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                   EMPLOYMENT AGREEMENT
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PARTIES:        CENTENNIAL BANCORP ("Company")

                RICHARD C. WILLIAMS ("Executive")

EFFECTIVE DATE:  OCTOBER 1, 1995
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RECITALS:

          A.   Company is an Oregon corporation.

          B.   Executive is an executive  officer of Company and has contributed
               substantially to the successful  development and expansion of the
               business of Company.

          C.   Company  desires to assure the continued  employment of Executive
               and to assist him in providing for his financial security.

          D.   The parties entered into an Employment Agreement dated October 1,
               1991  respecting  Executive's  employment  by Company  for a term
               ending  September 30, 1996, and have agreed to extend the term of
               such  employment  to end on December  31, 2001 as provided in and
               subject to the conditions stated in this Agreement.

AGREEMENT:

1.   POSITIONS, DUTIES AND TERM

     1.1  Company  shall  employ  Executive  as  President  and Chief  Executive
          Officer  of  Company,  and  Executive  shall  serve  Company  in  such
          capacity, during the Employment Period.

     1.2  The Employment Period under this Agreement shall commence effective at
          October 1, 1995,  and shall end on  December  31,  2001,  unless it is
          earlier  terminated  in  accordance  with  other  provisions  of  this
          Agreement.

     1.3  Executive  shall  perform  such  duties as may be assigned to him from
          time to time by the board of  directors of Company.  Such  assignments
          shall not unduly diminish the relative  importance and  responsibility
          of Executive's position, and the title of his position




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         shall not be changed without his consent, except
         pursuant to this Agreement.

     1.4  Without  limiting  the  generality  of the  other  provisions  of this
          Section, Executive shall:

            1.4.1 Be  responsible  to  Company's  board  of  directors  for  the
                  operation   of  Company   and  its   subsidiaries   (currently
                  Centennial Bank and Centennial Mortgage Co.);

            1.4.2 Serve as the vice  chairman  and chief  executive  officer  of
                  Centennial  Bank  (the  "Bank")  until a new  chief  executive
                  officer of the Bank is employed by the Bank;

            1.4.3 Identify  and select for approval by the board of directors of
                  the Bank a new chief  executive  officer for the Bank no later
                  than December 31, 1997;

            1.4.4 Implement a new regional organizational structure for the Bank
                  prior to the hiring of the new chief executive  officer of the
                  Bank;

            1.4.5 Serve,  if  requested  by  Company's  board of  directors,  as
                  chairman of the Bank's board of directors  after the new chief
                  executive officer of the Bank has been hired; and

            1.4.6 Serve as a member of  Company's  board of  directors,  and, if
                  requested by Company's  board of directors,  also serve on the
                  Bank's board of directors,  Centennial Mortgage Co.'s board of
                  directors,  the Bank's asset/liability  committee,  and on the
                  board of directors of any significant  subsidiary  Company may
                  form or acquire during the Employment Period.

2.   EXTENT OF SERVICES

      2.1   Except as  permitted  by Section or 2.4 or as approved by  Company's
            board of directors, which approval it may withhold in its reasonable
            discretion,  Executive  shall  devote  his full  time and  attention
            exclusively to the  performance  of the work and duties  assigned to
            him  for  and on  behalf  of  Company  and  shall  not,  during  the
            Employment  Period,  either  directly or  indirectly,  engage in, or
            enter  into any  business  or  perform  any  services  for any other
            person, firm, association, or corporation.



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      2.2   Executive  shall perform his duties with fidelity and to the best of
            his ability  during the  Employment  Period,  and shall at all times
            during the Employment Period and thereafter respect the confidential
            nature  of  the  information  received  by  him  in  the  course  of
            performing his duties.

      2.3   Nothing  contained in this Section  shall  prohibit  Executive  from
            serving on the board of directors of any other corporation that does
            not compete with Company or any of its subsidiaries  (subject to the
            approval  of  Company's  board  of  directors,  which  will  not  be
            unreasonably withheld), or from owning or controlling stock or other
            equity  securities  of  any  other  company,   whether  or  not  the
            securities are publicly traded  (including a company that operates a
            business that is competitive  with Company or its  subsidiaries,  if
            such   securities  are  publicly   traded  and  Executive  does  not
            beneficially  own  more  than  5% of  the  outstanding  securities);
            provided, however, that Executive shall not own or control more than
            25% of the stock or other equity  securities of any company  without
            first obtaining the approval of Company's board of directors,  which
            will not be unreasonably withheld.

      2.4   For  periods  after  September  30,  1997 or the date on which a new
            chief  executive  officer  of the Bank is  hired,  whichever  occurs
            later, Executive shall be deemed to have fulfilled his obligation to
            render  full time  service to Company if he devotes  time to Company
            and its  subsidiaries  in the  performance  of his duties under this
            Agreement  that is equivalent to  three-fourths  of a full-time work
            schedule.  The reduced  work  schedule  shall be applied  both on an
            annual basis and,  subject to vacations and other  permitted  leaves
            taken by Executive, on a monthly basis. During any period of reduced
            work  schedule  under this  section,  Executive may take sick leave,
            vacations and other  permitted  leaves of absence in accordance with
            Company's policies applicable to other executive officers.

      2.5   In  addition  to all other  permitted  leaves of  absence  under the
            employee benefit plans and policies of Company, Executive shall have
            the  elective  right to take a single  leave of absence for a period
            not exceeding  180 days,  during which time  Executive  shall not be
            required to perform any services  for Company.  During this leave of
            absence,  which  shall  not  commence  until  after  the  new  chief
            executive officer of the Bank is hired,  Executive shall be entitled
            to receive all compensation and benefits  provided in other sections
            of this Agreement. It is contemplated that this leave of



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         absence shall be completed by December 31, 1998. However, the timing of
         this leave  shall be  subject to the  approval  of  Company's  board of
         directors.

3.   COMPENSATION AND BENEFIT PLANS

      During the  Employment  Period,  the  Executive  shall be  compensated  as
      follows:

      3.1   BASE  SALARY.  Executive  shall  receive  an  annual  salary  ("Base
            Salary"),  payable in semimonthly installments on the first and 15th
            days of each month. The Base Salary shall be:

            3.1.1 $225,000  for the year  beginning  October  1, 1995 and ending
                  September 30, 1996.

            3.1.2 $250,000  for the year  beginning  October  1, 1996 and ending
                  September 30, 1997.

            3.1.3 Amounts  approved by Company's  board of directors for periods
                  after  September 30, 1997, but not less than $250,000 for each
                  12-month period.

      3.2   CASH  BONUS.  In addition to the Base  Salary  specified  above,  if
            Company and/or Executive reach the objectives for each calendar year
            that are  determined  by Company's  board of directors  prior to the
            beginning of such year, Executive shall be paid an annual cash bonus
            for that year (the "Cash  Bonus").  Any Cash Bonus  earned  shall be
            paid on the  following  schedule:  20% on the  fifteenth day of each
            April,  July,  and October and 40% on the  fifteenth day of January,
            with the first payment  being due on April 15, 1996.  The Cash Bonus
            payable hereunder shall be:

            3.2.1 $100,000  for the year  beginning  January  1, 1996 and ending
                  December 31, 1996.

            3.2.2 $100,000  for the year  beginning  January  1, 1997 and ending
                  December 31, 1997.

            3.2.3 Amounts  approved by Company's  board of directors for periods
                  after  December  31,  1997,  but not  less  than  $25,000  per
                  calendar quarter.

      3.3   STOCK OPTIONS AND INCENTIVE COMPENSATION

            3.3.1 On November 22, 1995,  Company  granted to Executive an option
                  (the "Stock  Option") to purchase  60,000  shares of Company's
                  common


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                  stock under the 1995 Stock Incentive Plan,  which was approved
                  by Company's  board of  directors  on November  22, 1995.  The
                  grant of the Stock Option was conditioned upon the approval of
                  the 1995 Stock Incentive Plan by Company's shareholders and to
                  the execution of this Agreement.  The Stock Option is governed
                  by a separate stock option agreement.

4. TERMINATION FOR DISABILITY

      4.1   For purposes of this  Agreement,  the term  "disability"  shall mean
            Executive's  inability  because of sickness or injury to perform the
            material  duties of his  occupation,  as  determined  by a physician
            acceptable to Company.

      4.2   If, during the Employment  Period,  because of disability  Executive
            becomes unable to perform his duties for six months in the aggregate
            in any  12-month  period,  or for any  consecutive  three  months in
            circumstances where Executive's medical prognosis is that he will be
            unable to resume  performance  of his  duties  within an  additional
            three months,  then Company may thereafter  terminate the Employment
            Period  upon 30 days'  written  notice to  Executive.  At  Company's
            request  and  expense,  Executive  shall  submit to annual  physical
            examinations  by  a  physician  mutually  approved  by  Company  and
            Executive,  and  Executive  will execute  such written  consents for
            release of information as will permit the physician's report on each
            examination to be delivered to Company's board of directors.

      4.3   Beginning with the date of any termination of the Employment  Period
            because of Executive's disability, Company shall provide:

            4.3.1 Disability income benefits  comparable to the benefits payable
                  under the insurance policies currently held by Company, issued
                  by Standard  Insurance  Company.  Company shall at its expense
                  continue   to  maintain   in  effect   those   policies  or  a
                  substantially  comparable  policy or policies  throughout  the
                  Employment Period.

            4.3.2 Employee  Group  Benefits  (as  defined  in  Section  6.1)  to
                  Executive  for so  long as  Executive  meets  the  eligibility
                  requirements  for  participation  in the insurance,  plans and
                  programs  maintained  or provided by Company for its employees
                  or executive officers generally. Company shall be obligated to
                  use


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                  its best efforts to maintain Employee's
                  eligibility to participate in such insurance,
                  plans and programs.

            4.3.3 Post-Retirement  Medical  Coverage to Executive as provided in
                  Section .

4.4   Upon any  termination  of the  Employment  Period  because of  Executive's
      disability,  Company's only other  obligations  to Executive  shall be the
      payment of: (a) Base Salary,  Cash Bonus, and benefits accrued to the date
      of termination; and (b) Deferred Compensation (as defined in Section 9).

5.    DEATH OF EXECUTIVE

      In the event of  Executive's  death  before any other  termination  of the
      Employment Period, the Employment Period shall terminate  effective at the
      date of his death.  Upon  termination of the Employment  Period because of
      Executive's  death,  Company's only  obligations to Executive shall be the
      payment of: (a) Base Salary,  Cash Bonus, and benefits accrued to the date
      of termination; and (b) Deferred Compensation.

6.    EMPLOYEE GROUP BENEFITS

      6.1   This  Agreement  shall not operate to reduce or otherwise  adversely
            affect  Executive's  continuing or future  participation  in, or his
            vested rights or accrued benefits under any plan,  program or policy
            of  Company  or any of its  subsidiaries  providing  Employee  Group
            benefits.  The term "Employee  Group  Benefits"  shall mean medical,
            dental, vision, group life, accidental death, and similar insurance,
            plans  and  programs  maintained  or  provided  by  Company  for its
            employees or executive officers generally, but shall not include any
            group  disability  insurance  plans or  programs  so long as Company
            provides  disability  coverage  for  Executive  in  accordance  with
            Section 4.3.1.

      6.2   Following  termination  of the  Employment  Period  (other  than any
            termination  by Company for cause or any  termination  by  Executive
            without good reason), Company shall at its expense provide Executive
            with coverage  ("Post-Retirement  Medical  Coverage") for payment or
            reimbursement of medical expenses  incurred by him, on the following
            terms and conditions:

            6.2.1 The  Post-Retirement  Medical  Coverage  shall be  provided by
                  Company either pursuant to an indemnity or capitation contract
                  with a medical insurance company or health




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                  maintenance organization, or by self-
                  insurance and direct reimbursement by Company
                  from its general funds.

            6.2.2 The  Post-Retirement   Medical  Coverage  shall  include  such
                  coverages,    deductibles,   and   co-payment   benefits   and
                  obligations  as are then being  provided  by  Company  for its
                  executive employees generally, but shall not require Executive
                  to pay insurance premiums.

            6.2.3 The  Post-Retirement  Medical  Coverage shall  terminate as to
                  Executive  at the end of the month  following  the earliest of
                  the following dates:  (a) the date Executive  becomes eligible
                  for Medicare;  or (b) the date at which Executive  attains age
                  65.

      6.3   This  Agreement  shall not operate or reduce or otherwise  adversely
            affect  Executive's  continuing or future  participation  in, or his
            vested rights or accrued benefits under, the Bank's Employee Savings
            and Profit Sharing Plan or any similar successor plan.

7.    TERMINATION OTHER THAN UPON DEATH OR DISABILITY

      7.1   BY  COMPANY.  Company  may  relieve  Executive  of  his  duties  and
            terminate the Employment  Period at any time in its sole  discretion
            upon written  notice to Executive,  in which event  Executive  shall
            have no further  authority to act on behalf of Company or any of its
            affiliates.

            7.1.1 TERMINATION  FOR CAUSE.  If Company  terminates the Employment
                  Period for "cause" (as  defined in Section  7.1.3),  Company's
                  only  obligations  to  Executive  shall be the payment of: (a)
                  Base Salary,  Cash Bonus,  and benefits accrued to the date of
                  termination; and (b) Deferred Compensation.

            7.1.2 TERMINATION   WITHOUT   CAUSE.   If  Company   terminates  the
                  Employment Period without cause, Company's only obligations to
                  Executive  shall be the  payment  of:  (a) Base  Salary,  Cash
                  Bonus,  and benefits  accrued to the date of termination;  (b)
                  Deferred Compensation; (c) Post-Retirement Medical Coverage as
                  provided in Section 6.2; and (d) Base Salary,  Cash Bonus, and
                  Employee Group  benefits  until  December 31, 2001;  provided,
                  however,   Company's  obligation  to  provide  Employee  Group
                  Benefits to Executive





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                  shall exist only so long as  Executive  meets the  eligibility
                  requirements  for  participation  in the insurance,  plans and
                  programs  maintained  or provided by Company for its employees
                  or executive officers generally. Company shall be obligated to
                  use its best efforts to maintain  Executive's  eligibility  to
                  participate in such insurance, plans and programs.

            7.1.3 DEFINITION OF CAUSE. As used in this Agreement,  "cause" shall
                  mean any one of the following:

                  7.1.3.1 Dishonesty, gross negligence, or deliberate misconduct
                        by Executive in  performance of his duties to Company or
                        its  subsidiaries or Executive's  conviction of or entry
                        of a plea of  guilty or nolo  contendere  to a felony or
                        other  crime  that  has or may have a  material  adverse
                        effect on  Executive's  ability  to carry out his duties
                        under this  Agreement or upon the  reputation of Company
                        or its subsidiaries.

                  7.1.3.2  Willful  and  material  breach of this  Agreement  by
                        Executive (other than acts covered by Section  7.1.3.1),
                        which breach continues uncorrected for 30 days following
                        written notice thereof by Company to Executive.

                  7.1.3.3  Executive's   removal  from  office  because  of  the
                        requirement  or  recommendation  of a regulatory  agency
                        having jurisdiction over Company or its subsidiary.

                  7.1.3.4 Uncorrected failure of Executive to perform his duties
                        in  a  manner   consistent  with  past   performance  or
                        consistent with standards respecting either Company's or
                        Executive's  performance  established by Company's board
                        of directors in  discussion  with  Executive  during the
                        course of regular review of Executive's performance. Any
                        such failure of performance shall be




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                           deemed uncorrected if it continues
                           substantially unrectified for a
                           period of 90 days or more.

      7.2   BY EXECUTIVE.  Executive may terminate the Employment  Period at any
            time in his sole discretion upon written notice to Company.

      7.2.1 TERMINATION FOR GOOD REASON. If Executive  terminates the Employment
            Period for "good  reason" (as defined in Section  7.2.3),  Company's
            only  obligations  to  Executive  shall be the  payment of: (a) Base
            Salary, Cash Bonus, and benefits accrued to the date of termination;
            (b) Deferred Compensation;  (c) Post-Retirement  Medical Coverage as
            provided  in Section  6.2;  and (d) Base  Salary,  Cash  Bonus,  and
            Employment  Group  Benefits  until  December  31,  2001;   provided,
            however,  Company's obligation to provide Employee Group Benefits to
            Executive   shall  exist  only  so  long  as  Executive   meets  the
            eligibility  requirements for participation in the insurance,  plans
            and programs  maintained or provided by Company for its employees or
            executive officers generally.  Company shall be obligated to use its
            best efforts to maintain  Executive's  eligibility to participate in
            such insurance, plans and programs.

      7.2.2 TERMINATION  WITHOUT  GOOD  REASON.  If  Executive   terminates  the
            Employment Period without good reason, Company's only obligations to
            Executive shall be the payment of: (a) Base Salary,  Cash Bonus, and
            benefits  accrued  to the  date of  termination;  and  (b)  Deferred
            Compensation.

      7.2.3 DEFINITION OF GOOD REASON. As used in this Agreement,  "good reason"
            shall mean (a) the assignment to Executive of any significant duties
            inconsistent  with his  status as the  Chief  Executive  Officer  of
            Company or any material and adverse  change in his  responsibilities
            or authority hereunder;  (b) the relocation of the Executive without
            his  consent  to any  place  other  than  Eugene,  Oregon  or,  on a
            temporary  basis   comparable  to  the   arrangement   currently  in
            existence,  to  Portland,  Oregon;  or (c)  any  other  willful  and
            material  breach  of  this  Agreement  by  Company  which  continues
            uncorrected for



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                  30 days following written notice thereof by
                  Executive to Company.

8.    OTHER EMPLOYMENT AFTER TERMINATION

      Without the consent of Company's board of directors, which it may withhold
      in its  reasonable  discretion,  during the  three-year  period  following
      termination of the Employment Period, Executive shall not, either directly
      or  indirectly,  engage in, or enter  into any  business  or  perform  any
      services for any other person,  firm,  association or corporation  that is
      engaged in any direct,  substantial competition with Company or any of its
      subsidiaries;  provided,  however,  that this restriction  shall not apply
      following any  termination by Company  without cause,  any  termination by
      Executive with good reason, or any termination by Executive  following the
      acquisition by any person (including any corporation,  partnership,  joint
      venture, trust, association,  or individual) of more than 50% of Company's
      then  outstanding  stock  (whether  by  exchange  of stock or  securities,
      purchase, redemption or any combination thereof) or the acquisition by any
      person of all or substantially all of Company's  operating assets.  Except
      as limited by the foregoing sentence,  Executive's becoming  self-employed
      or accepting  other  employment  following  termination  of the Employment
      Period  shall not  operate  to reduce or impair any  amount  payable,  any
      benefit, any service credit for benefits, or any other right, privilege or
      interest of Executive under this Agreement.

9.    DEFERRED COMPENSATION

      In  addition  to all other  payments  to be made in  accordance  with this
      Agreement,  Company shall pay to  Executive,  or to  Executive's  personal
      representative  in the event of Executive's death prior to satisfaction of
      Company's obligations  hereunder,  the deferred compensation  specified in
      this Section 9 ("Deferred Compensation").

      9.1   AMOUNT  OF  DEFERRED  COMPENSATION.  The total  amount  of  Deferred
            Compensation  shall be equal to eight and four  tenths  (8.4)  times
            Executive's Base Salary as specified in Section 3.1.2.

      9.2   VESTED  PERCENTAGE.  The Deferred  Compensation shall be 100% vested
            upon execution of this  Agreement,  unless the Employment  Period is
            terminated  by  Company  for  cause or is  terminated  by  Executive
            without  good  reason,   in  either  of  which  cases  the  Deferred
            Compensation  shall be vested 95% until  October  1, 1996,  on which
            date the Deferred  Compensation shall become 100% vested. Except for
            this  vesting  schedule,  the  Deferred  Compensation  shall  not be
            subject to reduction



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         for any reason (including but not limited to early
         termination of the Employment Period).

      9.3   INSTALLMENT PAYMENTS.  The Deferred Compensation shall be payable by
            Company in 288 equal semimonthly payments, without interest, payable
            on the fifteenth  day and the last day of each calendar  month after
            commencement of payments.

      9.4   COMMENCEMENT OF PAYMENTS.  The first semimonthly payment of Deferred
            Compensation  shall be paid on the  fifteenth  day of the month next
            following  the month in which occurs the  earliest of the  following
            dates:

            9.4.1 December 31, 2001.

            9.4.2 The date of Executive's death.

            9.4.3 The  date of  termination  of the  Employment  Period,  unless
                  Executive's  employment shall have terminated by reason of his
                  disability.

            9.4.4 The date of the last  payment to be made under the  disability
                  income  insurance  policy  referenced  in  Section  4.3.1,  if
                  Executive's  employment shall have terminated by reason of his
                  disability.

9.5   NO PREPAYMENT.  Deferred  Compensation shall not be prepaid or accelerated
      by Company  without the  written  approval of  Executive  or his  personal
      representative.

10.   AUTOMOBILE

      Company  agrees to provide for  Executive's  use an automobile  during the
      Employment Period on terms  substantially  comparable to Company's current
      arrangements with Executive.

11.   PAYROLL WITHHOLDINGS

      All payments of Base Salary, Cash Bonus, Deferred Compensation,  and other
      compensation  payable  by  Company  pursuant  to this  Agreement  shall be
      subject to the customary  withholding of income taxes and shall be subject
      to other  withholdings  required  with respect to  compensation  paid by a
      corporation to an employee.

12.   EXECUTIVE'S COVENANT AND INDEMNITY

      Executive  covenants  and  agrees  that all  information  supplied  by him
      incident to Company's or his application for any life,  disability  income
      or other insurance to fund (directly or indirectly)  Company's obligations
      hereunder will be true,




<PAGE>



     accurate  and  complete.  Executive  agrees to  indemnify  and hold Company
     harmless  from any loss or  reduction of life,  disability  income or other
     insurance  benefits or  proceeds  resulting  from breach of this  covenant.
     Company  shall  have the  right to set off any such  loss or  reduction  in
     insurance  benefits or proceeds  against amounts Company would otherwise be
     obligated to pay to Executive in accordance with this Agreement.

13.   ARBITRATION

      Any  controversy,   claim,  dispute  or  difference  arising  out  of  the
      interpretation,  construction  or performance  of this Agreement  shall be
      settled by arbitration in the state of Oregon under the rules and auspices
      of the  American  Arbitration  Association,  and  judgment  upon the award
      entered  in  such   arbitration   may  be  entered  in  any  court  having
      jurisdiction thereof.

14.   JURISDICTION

      This  Agreement  has been made in and shall be governed by the laws of the
      state of Oregon.

15.   SUCCESSORS AND ASSIGNS

      All rights and duties of Company under this Agreement  shall be binding on
      and inure to the benefit of its  successors,  assigns or any company which
      purchases or otherwise  acquires all or substantially all of its operating
      assets or outstanding  shares by any method.  This Agreement  shall not be
      assignable  by  Executive  other than by will or the laws of  descent  and
      distribution.  This  Agreement  shall  inure  to  the  benefit  of  and be
      enforceable by Executive's estate or personal  representative.  References
      in this Agreement to Executive's  personal  representative or estate shall
      also mean and include Executive's heirs and devisees.

16.   LEGAL COUNSEL AND EXPENSES

      The  parties  acknowledge  and  agree  that:  (a) the law firm of  Gleaves
      Swearingen  Larsen  Potter  Scott & Smith  ("GSLPSS")  has  acted as legal
      counsel to Company, Bank, and Executive,  respectively, on various matters
      in the past; (b) that GSLPSS represents Executive only, and not Company or
      Bank, in connection with this Agreement;  (c) neither Company nor Bank has
      sought  or relied  on any  advice  from  GSLPSS  in  connection  with this
      Agreement;  (d) prior to executing this  Agreement,  Company and Bank have
      obtained  and relied upon review by, and advice from their  general  legal
      counsel,  Tonkon, Torp, Galen, Marmaduke & Booth, concerning Company's and
      Bank's  rights  and  obligations  under  this  Agreement.   Company  shall
      reimburse Executive the amount of legal fees




<PAGE>



     incurred by Executive in having this Agreement prepared by
     GSLPSS.

17.   ATTORNEY FEES

      If any action,  suit or  arbitration is instituted to enforce or interpret
      this Agreement, the prevailing party shall be entitled to recover from the
      other party, in addition to all other rights and remedies,  the prevailing
      party's  reasonable  attorney fees in the  arbitration  or at trial and on
      appeal.

18.   INTEGRATION

      Effective  at October 1, 1995,  this  Agreement  entirely  superseded  the
      Employment  Agreement  dated  October  1,  1991,  and the 1991  Employment
      Agreement  shall be deemed  terminated,  and no further  payments shall be
      made under that  Agreement,  except for the January 15, 1996  payment with
      respect to Executive's  cash bonus for 1995.  This Agreement  contains the
      entire agreement of the parties relating to the subject matter hereof, and
      may not be  amended  except  by an  instrument  in  writing  signed by the
      parties.

19.   NOTICES

      All notices required or permitted under this Agreement shall be in writing
      and may be personally  served or mailed by  registered  or certified  U.S.
      mail,  postage  prepaid and  addressed  as follows,  or sent to such other
      address as a party shall specify by notice to the other party:

      If to Company:    Centennial Bancorp
                        675 Oak Street
                        Eugene, Oregon 97401
                              Attention: Secretary

      If to Executive:  Richard C. Williams
                        2060 Graham Drive
                        Eugene, Oregon 97405

20.   SEVERABILITY

      If any provision of this Agreement  shall be found,  in any action,  suit,
      arbitration  or  other  proceeding,  to be  invalid  or  ineffective,  the
      validity and effect of the remaining provisions shall not be affected.

21.   PERFORMANCE BY COMPANY OR BANK

      All compensation and benefits to be provided to Executive pursuant to this
      Agreement  shall be  provided  either by Company or by Bank,  or partly by
      each.




<PAGE>


22.   EXECUTION

      The parties have executed  this  Agreement on the dates  specified  below,
      with this  Agreement to be effective at the date  appearing in the caption
      of this Agreement.

COMPANY:                        EXECUTIVE:

CENTENNIAL BANCORP


By  /s/Cordy H. Jensen            /s/Richard C. Williams
  -----------------------       --------------------------
  Cordy H. Jensen               Richard C. Williams
  Director and Secretary

Date:  November 22, 1995        Date:  November 22, 1995
               ----                            ----