of the
last day of each calendar year.
7.7
CLAIMS PROCEDURE.
(a)
Claim. A person who believes that he or she is being denied a benefit to which
he or she is entitled under this Plan (hereinafter referred to as Claimant)
may file a written request for such benefit with the Committee, setting forth
his or her claim. The request must be addressed to the Committee at the
Companys principal place of business.
(b)
Claim Decision. Upon receipt of a claim, the Committee shall advise the
Claimant that a reply will be forthcoming within 90 days and shall, in fact,
deliver such reply within such period. The Committee may, however, extend the
reply period for an additional 90 days for special circumstances. If the claim
is denied in whole or in part, the Committee shall inform the Claimant in
writing, using language calculated to be understood by the Claimant, setting
forth: (i) the specified reason or reasons for such denial; (ii) the specific
reference to pertinent provisions of this Plan on which such denial is based;
(iii) a description of any additional material or information necessary for the
Claimant to perfect his or her claim and an explanation why such material or
such information is necessary; (iv) appropriate information as to the steps to
be taken if the Claimant wishes to submit the claim for review; and (v) the
time limits for requesting a review under subsection (c).
29

(c)
Request for Review. Within 60 days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that the
Committee review the determination. Such request must be addressed to the
Committee, at the Companys principal place of business. The Claimant or his or
her duly authorized representative may, but need not, review the pertinent
documents and submit issues and comments in writing for consideration by the
Committee. If the Claimant does not request a review within such 60 day period,
he or she shall be barred and estopped from challenging the original
determination.
(d)
Review of Decision. Within 60 days after the Committees receipt of a request
for review, after considering all materials presented by the Claimant, the
Committee will inform the Claimant in writing, in a manner calculated to be
understood by the Claimant, of its decision setting forth the specific reasons
for the decision and containing specific references to the pertinent provisions
of this Plan on which the decision is based. If special circumstances require
that the 60 day time period be extended, the Committee will so notify the
Claimant and will render the decision as soon as possible, but no later than
120 days after receipt of the request for review.
ARTICLE VIII
MISCELLANEOUS
8.1
UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries, heirs,
successors, and assigns shall have no legal or equitable rights, claims, or
interest in any specific property or assets of the Company. No assets of the
Company shall be held under any trust (other than a grantor trust as provided
in Section 8.2 of the Plan), or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan. Any and all of the
Companys assets shall be, and remain, the general unpledged, unrestricted
assets of the Company. The Companys obligation under the Plan shall be merely
that of an unfunded and unsecured promise of the Company to pay money in the
future, and the rights of the Participants and Beneficiaries shall be no
greater than those of unsecured general creditors. It is the intention of the
Company that this Plan and the grantor trust established pursuant to Section
8.2 of the Plan be unfunded for purposes of the Code and for purposes of Title
I of ERISA.
8.2
TRUST FUND.
(a)
The Company shall be responsible for the payment of all benefits provided under
the Plan. Nevertheless, the Company shall establish a grantor trust subject to
Code Section 671, with such trustee as the Board or Committee may approve, for
the purpose of facilitating the payment of such benefits following a Change of
Control and, at the discretion of the Board or Committee, for facilitating the
payment of such benefits at any time prior to a Change in Control. Such trust
or trusts shall be irrevocable, but the assets thereof shall be subject to the
claims of the Companys creditors. To the extent any benefits provided under
the Plan are actually paid from any such trust, the Company shall have no
further obligation with respect thereto, but to the extent not so paid, such
benefits shall remain the obligation of, and shall be paid by, the Company.
(b)
The trust agreement for the trust described in Section 8.2(a) shall require the
Company to fund the trust with an amount at least equal to 120% of the
aggregate amounts then credited to the Participants Deferral Accounts and
Company Contribution Accounts within five business days following a Change in
Control. For this purpose, such trust agreement shall define Change in
Control as such term is defined in this Plan document, except that the words
Consummation of in clause (c) of such definition shall be changed to
Approval by the stockholders of the Company of.
8.3
RESTRICTION AGAINST ASSIGNMENT. The Company shall pay all amounts payable
hereunder only to the person or persons designated by the Plan and not to any
other person or corporation. No part of a Participants Accounts shall be
liable for the debts, contracts, or engagements of any Participant, his or her
Beneficiary, or successors in interest, nor shall a Participants Accounts be
subject to execution by levy, attachment, or garnishment or by any other legal
or equitable proceeding, nor shall any such person have any right to alienate,
anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits
or payments hereunder in any manner whatsoever. If any Participant, Beneficiary
or successor in interest is adjudicated bankrupt or purports to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any distribution
or payment from the Plan, voluntarily or involuntarily, the Committee, in its
discretion, may cancel such distribution or payment (or any part thereof) to or
for the benefit of such Participant, Beneficiary or successor in interest in
such manner as the Committee shall direct.
30

8.4
WITHHOLDING. There shall be deducted from each payment made under the Plan or
any other compensation payable to the Participant (or Beneficiary) all taxes
which are required to be withheld by the Company in respect to such payment or
this Plan. The Company shall have the right to reduce any payment (or other
compensation) by the amount of cash sufficient to provide the amount of said
taxes.
8.5
AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION. The Company may amend,
modify, suspend or terminate the Plan in whole or in part, except that no
amendment, modification, suspension or termination shall have any retroactive
effect to reduce any amounts allocated to a Participants Accounts. In the
event that this Plan is terminated, the distribution of the amounts credited to
a Participants Accounts shall not be accelerated but shall be paid at such
time and in such manner as determined under the terms of the Plan immediately
prior to termination as if the Plan had not been terminated.
8.6
GOVERNING LAW. This Plan shall be construed, governed and administered in
accordance with the laws of the State of Oregon.
8.7
RECEIPT OR RELEASE. Any payment to a Participant or the Participants
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Committee, and the
Company. The Committee may require such Participant or Beneficiary, as a
condition precedent to such payment, to execute a receipt and release to such
effect.
8.8
PAYMENTS ON BEHALF OF PERSONS UNDER INCAPACITY. In the event that any amount
becomes payable under the Plan to a person who, in the sole judgment of the
Committee, is considered by reason of physical or mental condition to be unable
to give a valid receipt therefor the Committee may direct that such payment be
made to any person found by the Committee, in its sole judgment, to have
assumed the care of such person. Any payment made pursuant to such
determination shall constitute a full release and discharge of the Committee
and the Company.
8.9
HEADINGS NOT PART OF AGREEMENT. Headings and subheadings in this Plan are
inserted for convenience of reference only and are not to be considered in the
construction of the provisions hereof.
8.10
PRIOR PLANS. The Plan shall be deemed an amendment and restatement of the
Companys existing deferred compensation plan entitled the Oregon Pacific
Banking Co. Deferred Compensation and Incentive Plan effective July 1, 1995
(the 1995 Plan).  The Committee shall
take all appropriate steps to ensure that the rights of Participants who became
Eligible Employees under the 1995 Plan are substantially equivalent to the
rights of such Participants under the Plan.
OREGON PACIFIC BANKING COMPANYBy:      /s/ Dr. A. J. BrauerTitle:   Chairman of the Board31