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                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
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PARTIES:            CENTENNIAL BANCORP ("Company")

                    RICHARD C. WILLIAMS ("Executive").

EFFECTIVE DATE:     MAY 5, 2000
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This Second Amendment is made in respect of the following facts:

         A. The parties entered into an Employment Agreement dated October 1,
            1995, and a First Amendment to Employment Agreement dated December
            1, 1997 (collectively the "Agreement") respecting Executive's
            employment by Company for a term ending December 31, 2001.

         B. The parties have agreed further to amend the Agreement as provided
            in and subject to the conditions stated in this Second Amendment.

AGREEMENT:

Section 9.1 of the Agreement is amended to provide as follows:

            9.1.  AMOUNT OF DEFERRED COMPENSATION. The total amount of Deferred
                  Compensation shall be equal to fourteen (14) times Executive's
                  Base Salary as specified in Section 3.1.2, subject to
                  adjustment in accordance with the provisions of Section 9.3.

Section 9.3 of the Agreement is amended to provide as follows:

   9.3.   INSTALLMENT PAYMENTS. The Deferred Compensation shall be payable by
          Company in 480 equal semimonthly installment payments, without
          interest, payable on the fifteenth and the last day of each calendar
          month after commencement of payments. The amount of each installment
          payment, and the total balance of Deferred Compensation remaining
          payable, shall be subject to adjustment as provided in this Section
          9.3.

          9.3.1.   CPI ADJUSTMENT. Beginning with the thirteenth (13th) month of
                   the Deferred Compensation payment period, and at every
                   twelfth (12th) month thereafter during the payment period,
                   the amount of each installment payment thereafter payable,
                   and the total balance of Deferred Compensation then remaining
                   payable, shall be increased by the percentage of increase, if
                   any, in the CPI from the fifteenth (15th) month preceding the
                   month of adjustment to the third (3rd) month preceding the
                   month of adjustment.

          9.3.2.   CPI DEFINED.  The term "CPI" means the Consumer Price Index
                   for All Urban Consumers, All Items, U.S. City Average,
                   1982-84 = 100, as published by the United States Department
                   of Labor Statistics. In no event shall the amount or number
                   of installment payments remaining payable, or the total
                   balance of Deferred Compensation remaining payable, at any
                   time be decreased by reason of this CPI provision. If
                   publication of the CPI shall be discontinued, then another
                   comparable, generally recognized index shall


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SECOND AMENDMENT TO EMPLOYMENT AGREEMENT                                  Page 1
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                   be selected by the parties for the purpose of calculating
                   increases in the amounts payable hereunder, so as to reflect
                   the general rate of price inflation in the United States.

EFFECT OF AMENDMENT

Except as expressly modified by this Second Amendment, all terms, conditions,
and provisions of the Agreement (including the First Amendment), and all rights
and obligations of the parties thereunder, shall continue in full force and
effect.

LEGAL COUNSEL AND EXPENSES

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

EXECUTION

The parties have executed this Second Amendment to be effective at the date
appearing in the caption on page 1.

COMPANY                                      EXECUTIVE

CENTENNIAL BANCORP

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


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SECOND AMENDMENT TO EMPLOYMENT AGREEMENT                                  Page 2