CENTENNIAL BANCORP

                       RESTATED 1995 STOCK INCENTIVE PLAN

                        Adopted by the Board of Directors
                              on November 22, 1995
                         (Amended and Restated effective
                              as of March 18, 1998)


                                   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.

                    f. "COMMON STOCK" means the shares of Common Stock of the
          Company, without par value.

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



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                    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.

                    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.
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                    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.


                               IV. ADMINISTRATION

                  A. Composition of CommitteeComposition 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 CommitteeAuthority 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.

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                  C.       Liability of Committee MembersLiability 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 PlanCosts 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.

                         VI. SHARES SUBJECT TO THE PLAN

                  A. Aggregate Number of SharesAggregate 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 1,100,000 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 OfferedStock 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 PeriodOption 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 OptionLimitations 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 OptionsSpecial
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 CertificatesSeparate 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 AgreementOption 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 PaymentExercise 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 ServiceTermination 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.

                           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.
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                           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 ShareholderRights 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
CorporationsOptions 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 PeriodRestriction 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.

                  B. Other Terms and ConditionsOther 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,

<PAGE>

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 PaymentPurchase 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 AgreementRestricted 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,
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

<PAGE>

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.

                                XI. MISCELLANEOUS

                  A. No Right To An AwardNo 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 ConferredNo 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; WithholdingOther 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 ActionNo 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 TransferRestrictions 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

<PAGE>

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