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                            1998 EMPLOYMENT AGREEMENT

        This Employment Agreement (the "Agreement") is made and entered into
this 1st day of May, 1998 by and between Columbia Bancorp, an Oregon corporation
("Bancorp") and Terry L. Cochran ("Employee").

                                    RECITALS

        (1)     Bancorp is an Oregon corporation and is the holding company of
Columbia River Banking Company (the "Bank"), a state-chartered Oregon financial
institution with its principal office in The Dalles, Oregon.

        (2)     Bancorp desires to employ Employee as President and Chief
Executive Officer of Bancorp and of the Bank.

                Now, therefore, it is agreed:

        1.      Relationship and Duties.

        1.1     Bancorp shall employ Employee as an officer of Bancorp with the
title of President and Chief Executive Officer to perform such services and
duties as the Board of Directors of Bancorp (the "Bancorp Board") may designate
from time to time. Subject to the terms and conditions hereof, employee shall
perform such duties and exercise such authority as are customarily performed and
exercised by persons holding such office, subject to the general direction of
the Bancorp Board. Such services and duties shall be exercised in good faith and
in accordance with standards of reasonable business judgment.

        1.2     Employee shall serve on the Bancorp Board and on such committees
established by the Bancorp Board to which Employee may be appointed.

        1.3     Subject to Section 1.7 of the Agreement, Employee shall also be
employed to serve as an officer of the Bank with the title of President and
Chief Executive Officer to perform such services and duties as the Board of
Directors of the Bank (the "Bank Board") may designate from time to time.
Subject to the terms and conditions hereof, employee shall perform such duties
and exercise such authority as are customarily performed and exercised by
persons holding such office, subject to the general direction of the Bank Board.
Such services and duties shall be exercised in good faith and in accordance with
standards of reasonable business judgment.

        1.4     Employee shall serve on the Bank Board and on such committees
established by the Bank Board to which Employee may be appointed.

        1.5     Employee shall devote his full time, attention and efforts to
the diligent performance of his duties as an officer and director of Bancorp and
of the Bank. Employee will not accept employment with any other individual,
corporation, partnership, governmental authority or any other entity, or engage
in any other venture for profit which Bancorp may consider to be in conflict
with Bancorp's or the Bank's best interests or to be in competition with
Bancorp's or the Bank's business, or which may interfere in 


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any way with Employee's performance of his duties hereunder. Any exceptions to
the above conditions must be approved by the Bancorp Board in writing.

        1.6     Nothing in the Agreement shall prohibit Employee from serving on
the board of directors of any profit or non-profit corporation not in direct
competition with Bancorp or the Bank or with any other subsidiary, sister or
affiliated corporation of Bancorp. In addition, Employee may own stock in any
other corporation whether or not the stock is publicly traded; provided, that if
such corporation operates a business in competition with Bancorp Employee may
not own more than five percent (5%) of the outstanding shares of such
corporation.

        1.7     Nothing in the Agreement shall prohibit Bancorp from modifying,
adding to or otherwise changing Employee's duties as a full-time employee during
the term of the Agreement. In particular, and without limitation, Bancorp may in
its discretion direct Employee to (i) cease work as President and Chief
Executive Officer of the Bank and devote 100% of his efforts to serving as
President and Chief Executive Officer of Bancorp, (ii) allocate his efforts on
behalf of Bancorp and of the Bank in a manner determined by the Bancorp Board,
or (iii) undertake special projects on behalf of Bancorp, the Bank or both. Any
such modifications, additions to or changes in Employee's duties shall not be
deemed a termination of Employee's employment under the Agreement.
Notwithstanding the foregoing, Employee shall retain the title of President and
Chief Executive Officer of Bancorp during the term of the Agreement.

        2.      Term of Employment.

        2.1     The initial term of employment under the Agreement shall be two
years beginning May 15, 1998 and ending May 14, 2000.

        2.2     Employee's term of employment under the Agreement may be
extended for successive one-year terms after May 14, 2000 subject to the mutual
agreement of the parties. The parties shall reach mutual agreement concerning
such extensions on or before a date which is no less than one year prior to the
date of expiration of Employee's term of employment under the Agreement,
including any extensions thereof. Each extended term shall begin on the
fifteenth day of May in the year the extension becomes effective.

        3.      Termination.

        3.1     As used in the Agreement, "termination" shall mean the
termination of Employee's employment relation with Bancorp, whether initiated by
Bancorp or by Employee, and whether for cause or without cause; provided, that
Employee's retirement from full-time employment under Section 7 herein shall not
constitute a "termination" of employment under the terms of the Agreement.

        3.2     Notwithstanding any other provisions of the Agreement, the
employment of Employee shall terminate immediately on the earlier to occur of
any of the following:

                3.2.1   Employee's death;


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                3.2.2   Employee's complete disability. "Complete disability" as
used herein shall mean the inability of Employee, due to illness, accident, or
other physical or mental incapacity, to perform the services required under the
Agreement for an aggregate of sixty (60) days within any period of 120
consecutive days during the term hereof; provided, however, that disability
shall not constitute a basis for discharge for cause;

                3.2.3   The discharge of Employee by Bancorp for cause. "Cause"
as used herein shall mean (i) Employee's negligence or misconduct as shall
constitute, as a matter of law, a breach of the covenants and obligations of
Employee hereunder; (ii) failure or refusal of Employee to comply with the
provisions of the Agreement; (iii) Employee's conviction by any duly constituted
court with competent jurisdiction of a crime (other than traffic offenses); (iv)
Employee's malfeasance or incompetence, provided that in applying this criteria
the Bancorp Board shall not be unreasonable or arbitrary, and provided further
that prior to effecting a dismissal under this Section (iv) the Bancorp Board
shall afford Employee with fair and reasonable warning and with a fair and
reasonable opportunity to cure any defects in Employee's performance.

        3.3     Employee may terminate his employment with Bancorp with or
without cause by giving thirty (30) days written notice of termination. "Cause"
as used herein shall include Bancorp's failure or refusal to comply with the
provisions of the Agreement.

        3.4     The termination of Employee's employment prior to the Retirement
Date as defined in Section 7.1 herein shall constitute a tender by Employee of
his resignation as an officer of Bancorp and of the Bank, as a member of the
Bancorp Board, the Bank Board and any committees thereof, and as an officer and
Board member of any other subsidiaries of Bancorp.

        3.5     If prior to the Retirement Date Employee's employment is
terminated by Employee with or without cause, or by Bancorp without cause,
Employee shall be paid all base salary and benefits accrued under the Agreement
as of the termination date, and in addition, shall be entitled to the deferred
compensation payments provided under Section 1 of the Deferred Compensation
Agreement of May 1, 1998 between the parties (the "DC Agreement") or any
successor agreement thereto.

        3.6     If prior to the Retirement Date, as defined in Section 7.1
herein, Employee's employment is terminated by Bancorp with cause, Employee
shall be paid all base salary and benefits accrued under the Agreement as of the
termination date, but shall not be entitled to the deferred compensation
payments provided under Section 1 of the DC Agreement.

        4.      Compensation.

        4.1     Employee shall be paid an annual base salary of $145,000 in
equal bimonthly installments, subject to any deductions required by law, for the
period beginning May 15, 1998 and ending December 31, 1998. For the period
beginning January 1, 1999 and ending December 31, 1999, Employee's annual base
salary shall be $150,000.


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        4.2     On or before the 30th day of April, 1999, Bancorp shall
determine Employee's annual base salary for the calendar year beginning January
1, 2000. If Employee's term of employment under the Agreement has been extended,
on the 30th day of April, 2000, and for each successive April 30th prior to the
date of beginning of any further extended term, Bancorp shall determine
Employee's annual base salary for the immediately following calendar year.

        4.3     On or before June 30, 1998, the Bancorp Board shall determine
the amount of and the formulas and methods for establishing Employee's
performance bonus for the 1998 calendar year, subject to any deductions required
by law. Further, in December, 1998 and in the month of December of each
successive year for as long as Employee is employed under the Agreement, the
Bancorp Board shall determine the amount of and the formulas and methods for
establishing Employee's performance bonus for the following calendar year,
subject to any deductions required by law. The amount of such bonus shall be set
in the Bancorp Board's sole discretion, and the Bancorp Board may decline to
award a performance bonus in any year.

        4.4     Employee shall receive no fees for serving as a member of the
Bancorp Board or the Bank Board as long as Employee is also employed by Bancorp.
If after the Retirement Date Employee continues to serve as a member of the
Bancorp Board or any the Board of any of Bancorp's subsidiaries, Employee shall
be entitled to receive the fees and other amounts payable to any other such
member.

        5.      Benefits.

        5.1     Employee shall be eligible to participate in any plan of the
Bank or of Bancorp relating to stock options, stock purchases, profit sharing,
group life insurance, medical coverage, education and other retirement or
employee benefits that the Bank or Bancorp may adopt for the benefit of
employees.

        5.2     Employee shall be eligible to participate in any other benefits
which may be or become applicable to Bancorp's or the Bank's executive
employees. In addition, Employee shall be entitled to (i) a reasonable car
allowance or, at the Bancorp Board's discretion, in lieu of an allowance an
automobile and all expenses of maintenance to cover its use, (ii) a reasonable
expense account for use in connection with Bancorp and Bank business, (iii)
membership fees and dues for membership in one golf club mutually agreeable
between Employee and the Bancorp Board, and (iv) any other benefits which in the
Bancorp Board's judgment are commensurate with the responsibilities and
functions to be performed by Employee under the Agreement, including the payment
of reasonable expenses for attendance by Employee and Employee's spouse at
annual and periodic meetings of trade associations.

        6.      Vacations and Leaves.

        6.1     Employee shall be entitled to an annual paid vacation of
thirty-five (35) business days per year for the 1998 calendar year and forty-two
(42) business days per year for the 1999 calendar year. If the Agreement is not
renewed or extended beyond May 14, 2000, Employee shall be entitled to paid
vacation of twenty (20) business days for the period beginning January 1, 2000
and ending May 14, 2000. The timing of 


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vacations shall be scheduled in a reasonable manner by Employee. Employee shall
not be entitled to receive any additional compensation from Bancorp on account
of his failure to take a vacation, and may not accumulate unused vacation time
from one calendar year to the next.

        6.2     In addition to paid vacations, Employee shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of his
employment with Bancorp and the Bank for such additional periods of time and for
such valid and legitimate reasons as the Bancorp Board in its discretion may
determine.

        6.3     The Bancorp Board may grant Employee a leave or leaves of
absence, with or without pay, at such time or times and upon such terms and
conditions as the Bancorp Board, in its discretion, may determine.

        6.4     In each calendar year Employee shall be absent from Bancorp and
the Bank for one period of two consecutive weeks. Such period may include
vacation, leave, sick leave, attendance at seminars or conventions, or any
combination thereof.

        7.      Retirement From Full-Time Employment.

        7.1     If Employee's employment is not otherwise terminated prior
thereto, Employee's last day of employment under the Agreement or any extensions
thereof shall be deemed Employee's date of retirement (the "Retirement Date"),
after which Employee shall be deemed retired from employment by Bancorp. From
and after the Retirement Date, the Agreement shall be of no further force and
effect, and the relationship between Employee and Bancorp shall be governed
exclusively by the DC Agreement.

        7.2     If Employee's employment is terminated hereunder prior to the
Retirement Date, Employee's right to payment and benefits under the Agreement
and under the DC Agreement shall be determined in accordance with Section 3 and
Section 8 of the Agreement and under the DC Agreement. Such termination of
employment shall not invalidate the DC Agreement.

        7.3     Employee's retirement shall not constitute Employee's tender of
resignation as a Board member or Board committee member of the Board of
Directors of Bancorp or any of its subsidiaries. From and after the Retirement
Date Employee may serve in such positions on the same terms and conditions as
other such members and in accordance with applicable bylaws.

        8.      Change of Control.

        8.1     Employee's rights on termination of employment under Section 3
of the Agreement, as well as all other rights of Employee under the Agreement
and the DC Agreement or otherwise, shall survive a change of control of Bancorp.

        8.2     If a change of control of Bancorp occurs prior to the Retirement
Date, Employee shall have ninety (90) days following the date such change of
control becomes effective to elect to terminate Employee's employment without
cause. If 


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Employee so elects to terminate, Employee shall receive all payments and
benefits due to Employee on termination under the Agreement and under the DC
Agreement. Such payments and benefits shall include, without limitation, the
deferred compensation payments provided under Section 1 of the DC Agreement.

        8.3     Employee shall be entitled to the payments and benefits provided
under this Section 8 whether or not Employee opposed or favored the change in
control. Employee's rights under this Section are in addition to, and not in
lieu of, Employee's rights under Section 7 of the Agreement and under the DC
Agreement.

        8.4     The following items shall be due and payable immediately at
Employee's election in the event that a change of control occurs:

                8.4.1   Nonforfeitable deferred compensation;

                8.4.2   Long-term performance plan objective payments, if any,
shall be declared accomplished and earned based upon performance up to the date
of the change of control.

        8.5     If Employee is a participant in a restricted stock plan or share
option plan, and such plan is terminated involuntarily as a result of the change
of control, all stock and options shall be declared fully vested and shall be
paid, awarded or otherwise distributed. With respect to any unexercised options
under any stock option plan, such options may be exercised within the period
provided in such plan. Effective as of the date of the change of control, any
holding period established for stock paid as bonus or other compensation shall
be deemed terminated, except as otherwise provided by law.

        8.6     As used in this Section, "control" shall mean the acquisition of
twenty-five percent (25%) or more of the voting securities of Bancorp by any
person, or persons acting as a group within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, or to such acquisition of a percentage between
ten percent (10%) and twenty-five percent (25%) if the Board or the Comptroller
of the Currency, the FDIC, or the Federal Reserve Bank have made a determination
that such acquisition constitutes or will constitute control of Bancorp. The
term "person" refers to an individual, corporation, Bank, bank holding company,
or other entity, but excludes any Employee Stock Ownership Plan established for
the benefit of employees of Bancorp or any of its subsidiaries.

        9.      Post Termination Covenants.

        9.1     If Employee terminates his employment without cause, or if
Employee's employment is terminated by Bancorp for cause, then for one year from
the date of such termination Employee will not, without the prior written
consent of Bancorp:

                9.1.1   Undertake full or part-time work, either as an employee
or as a consultant, for another financial institution if such work is to be
done, in whole or in part, in or from an office or other work site in Wasco,
Hood River, Jefferson, Deschutes, Sherman or Gilliam Counties, Oregon or in
Klickitat County, Washington; or


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                9.1.2   Hire for any financial institution or other employer
(including himself) any employee of Bancorp, the Bank or any other subsidiary of
Bancorp, or directly or indirectly cause such an employee to leave his or her
employment to work for another employer, if such employee is to work in or from
an office or other work site in Wasco, Hood River, Jefferson, Deschutes, Sherman
or Gilliam Counties, Oregon or in Klickitat County, Washington.

        9.2     The covenants in this Section do not apply if Employee
terminates his employment for cause, or if Employee's employment is terminated
by Bancorp without cause.

        10.     Miscellaneous.

        10.1    Employee's retirement from employment under the Agreement on the
Retirement Date shall not be deemed a retirement or general termination under
any provision of Bancorp's 1996 Stock Incentive Plan or under any provision of
any successor Plan, except as otherwise provided therein or as provided under
law, and shall therefore not limit the time within which Employee may exercise
Employee's stock option rights under the Plan unless the Plan or applicable law
provides to the contrary.

        10.2    Each and every portion of the Agreement is contractual and not a
mere recital, and all recitals shall be deemed incorporated into the Agreement.
The Agreement shall be governed by and interpreted according to Oregon law and
any applicable federal law. The Agreement may not be amended except by a
subsequent written agreement signed by all parties hereto.

        10.3    The Agreement contains the entire understanding and agreement of
the parties with respect to the parties' relationship, and all prior
negotiations, discussions or understandings, oral or written, are hereby
integrated herein. No prior negotiations, discussions or agreements not
contained herein or in such documents shall be binding or enforceable against
the parties.

        10.4    The Agreement may be signed in several counterparts. The
signature of one party on any counterpart shall bind such party just as if all
parties had signed that counterpart. Each counterpart shall be considered an
original. All counterparts of the Agreement shall together constitute one
original document.

        10.5    Employee's rights under the Agreement are in addition to
Employee's rights under the Deferred Compensation Agreement of May 1, 1998
between the parties or any successor agreement thereto.

        10.6    All rights and duties of Bancorp under the Agreement shall be
binding on and inure to the benefit of Bancorp's successors and assigns,
including any person or entity which acquires a controlling interest in Bancorp
and any person or entity which acquires all or substantially all of Bancorp's
assets. Bancorp and any such successor or assign shall be and remain jointly and
severally liable to Employee under the Agreement. Employee may not assign or
transfer Employee's rights or interests in or under the Agreement other than by
a will or by the laws of descent and distribution. The 


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Agreement shall inure to the benefit of and be enforceable by Employee's estate
or legal representative.

        10.7    Any waiver by any party hereto of any provision of the
Agreement, or of any breach thereof, shall not constitute a waiver of any other
provision or of any other breach. If any provision, paragraph or subparagraph
herein shall be deemed invalid, illegal or unenforceable in any respect, the
validity and enforceability of the remaining provisions, paragraphs and
subparagraphs shall not be affected.

        10.8    Any dispute, controversy, claim or difference concerning or
arising from the Agreement or the rights or performance of either party under
the Agreement, including disputes about the interpretation or construction of
the Agreement, shall be settled through binding arbitration in the State of
Oregon and in accordance with the rules of the American Arbitration Association.
A judgment upon the award rendered in such arbitration may be entered in any
court of competent jurisdiction.

        10.9    The Agreement supersedes and replaces the Employment Agreement
between Employee and Bancorp of May 1, 1997, and the latter agreement shall be
deemed null and void as of May 1, 1998.

_______________________________________
Employee


COLUMBIA BANCORP

By:____________________________________
      Chairman