Exhibit 10.7(e)

                    SECOND AMENDMENT TO AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

     This SECOND  AMENDMENT TO AMENDED AND RESTATED  EMPLOYMENT  AGREMENT  (this
"Agreement")  is made and  entered  into on  November  19,  2003 by and  between
Klamath  First Federal  Savings and Loan  Association  ("Association"),  Klamath
First  Bancorp,  Inc.,  ("Company")  and the  undersigned  executive  officer of
Association and Company (the "Executive").

     WHEREAS,  Association,  Company and  Executive  entered into an Amended and
Restated Employment Agreement dated May 21, 2003, (the "Employment Agreement");

     WHEREAS,  Company has entered into an Agreement and Plan of Merger dated as
of July 14, 2003, (the "Merger  Agreement") with Sterling Financial  Corporation
("Sterling") with respect to a proposed transaction (the "Transaction")  whereby
Sterling will acquire all of the outstanding shares of Company common stock in a
stock merger;

     WHEREAS, Association,  Company and Executive entered into a First Amendment
to Amended and Restated  Employment  Contract  dated as of July 14,  2003,  (the
"First Amendment") to facilitate the Transaction;

     WHEREAS, Sterling desires to employ the Executive after consummation of the
Transaction in a different  capacity than Executive current functions within the
Association and Company;

     WHEREAS, Sterling believes the Executive will be entitled to receive change
in control  benefits  pursuant to the Employment  Agreement and First  Amendment
regardless of whether the Executive enters into a new employment  agreement with
Sterling;

     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged by the parties, it is agreed by the parties as follows:

     1.   Capitalized  terms used herein,  to the extent not defined  otherwise,
          shall have the meaning  ascribed to them in the  Employment  Agreement
          and First Amendment.

     2.   Section  5(c)  of the  Employment  Agreement  is  amended  in  full as
          follows:

          "Upon the occurrence of a Change in Control arising from or related to
          the Merger Agreement, Association shall pay the Executive as severance
          pay or liquidated damages,  or both (the "Base Severance Amount"),  an
          amount equal to $178,500.  In the event that all conditions to closing
          under the Merger  Agreement have been satisfied  during  calendar year
          2003, then Association shall make payment of the Base Severance Amount
          plus the  Additional  Severance  Amount (as  defined  in Section  5(d)
          below) to the  Executive  on  December  31,  2003.  In the event  such
          closing  conditions are not satisfied  during calendar year 2003, then
          the  payments  contemplated  herein shall be made within 10 days after
          consummation of the merger contemplated by the Merger Agreement."

     3.   Except as  specifically  set forth herein,  the Employment  Agreement,
          including the First Amendment shall continue in full force and effect.
          To the  extent  that any  provision  contained  in this  Agreement  is
          inconsistent  with any of the provisions of the Employment  Agreement,
          including  but not  limited  to  Section  5(b)  thereof,  or the First
          Amendment,  the  provisions  contained  in  this  Agreement  shall  be
          controlling.

     4.   In the event the Merger  Agreement is terminated,  then this Agreement
          shall have no further force or effect.

     5.   This Agreement may be executed in  counterparts by the parties hereto,
          each of which when so executed  shall be deemed an original and all of
          which, taken together, shall constitute one and the same agreement.

The parties have entered  into this  Agreement as of the date first  hereinabove
written.

Klamath First Federal Savings & Loan Association


By:  ____________________________________
         Duly Authorized Officer

Klamath First Bancorp, Inc.


By:  ____________________________________
         Duly Authorized Officer

Executive


By:  ____________________________________
         Walter F. Dodrill


Consented to by Sterling Financial Corporation


By:  ____________________________________
         Duly Authorized Officer


<PAGE>
                                                                Exhibit 10.9(e)

                    SECOND AMENDMENT TO AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

This SECOND  AMENDMENT  TO  AMENDED  AND  RESTATED   EMPLOYMENT  AGREMENT  (this
     "Agreement")  is made and entered  into on December 17, 2003 by and between
     Klamath First Federal Savings and Loan Association ("Association"), Klamath
     First Bancorp,  Inc.,  ("Company") and the undersigned executive officer of
     Association and Company (the "Executive").

     WHEREAS,  Association,  Company and  Executive  entered into an Amended and
Restated Employment Agreement dated May 21, 2003, (the "Employment Agreement");

     WHEREAS,  Company has entered into an Agreement and Plan of Merger dated as
of July 14, 2003, (the "Merger  Agreement") with Sterling Financial  Corporation
("Sterling") with respect to a proposed transaction (the "Transaction")  whereby
Sterling will acquire all of the outstanding shares of Company common stock in a
stock merger;

     WHEREAS, Association,  Company and Executive entered into a First Amendment
to Amended and Restated  Employment  Contract  dated as of July 14,  2003,  (the
"First Amendment") to facilitate the Transaction;

     WHEREAS, Sterling desires to employ the Executive after consummation of the
Transaction in a different  capacity than Executive current functions within the
Association and Company;

     WHEREAS, Sterling believes the Executive will be entitled to receive change
in control  benefits  pursuant to the Employment  Agreement and First  Amendment
regardless of whether the Executive enters into a new employment  agreement with
Sterling;

     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged by the parties, it is agreed by the parties as follows:

     1.   Capitalized  terms used herein,  to the extent not defined  otherwise,
          shall have the meaning  ascribed to them in the  Employment  Agreement
          and First Amendment.

     2.   Section  5(c)  of the  Employment  Agreement  is  amended  in  full as
          follows:

          "Upon the occurrence of a Change in Control arising from or related to
          the Merger Agreement, Association shall pay the Executive as severance
          pay or liquidated damages,  or both (the "Base Severance Amount"),  an
          amount equal to $178,500.  In the event that all conditions to closing
          under the Merger  Agreement have been satisfied  during  calendar year
          2003, then Association shall make payment of the Base Severance Amount
          plus the  Additional  Severance  Amount (as  defined  in Section  5(d)
          below) to the  Executive  on  December  31,  2003.  In the event  such
          closing  conditions are not satisfied  during calendar year 2003, then
          the  payments  contemplated  herein shall be made within 10 days after
          consummation of the merger contemplated by the Merger Agreement."

     3.   Except as  specifically  set forth herein,  the Employment  Agreement,
          including the First Amendment shall continue in full force and effect.
          To the  extent  that any  provision  contained  in this  Agreement  is
          inconsistent  with any of the provisions of the Employment  Agreement,
          including  but not  limited  to  Section  5(b)  thereof,  or the First
          Amendment,  the  provisions  contained  in  this  Agreement  shall  be
          controlling.

     4.   In the event the Merger  Agreement is terminated,  then this Agreement
          shall have no further force or effect.

     5.   This Agreement may be executed in  counterparts by the parties hereto,
          each of which when so executed  shall be deemed an original and all of
          which, taken together, shall constitute one and the same agreement.

     The  parties  have  entered  into  this  Agreement  as of  the  date  first
     hereinabove written.

     Klamath First Federal Savings & Loan Association


     By:  ____________________________________
               Duly Authorized Officer

     Klamath First Bancorp, Inc.


By:  ____________________________________
         Duly Authorized Officer

Executive


By:  ____________________________________
         Walter F. Dodrill


Consented to by Sterling Financial Corporation


By:  ____________________________________
         Duly Authorized Officer