CENTENNIAL BANCORP

                       RESTATED 1995 STOCK INCENTIVE PLAN

                        Adopted by the Board of Directors
                              on November 22, 1995
                         (Amended and Restated effective
                             as of August 20, 1996)


                                   I. PURPOSE

          The purpose of the Plan is to provide a means by which selected
Employees, Directors and Consultants may be given an opportunity to acquire
stock of the Company. The Company, by means of the Plan, seeks to retain the
services of persons who are currently Employees, Directors or Consultants, to
secure and retain the services of new Employees, Directors and Consultants, and
to provide incentives for such persons to exert maximum efforts for the success
of the Company. Accordingly, the Plan provides for granting Incentive Stock
Options, Nonstatutory Stock Options and Restricted Stock Awards, or any
combination of the foregoing, as is best suited to the circumstances of the
particular person as provided herein.

                                 II. DEFINITIONS

          The following definitions shall be applicable throughout the Plan
unless specifically modified by any paragraph:

          a. "1934 Act" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute.

          b. "Award" means, individually or collectively, any Option or
Restricted Stock Award.

          c. "Board" means the Board of Directors of Centennial Bancorp.

          d. "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor statute. Reference in the Plan to any
section of the Code shall be deemed to include any amendments or successor
provisions to any such section.

          e. "Committee" means not less than two members of the Board who are
selected by the Board as provided in Paragraph A of Article IV.

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          f. "Common Stock" means the shares of Common Stock of the Company,
with par value of $2.00 per share.

          g. "Company" means Centennial Bancorp and any Parent and Subsidiary of
Centennial Bancorp.

          h. "Consultant" means any person, including an adviser, engaged by the
Company to render services and who does not render such services as an Employee
or Director.

          i. "Director" means an individual elected to the Board by the
shareholders of the Company or by the Board under applicable corporate law who
is serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.

          j. "Disability" means the condition of being permanently "disabled"
within the meaning of Section 22(e)(3) of the Code, namely being unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.

          k. "Employee" means any person (including a Director) in an employment
relationship with the Company.

          l. "Fair Market Value" means, as of any specified date:

             (i) If the Common Stock is listed on any established stock
     exchange, its fair market value shall be the closing sale price of the
     Common Stock (or the average of the closing bid and asked prices, if no
     sales were reported), as quoted on such exchange (or the exchange with the
     greatest volume of trading in Common Stock) on the business day preceding
     the date of such determination, as reported in The Wall Street Journal or
     such other source as the Board deems reliable; or

             (ii) If the Common Stock is quoted on the National Market System of
     the National Association of Securities Dealers, Inc. Automated Quotation
     (Nasdaq) System, its fair market value shall be the average of the closing
     bid and asked prices for the Common Stock on the business day preceding the
     date of such determination, as reported in The Wall Street Journal or such
     other source as the Board deems reliable; or

             (iii) In the absence of an established market for the Common Stock,
     the fair market value thereof shall be determined in good faith by the
     Committee.

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          m. "Holder" means an Employee, Consultant or a Director who has been
granted an Award, and any assignee or transferee of such person as permitted
under the Plan.

          n. "Incentive Stock Option" means an incentive stock option within the
meaning of Section 422 of the Code.

          o. "Nonemployee Director" means a Nonemployee Director as defined in
Rule 16b-3(b)(3)(i).

          p. "Nonstatutory Stock Option" means a stock option other than an
Incentive Stock Option.

          q. "Option" means an Award described in Article VII of the Plan.

          r. "Option Agreement" means a written agreement between the Company
and a Holder with respect to an Option.

          s. "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          t. "Plan" means the 1995 Stock Incentive Plan of Centennial Bancorp,
as set forth herein and as may be hereafter amended from time to time.

          u. "Restricted Stock Agreement" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.

          v. "Restricted Stock Award" means an Award described in Article VIII
of the Plan.

          w. "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the 1934 Act, as such may be amended from time to
time, and any successor rule, regulation or statute fulfilling the same or
similar function.

          x. "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code; namely, any
corporation in which the Company directly or indirectly controls 50 percent or
more of the total combined voting power of all classes of stock having voting
power.

                  III. EFFECTIVE DATE AND DURATION OF THE PLAN

          The Plan shall be effective as of November 22, 1995, the date of its
adoption by the Board, subject to its ratification and approval by the
shareholders of Centennial Bancorp on or before November 21, 1996. Until the
Plan has been approved by shareholders, any Awards made under the Plan shall be
conditioned upon such approval. No Awards may be granted under the Plan after
November 21, 2005. The Plan shall remain in effect until all Awards granted
under the Plan have been satisfied or expired.

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                               IV. ADMINISTRATION

          A. COMPOSITION OF COMMITTEE. The Plan shall be administered by a
committee which shall (i) be appointed by the Board and (ii) consist of
Nonemployee Directors.

          B. AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan,
the Committee shall have sole authority, in its discretion, to determine: (i)
which Employees, Directors and Consultants shall receive Awards; (ii) the time
or times when Awards shall be granted; (iii) the type or types of Awards to be
granted; and (iv) the number of shares of Common Stock which may be issued under
each Award. In making such determinations, the Committee may take into account
the nature of the services rendered by the respective individuals, their present
and potential contribution to the success of the Company, and such other factors
as the Committee in its discretion shall deem relevant. The Committee shall also
have such additional powers as are delegated to it by the Plan. Subject to the
express provisions of the Plan, the Committee is authorized to construe the Plan
and the respective agreements executed hereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the manner
and to the extent it shall deem expedient to carry the Award into effect. The
determinations of the Committee on the matters referred to in this Article IV
shall be conclusive.

          C. LIABILITY OF COMMITTEE MEMBERS. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Award.

          D. COSTS OF PLAN. The costs and expenses of administering the Plan
shall be borne by the Company.

                                 V. ELIGIBILITY

          Employees, Directors and Consultants are eligible to receive Options
and Restricted Stock Awards; provided, however, only Employees are eligible to
receive Incentive Stock Options. Any Award may be granted on more than one
occasion to the same person, and may include an Incentive Stock Option, a
Nonstatutory Stock Option, a Restricted Stock Award, or any combination thereof.

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                         VI. SHARES SUBJECT TO THE PLAN

          A. AGGREGATE NUMBER OF SHARES. Subject to Article IX, the aggregate
number of shares of Common Stock that may be issued under the Plan shall not
exceed 200,000 shares. Shares shall be deemed to have been issued under the Plan
only (i) to the extent actually issued and delivered pursuant to an Award, or
(ii) to the extent an Award is settled in cash. To the extent that an Award
lapses or the rights of its Holder terminate, any shares of Common Stock subject
to such Award shall again be available for the grant of an Award under the Plan.

          B. STOCK OFFERED. The stock to be offered pursuant to the grant of any
Award may be authorized but unissued Common Stock or Common Stock previously
issued and outstanding and reacquired by the Company.

                                  VII. OPTIONS

          A. OPTION PERIOD. The term of each Option shall be as specified by the
Committee at the date of grant, except that no Incentive Stock Option shall be
exercisable after the expiration of ten years from the date of grant of such
Incentive Stock Option.

          B. LIMITATIONS ON EXERCISE OF OPTION. An Option shall be exercisable
in whole or in such installments and at such times as determined by the
Committee.

          C. SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent that
the aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Common Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by an individual during any
calendar year under all incentive stock option plans of the Company exceeds
$100,000, such Incentive Stock Options shall be treated as options which do not
constitute Incentive Stock Options. The Committee shall determine, in accordance
with applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of a Holder's Options will not constitute
Incentive Stock Options because of such limitation and shall notify the Holder
of such determination as soon as practicable after such determination. No
Incentive Stock Option shall be granted to an individual if, at the time the
Option is granted, such individual owns stock possessing more than 10 percent of
the total combined voting power of all classes of stock of the Company, unless
(i) at the time such Option is granted the exercise price is at least 110
percent of the Fair Market Value of the Common Stock subject to the Option and
(ii) such Option by its terms is not exercisable after the expiration of five
years from the date of grant.

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          D. SEPARATE STOCK CERTIFICATES. Separate stock certificates shall be
issued by the Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise of
a Nonstatutory Stock Option.

          E. OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under Section 422 of the Code. An Option Agreement may provide for the payment
of the exercise price, in whole or in part, by the delivery of a number of
shares of Common Stock (plus cash if necessary) having a Fair Market Value (as
of the exercise date of the Option) equal to such exercise price. Moreover, an
Option Agreement may provide for a "cashless exercise" of the Option by
establishing procedures whereby the Holder, by a properly executed written
notice, directs: (i) an immediate market sale or margin loan respecting all or a
part of the shares of Common Stock to which the Holder is entitled upon exercise
of the Option; (ii) the delivery of the shares of Common Stock from the Company
directly to a brokerage firm; and (iii) the delivery of the exercise price from
sale or margin loan proceeds from the brokerage firm directly to the Company.
Such Option Agreement may also include, without limitation, provisions relating
to: (a) vesting of Options; (b) tax matters (including provisions covering any
applicable employee wage withholding requirements); and (c) any other matters
not inconsistent with the terms and provisions of this Plan that the Committee
shall in its sole discretion determine. The terms and conditions of the
respective Option Agreements need not be identical.

          F. EXERCISE PRICE AND PAYMENT. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be determined by the
Committee, but such exercise price (i) shall not be less than the Fair Market
Value of a share of Common Stock on the date such Option is granted if the
Option is an Incentive Stock Option and (ii) shall be subject to adjustment as
provided in Article IX. An Option or portion thereof may be exercised by
delivery of an irrevocable notice of exercise to the Company. The exercise price
of an Option or portion thereof shall be paid in full in the manner prescribed
by the Committee.

          G. TERMINATION OF EMPLOYMENT OR SERVICE.

             1. In the event the employment or service of a Holder of an Option
     by the Company terminates for any reason other than because of Disability
     or death, such Option may be exercised at any time prior to the expiration
     date of the Option or the expiration of three months after the date of such
     termination, whichever is the shorter period, but only if and to the extent
     the Holder was entitled to exercise the Option at the date of such
     termination.

             2. In the event the employment or service of a Holder of an Option
     by the Company terminates because of Disability, such Option may be
     exercised at any time prior to the expiration date of the Option or the
     expiration of one year after the date of such termination, whichever is the
     shorter period, but only if and to the extent the Holder was entitled to
     exercise the Option at the date of such termination.

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             3. In the event of the death of a Holder of an Option while
     employed by or providing service to the Company, such Option may be
     exercised at any time prior to the expiration date of the Option or the
     expiration of one year after the date of such death, whichever is the
     shorter period, but only if and to the extent the Holder was entitled to
     exercise the Option on the date of death. An Incentive Stock Option may be
     exercised only by the person or persons to whom such Holder's rights under
     the Option shall pass by the Holder's will or by the laws of descent and
     distribution of the state or country of domicile at the time of death.

             4. The Committee, at the time of grant or at any time thereafter,
     may extend the three-month and one-year post-termination exercise periods
     any length of time not later than the original expiration date of the
     Option, and may increase the portion of the Option that is exercisable,
     subject to such terms and conditions as the Committee may determine.

             5. To the extent that the Option of any deceased Holder or of any
     Holder whose employment or service terminates is not exercised within the
     applicable period, all further rights to purchase Common Stock pursuant to
     such Option shall cease and terminate.

          H. RIGHTS AS A SHAREHOLDER. The Holder of an Option under the Plan
shall have no rights as a shareholder with respect to the Common Stock subject
to such Option until the date of issue to the Holder of a stock certificate for
such shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.

          I. OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
CORPORATIONS. Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by corporations who
become Employees as a result of a merger or consolidation of the employing
corporation with the Company, or the acquisition by the Company of the assets of
the employing corporation, or the acquisition by the Company of stock of the
employing corporation with the result that such employing corporation becomes a
Subsidiary.

                         VIII. RESTRICTED STOCK AWARDS

          A. RESTRICTION PERIOD. At the time a Restricted Stock Award is
granted, the Committee shall establish a period of time (the "Restriction
Period") applicable to such Award. Each Restricted Stock Award may have a
different Restriction Period, in the discretion of the Committee. The
Restriction Period applicable to a particular Restricted Stock Award shall not
be changed except as permitted by Paragraph B of this Article VIII or by Article
IX.

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          B. OTHER TERMS AND CONDITIONS. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to receive dividends during the Restriction Period, to vote Common Stock
subject thereto and to enjoy all other shareholder rights, except that: (i) the
Holder shall not be entitled to delivery of the stock certificate until the
Restriction Period shall have expired; (ii) the Company shall retain custody of
the stock certificate during the Restriction Period; (iii) the Holder may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the stock
during the Restriction Period; and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement shall
cause a forfeiture of the Restricted Stock Award. Stock dividends issued with
respect to Common Stock awarded pursuant to a Restricted Stock Award shall be
treated as additional Common Stock covered by the Restricted Stock Award. At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the termination of
employment or service (by retirement, Disability, death or otherwise) of a
Holder prior to expiration of the Restriction Period. Such additional terms,
conditions or restrictions shall be set forth in a Restricted Stock Agreement
entered into in conjunction with the Award. Such Restricted Stock Agreement may
also include, without limitation, provisions relating to: (i) vesting of Awards;
(ii) tax matters (including provisions (x) covering any applicable employee wage
withholding requirements and (y) prohibiting an election by the Holder under
Section 83(b) of the Code); and (iii) any other matters not inconsistent with
the terms and provisions of this Plan that the Committee shall in its sole
discretion determine.

          C. PURCHASE PRICE AND PAYMENT. The Committee shall determine the
amount and form of any payment for Common Stock received pursuant to a
Restricted Stock Award, provided that, in the absence of such a determination, a
Holder shall not be required to make any payment for Common Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required by
law.

          D. RESTRICTED STOCK AGREEMENT. At the time any Award is granted under
this Article VIII, the Company and the Holder shall enter into a Restricted
Stock Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need not be identical.

                        IX. CHANGES IN CAPITAL STRUCTURE

          A. If the outstanding Common Stock is hereafter increased or decreased
or changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, plan of exchange, recapitalization,

<PAGE>

reclassification, stock split-up, combination of shares or dividend payable in
shares, appropriate adjustment shall be made by the Committee in the number and
kind of shares available for Awards. In addition, the Committee shall make
appropriate adjustment in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised, shall be exercisable, so that the
Holder's proportionate interest before and after the occurrence of the event is
maintained. Notwithstanding the foregoing, the Committee shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Committee.
Any such adjustments made by the Committee shall be conclusive. Any adjustment
provided for in this Paragraph A of Article IX shall be subject to any required
shareholder action. In the event of dissolution of the Company or a merger,
consolidation, plan of exchange or similar transaction affecting the Company, in
lieu of providing for Options as provided above in this Paragraph A of Article
IX or in lieu of having the Options continue unchanged, the Committee may, in
its sole discretion, provide a 30-day period prior to such event during which
Holders shall have the right to exercise Options in whole or in part without any
limitation on exercisability and upon the expiration of such 30-day period all
unexercised Options shall immediately terminate.

          B. The existence of the Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities senior to
or affecting Common Stock or the rights thereof, the dissolution or liquidation
of the Company, or any sale, lease, exchange or other disposition of all or any
part of its assets or business or any other corporate act or proceeding.

          C. Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Common Stock subject to Awards previously granted or the
exercise price per share, if applicable.

                    X. AMENDMENT AND TERMINATION OF THE PLAN

          The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not previously been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided, that no change in any Award previously granted may be
made which would impair the rights of the Holder without the consent of the
Holder.

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                                XI. MISCELLANEOUS

          A. NO RIGHT TO AN AWARD. Neither the adoption of the Plan by the
Company nor any action of the Board or the Committee shall be deemed to give an
Employee, a Consultant or a Director any right to be granted an Award or any of
the rights hereunder except as may be evidenced by an Award or by an Option
Agreement or Restricted Stock Agreement duly executed on behalf of the Company,
and then only to the extent and on the terms and conditions expressly set forth
therein.

          B. NO EMPLOYMENT RIGHTS CONFERRED. Nothing in the Plan shall (i)
confer upon any Employee any right with respect to continuation of employment
with the Company or (ii) interfere in any way with the right of the Company to
terminate the Employee's employment (or service as a Director, in accordance
with applicable corporate law, or service as a Consultant) at any time for any
reason, with or without cause.

          C. OTHER LAWS; WITHHOLDING. The Company shall not be obligated to
issue any Common Stock pursuant to any Award granted under the Plan at any time
when the shares covered by such Award have not been registered under the
Securities Act of 1933, as amended, and such other state and federal laws, rules
or regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules or regulations available for the
issuance and sale of such shares. No fractional shares of Common Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The Company
shall have the right to deduct in connection with all Awards any taxes required
by law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.

          D. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company from taking any corporate action which
is deemed by the Company to be appropriate or in its best interest, whether or
not such action would have an adverse effect on the Plan or any Award granted
under the Plan. No Employee, Consultant, Director, beneficiary or other person
shall have any claim against the Company as a result of any such action.

          E. RESTRICTIONS ON TRANSFER.

             1. An Award shall not be transferable otherwise than by will or the
     laws of descent and distribution; provided, however, that, with the consent
     of the Committee, which consent may be withheld in its sole discretion or
     conditioned on such requirements as the Committee shall deem appropriate,
     all or any portion of a Nonqualified Stock Option may be assigned or
     transferred to the optionee's immediate family (i.e., children,
     grandchildren, spouse, parents and siblings), to trusts for the benefit of
     the optionee's immediate family members, and pursuant to qualified domestic
     relations orders. No consideration may be paid for the transfer of any
     Nonqualified Stock Option, and, after any permitted transfer, the
     Nonqualified Stock Option shall continue to be subject to the same terms

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     and conditions as were applicable to it immediately prior to its transfer,
     except that: (i) subsequent transfers of transferred options shall be
     prohibited except by will or the laws of descent and distribution; (ii) for
     purposes of Section G of Article VII, the term "Holder" shall refer to the
     original optionee; (iii) the events of termination of employment specified
     in Section G of Article VII shall continue to be applied with respect to
     the original optionee, following which the Nonqualified Stock Option shall
     be exercisable by the transferee only to the extent, and for the periods
     specified in Section G of Article VII; and (iv) the original optionee shall
     remain subject to withholding taxes upon exercise of the Nonqualified Stock
     Option by the transferee. Before permitting any transfer, the Committee may
     require the transferee to agree in writing to be bound by all other terms
     and conditions applicable to the Nonqualified Stock Option prior to its
     transfer.

             2. Incentive Stock Options may be exercisable during the lifetime
     of the optionee only by the optionee, or by the optionee's guardian or
     legal representative.

          F. GOVERNING LAW. To the extent that federal laws (such as the Code
and the federal securities laws) do not otherwise control, the Plan shall be
construed in accordance with the laws of the state of Oregon.

          G. HEADINGS. Headings contained in the Plan are for reference purposes
and shall not affect the meaning or interpretation of the Plan.