EXHIBIT 10(f)

                              EMPLOYMENT AGREEMENT


     THIS  AGREEMENT  is made  effective  as of October 1, 2001,  by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"),  Klamath
Falls,  Oregon;   KLAMATH  FIRST  BANCORP,  INC.  (the  "Company"),   an  Oregon
corporation; and
M. Isabel Castellanos (the "Executive").

     WHEREAS,  the  Association  wishes to  assure  itself  of the  services  of
Executive for the period provided in this Agreement; and

     WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve as
Senior Vice  President of the  Association.  During said period,  Executive also
agrees to serve,  if elected,  as an officer of the Company or any subsidiary or
affiliate of the Company or the Association.

2.   TERMS AND DUTIES.

     (a)  The term of this Agreement shall be deemed to have commenced as of the
          date  first  above  written  and  shall   continue  for  a  period  of
          twenty-four  (24) full calendar months  thereafter.  Commencing on the
          first  anniversary  date,  and  continuing  at each  anniversary  date
          thereafter,  the Board of Directors of the  Association  (the "Board")
          may  extend  the  Agreement  for  an  additional  year.  Prior  to the
          extension of the Agreement as provided herein,  the Board of Directors
          of the Association will conduct a formal performance evaluation of the
          Executive for purposes of determining whether to extend the Agreement,
          and the  results  thereof  shall be  included  in the  minutes  of the
          Board's meeting.

     (b)  During the period of his employment  hereunder,  except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and efforts to the  faithful
          performance of his duties hereunder including  activities and services
          related  to  the   organization,   operation  and  management  of  the
          Association;  provided, however, that, with the approval of the Board,
          as  evidenced  by a  resolution  of such  Board,  from  time to  time,
          Executive may serve,  or continue to serve, on the boards of directors
          of,  and  hold  any  other  offices  or  positions  in,  companies  or
          organizations,  which, in such Board's judgment,  will not present any
          conflict of interest with the  Association,  or materially  affect the
          performance of Executive's duties pursuant to this Agreement.

                                      -14-

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3.   COMPENSATION AND REIMBURSEMENT.

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Sections 1 and 2.
          The  Association  shall pay  Executive as  compensation  a salary of $
          95,000 per year ("Base Salary").  Such Base Salary shall be payable in
          accordance with the customary  payroll  practices of the  Association.
          During the period of this Agreement,  Executive's Base Salary shall be
          reviewed  at least  annually;  the first such  review  will be made no
          later than one year from the date of this Agreement. Such review shall
          be conducted by a Committee designated by the Board, and the Board may
          increase  Executive's  Base  Salary.  In  addition  to the Base Salary
          provided in this Section 3(a), the Association shall provide Executive
          at no cost to Executive  with all such other  benefits as are provided
          uniformly to permanent full-time employees of the Association.

     (b)  The Association  will provide  Executive with employee  benefit plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which Executive was  participating or otherwise  deriving benefit from
          immediately prior to the beginning of the term of this Agreement,  and
          the Association will not, without  Executive's  prior written consent,
          make any  changes in such plans,  arrangements  or  perquisites  which
          would  adversely  affect  Executive's  rights or benefits  thereunder.
          Without  limiting the  generality of the foregoing  provisions of this
          Subsection  (b),  Executive  will be  entitled  to  participate  in or
          receive benefits under any employee  benefit plans including,  but not
          limited to, retirement plans,  supplemental  retirement plans, pension
          plans,   profit-sharing  plans,   health-and-accident   plan,  medical
          coverage  or any  other  employee  benefit  plan or  arrangement  made
          available by the  Association  in the future to its senior  executives
          and key management  employees,  subject to, and on a basis  consistent
          with, the terms,  conditions and overall  administration of such plans
          and arrangements. Executive will be entitled to incentive compensation
          and bonuses as provided in any plan, or pursuant to any arrangement of
          the  Association,  in which  Executive  is  eligible  to  participate.
          Nothing paid to the Executive under any such plan or arrangement  will
          be deemed to be in lieu of other  compensation  to which the Executive
          is entitled  under this  Agreement,  except as provided  under Section
          5(e).

     (c)  In addition to the Base Salary  provided for by paragraph  (a) of this
          Section 3, the  Association  shall pay or reimburse  Executive for all
          reasonable  travel and other  obligations under this Agreement and may
          provide such additional  compensation in such form and such amounts as
          the Board may from time to time determine.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

<PAGE>



     (a)  Upon the  occurrence of an Event of  Termination  (as herein  defined)
          during the Executive's  term of employment  under this Agreement,  the
          provisions of this Section shall apply. As used in this Agreement,  an
          "Event of  Termination"  shall mean and include any one or more of the
          following:  (i) the  termination  by the  Association  of  Executive's
          full-time  employment  hereunder for any reason other than a Change in
          Control, as defined in Section 5(a) hereof;  disability, as defined in
          Section  6(a)  hereof;  death;  retirement,  as  defined  in Section 7
          hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
          resignation from the Association's  employ,  upon (A) unless consented
          to by the  Executive,  a  material  change  in  Executive's  function,
          duties,  or  responsibilities,  which change  would cause  Executive's
          position to become one of lesser responsibility,  importance, or scope
          from the position and attributes  thereof  described in Sections 1 and
          2,  above,  (any such  material  change  shall be deemed a  continuing
          breach of this Agreement),  (B) a relocation of Executive's  principal
          place of  employment  by more than 35 miles from its  location  at the
          effective  date of this  Agreement,  or a  material  reduction  in the
          benefits and  perquisites to Executive from those being provided as of
          the  effective  date  of  this  Agreement,   (C)  the  liquidation  or
          dissolution of the Association, or (D) any breach of this Agreement by
          the Association. Upon the occurrence of any event described in clauses
          (A), (B), (C), or (D), above,  Executive shall have the right to elect
          to terminate his employment  under this Agreement by resignation  upon
          not less than sixty  (60) days prior  written  notice  given  within a
          reasonable  period  of  time  not  to  exceed,  except  in  case  of a
          continuing breach, four calendar months after the event giving rise to
          said right to elect.

     (b)  Upon the occurrence of an Event of Termination,  the Association shall
          pay  Executive,  or,  in  the  event  of  his  subsequent  death,  his
          beneficiary or  beneficiaries,  or his estate,  as the case may be, as
          severance  pay or  liquidated  damages,  or both,  a sum  equal to the
          payments due to the Executive for the remaining term of the Agreement,
          including  Base  Salary,  bonuses,  and any  other  cash  or  deferred
          compensation  paid or to be paid  (including  the  value  of  employer
          contributions that would have been made on the Executive's behalf over
          the remaining  term of the agreement to any  tax-qualified  retirement
          plan sponsored by the Association as of the Date of  Termination),  to
          the Executive for the term of the Agreement provided, however, that if
          the  Association  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Association's capital
          to be reduced below its minimum  capital  requirements,  such payments
          shall be  deferred  until such time as the  Association  is in capital
          compliance.  All payments  made pursuant to this Section 4(b) shall be
          paid in substantially  equal monthly  installments  over the remaining
          term  of  this  Agreement   following  the  Executive's   termination;
          provided, however, that if the remaining term of the Agreement is less
          than  one  (1)  year   (determined  as  of  the  Executive's  Date  of
          Termination),  such  payments  and  benefits  shall  be  paid  to  the
          Executive in a lump sum within 30 days of the Date of Termination.

     (c)  Upon the occurrence of an Event of Termination,  the Association  will
          cause to be continued life,  medical,  dental and disability  coverage
          substantially  identical to the coverage maintained by the Association
          for Executive prior to his termination. Such coverage shall cease upon
          the expiration of the remaining term of this Agreement.

5.   CHANGE IN CONTROL.

     (a)  No benefit  shall be paid under this Section 5 unless there shall have
          occurred a Change in Control of the  Company or the  Association.  For
          purposes  of this  Agreement,  a "Change in Control" of the Company or
          the  Association  shall be deemed to occur if and when (a) an  offeror
          other than the  Company  purchases  shares of the common  stock of the
          Company or the Association  pursuant to a tender or exchange offer for
          such  shares,  (b) any person (as such term is used in Sections  13(d)
          and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
          beneficial owner, directly or indirectly, of securities of the Company
          or the  Association  representing  25% or more of the combined  voting
          power of the Company's then outstanding securities, (c) the membership
          of the board of directors of the Company or the Association changes as
          the result of a contested  election,  such that  individuals  who were
          directors at the beginning of any  twenty-four  month period  (whether
          commencing  before or after the effective  date of this  Agreement) do
          not  constitute a majority of the Board at the end of such period,  or
          (d)  shareholders of the Company or the Association  approve a merger,
          consolidation,  sale or disposition of all or substantially all of the
          Company's  or the  Association's  assets,  or a  plan  of  partial  or
          complete liquidation.
<PAGE>

     (b)  If any of the events  described in Section 5(a) hereof  constituting a
          Change in Control have occurred or the Board of the Association or the
          Company  has  determined  that  a  Change  in  Control  has  occurred,
          Executive  shall be entitled to the  benefits  provided in  paragraphs
          (c),  (d) and (e) of this  Section 5 upon his  subsequent  involuntary
          termination  of  employment  at any  time  during  the  term  of  this
          Agreement  (or  voluntary  termination  following  a Change of Control
          following  any  demotion,   loss  of  title,   office  or  significant
          authority,  reduction  in his  annual  compensation  or  benefits,  or
          relocation of his principal  place of employment by more than 35 miles
          from its location immediately prior to the Change in Control),  unless
          such  termination  is because of his death,  retirement as provided in
          Section 7, termination for Cause, or termination for Disability.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association shall pay Executive, or in
          the event of his subsequent  death, his beneficiary or  beneficiaries,
          or his  estate,  as the case may be, as  severance  pay or  liquidated
          damages,  or both,  a sum equal to 2.99  times the  Executive's  "base
          amount,"  within the  meaning of section  280G(b)(3)  of the  Internal
          Revenue Code of 1986 ("Code"),  as amended. Such payment shall be made
          in a lump sum paid  within  ten (10) days of the  Executive's  Date of
          Termination.

     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association will cause to be continued
          life, medical,  dental and disability coverage substantially identical
          to the coverage  maintained by the  Association for Executive prior to
          his severance. In addition, Executive shall be entitled to receive the
          value of  employer  contributions  that  would  have  been made on the
          Executive's  behalf over the  remaining  term of the  agreement to any
          tax-qualified  retirement  plan sponsored by the Association as of the
          Date of  Termination.  Such coverage and payments shall cease upon the
          expiration of thirty-six (36) months.

     (e)  Upon the  occurrence of a Change in Control,  the  Executive  shall be
          entitled to receive  benefits  due him under,  or  contributed  by the
          Company or the Association on his behalf,  pursuant to any retirement,
          incentive,  profit sharing,  bonus,  performance,  disability or other
          employee  benefit plan maintained by the Association or the Company on
          the  Executive's  behalf  to the  extent  that such  benefits  are not
          otherwise paid to the Executive upon a Change in Control.

     (f)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event that the  aggregate  payments or benefits to be made or afforded
          to the  Executive  under  this  Section  would be deemed to include an
          "excess  parachute  payment"  under  section  280G of the  Code,  such
          payments or benefits  shall be payable or provided to  Executive  over
          the  minimum  period  necessary  to reduce the  present  value of such
          payments  or benefits to an amount  which is one dollar  ($1.00)  less
          than  three (3) times the  Executive's  "base  amount"  under  section
          280G(b)(3) of the Code.

6.   TERMINATION FOR DISABILITY.

     (a)  If the Executive shall become disabled as defined in the Association's
          then current  disability  plan (or, if no such plan is then in effect,
          if the  Executive  is  permanently  and  totally  disabled  within the
          meaning of Section  22(e)(3) of the Code as  determined by a physician
          designated by the Board),  the Association  may terminate  Executive's
          employment for "Disability."
<PAGE>

     (b)  Upon the  Executive's  termination of employment for  Disability,  the
          Association will pay Executive, as disability pay, a bi-weekly payment
          equal to  three-quarters  (3/4) of Executive's  bi-weekly rate of Base
          Salary on the effective  date of such  termination.  These  disability
          payments   shall   commence  on  the  effective  date  of  Executive's
          termination  and will  end on the  earlier  of (i) the date  Executive
          returns to the  full-time  employment of the  Association  in the same
          capacity as he was employed  prior to his  termination  for Disability
          and pursuant to an  employment  agreement  between  Executive  and the
          Association;   (ii)  Executive's   full-time   employment  by  another
          employer; (iii) Executive attaining the age of 65; or (iv) Executive's
          death;  or (v) the  expiration  of the  term of  this  Agreement.  The
          disability  pay shall be reduced by the  amount,  if any,  paid to the
          Executive  under  any  plan of the  Association  providing  disability
          benefits to the Executive.

     (c)  The Association will cause to be continued life,  medical,  dental and
          disability coverage substantially identical to the coverage maintained
          by  the  Association  for  Executive  prior  to  his  termination  for
          Disability. This coverage and payments shall cease upon the earlier of
          (i) the date  Executive  returns to the  full-time  employment  of the
          Association,  in the same  capacity  as he was  employed  prior to his
          termination  for  Disability  and pursuant to an employment  agreement
          between  Executive and the  Association;  (ii)  Executive's  full-time
          employment by another employer; (iii) Executive's attaining the age of
          65; or (iv) the  Executive's  death; or (v) the expiration of the term
          of this Agreement.

     (d)  Notwithstanding  the  foregoing,  there  will be no  reduction  in the
          compensation  otherwise  payable to Executive during any period during
          which  Executive is incapable of  performing  his duties  hereunder by
          reason of temporary disability.

7.   TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.

     Termination by the  Association of Executive  based on  "Retirement"  shall
     mean retirement at age 65 or in accordance with any retirement  arrangement
     established with Executive's  consent with respect to him. Upon termination
     of Executive upon  Retirement,  Executive shall be entitled to all benefits
     under any retirement plan of the Association or the Company and other plans
     to which Executive is a party.  Upon the death of the Executive  during the
     term of this Agreement, the Association shall pay to Executive's estate the
     compensation  due to the  Executive  through  the last day of the  calendar
     month in which his death occurred.

<PAGE>
8.   TERMINATION FOR CAUSE.


     For  purposes of this  Agreement,  "Termination  for Cause"  shall  include
     termination because of the Executive's personal  dishonesty,  incompetence,
     willful  misconduct,  breach of fiduciary duty involving  personal  profit,
     willful  violation  of any law,  rule,  or  regulation  (other than traffic
     violations  or  similar  offenses)  or  final  cease-and-desist  order,  or
     material  breach  of  any  provision  of  this   Agreement.   In  addition,
     "Termination for Cause" shall include  termination because of continuing or
     repeated  problems  with  the  Executive's   performance  or  conduct,  the
     Executive's  inattention to duties,  the refusal of the Executive to comply
     with the Association's or the Company's instructions,  policies or rules or
     other  conduct  of  the   Executive   which   reflects   adversely  on  the
     Association's  or the Company 's reputation  or operation.  For purposes of
     this Section,  no act, or the failure to act, on Executive's  part shall be
     "willful" unless done, or omitted to be done, not in good faith and without
     reasonable  belief that the action or omission was in the best  interest of
     the Association or its affiliates. Notwithstanding the foregoing, Executive
     shall  not be deemed to have been  terminated  for Cause  unless  and until
     there shall have been delivered to him a copy of a resolution  duly adopted
     by the affirmative  vote of not less than  three-fourths  of the members of
     the Board at a meeting of the Board called and held for that purpose (after
     reasonable  notice to Executive and an opportunity  for him,  together with
     counsel,  to be heard  before the  Board),  finding  that in the good faith
     opinion  of  the  Board,   Executive  was  guilty  of  conduct   justifying
     termination  for Cause and  specifying the reasons  thereof.  The Executive
     shall not have the right to receive  compensation or other benefits for any
     period after  termination for Cause. Any stock options granted to Executive
     under any stock option plan or any unvested  awards granted under any other
     stock benefit plan of the  Association,  the Company,  or any subsidiary or
     affiliate  thereof,  shall become null and void effective upon  Executive's
     receipt of Notice of  Termination  for Cause  pursuant to Section 9 hereof,
     and shall not be  exercisable  by Executive at any time  subsequent to such
     Termination for Cause.

9.   REQUIRED PROVISIONS.

     (a)  The Association may terminate Executive's  employment at any time, but
          any termination by the Association,  other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits under this  Agreement.  Executive shall not have the right to
          receive   compensation   or  other   benefits  for  any  period  after
          Termination for Cause as defined in Section 8 herein.

     (b)  If  Executive  is  suspended   and/or   temporarily   prohibited  from
          participating in the conduct of the Association's  affairs by a notice
          served  under  Section  8(e)(3)  or  (g)(1)  of  the  Federal  Deposit
          Insurance  Act  ("FDIA")  (12  U.S.C.   1818(e)(3)  and  (g)(1)),  the
          Association's obligations under the Agreement shall be suspended as of
          the date of service, unless stayed by appropriate proceedings.  If the
          charges in the notice  are  dismissed,  the  Association  may,  in its
          discretion, (i) pay Executive all or part of the compensation withheld
          while its contract  obligations  were suspended and (ii) reinstate (in
          whole or in part) any of its obligations that were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
          participating in the conduct of the Association's  affairs by an order
          issued  under  Section  8(e)(4)  or  (g)(1)  of the  FDIA  (12  U.S.C.
          1818(e)(4) or (g)(1)),  all obligations of the  Association  under the
          Agreement shall  terminate as of the effective date of the order,  but
          vested rights of the contracting parties shall not be affected.

     (d)  If the Association is in default (as defined in Section 3(x)(1) of the
          FDIA), all obligations  under this Agreement shall terminate as of the
          date of default, but this paragraph shall not affect any vested rights
          of the parties.

     (e)  All obligations  under this Agreement  shall be terminated  (except to
          the extent  determined that continuation of the Agreement is necessary
          for the continued  operation of the Association):  (i) by the Director
          of the Office of Thrift  Supervision  (the  "Director")  or his or her
          designee at the time the Federal Deposit Insurance  Corporation or the
          Resolution  Trust  Corporation  enters  into an  agreement  to provide
          assistance  to or on behalf  of the  Association  under the  authority
          contained in Section 13(c) of the FDIA or (ii) by the Director, or his
          or her designee at the time the Director or such  designee  approves a
          supervisory  merger to resolve  problems  related to  operation of the
          Association  or when the  Association is determined by the Director to
          be in an unsafe or unsound  condition.  Any rights of the parties that
          have already vested, however, shall not be affected by such action.

     (f)  Any  payments  made  to  Executive  pursuant  to  this  Agreement,  or
          otherwise,  are subject to and  conditioned  upon  compliance  with 12
          U.S.C. section 1828(k) and any regulations promulgated thereunder.

10.  NOTICE.

     (a)  Any purported  termination by the Association or by Executive shall be
          communicated  by Notice of Termination to the other party hereto.  For
          purposes of this  Agreement,  a "Notice of  Termination"  shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of Executive's employment under the provision so indicated.

     (b)  "Date of  Termination"  shall mean (A) if  Executive's  employment  is
          terminated  for  Disability,  thirty  (30)  days  after  a  Notice  of
          Termination is given  (provided that he shall not have returned to the
          performance of his duties on a full-time basis during such thirty (30)
          day period),  and (B) if his  employment is  terminated  for any other
          reason, the date specified in the Notice of Termination (which, in the
          case of a  Termination  for Cause,  shall not be less than thirty (30)
          days from the date such Notice of Termination is given).

     (c)  If, within thirty (30) days after any Notice of  Termination is given,
          the party  receiving  such Notice of  Termination  notifies  the other
          party that a dispute exists  concerning the  termination,  except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in which  case the  Date of  Termination  shall be the date
          specified in the Notice,  the Date of Termination shall be the date on
          which the  dispute is  finally  determined,  either by mutual  written
          agreement  of the parties,  by a binding  arbitration  award,  or by a
          final judgment,  order or decree of a court of competent  jurisdiction
          (the time for appeal  there from having  expired and no appeal  having
          been  perfected)  and provided  further  that the Date of  Termination
          shall be extended by a notice of dispute  only if such notice is given
          in good faith and the party giving such notice  pursues the resolution
          of  such  dispute  with  reasonable  diligence.   Notwithstanding  the
          pendency of any such  dispute,  the  Association  will continue to pay
          Executive his full  compensation in effect when the notice giving rise
          to the dispute was given (including,  but not limited to, Base Salary)
          and continue him as a  participant  in all  compensation,  benefit and
          insurance  plans in  which he was  participating  when the  notice  of
          dispute was given, until the dispute is finally resolved in accordance
          with this  Agreement.  Amounts paid under this Section are in addition
          to all other amounts due under this  Agreement and shall not be offset
          against or reduce any other amounts due under this Agreement.

<PAGE>

11.  NON-COMPETITION.

     (a)  Upon any termination of Executive's  employment  hereunder pursuant to
          an Event of  Termination  as provided  in Section 4 hereof,  Executive
          agrees not to compete  with the  Association  and/or the Company for a
          period of one (1) year following such termination in any city, town or
          county in which the  Association  and/or the  Company has an office or
          has filed an  application  for  regulatory  approval to  establish  an
          office,  determined  as of the  effective  date of  such  termination.
          Executive agrees that during such period and within said cities, towns
          and  counties,  Executive  shall not work for or  advise,  consult  or
          otherwise  serve  with,  directly  or  indirectly,  any  entity  whose
          business  materially  competes with the  depository,  lending or other
          business activities of the Association and/or the Company. The parties
          hereto,  recognizing  that  irreparable  injury  will  result  to  the
          Association and/or the Company, its business and property in the event
          of Executive's breach of this Subsection 11(a) agree that in the event
          of any such breach by Executive,  the  Association  and/or the Company
          will be  entitled,  in  addition  to any other  remedies  and  damages
          available,  to an  injunction  to  restrain  the  violation  hereof by
          Executive,   Executive's  partners,   agents,   servants,   employers,
          employees  and all  persons  acting for or with  Executive.  Executive
          represents  and  admits  that in the event of the  termination  of his
          employment  pursuant to Section 8 hereof,  Executive's  experience and
          capabilities  are such  that  Executive  can  obtain  employment  in a
          business  engaged in other lines and/or of a different nature than the
          Association  and/or the Company,  and that the enforcement of a remedy
          by way of  injunction  will  not  prevent  Executive  from  earning  a
          livelihood.  Nothing  herein  will be  construed  as  prohibiting  the
          Association  and/or  the  Company  from  pursuing  any other  remedies
          available  to the  Association  and/or the  Company for such breach or
          threatened breach, including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business   activities  and  plans  for  business   activities  of  the
          Association and affiliates thereof, as it may exist from time to time,
          is a  valuable,  special  and  unique  asset  of the  business  of the
          Association.  Executive  will  not,  during  or after  the term of his
          employment,  disclose any knowledge of the past,  present,  planned or
          considered  business  activities  of  the  Association  or  affiliates
          thereof to any  person,  firm,  corporation,  or other  entity for any
          reason or purpose whatsoever. Notwithstanding the foregoing, Executive
          may  disclose  any  knowledge of banking,  financial  and/or  economic
          principles,  concepts  or ideas  which are not solely and  exclusively
          derived from the business plans and activities of the Association.  In
          the event of a breach or  threatened  breach by the  Executive  of the
          provisions of this  Section,  the  Association  will be entitled to an
          injunction restraining Executive from disclosing, in whole or in part,
          the knowledge of the past,  present,  planned or  considered  business
          activities of the Association or affiliates thereof, or from rendering
          any services to any person,  firm,  corporation,  other entity to whom
          such  knowledge,  in  whole  or in  part,  has  been  disclosed  or is
          threatened  to be  disclosed.  Nothing  herein  will be  construed  as
          prohibiting the Association from pursuing any other remedies available
          to the Association for such breach or threatened breach, including the
          recovery of damages from Executive.

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
     check from the general  funds of the  Association.  The  Company,  however,
     guarantees  all payments and the  provision of all amounts and benefits due
     hereunder  to  Executive  and,  if such  payments  are not  timely  paid or
     provided by the  Association,  such amounts and  benefits  shall be paid or
     provided by the Company.

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
     and supersedes any prior  employment  agreement  between the Association or
     any  predecessor  of  the  Association  and  Executive,  except  that  this
     Agreement shall not affect or operate to reduce any benefit or compensation
     inuring to the Executive of a kind elsewhere provided. No provision of this
     Agreement  shall be  interpreted  to mean  that  Executive  is  subject  to
     receiving fewer benefits than those  available to him without  reference to
     this Agreement.

14.  NO ATTACHMENT.

     (a)  Except as  required by law,  no right to receive  payments  under this
          Agreement shall be subject to anticipation,  commutation,  alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or similar  process or  assignment  by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any such action shall be null, void, and of no effect.
<PAGE>


     (b)  This  Agreement  shall be binding  upon,  and inure to the benefit of,
          Executive,   the   Association,   the  Company  and  their  respective
          successors and assigns.

15.  MODIFICATION AND WAIVER.

     (a)  This  Agreement may not be modified or amended except by an instrument
          in writing signed by the parties hereto.

     (b)  No term or  condition of this  Agreement  shall be deemed to have been
          waived, nor shall there be any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged with such waiver or estoppel.  No such written waiver shall be
          deemed a continuing  waiver unless  specifically  stated therein,  and
          each  such  waiver  shall  operate  only  as to the  specific  term or
          condition  waived  and shall not  constitute  a waiver of such term or
          condition  for the future as to any act other  than that  specifically
          waived.




16.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
     provision,  is held  invalid,  such  invalidity  shall not affect any other
     provision  of this  Agreement  or any  part of such  provision  not held so
     invalid,  and each such other  provision and part thereof shall to the full
     extent consistent with law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
     convenience   of   reference   and  shall  not   control   the  meaning  or
     interpretation of any of the provisions of this Agreement.

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Oregon, unless
     otherwise  specified  herein;  provided,  however,  that in the  event of a
     conflict between the terms of this Agreement and any applicable  federal or
     state law or  regulation,  the  provisions of such law or regulation  shall
     prevail.

19.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
     Agreement shall be settled  exclusively by arbitration,  conducted before a
     panel of three  arbitrators  sitting in a location selected by the employee
     within one hundred  (100) miles from the  location of the  Association,  in
     accordance with the rules of the American  Arbitration  Association then in
     effect.  Judgment  may be  entered on the  arbitrator's  award in any court
     having jurisdiction; provided, however, that Executive shall be entitled to
     seek  specific  performance  of his  right  to be paid  until  the  Date of
     Termination during the pendency of any dispute or controversy arising under
     or in connection with this Agreement.

20.  PAYMENT OF LEGAL FEES.

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
     dispute or question of  interpretation  relating to this Agreement shall be
     paid or reimbursed by the  Association,  if successful  pursuant to a legal
     judgment, arbitration or settlement.

21.  INDEMNIFICATION.

     The Association shall provide Executive (including his heirs, executors and
     administrators)  with coverage  under a standard  directors'  and officers'
     liability  insurance  policy  at its  expense,  or in lieu  thereof,  shall
     indemnify  Executive (and his heirs,  executors and  administrators) to the
     fullest  extent  permitted  under law against all expenses and  liabilities
     reasonably incurred by him in connection with or arising out of any action,
     suite or  proceeding  in which he may be  involved  by reason of his having
     been a director or officer of the Association  (whether or not he continues
     to be a  directors  or officer at the time of  incurring  such  expenses or
     liabilities),  such expenses and liabilities to include, but not be limited
     to,  judgment,  court costs and attorneys'  fees and the cost of reasonable
     settlements.

22.  SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.

     The  Association  and the Company  shall require any successor or assignee,
     whether  direct  or  indirect,  by  purchase,   merger,   consolidation  or
     otherwise,  to all or  substantially  all the  business  or  assets  of the
     Association  or the Company,  expressly and  unconditionally  to assume and
     agree to perform the Association's or the Company's  obligations under this
     Agreement,  in the same manner and to the same extent that the  Association
     or the  Company  would be  required  to  perform if no such  succession  or
     assignment had taken place.

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
     executed and their seal to be affixed hereunto by a duly authorized officer
     or director, and Executive has signed this Agreement, all on the

                   day of                             , 20     .


ATTEST:                                     KLAMATH FIRST FEDERAL SAVINGS
                                                      AND LOAN ASSOCIATION



                                                     BY:
                  [SEAL]


ATTEST:                                     KLAMATH FIRST BANCORP, INC.



                                            BY:  ________________________

                  [SEAL]



WITNESS:




                                              ___________________________
                                              M. Isabel Castellanos






<PAGE>


                                  EXHIBIT 10(g)

                              EMPLOYMENT AGREEMENT


     THIS  AGREEMENT  is made  effective  as of January 2, 2002,  by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"),  Klamath
Falls,  Oregon;   KLAMATH  FIRST  BANCORP,  INC.  (the  "Company"),   an  Oregon
corporation; and Walt Dodrill (the "Executive").

     WHEREAS,  the  Association  wishes to  assure  itself  of the  services  of
Executive for the period provided in this Agreement; and

     WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve as
Senior Vice  President of the  Association.  During said period,  Executive also
agrees to serve,  if elected,  as an officer of the Company or any subsidiary or
affiliate of the Company or the Association.

2.   TERMS AND DUTIES.

     (a)  The term of this Agreement shall be deemed to have commenced as of the
          date  first  above  written  and  shall   continue  for  a  period  of
          twenty-four  (24) full calendar months  thereafter.  Commencing on the
          first  anniversary  date,  and  continuing  at each  anniversary  date
          thereafter,  the Board of Directors of the  Association  (the "Board")
          may  extend  the  Agreement  for  an  additional  year.  Prior  to the
          extension of the Agreement as provided herein,  the Board of Directors
          of the Association will conduct a formal performance evaluation of the
          Executive for purposes of determining whether to extend the Agreement,
          and the  results  thereof  shall be  included  in the  minutes  of the
          Board's meeting.

     (b)  During the period of his employment  hereunder,  except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and efforts to the  faithful
          performance of his duties hereunder including  activities and services
          related  to  the   organization,   operation  and  management  of  the
          Association;  provided, however, that, with the approval of the Board,
          as  evidenced  by a  resolution  of such  Board,  from  time to  time,
          Executive may serve,  or continue to serve, on the boards of directors
          of,  and  hold  any  other  offices  or  positions  in,  companies  or
          organizations,  which, in such Board's judgment,  will not present any
          conflict of interest with the  Association,  or materially  affect the
          performance of Executive's duties pursuant to this Agreement.

<PAGE>



                                      -23-

3.   COMPENSATION AND REIMBURSEMENT.

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Sections 1 and 2.
          The  Association  shall pay  Executive as  compensation  a salary of $
          110,000 per year ("Base Salary"). Such Base Salary shall be payable in
          accordance with the customary  payroll  practices of the  Association.
          During the period of this Agreement,  Executive's Base Salary shall be
          reviewed  at least  annually;  the first such  review  will be made no
          later than one year from the date of this Agreement. Such review shall
          be conducted by a Committee designated by the Board, and the Board may
          increase  Executive's  Base  Salary.  In  addition  to the Base Salary
          provided in this Section 3(a), the Association shall provide Executive
          at no cost to Executive  with all such other  benefits as are provided
          uniformly to permanent full-time employees of the Association.

     (b)  The Association  will provide  Executive with employee  benefit plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which Executive was  participating or otherwise  deriving benefit from
          immediately prior to the beginning of the term of this Agreement,  and
          the Association will not, without  Executive's  prior written consent,
          make any  changes in such plans,  arrangements  or  perquisites  which
          would  adversely  affect  Executive's  rights or benefits  thereunder.
          Without  limiting the  generality of the foregoing  provisions of this
          Subsection  (b),  Executive  will be  entitled  to  participate  in or
          receive benefits under any employee  benefit plans including,  but not
          limited to, retirement plans,  supplemental  retirement plans, pension
          plans,   profit-sharing  plans,   health-and-accident   plan,  medical
          coverage  or any  other  employee  benefit  plan or  arrangement  made
          available by the  Association  in the future to its senior  executives
          and key management  employees,  subject to, and on a basis  consistent
          with, the terms,  conditions and overall  administration of such plans
          and arrangements. Executive will be entitled to incentive compensation
          and bonuses as provided in any plan, or pursuant to any arrangement of
          the  Association,  in which  Executive  is  eligible  to  participate.
          Nothing paid to the Executive under any such plan or arrangement  will
          be deemed to be in lieu of other  compensation  to which the Executive
          is entitled  under this  Agreement,  except as provided  under Section
          5(e).

     (c)  In addition to the Base Salary  provided for by paragraph  (a) of this
          Section 3, the  Association  shall pay or reimburse  Executive for all
          reasonable  travel and other  obligations under this Agreement and may
          provide such additional  compensation in such form and such amounts as
          the Board may from time to time determine.
<PAGE>

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a)  Upon the  occurrence of an Event of  Termination  (as herein  defined)
          during the Executive's  term of employment  under this Agreement,  the
          provisions of this Section shall apply. As used in this Agreement,  an
          "Event of  Termination"  shall mean and include any one or more of the
          following:  (i) the  termination  by the  Association  of  Executive's
          full-time  employment  hereunder for any reason other than a Change in
          Control, as defined in Section 5(a) hereof;  disability, as defined in
          Section  6(a)  hereof;  death;  retirement,  as  defined  in Section 7
          hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
          resignation from the Association's  employ,  upon (A) unless consented
          to by the  Executive,  a  material  change  in  Executive's  function,
          duties,  or  responsibilities,  which change  would cause  Executive's
          position to become one of lesser responsibility,  importance, or scope
          from the position and attributes  thereof  described in Sections 1 and
          2,  above,  (any such  material  change  shall be deemed a  continuing
          breach of this Agreement),  (B) a relocation of Executive's  principal
          place of  employment  by more than 35 miles from its  location  at the
          effective  date of this  Agreement,  or a  material  reduction  in the
          benefits and  perquisites to Executive from those being provided as of
          the  effective  date  of  this  Agreement,   (C)  the  liquidation  or
          dissolution of the Association, or (D) any breach of this Agreement by
          the Association. Upon the occurrence of any event described in clauses
          (A), (B), (C), or (D), above,  Executive shall have the right to elect
          to terminate his employment  under this Agreement by resignation  upon
          not less than sixty  (60) days prior  written  notice  given  within a
          reasonable  period  of  time  not  to  exceed,  except  in  case  of a
          continuing breach, four calendar months after the event giving rise to
          said right to elect.

     (b)  Upon the occurrence of an Event of Termination,  the Association shall
          pay  Executive,  or,  in  the  event  of  his  subsequent  death,  his
          beneficiary or  beneficiaries,  or his estate,  as the case may be, as
          severance  pay or  liquidated  damages,  or both,  a sum  equal to the
          payments due to the Executive for the remaining term of the Agreement,
          including  Base  Salary,  bonuses,  and any  other  cash  or  deferred
          compensation  paid or to be paid  (including  the  value  of  employer
          contributions that would have been made on the Executive's behalf over
          the remaining  term of the agreement to any  tax-qualified  retirement
          plan sponsored by the Association as of the Date of  Termination),  to
          the Executive for the term of the Agreement provided, however, that if
          the  Association  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Association's capital
          to be reduced below its minimum  capital  requirements,  such payments
          shall be  deferred  until such time as the  Association  is in capital
          compliance.  All payments  made pursuant to this Section 4(b) shall be
          paid in substantially  equal monthly  installments  over the remaining
          term  of  this  Agreement   following  the  Executive's   termination;
          provided, however, that if the remaining term of the Agreement is less
          than  one  (1)  year   (determined  as  of  the  Executive's  Date  of
          Termination),  such  payments  and  benefits  shall  be  paid  to  the
          Executive in a lump sum within 30 days of the Date of Termination.

     (c)  Upon the occurrence of an Event of Termination,  the Association  will
          cause to be continued life,  medical,  dental and disability  coverage
          substantially  identical to the coverage maintained by the Association
          for Executive prior to his termination. Such coverage shall cease upon
          the expiration of the remaining term of this Agreement.

5.   CHANGE IN CONTROL.

     (a)  No benefit  shall be paid under this Section 5 unless there shall have
          occurred a Change in Control of the  Company or the  Association.  For
          purposes  of this  Agreement,  a "Change in Control" of the Company or
          the  Association  shall be deemed to occur if and when (a) an  offeror
          other than the  Company  purchases  shares of the common  stock of the
          Company or the Association  pursuant to a tender or exchange offer for
          such  shares,  (b) any person (as such term is used in Sections  13(d)
          and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
          beneficial owner, directly or indirectly, of securities of the Company
          or the  Association  representing  25% or more of the combined  voting
          power of the Company's then outstanding securities, (c) the membership
          of the board of directors of the Company or the Association changes as
          the result of a contested  election,  such that  individuals  who were
          directors at the beginning of any  twenty-four  month period  (whether
          commencing  before or after the date of  adoption of this Plan) do not
          constitute a majority of the Board at the end of such  period,  or (d)
          shareholders  of the  Company  or the  Association  approve  a merger,
          consolidation,  sale or disposition of all or substantially all of the
          Company's  or the  Association's  assets,  or a  plan  of  partial  or
          complete liquidation.

<PAGE>

     (b)  If any of the events  described in Section 5(a) hereof  constituting a
          Change in Control have occurred or the Board of the Association or the
          Company  has  determined  that  a  Change  in  Control  has  occurred,
          Executive  shall be entitled to the  benefits  provided in  paragraphs
          (c),  (d) and (e) of this  Section 5 upon his  subsequent  involuntary
          termination  of  employment  at any  time  during  the  term  of  this
          Agreement  (or  voluntary  termination  following  a Change of Control
          following  any  demotion,   loss  of  title,   office  or  significant
          authority,  reduction  in his  annual  compensation  or  benefits,  or
          relocation of his principal  place of employment by more than 35 miles
          from its location immediately prior to the Change in Control),  unless
          such  termination  is because of his death,  retirement as provided in
          Section 7, termination for Cause, or termination for Disability.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association shall pay Executive, or in
          the event of his subsequent  death, his beneficiary or  beneficiaries,
          or his  estate,  as the case may be, as  severance  pay or  liquidated
          damages,  or both,  a sum equal to 2.99  times the  Executive's  "base
          amount,"  within the  meaning of section  280G(b)(3)  of the  Internal
          Revenue Code of 1986 ("Code"),  as amended. Such payment shall be made
          in a lump sum paid  within  ten (10) days of the  Executive's  Date of
          Termination.

     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association will cause to be continued
          life, medical,  dental and disability coverage substantially identical
          to the coverage  maintained by the  Association for Executive prior to
          his severance. In addition, Executive shall be entitled to receive the
          value of  employer  contributions  that  would  have  been made on the
          Executive's  behalf over the  remaining  term of the  agreement to any
          tax-qualified  retirement  plan sponsored by the Association as of the
          Date of  Termination.  Such coverage and payments shall cease upon the
          expiration of twenty-four (24) months.

     (e)  Upon the  occurrence of a Change in Control,  the  Executive  shall be
          entitled to receive  benefits  due him under,  or  contributed  by the
          Company or the Association on his behalf,  pursuant to any retirement,
          incentive,  profit sharing,  bonus,  performance,  disability or other
          employee  benefit plan maintained by the Association or the Company on
          the  Executive's  behalf  to the  extent  that such  benefits  are not
          otherwise paid to the Executive upon a Change in Control.

     (f)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event that the  aggregate  payments or benefits to be made or afforded
          to the  Executive  under  this  Section  would be deemed to include an
          "excess  parachute  payment"  under  section  280G of the  Code,  such
          payments or benefits  shall be payable or provided to  Executive  over
          the  minimum  period  necessary  to reduce the  present  value of such
          payments  or benefits to an amount  which is one dollar  ($1.00)  less
          than  three (3) times the  Executive's  "base  amount"  under  section
          280G(b)(3) of the Code.

6.   TERMINATION FOR DISABILITY.

     (a)  If the Executive shall become disabled as defined in the Association's
          then current  disability  plan (or, if no such plan is then in effect,
          if the  Executive  is  permanently  and  totally  disabled  within the
          meaning of Section  22(e)(3) of the Code as  determined by a physician
          designated by the Board),  the Association  may terminate  Executive's
          employment for "Disability."
<PAGE>

     (b)  Upon the  Executive's  termination of employment for  Disability,  the
          Association will pay Executive, as disability pay, a bi-weekly payment
          equal to  three-quarters  (3/4) of Executive's  bi-weekly rate of Base
          Salary on the effective  date of such  termination.  These  disability
          payments   shall   commence  on  the  effective  date  of  Executive's
          termination  and will  end on the  earlier  of (i) the date  Executive
          returns to the  full-time  employment of the  Association  in the same
          capacity as he was employed  prior to his  termination  for Disability
          and pursuant to an  employment  agreement  between  Executive  and the
          Association;   (ii)  Executive's   full-time   employment  by  another
          employer; (iii) Executive attaining the age of 65; or (iv) Executive's
          death;  or (v) the  expiration  of the  term of  this  Agreement.  The
          disability  pay shall be reduced by the  amount,  if any,  paid to the
          Executive  under  any  plan of the  Association  providing  disability
          benefits to the Executive.

     (c)  The Association will cause to be continued life,  medical,  dental and
          disability coverage substantially identical to the coverage maintained
          by  the  Association  for  Executive  prior  to  his  termination  for
          Disability. This coverage and payments shall cease upon the earlier of
          (i) the date  Executive  returns to the  full-time  employment  of the
          Association,  in the same  capacity  as he was  employed  prior to his
          termination  for  Disability  and pursuant to an employment  agreement
          between  Executive and the  Association;  (ii)  Executive's  full-time
          employment by another employer; (iii) Executive's attaining the age of
          65; or (iv) the  Executive's  death; or (v) the expiration of the term
          of this Agreement.

     (d)  Notwithstanding  the  foregoing,  there  will be no  reduction  in the
          compensation  otherwise  payable to Executive during any period during
          which  Executive is incapable of  performing  his duties  hereunder by
          reason of temporary disability.

7.   TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.

     Termination by the  Association of Executive  based on  "Retirement"  shall
     mean retirement at age 65 or in accordance with any retirement  arrangement
     established with Executive's  consent with respect to him. Upon termination
     of Executive upon  Retirement,  Executive shall be entitled to all benefits
     under any retirement plan of the Association or the Company and other plans
     to which Executive is a party.  Upon the death of the Executive  during the
     term of this Agreement, the Association shall pay to Executive's estate the
     compensation  due to the  Executive  through  the last day of the  calendar
     month in which his death occurred.

<PAGE>

8.   TERMINATION FOR CAUSE.

     For  purposes of this  Agreement,  "Termination  for Cause"  shall  include
     termination because of the Executive's personal  dishonesty,  incompetence,
     willful  misconduct,  breach of fiduciary duty involving  personal  profit,
     intentional failure to perform stated duties, willful violation of any law,
     rule, or regulation (other than traffic  violations or similar offenses) or
     final  cease-and-desist  order, or material breach of any provision of this
     Agreement.  For purposes of this Section, no act, or the failure to act, on
     Executive's part shall be "willful" unless done, or omitted to be done, not
     in good faith and without reasonable belief that the action or omission was
     in the best interest of the Association or its affiliates.  Notwithstanding
     the foregoing,  Executive  shall not be deemed to have been  terminated for
     Cause  unless and until there shall have been  delivered to him a copy of a
     resolution  duly  adopted  by  the  affirmative   vote  of  not  less  than
     three-fourths  of the members of the Board at a meeting of the Board called
     and held for that purpose  (after  reasonable  notice to  Executive  and an
     opportunity for him, together with counsel,  to be heard before the Board),
     finding that in the good faith  opinion of the Board,  Executive was guilty
     of conduct  justifying  termination  for Cause and  specifying  the reasons
     thereof.  The Executive shall not have the right to receive compensation or
     other  benefits  for any period  after  termination  for  Cause.  Any stock
     options  granted to  Executive  under any stock option plan or any unvested
     awards granted under any other stock benefit plan of the  Association,  the
     Company, or any subsidiary or affiliate thereof, shall become null and void
     effective  upon  Executive's  receipt  of Notice of  Termination  for Cause
     pursuant to Section 9 hereof,  and shall not be exercisable by Executive at
     any time subsequent to such Termination for Cause.

9.   REQUIRED PROVISIONS.

     (a)  The Association may terminate Executive's  employment at any time, but
          any termination by the Association,  other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits under this  Agreement.  Executive shall not have the right to
          receive   compensation   or  other   benefits  for  any  period  after
          Termination for Cause as defined in Section 8 herein.

     (b)  If  Executive  is  suspended   and/or   temporarily   prohibited  from
          participating in the conduct of the Association's  affairs by a notice
          served  under  Section  8(e)(3)  or  (g)(1)  of  the  Federal  Deposit
          Insurance  Act  ("FDIA")  (12  U.S.C.   1818(e)(3)  and  (g)(1)),  the
          Association's obligations under the Agreement shall be suspended as of
          the date of service, unless stayed by appropriate proceedings.  If the
          charges in the notice  are  dismissed,  the  Association  may,  in its
          discretion, (i) pay Executive all or part of the compensation withheld
          while its contract  obligations  were suspended and (ii) reinstate (in
          whole or in part) any of its obligations that were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
          participating in the conduct of the Association's  affairs by an order
          issued  under  Section  8(e)(4)  or  (g)(1)  of the  FDIA  (12  U.S.C.
          1818(e)(4) or (g)(1)),  all obligations of the  Association  under the
          Agreement shall  terminate as of the effective date of the order,  but
          vested rights of the contracting parties shall not be affected.

     (d)  If the Association is in default (as defined in Section 3(x)(1) of the
          FDIA), all obligations  under this Agreement shall terminate as of the
          date of default, but this paragraph shall not affect any vested rights
          of the parties.

     (e)  All obligations  under this Agreement  shall be terminated  (except to
          the extent  determined that continuation of the Agreement is necessary
          for the continued  operation of the Association):  (i) by the Director
          of the Office of Thrift  Supervision  (the  "Director")  or his or her
          designee at the time the Federal Deposit Insurance  Corporation or the
          Resolution  Trust  Corporation  enters  into an  agreement  to provide
          assistance  to or on behalf  of the  Association  under the  authority
          contained in Section 13(c) of the FDIA or (ii) by the Director, or his
          or her designee at the time the Director or such  designee  approves a
          supervisory  merger to resolve  problems  related to  operation of the
          Association  or when the  Association is determined by the Director to
          be in an unsafe or unsound  condition.  Any rights of the parties that
          have already vested, however, shall not be affected by such action.

     (f)  Any  payments  made  to  Executive  pursuant  to  this  Agreement,  or
          otherwise,  are subject to and  conditioned  upon  compliance  with 12
          U.S.C. section 1828(k) and any regulations promulgated thereunder.

10.  NOTICE.

     (a)  Any purported  termination by the Association or by Executive shall be
          communicated  by Notice of Termination to the other party hereto.  For
          purposes of this  Agreement,  a "Notice of  Termination"  shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of Executive's employment under the provision so indicated.

     (b)  "Date of  Termination"  shall mean (A) if  Executive's  employment  is
          terminated  for  Disability,  thirty  (30)  days  after  a  Notice  of
          Termination is given  (provided that he shall not have returned to the
          performance of his duties on a full-time basis during such thirty (30)
          day period),  and (B) if his  employment is  terminated  for any other
          reason, the date specified in the Notice of Termination (which, in the
          case of a  Termination  for Cause,  shall not be less than thirty (30)
          days from the date such Notice of Termination is given).

     (c)  If, within thirty (30) days after any Notice of  Termination is given,
          the party  receiving  such Notice of  Termination  notifies  the other
          party that a dispute exists  concerning the  termination,  except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in which  case the  Date of  Termination  shall be the date
          specified in the Notice,  the Date of Termination shall be the date on
          which the  dispute is  finally  determined,  either by mutual  written
          agreement  of the parties,  by a binding  arbitration  award,  or by a
          final judgment,  order or decree of a court of competent  jurisdiction
          (the time for appeal  there from having  expired and no appeal  having
          been  perfected)  and provided  further  that the Date of  Termination
          shall be extended by a notice of dispute  only if such notice is given
          in good faith and the party giving such notice  pursues the resolution
          of  such  dispute  with  reasonable  diligence.   Notwithstanding  the
          pendency of any such  dispute,  the  Association  will continue to pay
          Executive his full  compensation in effect when the notice giving rise
          to the dispute was given (including,  but not limited to, Base Salary)
          and continue him as a  participant  in all  compensation,  benefit and
          insurance  plans in  which he was  participating  when the  notice  of
          dispute was given, until the dispute is finally resolved in accordance
          with this  Agreement.  Amounts paid under this Section are in addition
          to all other amounts due under this  Agreement and shall not be offset
          against or reduce any other amounts due under this Agreement.
<PAGE>

11.  NON-COMPETITION.

     (a)  Upon any termination of Executive's  employment  hereunder pursuant to
          an Event of  Termination  as provided  in Section 4 hereof,  Executive
          agrees not to compete  with the  Association  and/or the Company for a
          period of one (1) year following such termination in any city, town or
          county in which the  Association  and/or the  Company has an office or
          has filed an  application  for  regulatory  approval to  establish  an
          office,  determined  as of the  effective  date of  such  termination.
          Executive agrees that during such period and within said cities, towns
          and  counties,  Executive  shall not work for or  advise,  consult  or
          otherwise  serve  with,  directly  or  indirectly,  any  entity  whose
          business  materially  competes with the  depository,  lending or other
          business activities of the Association and/or the Company. The parties
          hereto,  recognizing  that  irreparable  injury  will  result  to  the
          Association and/or the Company, its business and property in the event
          of Executive's breach of this Subsection 11(a) agree that in the event
          of any such breach by Executive,  the  Association  and/or the Company
          will be  entitled,  in  addition  to any other  remedies  and  damages
          available,  to an  injunction  to  restrain  the  violation  hereof by
          Executive,   Executive's  partners,   agents,   servants,   employers,
          employees  and all  persons  acting for or with  Executive.  Executive
          represents  and  admits  that in the event of the  termination  of his
          employment  pursuant to Section 8 hereof,  Executive's  experience and
          capabilities  are such  that  Executive  can  obtain  employment  in a
          business  engaged in other lines and/or of a different nature than the
          Association  and/or the Company,  and that the enforcement of a remedy
          by way of  injunction  will  not  prevent  Executive  from  earning  a
          livelihood.  Nothing  herein  will be  construed  as  prohibiting  the
          Association  and/or  the  Company  from  pursuing  any other  remedies
          available  to the  Association  and/or the  Company for such breach or
          threatened breach, including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business   activities  and  plans  for  business   activities  of  the
          Association and affiliates thereof, as it may exist from time to time,
          is a  valuable,  special  and  unique  asset  of the  business  of the
          Association.  Executive  will  not,  during  or after  the term of his
          employment,  disclose any knowledge of the past,  present,  planned or
          considered  business  activities  of  the  Association  or  affiliates
          thereof to any  person,  firm,  corporation,  or other  entity for any
          reason or purpose whatsoever. Notwithstanding the foregoing, Executive
          may  disclose  any  knowledge of banking,  financial  and/or  economic
          principles,  concepts  or ideas  which are not solely and  exclusively
          derived from the business plans and activities of the Association.  In
          the event of a breach or  threatened  breach by the  Executive  of the
          provisions of this  Section,  the  Association  will be entitled to an
          injunction restraining Executive from disclosing, in whole or in part,
          the knowledge of the past,  present,  planned or  considered  business
          activities of the Association or affiliates thereof, or from rendering
          any services to any person,  firm,  corporation,  other entity to whom
          such  knowledge,  in  whole  or in  part,  has  been  disclosed  or is
          threatened  to be  disclosed.  Nothing  herein  will be  construed  as
          prohibiting the Association from pursuing any other remedies available
          to the Association for such breach or threatened breach, including the
          recovery of damages from Executive.

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
     check from the general  funds of the  Association.  The  Company,  however,
     guarantees  all payments and the  provision of all amounts and benefits due
     hereunder  to  Executive  and,  if such  payments  are not  timely  paid or
     provided by the  Association,  such amounts and  benefits  shall be paid or
     provided by the Company.

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
     and supersedes any prior  employment  agreement  between the Association or
     any  predecessor  of  the  Association  and  Executive,  except  that  this
     Agreement shall not affect or operate to reduce any benefit or compensation
     inuring to the Executive of a kind elsewhere provided. No provision of this
     Agreement  shall be  interpreted  to mean  that  Executive  is  subject  to
     receiving fewer benefits than those  available to him without  reference to
     this Agreement.

14.  NO ATTACHMENT.

     (a)  Except as  required by law,  no right to receive  payments  under this
          Agreement shall be subject to anticipation,  commutation,  alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or similar  process or  assignment  by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any such action shall be null, void, and of no effect.
<PAGE>

     (b)  This  Agreement  shall be binding  upon,  and inure to the benefit of,
          Executive,   the   Association,   the  Company  and  their  respective
          successors and assigns.

15.  MODIFICATION AND WAIVER.

     (a)  This  Agreement may not be modified or amended except by an instrument
          in writing signed by the parties hereto.

     (b)  No term or  condition of this  Agreement  shall be deemed to have been
          waived, nor shall there be any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged with such waiver or estoppel.  No such written waiver shall be
          deemed a continuing  waiver unless  specifically  stated therein,  and
          each  such  waiver  shall  operate  only  as to the  specific  term or
          condition  waived  and shall not  constitute  a waiver of such term or
          condition  for the future as to any act other  than that  specifically
          waived.





16.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
     provision,  is held  invalid,  such  invalidity  shall not affect any other
     provision  of this  Agreement  or any  part of such  provision  not held so
     invalid,  and each such other  provision and part thereof shall to the full
     extent consistent with law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
     convenience   of   reference   and  shall  not   control   the  meaning  or
     interpretation of any of the provisions of this Agreement.

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Oregon, unless
     otherwise  specified  herein;  provided,  however,  that in the  event of a
     conflict between the terms of this Agreement and any applicable  federal or
     state law or  regulation,  the  provisions of such law or regulation  shall
     prevail.

19.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
     Agreement shall be settled  exclusively by arbitration,  conducted before a
     panel of three  arbitrators  sitting in a location selected by the employee
     within one hundred  (100) miles from the  location of the  Association,  in
     accordance with the rules of the American  Arbitration  Association then in
     effect.  Judgment  may be  entered on the  arbitrator's  award in any court
     having jurisdiction; provided, however, that Executive shall be entitled to
     seek  specific  performance  of his  right  to be paid  until  the  Date of
     Termination during the pendency of any dispute or controversy arising under
     or in connection with this Agreement.

20.  PAYMENT OF LEGAL FEES.

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
     dispute or question of  interpretation  relating to this Agreement shall be
     paid or reimbursed by the  Association,  if successful  pursuant to a legal
     judgment, arbitration or settlement.

21.  INDEMNIFICATION.

     The Association shall provide Executive (including his heirs, executors and
     administrators)  with coverage  under a standard  directors'  and officers'
     liability  insurance  policy  at its  expense,  or in lieu  thereof,  shall
     indemnify  Executive (and his heirs,  executors and  administrators) to the
     fullest  extent  permitted  under law against all expenses and  liabilities
     reasonably incurred by him in connection with or arising out of any action,
     suite or  proceeding  in which he may be  involved  by reason of his having
     been a director or officer of the Association  (whether or not he continues
     to be a  directors  or officer at the time of  incurring  such  expenses or
     liabilities),  such expenses and liabilities to include, but not be limited
     to,  judgment,  court costs and attorneys'  fees and the cost of reasonable
     settlements.

22.  SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.

     The  Association  and the Company  shall require any successor or assignee,
     whether  direct  or  indirect,  by  purchase,   merger,   consolidation  or
     otherwise,  to all or  substantially  all the  business  or  assets  of the
     Association  or the Company,  expressly and  unconditionally  to assume and
     agree to perform the Association's or the Company's  obligations under this
     Agreement,  in the same manner and to the same extent that the  Association
     or the  Company  would be  required  to  perform if no such  succession  or
     assignment had taken place.

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
     executed and their seal to be affixed hereunto by a duly authorized officer
     or director,  and Executive has signed this Agreement,  all on the day of ,
     20 .


ATTEST:                                     KLAMATH FIRST FEDERAL SAVINGS
                                            AND LOAN ASSOCIATION



                                                     BY:
                  [SEAL]


ATTEST:                                     KLAMATH FIRST BANCORP, INC.



                                            BY:  ________________________

                  [SEAL]



WITNESS:




                                              ___________________________
                                              Walt Dodrill


<PAGE>



                                  EXHIBIT 10(h)

                              EMPLOYMENT AGREEMENT


     THIS  AGREEMENT  is made  effective  as of October 1, 2002,  by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"),  Klamath
Falls,  Oregon;   KLAMATH  FIRST  BANCORP,  INC.  (the  "Company"),   an  Oregon
corporation; and James E. Essany (the "Executive").

     WHEREAS,  the  Association  wishes to  assure  itself  of the  services  of
Executive for the period provided in this Agreement; and

     WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve as
Senior Vice  President of the  Association.  During said period,  Executive also
agrees to serve,  if elected,  as an officer of the Company or any subsidiary or
affiliate of the Company or the Association.

2.   TERMS AND DUTIES.

     (a)  The term of this Agreement shall be deemed to have commenced as of the
          date  first  above  written  and  shall   continue  for  a  period  of
          twenty-four  (24) full calendar months  thereafter.  Commencing on the
          first  anniversary  date,  and  continuing  at each  anniversary  date
          thereafter, the Board of Directors of the Association (the "Board") or
          its Compensation  Committee may extend the Agreement for an additional
          year. Prior to the extension of the Agreement as provided herein,  the
          Board of  Directors  of the  Association  will review the  Executive's
          performance  evaluation for purposes of determining  whether to extend
          the  Agreement,  and the  results  thereof  shall be  included  in the
          minutes of the Board's meeting.

     (b)  During the period of his employment  hereunder,  except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          his  business  time,  attention,  skill,  and efforts to the  faithful
          performance of his duties hereunder including  activities and services
          related  to  the   organization,   operation  and  management  of  the
          Association;  provided, however, that, with the approval of the Board,
          as  evidenced  by a  resolution  of such  Board,  from  time to  time,
          Executive may serve,  or continue to serve, on the boards of directors
          of,  and  hold  any  other  offices  or  positions  in,  companies  or
          organizations,  which, in such Board's judgment,  will not present any
          conflict of interest with the  Association,  or materially  affect the
          performance of Executive's duties pursuant to this Agreement.

<PAGE>

3.   COMPENSATION AND REIMBURSEMENT.

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Sections 1 and 2.
          The  Association  shall  pay  Executive  as  compensation  a salary of
          $85,000 per year ("Base Salary"). Effective November 1, 2002, the Base
          Salary  shall be  calculated  at $95,000 per year unless  subsequently
          changed  as  provided  below.  Such Base  Salary  shall be  payable in
          accordance with the customary  payroll  practices of the  Association.
          During the period of this Agreement,  Executive's Base Salary shall be
          reviewed  at least  annually;  the first such  review  will be made no
          later than one year from the date of this Agreement. Such review shall
          be conducted by the Board or its Compensation Committee, and the Board
          may increase  Executive's Base Salary.  In addition to the Base Salary
          provided in this Section 3(a), the Association shall provide Executive
          at no cost to Executive  with all such other  benefits as are provided
          uniformly to regular salaried employees of the Association.

     (b)  The Association  will provide  Executive with employee  benefit plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which Executive was  participating or otherwise  deriving benefit from
          immediately prior to the beginning of the term of this Agreement,  and
          the Association will not, without  Executive's  prior written consent,
          make any  changes in such plans,  arrangements  or  perquisites  which
          would  adversely  affect  Executive's  rights or benefits  thereunder.
          However,  changes  in   Association-sponsored   group  insurance  plan
          premiums,  deductibles,  co-payments,  and related  coverage limits or
          conditions  are excluded  from the prior  sentence for any such change
          which is  consistently  applied to or  available  to regular  salaried
          Association   employees.   Without  limiting  the  generality  of  the
          foregoing  provisions  of  this  Subsection  (b),  Executive  will  be
          entitled to  participate  in or receive  benefits  under any  employee
          benefit  plans  including,  but  not  limited  to,  retirement  plans,
          supplemental  retirement plans, pension plans,  profit-sharing  plans,
          health-and-accident  plan,  medical  coverage  or any  other  employee
          benefit plan or arrangement  made available by the  Association in the
          future to its senior executives and key management employees,  subject
          to, and on a basis consistent with, the terms,  conditions and overall
          administration  of such  plans  and  arrangements.  Executive  will be
          entitled  to  incentive  compensation  and  bonuses as provided in any
          plan,  or pursuant to any  arrangement  of the  Association,  in which
          Executive is eligible to  participate.  Nothing paid to the  Executive
          under  any such  plan or  arrangement  will be deemed to be in lieu of
          other  compensation  to which the  Executive  is  entitled  under this
          Agreement, except as provided under Section 5(e).

     (c)  In addition to the Base Salary  provided for by paragraph  (a) of this
          Section 3, the  Association  shall pay or reimburse  Executive for all
          reasonable  travel and other  obligations under this Agreement and may
          provide such additional  compensation in such form and such amounts as
          the Board may from time to time determine.
<PAGE>

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a)  Upon the  occurrence of an Event of  Termination  (as herein  defined)
          during the Executive's  term of employment  under this Agreement,  the
          provisions of this Section shall apply. As used in this Agreement,  an
          "Event of  Termination"  shall mean and include any one or more of the
          following:  (i) the  termination  by the  Association  of  Executive's
          full-time  employment  hereunder for any reason other than a Change in
          Control, as defined in Section 5(a) hereof;  disability, as defined in
          Section  6(a)  hereof;  death;  retirement,  as  defined  in Section 7
          hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
          resignation from the Association's  employ,  upon (A) unless consented
          to by the  Executive,  a  material  change  in  Executive's  function,
          duties,  or  responsibilities,  which change  would cause  Executive's
          position to become one of lesser responsibility,  importance, or scope
          from the position and attributes  thereof  described in Sections 1 and
          2,  above,  (any such  material  change  shall be deemed a  continuing
          breach of this Agreement),  (B) a relocation of Executive's  principal
          place of  employment  by more than 35 miles from its  location  at the
          effective  date of this  Agreement,  or a  material  reduction  in the
          benefits and  perquisites to Executive from those being provided as of
          the  effective  date  of  this  Agreement,   (C)  the  liquidation  or
          dissolution of the Association, or (D) any breach of this Agreement by
          the Association. Upon the occurrence of any event described in clauses
          (A), (B), (C), or (D), above,  Executive shall have the right to elect
          to terminate his employment  under this Agreement by resignation  upon
          not less than sixty  (60) days prior  written  notice  given  within a
          reasonable  period  of  time  not  to  exceed,  except  in  case  of a
          continuing breach, four calendar months after the event giving rise to
          said right to elect.

     (b)  Upon the occurrence of an Event of Termination,  the Association shall
          pay  Executive,  or,  in  the  event  of  his  subsequent  death,  his
          beneficiary or  beneficiaries,  or his estate,  as the case may be, as
          severance  pay or  liquidated  damages,  or both,  a sum  equal to the
          payments due to the Executive for the remaining term of the Agreement,
          including  Base  Salary,  bonuses,  and any  other  cash  or  deferred
          compensation  paid or to be paid  (including  the  value  of  employer
          contributions that would have been made on the Executive's behalf over
          the remaining  term of the agreement to any  tax-qualified  retirement
          plan sponsored by the Association as of the Date of  Termination),  to
          the Executive for the term of the Agreement provided, however, that if
          the  Association  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Association's capital
          to be reduced below its minimum  capital  requirements,  such payments
          shall be  deferred  until such time as the  Association  is in capital
          compliance.  All payments  made pursuant to this Section 4(b) shall be
          paid in substantially  equal monthly  installments  over the remaining
          term  of  this  Agreement   following  the  Executive's   termination;
          provided, however, that if the remaining term of the Agreement is less
          than  one  (1)  year   (determined  as  of  the  Executive's  Date  of
          Termination),  such  payments  and  benefits  shall  be  paid  to  the
          Executive in a lump sum within 30 days of the Date of Termination.

     (c)  Upon the occurrence of an Event of Termination,  the Association  will
          cause to be continued life,  medical,  dental and disability  coverage
          substantially  identical to the coverage maintained by the Association
          for Executive prior to his termination. Such coverage shall cease upon
          the expiration of the remaining term of this Agreement.

5.   CHANGE IN CONTROL.

     (a)  No benefit  shall be paid under this Section 5 unless there shall have
          occurred a Change in Control of the  Company or the  Association.  For
          purposes  of this  Agreement,  a "Change in Control" of the Company or
          the  Association  shall be deemed to occur if and when (a) an  offeror
          other than the  Company  purchases  shares of the common  stock of the
          Company or the Association  pursuant to a tender or exchange offer for
          such  shares,  (b) any person (as such term is used in Sections  13(d)
          and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
          beneficial owner, directly or indirectly, of securities of the Company
          or the  Association  representing  25% or more of the combined  voting
          power of the Company's then outstanding securities, (c) the membership
          of the board of directors of the Company or the Association changes as
          the result of a contested  election,  such that  individuals  who were
          directors at the beginning of any  twenty-four  month period  (whether
          commencing  before or after the effective  date of this  Agreement) do
          not  constitute a majority of the Board at the end of such period,  or
          (d)  shareholders of the Company or the Association  approve a merger,
          consolidation,  sale or disposition of all or substantially all of the
          Company's  or the  Association's  assets,  or a  plan  of  partial  or
          complete liquidation.

<PAGE>


     (b)  If any of the events  described in Section 5(a) hereof  constituting a
          Change in Control have occurred or the Board of the Association or the
          Company  has  determined  that  a  Change  in  Control  has  occurred,
          Executive  shall be entitled to the  benefits  provided in  paragraphs
          (c),  (d) and (e) of this  Section 5 upon his  subsequent  involuntary
          termination  of  employment  at any  time  during  the  term  of  this
          Agreement  (or  voluntary  termination  following  a Change of Control
          following  any  demotion,   loss  of  title,   office  or  significant
          authority,  reduction  in his  annual  compensation  or  benefits,  or
          relocation of his principal  place of employment by more than 35 miles
          from its location immediately prior to the Change in Control),  unless
          such  termination  is because of his death,  retirement as provided in
          Section 7, termination for Cause, or termination for Disability.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association shall pay Executive, or in
          the event of his subsequent  death, his beneficiary or  beneficiaries,
          or his  estate,  as the case may be, as  severance  pay or  liquidated
          damages,  or both,  a sum equal to 2.99  times the  Executive's  "base
          amount,"  within the  meaning of section  280G(b)(3)  of the  Internal
          Revenue Code of 1986 ("Code"),  as amended. Such payment shall be made
          in a lump sum paid  within  ten (10) days of the  Executive's  Date of
          Termination.

     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association will cause to be continued
          life, medical,  dental and disability coverage substantially identical
          to the coverage  maintained by the  Association for Executive prior to
          his severance. In addition, Executive shall be entitled to receive the
          value of  employer  contributions  that  would  have  been made on the
          Executive's  behalf over the  remaining  term of the  agreement to any
          tax-qualified  retirement  plan sponsored by the Association as of the
          Date of  Termination.  Such coverage and payments shall cease upon the
          expiration of thirty-six (36) months.

     (e)  Upon the  occurrence of a Change in Control,  the  Executive  shall be
          entitled to receive  benefits  due him under,  or  contributed  by the
          Company or the Association on his behalf,  pursuant to any retirement,
          incentive,  profit sharing,  bonus,  performance,  disability or other
          employee  benefit plan maintained by the Association or the Company on
          the  Executive's  behalf  to the  extent  that such  benefits  are not
          otherwise paid to the Executive upon a Change in Control.

     (f)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event that the  aggregate  payments or benefits to be made or afforded
          to the  Executive  under  this  Section  would be deemed to include an
          "excess  parachute  payment"  under  section  280G of the  Code,  such
          payments or benefits  shall be payable or provided to  Executive  over
          the  minimum  period  necessary  to reduce the  present  value of such
          payments  or benefits to an amount  which is one dollar  ($1.00)  less
          than  three (3) times the  Executive's  "base  amount"  under  section
          280G(b)(3) of the Code.
<PAGE>

6.       TERMINATION FOR DISABILITY.

     (a)  If the Executive shall become disabled as defined in the Association's
          then current  disability  plan (or, if no such plan is then in effect,
          if the  Executive  is  permanently  and  totally  disabled  within the
          meaning of Section  22(e)(3) of the Code as  determined by a physician
          designated by the Board),  the Association  may terminate  Executive's
          employment for "Disability."
<PAGE>

     (b)  Upon the  Executive's  termination of employment for  Disability,  the
          Association will pay Executive, as disability pay, a bi-weekly payment
          equal to  three-quarters  (3/4) of Executive's  bi-weekly rate of Base
          Salary on the effective  date of such  termination.  These  disability
          payments   shall   commence  on  the  effective  date  of  Executive's
          termination  and will  end on the  earlier  of (i) the date  Executive
          returns to the  full-time  employment of the  Association  in the same
          capacity as he was employed  prior to his  termination  for Disability
          and pursuant to an  employment  agreement  between  Executive  and the
          Association;   (ii)  Executive's   full-time   employment  by  another
          employer; (iii) Executive attaining the age of 65; or (iv) Executive's
          death;  or (v) the  expiration  of the  term of  this  Agreement.  The
          disability  pay shall be reduced by the  amount,  if any,  paid to the
          Executive  under  any  plan of the  Association  providing  disability
          benefits to the Executive.

     (c)  The Association will cause to be continued life,  medical,  dental and
          disability coverage substantially identical to the coverage maintained
          by  the  Association  for  Executive  prior  to  his  termination  for
          Disability. This coverage and payments shall cease upon the earlier of
          (i) the date  Executive  returns to the  full-time  employment  of the
          Association,  in the same  capacity  as he was  employed  prior to his
          termination  for  Disability  and pursuant to an employment  agreement
          between  Executive and the  Association;  (ii)  Executive's  full-time
          employment by another employer; (iii) Executive's attaining the age of
          65; or (iv) the  Executive's  death; or (v) the expiration of the term
          of this Agreement.

     (d)  Notwithstanding  the  foregoing,  there  will be no  reduction  in the
          compensation  otherwise  payable to Executive during any period during
          which  Executive is incapable of  performing  his duties  hereunder by
          reason of temporary disability.

7.   TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.

     Termination by the  Association of Executive  based on  "Retirement"  shall
     mean retirement at age 65 or in accordance with any retirement  arrangement
     established with Executive's  consent with respect to him. Upon termination
     of Executive upon  Retirement,  Executive shall be entitled to all benefits
     under any retirement plan of the Association or the Company and other plans
     to which Executive is a party.  Upon the death of the Executive  during the
     term of this Agreement, the Association shall pay to Executive's estate the
     compensation  due to the  Executive  through  the last day of the  calendar
     month in which his death occurred.
<PAGE>

8.   TERMINATION FOR CAUSE.

     For  purposes of this  Agreement,  "Termination  for Cause"  shall  include
     termination because of the Executive's personal  dishonesty,  incompetence,
     willful  misconduct,  breach of fiduciary duty involving  personal  profit,
     willful  violation  of any law,  rule,  or  regulation  (other than traffic
     violations  or  similar  offenses)  or  final  cease-and-desist  order,  or
     material  breach  of  any  provision  of  this   Agreement.   In  addition,
     "Termination for Cause" shall include  termination because of continuing or
     repeated  problems  with  the  Executive's   performance  or  conduct,  the
     Executive's  inattention to duties,  the refusal of the Executive to comply
     with the Association's or the Company's instructions,  policies or rules or
     other  conduct  of  the   Executive   which   reflects   adversely  on  the
     Association's  or the Company 's reputation  or operation.  For purposes of
     this Section,  no act, or the failure to act, on Executive's  part shall be
     "willful" unless done, or omitted to be done, not in good faith and without
     reasonable  belief that the action or omission was in the best  interest of
     the Association or its affiliates. Notwithstanding the foregoing, Executive
     shall  not be deemed to have been  terminated  for Cause  unless  and until
     there shall have been delivered to him a copy of a resolution  duly adopted
     by the affirmative  vote of not less than  three-fourths  of the members of
     the Board at a meeting of the Board called and held for that purpose (after
     reasonable  notice to Executive and an opportunity  for him,  together with
     counsel,  to be heard  before the  Board),  finding  that in the good faith
     opinion  of  the  Board,   Executive  was  guilty  of  conduct   justifying
     termination  for Cause and  specifying the reasons  thereof.  The Executive
     shall not have the right to receive  compensation or other benefits for any
     period after  termination for Cause. Any stock options granted to Executive
     under any stock option plan or any unvested  awards granted under any other
     stock benefit plan of the  Association,  the Company,  or any subsidiary or
     affiliate  thereof,  shall become null and void effective upon  Executive's
     receipt of Notice of  Termination  for Cause  pursuant to Section 9 hereof,
     and shall not be  exercisable  by Executive at any time  subsequent to such
     Termination for Cause.

9.   REQUIRED PROVISIONS.

     (a)  The Association may terminate Executive's  employment at any time, but
          any termination by the Association,  other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits under this  Agreement.  Executive shall not have the right to
          receive   compensation   or  other   benefits  for  any  period  after
          Termination for Cause as defined in Section 8 herein.

     (b)  If  Executive  is  suspended   and/or   temporarily   prohibited  from
          participating in the conduct of the Association's  affairs by a notice
          served  under  Section  8(e)(3)  or  (g)(1)  of  the  Federal  Deposit
          Insurance  Act  ("FDIA")  (12  U.S.C.   1818(e)(3)  and  (g)(1)),  the
          Association's obligations under the Agreement shall be suspended as of
          the date of service, unless stayed by appropriate proceedings.  If the
          charges in the notice  are  dismissed,  the  Association  may,  in its
          discretion, (i) pay Executive all or part of the compensation withheld
          while its contract  obligations  were suspended and (ii) reinstate (in
          whole or in part) any of its obligations that were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
          participating in the conduct of the Association's  affairs by an order
          issued  under  Section  8(e)(4)  or  (g)(1)  of the  FDIA  (12  U.S.C.
          1818(e)(4) or (g)(1)),  all obligations of the  Association  under the
          Agreement shall  terminate as of the effective date of the order,  but
          vested rights of the contracting parties shall not be affected.

     (d)  If the Association is in default (as defined in Section 3(x)(1) of the
          FDIA), all obligations  under this Agreement shall terminate as of the
          date of default, but this paragraph shall not affect any vested rights
          of the parties.

     (e)  All obligations  under this Agreement  shall be terminated  (except to
          the extent  determined that continuation of the Agreement is necessary
          for the continued  operation of the Association):  (i) by the Director
          of the Office of Thrift  Supervision  (the  "Director")  or his or her
          designee at the time the Federal Deposit Insurance  Corporation or the
          Resolution  Trust  Corporation  enters  into an  agreement  to provide
          assistance  to or on behalf  of the  Association  under the  authority
          contained in Section 13(c) of the FDIA or (ii) by the Director, or his
          or her designee at the time the Director or such  designee  approves a
          supervisory  merger to resolve  problems  related to  operation of the
          Association  or when the  Association is determined by the Director to
          be in an unsafe or unsound  condition.  Any rights of the parties that
          have already vested, however, shall not be affected by such action.

     (f)  Any  payments  made  to  Executive  pursuant  to  this  Agreement,  or
          otherwise,  are subject to and  conditioned  upon  compliance  with 12
          U.S.C. section 1828(k) and any regulations promulgated thereunder.
<PAGE>

10.      NOTICE.

     (a)  Any purported  termination by the Association or by Executive shall be
          communicated  by Notice of Termination to the other party hereto.  For
          purposes of this  Agreement,  a "Notice of  Termination"  shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of Executive's employment under the provision so indicated.

     (b)  "Date of  Termination"  shall mean (A) if  Executive's  employment  is
          terminated  for  Disability,  thirty  (30)  days  after  a  Notice  of
          Termination is given  (provided that he shall not have returned to the
          performance of his duties on a full-time basis during such thirty (30)
          day period),  and (B) if his  employment is  terminated  for any other
          reason, the date specified in the Notice of Termination (which, in the
          case of a  Termination  for Cause,  shall not be less than thirty (30)
          days from the date such Notice of Termination is given).

     (c)  If, within thirty (30) days after any Notice of  Termination is given,
          the party  receiving  such Notice of  Termination  notifies  the other
          party that a dispute exists  concerning the  termination,  except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in which  case the  Date of  Termination  shall be the date
          specified in the Notice,  the Date of Termination shall be the date on
          which the  dispute is  finally  determined,  either by mutual  written
          agreement  of the parties,  by a binding  arbitration  award,  or by a
          final judgment,  order or decree of a court of competent  jurisdiction
          (the time for appeal  there from having  expired and no appeal  having
          been  perfected)  and provided  further  that the Date of  Termination
          shall be extended by a notice of dispute  only if such notice is given
          in good faith and the party giving such notice  pursues the resolution
          of  such  dispute  with  reasonable  diligence.   Notwithstanding  the
          pendency of any such  dispute,  the  Association  will continue to pay
          Executive his full  compensation in effect when the notice giving rise
          to the dispute was given (including,  but not limited to, Base Salary)
          and continue him as a  participant  in all  compensation,  benefit and
          insurance  plans in  which he was  participating  when the  notice  of
          dispute was given, until the dispute is finally resolved in accordance
          with this  Agreement.  Amounts paid under this Section are in addition
          to all other amounts due under this  Agreement and shall not be offset
          against or reduce any other amounts due under this Agreement.


<PAGE>

11.  NON-COMPETITION.

     (a)  Upon any termination of Executive's  employment  hereunder pursuant to
          an Event of  Termination  as provided  in Section 4 hereof,  Executive
          agrees not to compete  with the  Association  and/or the Company for a
          period of one (1) year following such termination in any city, town or
          county in which the  Association  and/or the  Company has an office or
          has filed an  application  for  regulatory  approval to  establish  an
          office,  determined  as of the  effective  date of  such  termination.
          Executive agrees that during such period and within said cities, towns
          and  counties,  Executive  shall not work for or  advise,  consult  or
          otherwise  serve  with,  directly  or  indirectly,  any  entity  whose
          business  materially  competes with the  depository,  lending or other
          business activities of the Association and/or the Company. The parties
          hereto,  recognizing  that  irreparable  injury  will  result  to  the
          Association and/or the Company, its business and property in the event
          of Executive's breach of this Subsection 11(a) agree that in the event
          of any such breach by Executive,  the  Association  and/or the Company
          will be  entitled,  in  addition  to any other  remedies  and  damages
          available,  to an  injunction  to  restrain  the  violation  hereof by
          Executive,   Executive's  partners,   agents,   servants,   employers,
          employees  and all  persons  acting for or with  Executive.  Executive
          represents  and  admits  that in the event of the  termination  of his
          employment  pursuant to Section 8 hereof,  Executive's  experience and
          capabilities  are such  that  Executive  can  obtain  employment  in a
          business  engaged in other lines and/or of a different nature than the
          Association  and/or the Company,  and that the enforcement of a remedy
          by way of  injunction  will  not  prevent  Executive  from  earning  a
          livelihood.  Nothing  herein  will be  construed  as  prohibiting  the
          Association  and/or  the  Company  from  pursuing  any other  remedies
          available  to the  Association  and/or the  Company for such breach or
          threatened breach, including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business   activities  and  plans  for  business   activities  of  the
          Association and affiliates thereof, as it may exist from time to time,
          is a  valuable,  special  and  unique  asset  of the  business  of the
          Association.  Executive  will  not,  during  or after  the term of his
          employment,  disclose any knowledge of the past,  present,  planned or
          considered  business  activities  of  the  Association  or  affiliates
          thereof to any  person,  firm,  corporation,  or other  entity for any
          reason or purpose whatsoever. Notwithstanding the foregoing, Executive
          may  disclose  any  knowledge of banking,  financial  and/or  economic
          principles,  concepts  or ideas  which are not solely and  exclusively
          derived from the business plans and activities of the Association.  In
          the event of a breach or  threatened  breach by the  Executive  of the
          provisions of this  Section,  the  Association  will be entitled to an
          injunction restraining Executive from disclosing, in whole or in part,
          the knowledge of the past,  present,  planned or  considered  business
          activities of the Association or affiliates thereof, or from rendering
          any services to any person,  firm,  corporation,  other entity to whom
          such  knowledge,  in  whole  or in  part,  has  been  disclosed  or is
          threatened  to be  disclosed.  Nothing  herein  will be  construed  as
          prohibiting the Association from pursuing any other remedies available
          to the Association for such breach or threatened breach, including the
          recovery of damages from Executive.

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
     check from the general  funds of the  Association.  The  Company,  however,
     guarantees  all payments and the  provision of all amounts and benefits due
     hereunder  to  Executive  and,  if such  payments  are not  timely  paid or
     provided by the  Association,  such amounts and  benefits  shall be paid or
     provided by the Company.

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
     and supersedes any prior  employment  agreement  between the Association or
     any  predecessor  of  the  Association  and  Executive,  except  that  this
     Agreement shall not affect or operate to reduce any benefit or compensation
     inuring to the Executive of a kind elsewhere provided. No provision of this
     Agreement  shall be  interpreted  to mean  that  Executive  is  subject  to
     receiving fewer benefits than those  available to him without  reference to
     this Agreement.

14.  NO ATTACHMENT.

     (a) Except as  required  by law,  no right to receive  payments  under this
     Agreement shall be subject to anticipation,  commutation, alienation, sale,
     assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
     attachment, levy, or similar process or assignment by operation of law, and
     any attempt,  voluntary or involuntary,  to affect any such action shall be
     null, void, and of no effect.
<PAGE>

     (b)  This  Agreement  shall be binding  upon,  and inure to the benefit of,
          Executive,   the   Association,   the  Company  and  their  respective
          successors and assigns.

15.  MODIFICATION AND WAIVER.

     (a)  This  Agreement may not be modified or amended except by an instrument
          in writing signed by the parties hereto.

     (b)  No term or  condition of this  Agreement  shall be deemed to have been
          waived, nor shall there by any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged with such waiver or estoppel.  No such written waiver shall be
          deemed a continuing  waiver unless  specifically  stated therein,  and
          each  such  waiver  shall  operate  only  as to the  specific  term or
          condition  waived  and shall not  constitute  a waiver of such term or
          condition  for the future as to any act other  than that  specifically
          waived.

16.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
     provision,  is held  invalid,  such  invalidity  shall not affect any other
     provision  of this  Agreement  or any  part of such  provision  not held so
     invalid,  and each such other  provision and part thereof shall to the full
     extent consistent with law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
     convenience   of   reference   and  shall  not   control   the  meaning  or
     interpretation of any of the provisions of this Agreement.
<PAGE>

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Oregon, unless
     otherwise  specified  herein;  provided,  however,  that in the  event of a
     conflict between the terms of this Agreement and any applicable  federal or
     state law or  regulation,  the  provisions of such law or regulation  shall
     prevail.

19.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
     Agreement shall be settled  exclusively by arbitration,  conducted before a
     panel of three arbitrators  sitting in a location selected by the Executive
     within one hundred  (100) miles from the  location of the  Association,  in
     accordance with the rules of the American  Arbitration  Association then in
     effect.  Judgment  may be  entered on the  arbitrator's  award in any court
     having jurisdiction; provided, however, that Executive shall be entitled to
     seek  specific  performance  of his  right  to be paid  until  the  Date of
     Termination during the pendency of any dispute or controversy arising under
     or in connection with this Agreement.
<PAGE>

20.  PAYMENT OF LEGAL FEES.

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
     dispute or question of  interpretation  relating to this Agreement shall be
     paid or reimbursed by the  Association,  if successful  pursuant to a legal
     judgment, arbitration or settlement.

21.  INDEMNIFICATION.

     The Association shall provide Executive (including his heirs, executors and
     administrators)  with coverage  under a standard  directors'  and officers'
     liability  insurance  policy  at its  expense,  or in lieu  thereof,  shall
     indemnify  Executive (and his heirs,  executors and  administrators) to the
     fullest  extent  permitted  under law against all expenses and  liabilities
     reasonably incurred by him in connection with or arising out of any action,
     suite or  proceeding  in which he may be  involved  by reason of his having
     been a director or officer of the Association  (whether or not he continues
     to be a  directors  or officer at the time of  incurring  such  expenses or
     liabilities),  such expenses and liabilities to include, but not be limited
     to,  judgment,  court costs and attorneys'  fees and the cost of reasonable
     settlements.

22.  SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.

     The  Association  and the Company  shall require any successor or assignee,
     whether  direct  or  indirect,  by  purchase,   merger,   consolidation  or
     otherwise,  to all or  substantially  all the  business  or  assets  of the
     Association  or the Company,  expressly and  unconditionally  to assume and
     agree to perform the Association's or the Company's  obligations under this
     Agreement,  in the same manner and to the same extent that the  Association
     or the  Company  would be  required  to  perform if no such  succession  or
     assignment had taken place.

<PAGE>




     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
     executed by a duly  authorized  officer or director of the  Association and
     the Company,  and Executive has signed this Agreement,  all on the day of ,
     20 .


                                             KLAMATH FIRST FEDERAL SAVINGS
                                             AND LOAN ASSOCIATION



                                             BY:
Kermit K. Houser, President



                                             KLAMATH FIRST BANCORP, INC.



                                             BY:____________________________
                                                Kermit K. Houser, President

WITNESS:



______________________                         _____________________________
                                               James E. Essany


<PAGE>

                                  EXHIBIT 10(i)

                              EMPLOYMENT AGREEMENT


     THIS  AGREEMENT  is made  effective  as of October 1, 2002,  by and between
KLAMATH FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Association"),  Klamath
Falls,  Oregon;   KLAMATH  FIRST  BANCORP,  INC.  (the  "Company"),   an  Oregon
corporation; and Nina G. Drake (the "Executive").

     WHEREAS,  the  Association  wishes to  assure  itself  of the  services  of
Executive for the period provided in this Agreement; and

     WHEREAS, the Executive is willing to serve in the employ of the Association
on a full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of her employment hereunder, Executive agrees to serve as
Vice President of the Association.  During said period, Executive also agrees to
serve,  if elected,  as an officer of the Company or any subsidiary or affiliate
of the Company or the Association.

2.   TERMS AND DUTIES.

     (a)  The term of this Agreement shall be deemed to have commenced as of the
          date  first  above  written  and  shall   continue  for  a  period  of
          twenty-four  (24) full calendar months  thereafter.  Commencing on the
          first  anniversary  date,  and  continuing  at each  anniversary  date
          thereafter, the Board of Directors of the Association (the "Board") or
          its Compensation  Committee may extend the Agreement for an additional
          year. Prior to the extension of the Agreement as provided herein,  the
          Board of  Directors  of the  Association  will review the  Executive's
          performance  evaluation for purposes of determining  whether to extend
          the  Agreement,  and the  results  thereof  shall be  included  in the
          minutes of the Board's meeting.

     (b)  During the period of her employment  hereunder,  except for periods of
          absence  occasioned  by  illness,  reasonable  vacation  periods,  and
          reasonable leaves of absence, Executive shall devote substantially all
          her  business  time,  attention,  skill,  and efforts to the  faithful
          performance of her duties hereunder including  activities and services
          related  to  the   organization,   operation  and  management  of  the
          Association;  provided, however, that, with the approval of the Board,
          as  evidenced  by a  resolution  of such  Board,  from  time to  time,
          Executive may serve,  or continue to serve, on the boards of directors
          of,  and  hold  any  other  offices  or  positions  in,  companies  or
          organizations,  which, in such Board's judgment,  will not present any
          conflict of interest with the  Association,  or materially  affect the
          performance of Executive's duties pursuant to this Agreement.

<PAGE>

     3.   COMPENSATION AND REIMBURSEMENT.

     (a)  The  compensation  specified under this Agreement shall constitute the
          salary and benefits paid for the duties described in Sections 1 and 2.
          The  Association  shall  pay  Executive  as  compensation  a salary of
          $90,000 per year ("Base Salary"). Effective December 1, 2002, the Base
          Salary  shall be  calculated  at $99,000 per year unless  subsequently
          changed  as  provided  below.  Such Base  Salary  shall be  payable in
          accordance with the customary  payroll  practices of the  Association.
          During the period of this Agreement,  Executive's Base Salary shall be
          reviewed  at least  annually;  the first such  review  will be made no
          later than one year from the date of this Agreement. Such review shall
          be conducted by the Board or its Compensation Committee, and the Board
          may increase  Executive's Base Salary.  In addition to the Base Salary
          provided in this Section 3(a), the Association shall provide Executive
          at no cost to Executive  with all such other  benefits as are provided
          uniformly to regular salaried employees of the Association.

     (b)  The Association  will provide  Executive with employee  benefit plans,
          arrangements  and  perquisites  substantially  equivalent  to those in
          which Executive was  participating or otherwise  deriving benefit from
          immediately prior to the beginning of the term of this Agreement,  and
          the Association will not, without  Executive's  prior written consent,
          make any  changes in such plans,  arrangements  or  perquisites  which
          would  adversely  affect  Executive's  rights or benefits  thereunder.
          However,  changes  in   Association-sponsored   group  insurance  plan
          premiums,  deductibles,  co-payments,  and related  coverage limits or
          conditions  are excluded  from the prior  sentence for any such change
          which is  consistently  applied to or  available  to regular  salaried
          Association   employees.   Without  limiting  the  generality  of  the
          foregoing  provisions  of  this  Subsection  (b),  Executive  will  be
          entitled to  participate  in or receive  benefits  under any  employee
          benefit  plans  including,  but  not  limited  to,  retirement  plans,
          supplemental  retirement plans, pension plans,  profit-sharing  plans,
          health-and-accident  plan,  medical  coverage  or any  other  employee
          benefit plan or arrangement  made available by the  Association in the
          future to its senior executives and key management employees,  subject
          to, and on a basis consistent with, the terms,  conditions and overall
          administration  of such  plans  and  arrangements.  Executive  will be
          entitled  to  incentive  compensation  and  bonuses as provided in any
          plan,  or pursuant to any  arrangement  of the  Association,  in which
          Executive is eligible to  participate.  Nothing paid to the  Executive
          under  any such  plan or  arrangement  will be deemed to be in lieu of
          other  compensation  to which the  Executive  is  entitled  under this
          Agreement, except as provided under Section 5(e).

     (c)  In addition to the Base Salary  provided for by paragraph  (a) of this
          Section 3, the  Association  shall pay or reimburse  Executive for all
          reasonable  travel and other  obligations under this Agreement and may
          provide such additional  compensation in such form and such amounts as
          the Board may from time to time determine.
<PAGE>

     4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a)  Upon the  occurrence of an Event of  Termination  (as herein  defined)
          during the Executive's  term of employment  under this Agreement,  the
          provisions of this Section shall apply. As used in this Agreement,  an
          "Event of  Termination"  shall mean and include any one or more of the
          following:  (i) the  termination  by the  Association  of  Executive's
          full-time  employment  hereunder for any reason other than a Change in
          Control, as defined in Section 5(a) hereof;  disability, as defined in
          Section  6(a)  hereof;  death;  retirement,  as  defined  in Section 7
          hereof; or for Cause, as defined in Section 8 hereof; (ii) Executive's
          resignation from the Association's  employ,  upon (A) unless consented
          to by the  Executive,  a  material  change  in  Executive's  function,
          duties,  or  responsibilities,  which change  would cause  Executive's
          position to become one of lesser responsibility,  importance, or scope
          from the position and attributes  thereof  described in Sections 1 and
          2,  above,  (any such  material  change  shall be deemed a  continuing
          breach of this Agreement),  (B) a relocation of Executive's  principal
          place of  employment  by more than 35 miles from its  location  at the
          effective  date of this  Agreement,  or a  material  reduction  in the
          benefits and  perquisites to Executive from those being provided as of
          the  effective  date  of  this  Agreement,   (C)  the  liquidation  or
          dissolution of the Association, or (D) any breach of this Agreement by
          the Association. Upon the occurrence of any event described in clauses
          (A), (B), (C), or (D), above,  Executive shall have the right to elect
          to terminate her employment  under this Agreement by resignation  upon
          not less than sixty  (60) days prior  written  notice  given  within a
          reasonable  period  of  time  not  to  exceed,  except  in  case  of a
          continuing breach, four calendar months after the event giving rise to
          said right to elect.

     (b)  Upon the occurrence of an Event of Termination,  the Association shall
          pay  Executive,  or,  in  the  event  of  her  subsequent  death,  her
          beneficiary or  beneficiaries,  or her estate,  as the case may be, as
          severance  pay or  liquidated  damages,  or both,  a sum  equal to the
          payments due to the Executive for the remaining term of the Agreement,
          including  Base  Salary,  bonuses,  and any  other  cash  or  deferred
          compensation  paid or to be paid  (including  the  value  of  employer
          contributions that would have been made on the Executive's behalf over
          the remaining  term of the agreement to any  tax-qualified  retirement
          plan sponsored by the Association as of the Date of  Termination),  to
          the Executive for the term of the Agreement provided, however, that if
          the  Association  is  not  in  compliance  with  its  minimum  capital
          requirements or if such payments would cause the Association's capital
          to be reduced below its minimum  capital  requirements,  such payments
          shall be  deferred  until such time as the  Association  is in capital
          compliance.  All payments  made pursuant to this Section 4(b) shall be
          paid in substantially  equal monthly  installments  over the remaining
          term  of  this  Agreement   following  the  Executive's   termination;
          provided, however, that if the remaining term of the Agreement is less
          than  one  (1)  year   (determined  as  of  the  Executive's  Date  of
          Termination),  such  payments  and  benefits  shall  be  paid  to  the
          Executive in a lump sum within 30 days of the Date of Termination.

     (c)  Upon the occurrence of an Event of Termination,  the Association  will
          cause to be continued life,  medical,  dental and disability  coverage
          substantially  identical to the coverage maintained by the Association
          for Executive prior to her termination. Such coverage shall cease upon
          the expiration of the remaining term of this Agreement.

5.   CHANGE IN CONTROL.

     (a)  No benefit  shall be paid under this Section 5 unless there shall have
          occurred a Change in Control of the  Company or the  Association.  For
          purposes  of this  Agreement,  a "Change in Control" of the Company or
          the  Association  shall be deemed to occur if and when (a) an  offeror
          other than the  Company  purchases  shares of the common  stock of the
          Company or the Association  pursuant to a tender or exchange offer for
          such  shares,  (b) any person (as such term is used in Sections  13(d)
          and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes the
          beneficial owner, directly or indirectly, of securities of the Company
          or the  Association  representing  25% or more of the combined  voting
          power of the Company's then outstanding securities, (c) the membership
          of the board of directors of the Company or the Association changes as
          the result of a contested  election,  such that  individuals  who were
          directors at the beginning of any  twenty-four  month period  (whether
          commencing  before or after the effective  date of this  Agreement) do
          not  constitute a majority of the Board at the end of such period,  or
          (d)  shareholders of the Company or the Association  approve a merger,
          consolidation,  sale or disposition of all or substantially all of the
          Company's  or the  Association's  assets,  or a  plan  of  partial  or
          complete liquidation.

<PAGE>

     (b)  If any of the events  described in Section 5(a) hereof  constituting a
          Change in Control have occurred or the Board of the Association or the
          Company  has  determined  that  a  Change  in  Control  has  occurred,
          Executive  shall be entitled to the  benefits  provided in  paragraphs
          (c),  (d) and (e) of this  Section 5 upon her  subsequent  involuntary
          termination  of  employment  at any  time  during  the  term  of  this
          Agreement  (or  voluntary  termination  following  a Change of Control
          following  any  demotion,   loss  of  title,   office  or  significant
          authority,  reduction  in her  annual  compensation  or  benefits,  or
          relocation of her principal  place of employment by more than 35 miles
          from its location immediately prior to the Change in Control),  unless
          such  termination  is because of her death,  retirement as provided in
          Section 7, termination for Cause, or termination for Disability.

     (c)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association shall pay Executive, or in
          the event of her subsequent  death, her beneficiary or  beneficiaries,
          or her  estate,  as the case may be, as  severance  pay or  liquidated
          damages,  or both,  a sum equal to 2.99  times the  Executive's  "base
          amount,"  within the  meaning of section  280G(b)(3)  of the  Internal
          Revenue Code of 1986 ("Code"),  as amended. Such payment shall be made
          in a lump sum paid  within  ten (10) days of the  Executive's  Date of
          Termination.

     (d)  Upon the occurrence of a Change in Control followed by the Executive's
          termination of employment,  the Association will cause to be continued
          life, medical,  dental and disability coverage substantially identical
          to the coverage  maintained by the  Association for Executive prior to
          her severance. In addition, Executive shall be entitled to receive the
          value of  employer  contributions  that  would  have  been made on the
          Executive's  behalf over the  remaining  term of the  agreement to any
          tax-qualified  retirement  plan sponsored by the Association as of the
          Date of  Termination.  Such coverage and payments shall cease upon the
          expiration of thirty-six (36) months.

     (e)  Upon the  occurrence of a Change in Control,  the  Executive  shall be
          entitled to receive  benefits  due her under,  or  contributed  by the
          Company or the Association on her behalf,  pursuant to any retirement,
          incentive,  profit sharing,  bonus,  performance,  disability or other
          employee  benefit plan maintained by the Association or the Company on
          the  Executive's  behalf  to the  extent  that such  benefits  are not
          otherwise paid to the Executive upon a Change in Control.

     (f)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
          event that the  aggregate  payments or benefits to be made or afforded
          to the  Executive  under  this  Section  would be deemed to include an
          "excess  parachute  payment"  under  section  280G of the  Code,  such
          payments or benefits  shall be payable or provided to  Executive  over
          the  minimum  period  necessary  to reduce the  present  value of such
          payments  or benefits to an amount  which is one dollar  ($1.00)  less
          than  three (3) times the  Executive's  "base  amount"  under  section
          280G(b)(3) of the Code.
<PAGE>

6.   TERMINATION FOR DISABILITY.

     (a)  If the Executive shall become disabled as defined in the Association's
          then current  disability  plan (or, if no such plan is then in effect,
          if the  Executive  is  permanently  and  totally  disabled  within the
          meaning of Section  22(e)(3) of the Code as  determined by a physician
          designated by the Board),  the Association  may terminate  Executive's
          employment for "Disability."

<PAGE>

     (b)  Upon the  Executive's  termination of employment for  Disability,  the
          Association will pay Executive, as disability pay, a bi-weekly payment
          equal to  three-quarters  (3/4) of Executive's  bi-weekly rate of Base
          Salary on the effective  date of such  termination.  These  disability
          payments   shall   commence  on  the  effective  date  of  Executive's
          termination  and will  end on the  earlier  of (i) the date  Executive
          returns to the  full-time  employment of the  Association  in the same
          capacity as she was employed prior to her  termination  for Disability
          and pursuant to an  employment  agreement  between  Executive  and the
          Association;   (ii)  Executive's   full-time   employment  by  another
          employer; (iii) Executive attaining the age of 65; or (iv) Executive's
          death;  or (v) the  expiration  of the  term of  this  Agreement.  The
          disability  pay shall be reduced by the  amount,  if any,  paid to the
          Executive  under  any  plan of the  Association  providing  disability
          benefits to the Executive.

     (c)  The Association will cause to be continued life,  medical,  dental and
          disability coverage substantially identical to the coverage maintained
          by  the  Association  for  Executive  prior  to  her  termination  for
          Disability. This coverage and payments shall cease upon the earlier of
          (i) the date  Executive  returns to the  full-time  employment  of the
          Association,  in the same  capacity as she was  employed  prior to her
          termination  for  Disability  and pursuant to an employment  agreement
          between  Executive and the  Association;  (ii)  Executive's  full-time
          employment by another employer; (iii) Executive's attaining the age of
          65; or (iv) the  Executive's  death; or (v) the expiration of the term
          of this Agreement.

     (d)  Notwithstanding  the  foregoing,  there  will be no  reduction  in the
          compensation  otherwise  payable to Executive during any period during
          which  Executive is incapable of  performing  her duties  hereunder by
          reason of temporary disability.

7.   TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE.

     Termination by the  Association of Executive  based on  "Retirement"  shall
     mean retirement at age 65 or in accordance with any retirement  arrangement
     established with Executive's  consent with respect to her. Upon termination
     of Executive upon  Retirement,  Executive shall be entitled to all benefits
     under any retirement plan of the Association or the Company and other plans
     to which Executive is a party.  Upon the death of the Executive  during the
     term of this Agreement, the Association shall pay to Executive's estate the
     compensation  due to the  Executive  through  the last day of the  calendar
     month in which her death occurred.
<PAGE>

8.   TERMINATION FOR CAUSE.

     For  purposes of this  Agreement,  "Termination  for Cause"  shall  include
     termination because of the Executive's personal  dishonesty,  incompetence,
     willful  misconduct,  breach of fiduciary duty involving  personal  profit,
     willful  violation  of any law,  rule,  or  regulation  (other than traffic
     violations  or  similar  offenses)  or  final  cease-and-desist  order,  or
     material  breach  of  any  provision  of  this   Agreement.   In  addition,
     "Termination for Cause" shall include  termination because of continuing or
     repeated  problems  with  the  Executive's   performance  or  conduct,  the
     Executive's  inattention to duties,  the refusal of the Executive to comply
     with the Association's or the Company's instructions,  policies or rules or
     other  conduct  of  the   Executive   which   reflects   adversely  on  the
     Association's  or the Company 's reputation  or operation.  For purposes of
     this Section,  no act, or the failure to act, on Executive's  part shall be
     "willful" unless done, or omitted to be done, not in good faith and without
     reasonable  belief that the action or omission was in the best  interest of
     the Association or its affiliates. Notwithstanding the foregoing, Executive
     shall  not be deemed to have been  terminated  for Cause  unless  and until
     there shall have been delivered to her a copy of a resolution  duly adopted
     by the affirmative  vote of not less than  three-fourths  of the members of
     the Board at a meeting of the Board called and held for that purpose (after
     reasonable  notice to Executive and an opportunity  for her,  together with
     counsel,  to be heard  before the  Board),  finding  that in the good faith
     opinion  of  the  Board,   Executive  was  guilty  of  conduct   justifying
     termination  for Cause and  specifying the reasons  thereof.  The Executive
     shall not have the right to receive  compensation or other benefits for any
     period after  termination for Cause. Any stock options granted to Executive
     under any stock option plan or any unvested  awards granted under any other
     stock benefit plan of the  Association,  the Company,  or any subsidiary or
     affiliate  thereof,  shall become null and void effective upon  Executive's
     receipt of Notice of  Termination  for Cause  pursuant to Section 9 hereof,
     and shall not be  exercisable  by Executive at any time  subsequent to such
     Termination for Cause.

9.   REQUIRED PROVISIONS.

     (a)  The Association may terminate Executive's  employment at any time, but
          any termination by the Association,  other than Termination for Cause,
          shall  not  prejudice  Executive's  right  to  compensation  or  other
          benefits under this  Agreement.  Executive shall not have the right to
          receive   compensation   or  other   benefits  for  any  period  after
          Termination for Cause as defined in Section 8 herein.

     (b)  If  Executive  is  suspended   and/or   temporarily   prohibited  from
          participating in the conduct of the Association's  affairs by a notice
          served  under  Section  8(e)(3)  or  (g)(1)  of  the  Federal  Deposit
          Insurance  Act  ("FDIA")  (12  U.S.C.   1818(e)(3)  and  (g)(1)),  the
          Association's obligations under the Agreement shall be suspended as of
          the date of service, unless stayed by appropriate proceedings.  If the
          charges in the notice  are  dismissed,  the  Association  may,  in its
          discretion, (i) pay Executive all or part of the compensation withheld
          while its contract  obligations  were suspended and (ii) reinstate (in
          whole or in part) any of its obligations that were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
          participating in the conduct of the Association's  affairs by an order
          issued  under  Section  8(e)(4)  or  (g)(1)  of the  FDIA  (12  U.S.C.
          1818(e)(4) or (g)(1)),  all obligations of the  Association  under the
          Agreement shall  terminate as of the effective date of the order,  but
          vested rights of the contracting parties shall not be affected.

     (d)  If the Association is in default (as defined in Section 3(x)(1) of the
          FDIA), all obligations  under this Agreement shall terminate as of the
          date of default, but this paragraph shall not affect any vested rights
          of the parties.

     (e)  All obligations  under this Agreement  shall be terminated  (except to
          the extent  determined that continuation of the Agreement is necessary
          for the continued  operation of the Association):  (i) by the Director
          of the Office of Thrift  Supervision  (the  "Director")  or his or her
          designee at the time the Federal Deposit Insurance  Corporation or the
          Resolution  Trust  Corporation  enters  into an  agreement  to provide
          assistance  to or on behalf  of the  Association  under the  authority
          contained in Section 13(c) of the FDIA or (ii) by the Director, or his
          or her designee at the time the Director or such  designee  approves a
          supervisory  merger to resolve  problems  related to  operation of the
          Association  or when the  Association is determined by the Director to
          be in an unsafe or unsound  condition.  Any rights of the parties that
          have already vested, however, shall not be affected by such action.

     (f)  Any  payments  made  to  Executive  pursuant  to  this  Agreement,  or
          otherwise,  are subject to and  conditioned  upon  compliance  with 12
          U.S.C. section 1828(k) and any regulations promulgated thereunder.

<PAGE>

10.  NOTICE.

     (a)  Any purported  termination by the Association or by Executive shall be
          communicated  by Notice of Termination to the other party hereto.  For
          purposes of this  Agreement,  a "Notice of  Termination"  shall mean a
          written notice which shall indicate the specific termination provision
          in this Agreement relied upon and shall set forth in reasonable detail
          the facts and circumstances claimed to provide a basis for termination
          of Executive's employment under the provision so indicated.

     (b)  "Date of  Termination"  shall mean (A) if  Executive's  employment  is
          terminated  for  Disability,  thirty  (30)  days  after  a  Notice  of
          Termination is given (provided that she shall not have returned to the
          performance of her duties on a full-time basis during such thirty (30)
          day period),  and (B) if her  employment is  terminated  for any other
          reason, the date specified in the Notice of Termination (which, in the
          case of a  Termination  for Cause,  shall not be less than thirty (30)
          days from the date such Notice of Termination is given).

     (c)  If, within thirty (30) days after any Notice of  Termination is given,
          the party  receiving  such Notice of  Termination  notifies  the other
          party that a dispute exists  concerning the  termination,  except upon
          the occurrence of a Change in Control and voluntary termination by the
          Executive  in which  case the  Date of  Termination  shall be the date
          specified in the Notice,  the Date of Termination shall be the date on
          which the  dispute is  finally  determined,  either by mutual  written
          agreement  of the parties,  by a binding  arbitration  award,  or by a
          final judgment,  order or decree of a court of competent  jurisdiction
          (the time for appeal  there from having  expired and no appeal  having
          been  perfected)  and provided  further  that the Date of  Termination
          shall be extended by a notice of dispute  only if such notice is given
          in good faith and the party giving such notice  pursues the resolution
          of  such  dispute  with  reasonable  diligence.   Notwithstanding  the
          pendency of any such  dispute,  the  Association  will continue to pay
          Executive her full  compensation in effect when the notice giving rise
          to the dispute was given (including,  but not limited to, Base Salary)
          and continue her as a  participant  in all  compensation,  benefit and
          insurance  plans in which  she was  participating  when the  notice of
          dispute was given, until the dispute is finally resolved in accordance
          with this  Agreement.  Amounts paid under this Section are in addition
          to all other amounts due under this  Agreement and shall not be offset
          against or reduce any other amounts due under this Agreement.
<PAGE>

11.  NON-COMPETITION.

     (a)  Upon any termination of Executive's  employment  hereunder pursuant to
          an Event of  Termination  as provided  in Section 4 hereof,  Executive
          agrees not to compete  with the  Association  and/or the Company for a
          period of one (1) year following such termination in any city, town or
          county in which the  Association  and/or the  Company has an office or
          has filed an  application  for  regulatory  approval to  establish  an
          office,  determined  as of the  effective  date of  such  termination.
          Executive agrees that during such period and within said cities, towns
          and  counties,  Executive  shall not work for or  advise,  consult  or
          otherwise  serve  with,  directly  or  indirectly,  any  entity  whose
          business  materially  competes with the  depository,  lending or other
          business activities of the Association and/or the Company. The parties
          hereto,  recognizing  that  irreparable  injury  will  result  to  the
          Association and/or the Company, its business and property in the event
          of Executive's breach of this Subsection 11(a) agree that in the event
          of any such breach by Executive,  the  Association  and/or the Company
          will be  entitled,  in  addition  to any other  remedies  and  damages
          available,  to an  injunction  to  restrain  the  violation  hereof by
          Executive,   Executive's  partners,   agents,   servants,   employers,
          employees  and all  persons  acting for or with  Executive.  Executive
          represents  and  admits  that in the event of the  termination  of her
          employment  pursuant to Section 8 hereof,  Executive's  experience and
          capabilities  are such  that  Executive  can  obtain  employment  in a
          business  engaged in other lines and/or of a different nature than the
          Association  and/or the Company,  and that the enforcement of a remedy
          by way of  injunction  will  not  prevent  Executive  from  earning  a
          livelihood.  Nothing  herein  will be  construed  as  prohibiting  the
          Association  and/or  the  Company  from  pursuing  any other  remedies
          available  to the  Association  and/or the  Company for such breach or
          threatened breach, including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
          business   activities  and  plans  for  business   activities  of  the
          Association and affiliates thereof, as it may exist from time to time,
          is a  valuable,  special  and  unique  asset  of the  business  of the
          Association.  Executive  will  not,  during  or after  the term of her
          employment,  disclose any knowledge of the past,  present,  planned or
          considered  business  activities  of  the  Association  or  affiliates
          thereof to any  person,  firm,  corporation,  or other  entity for any
          reason or purpose whatsoever. Notwithstanding the foregoing, Executive
          may  disclose  any  knowledge of banking,  financial  and/or  economic
          principles,  concepts  or ideas  which are not solely and  exclusively
          derived from the business plans and activities of the Association.  In
          the event of a breach or  threatened  breach by the  Executive  of the
          provisions of this  Section,  the  Association  will be entitled to an
          injunction restraining Executive from disclosing, in whole or in part,
          the knowledge of the past,  present,  planned or  considered  business
          activities of the Association or affiliates thereof, or from rendering
          any services to any person,  firm,  corporation,  other entity to whom
          such  knowledge,  in  whole  or in  part,  has  been  disclosed  or is
          threatened  to be  disclosed.  Nothing  herein  will be  construed  as
          prohibiting the Association from pursuing any other remedies available
          to the Association for such breach or threatened breach, including the
          recovery of damages from Executive.

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
     check from the general  funds of the  Association.  The  Company,  however,
     guarantees  all payments and the  provision of all amounts and benefits due
     hereunder  to  Executive  and,  if such  payments  are not  timely  paid or
     provided by the  Association,  such amounts and  benefits  shall be paid or
     provided by the Company.

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
     and supersedes any prior  employment  agreement  between the Association or
     any  predecessor  of  the  Association  and  Executive,  except  that  this
     Agreement shall not affect or operate to reduce any benefit or compensation
     inuring to the Executive of a kind elsewhere provided. No provision of this
     Agreement  shall be  interpreted  to mean  that  Executive  is  subject  to
     receiving fewer benefits than those  available to her without  reference to
     this Agreement.

14.  NO ATTACHMENT.

     (a)  Except as  required by law,  no right to receive  payments  under this
          Agreement shall be subject to anticipation,  commutation,  alienation,
          sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
          execution,  attachment,  levy,  or similar  process or  assignment  by
          operation of law, and any attempt, voluntary or involuntary, to affect
          any such action shall be null, void, and of no effect.
<PAGE>

     (b)  This  Agreement  shall be binding  upon,  and inure to the benefit of,
          Executive,   the   Association,   the  Company  and  their  respective
          successors and assigns.

15.  MODIFICATION AND WAIVER.

     (a)  This  Agreement may not be modified or amended except by an instrument
          in writing signed by the parties hereto.

     (b)  No term or  condition of this  Agreement  shall be deemed to have been
          waived, nor shall there by any estoppel against the enforcement of any
          provision of this Agreement, except by written instrument of the party
          charged with such waiver or estoppel.  No such written waiver shall be
          deemed a continuing  waiver unless  specifically  stated therein,  and
          each  such  waiver  shall  operate  only  as to the  specific  term or
          condition  waived  and shall not  constitute  a waiver of such term or
          condition  for the future as to any act other  than that  specifically
          waived.

16.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
     provision,  is held  invalid,  such  invalidity  shall not affect any other
     provision  of this  Agreement  or any  part of such  provision  not held so
     invalid,  and each such other  provision and part thereof shall to the full
     extent consistent with law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
     convenience   of   reference   and  shall  not   control   the  meaning  or
     interpretation of any of the provisions of this Agreement.

<PAGE>

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Oregon, unless
     otherwise  specified  herein;  provided,  however,  that in the  event of a
     conflict between the terms of this Agreement and any applicable  federal or
     state law or  regulation,  the  provisions of such law or regulation  shall
     prevail.

19.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
     Agreement shall be settled  exclusively by arbitration,  conducted before a
     panel of three arbitrators  sitting in a location selected by the Executive
     within one hundred  (100) miles from the  location of the  Association,  in
     accordance with the rules of the American  Arbitration  Association then in
     effect.  Judgment  may be  entered on the  arbitrator's  award in any court
     having jurisdiction; provided, however, that Executive shall be entitled to
     seek  specific  performance  of her  right  to be paid  until  the  Date of
     Termination during the pendency of any dispute or controversy arising under
     or in connection with this Agreement.


<PAGE>


20.  PAYMENT OF LEGAL FEES.

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
     dispute or question of  interpretation  relating to this Agreement shall be
     paid or reimbursed by the  Association,  if successful  pursuant to a legal
     judgment, arbitration or settlement.

21.  INDEMNIFICATION.

     The Association shall provide Executive (including her heirs, executors and
     administrators)  with coverage  under a standard  directors'  and officers'
     liability  insurance  policy  at its  expense,  or in lieu  thereof,  shall
     indemnify  Executive (and her heirs,  executors and  administrators) to the
     fullest  extent  permitted  under law against all expenses and  liabilities
     reasonably incurred by her in connection with or arising out of any action,
     suite or  proceeding  in which she may be  involved by reason of her having
     been a director or officer of the Association (whether or not she continues
     to be a  directors  or officer at the time of  incurring  such  expenses or
     liabilities),  such expenses and liabilities to include, but not be limited
     to,  judgment,  court costs and attorneys'  fees and the cost of reasonable
     settlements.

22.  SUCCESSOR TO THE ASSOCIATION OR THE COMPANY.

     The  Association  and the Company  shall require any successor or assignee,
     whether  direct  or  indirect,  by  purchase,   merger,   consolidation  or
     otherwise,  to all or  substantially  all the  business  or  assets  of the
     Association  or the Company,  expressly and  unconditionally  to assume and
     agree to perform the Association's or the Company's  obligations under this
     Agreement,  in the same manner and to the same extent that the  Association
     or the  Company  would be  required  to  perform if no such  succession  or
     assignment had taken place.

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
     executed by a duly  authorized  officer or director of the  Association and
     the Company, and Executive has signed this Agreement, all on the

                   day of                             , 20     .


                                                KLAMATH FIRST FEDERAL SAVINGS
                                                AND LOAN ASSOCIATION



                                                BY:
Kermit K. Houser, President



                                                KLAMATH FIRST BANCORP, INC.



                                                BY:____________________________
                                                   Kermit K. Houser, President

WITNESS:



______________________                            _____________________________
                                                  Nina G. Drake


<PAGE>



                                  EXHIBIT 10(j)
                       AMENDMENTS TO EMPLOYMENT AGREEMENTS

                      AMENDMENT #2 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement (the  "Agreement") with Kermit K. Houser (the "Executive") on November
15, 2000; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants,  terms  and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

1.   The term of the agreement as outlined in Section 3 is extended for one year
     effective  November 15, 2002,  with the new expiration  date being November
     14, 2004.

2.   This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
     #2 to the Agreement as of November 15, 2002.

                                            Klamath First Federal Savings and
                                            Loan Association

______________________________      By:_______________________________________
Kermit K. Houser                       Rodney N. Murray, Chairman of the Board

                                       Klamath First Bancorp, Inc.

______________________________      By:_______________________________________
Witness                                Rodney N. Murray, Chairman of the Board


<PAGE>

                      AMENDMENT #1 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement (the  "Agreement")  with Marshall J. Alexander  (the  "Executive")  on
October 1, 2001; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  , terms and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

3.   The term of the  agreement  is  extended  effective  October 1, 2002 for an
     additional  year,  with the new expiration  date being  September 30, 2004,
     unless further modified as provided in Section 2.a. of the Agreement.

4.   The Base  Salary as  defined in  Section 3 of the  Agreement  is changed to
     $138,000 per year effective November 1, 2002.

5.   This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
     #1 to the Agreement as of October 1, 2002.

                                       Klamath First Federal Savings and
                                       Loan Association

______________________________      By:_________________________________
Marshall J. Alexander                  Kermit K. Houser, President & CEO

                                       Klamath First Bancorp, Inc.

______________________________      By:_________________________________
Witness                                Kermit K. Houser, President & CEO

<PAGE>

                      AMENDMENT #1 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement  (the  "Agreement")  with Ben A. Gay (the  "Executive")  on October 1,
2001; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  , terms and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

6.   The term of the  agreement  is  extended  effective  October 1, 2002 for an
     additional  year,  with the new expiration  date being  September 30, 2004,
     unless further modified as provided in Section 2.a. of the Agreement.

7.   The Base  Salary as  defined in  Section 3 of the  Agreement  is changed to
     $138,000 per year effective November 1, 2002.

8.   This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.

                                    Klamath First Federal Savings and
                                    Loan Association

______________________________      By:_________________________________
Ben A. Gay                          Kermit K. Houser, President & CEO

                                    Klamath First Bancorp, Inc.

______________________________      By:_________________________________
Witness                                Kermit K. Houser, President & CEO


<PAGE>

                      AMENDMENT #1 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement (the "Agreement") with Frank X. Hernandez (the "Executive") on October
1, 2001; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  , terms and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

9.   The term of the  agreement  is  extended  effective  October 1, 2002 for an
     additional  year,  with the new expiration  date being  September 30, 2004,
     unless further modified as provided in Section 2.a. of the Agreement.

10.  The Base  Salary as  defined in  Section 3 of the  Agreement  is changed to
     $108,000 per year effective November 1, 2002.

11.  This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
     #1 to the Agreement as of October 1, 2002.

                                       Klamath First Federal Savings and
                                       Loan Association

______________________________      By:_________________________________
Frank X. Hernandez                     Kermit K. Houser, President & CEO

                                       Klamath First Bancorp, Inc.

______________________________      By:_________________________________
Witness                                Kermit K. Houser, President & CEO


<PAGE>

                      AMENDMENT #1 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement (the  "Agreement")  with Craig M Moore (the "Executive") on October 1,
2001; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  , terms and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

12.  The term of the  agreement  is  extended  effective  October 1, 2002 for an
     additional  year,  with the new expiration  date being  September 30, 2004,
     unless further modified as provided in Section 2.a. of the Agreement.

13.  The Base  Salary as  defined in  Section 3 of the  Agreement  is changed to
     $117,000 per year effective November 1, 2002.

14.  This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
     #1 to the Agreement as of October 1, 2002.

                                    Klamath First Federal Savings and
                                    Loan Association

______________________________      By:_________________________________
Craig M Moore                          Kermit K. Houser, President & CEO

                                       Klamath First Bancorp, Inc.

______________________________      By:_________________________________
                                       Witness Kermit K. Houser, President & CEO
<PAGE>

                      AMENDMENT #1 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement (the  "Agreement")  with M. Isabel  Castellanos  (the  "Executive") on
October 1, 2001; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  , terms and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

15.  The term of the  agreement  is  extended  effective  October 1, 2002 for an
     additional  year,  with the new expiration  date being  September 30, 2004,
     unless further modified as provided in Section 2.a. of the Agreement.

16.  The Base  Salary as  defined in  Section 3 of the  Agreement  is changed to
     $119,000 per year effective November 1, 2002.

17.  This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
#1 to the Agreement as of October 1, 2002.

                                    Klamath First Federal Savings and
                                    Loan Association

______________________________      By:_________________________________
M. Isabel Castellanos                  Kermit K. Houser, President & CEO

                                       Klamath First Bancorp, Inc.

______________________________      By:_________________________________
Witness                                Kermit K. Houser, President & CEO
<PAGE>

                      AMENDMENT #1 TO EMPLOYMENT AGREEMENT

     WHEREAS  Klamath First  Federal  Savings and Loan  Association  and Klamath
First  Bancorp,  Inc.  (collectively   "Klamath")  entered  into  an  Employment
Agreement (the  "Agreement") with Walter F. Dodrill (the "Executive") on January
2, 2002; and

     WHEREAS,  the Board of Directors  of Klamath has  reviewed the  Executive's
performance in connection  with Klamath's  financial  results and an independent
compensation study; and

     WHEREAS,  Klamath  wishes to continue to assure  itself of the  Executive's
services for the period of the Agreement as amended herein; and

     WHEREAS,  the  Executive  is willing to  continue  serving in the employ of
Klamath on a full-time basis for said period;

     NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  , terms and
conditions  contained in the Agreement and as amended below,  the parties hereby
agree that the Agreement is amended as follows:

18.  The term of the  agreement  is  extended  effective  January 2, 2003 for an
     additional year, with the new expiration date being January 1, 2005, unless
     further modified as provided in Section 2.a. of the Agreement.

19.  The Base  Salary as  defined in  Section 3 of the  Agreement  is changed to
     $119,000 per year effective November 1, 2002.

20.  This  amendment  is governed by the laws of the State of Oregon.  Except as
     specifically   modified  herein,   the  Agreement,   including  all  terms,
     conditions and covenants, shall remain fully in force.

     IN WITNESS WHEREOF,  Klamath and the Executive have executed this Amendment
#1 to the Agreement as of November 1, 2002.

                                    Klamath First Federal Savings and
                                    Loan Association

______________________________      By:_________________________________
Walter F. Dodrill                      Kermit K. Houser, President & CEO

                                       Klamath First Bancorp, Inc.

______________________________      By:_________________________________
Witness                                Kermit K. Houser, President & CEO