Bank of the Cascades
Supplemental Employee Retirement Plan



    



 


BANK OF THE CASCADES


SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN


 


This SUPPLEMENTAL EMPLOYEE
RETIREMENT PLAN (this “Agreement”) is adopted this 20th day of March, 2008, by and between BANK OF THE CASCADES, an
Oregon corporation located in Bend, Oregon (the “Bank”), and Gregory D. Newton (the “Executive”).


 


This Agreement amends
and restates the prior Salary Continuation Agreement dated November 19, 1998 and Supplemental Employee Retirement Plan, dated March
9, 2004, between the Bank and the Executive (the “Prior Agreements”). The parties intend this Agreement to be a material
modification of the Prior Agreements such that all amounts earned and vested prior to December 31, 2004 shall be subject to the
provisions of Code Section 409A.


 


The purpose of this
Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees
who contribute materially to the continued growth, development and future business success of the Bank. This Agreement shall be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”),
as amended from time to time.


 


Article 1


Definitions


 


Whenever used in this
Agreement, the following words and phrases shall have the meanings specified:


 


		1.1	“Bancorp” means Cascade Bancorp.



 


		1.2	“Account Value” means the amount shown on Schedule A under the heading Account
Value. The parties expressly acknowledge that the Account Value may be different than the liability that should be accrued by the
Bank under Generally Accepted Accounting Principles for the Bank’s obligation to the Executive under this Agreement.



 


		1.3	“Beneficiary” means each designated person or entity, or the estate of the deceased
Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4.



 


		1.4	“Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.



 


		1.5	“Board” means the Board of Directors of the Bank as from time to time constituted.



 


		1.6	“Change in Control” means the occurrence of any of the following events:



 


		(a)	Any person acting individually or as a “group” for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) becomes the “beneficial
owner” (as defined in Rule 13d(3) of the Exchange Act), directly or indirectly, of securities of Bancorp representing fifty
percent (50%) or more of the total voting power represented by Bancorp’s then outstanding voting securities; 



 



    	 



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Supplemental Employee Retirement Plan



    

 


		(b)	The consummation of the sale, liquidation or disposition by Bancorp
of all or substantially all of Bancorp’s or the Bank’s assets; or 



		(c)	The consummation of a share exchange, merger or consolidation
of Bancorp or the Bank with any other corporation, other than a share exchange, merger or consolidation which would result in the
voting securities of Bancorp outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of Bancorp or such surviving entity or its parent outstanding immediately after such
share exchange, merger or consolidation.



 


Notwithstanding the foregoing,
for the purposes of this Agreement, no transaction, series of transactions or change in the composition of the Board or of the
board of directors of Bancorp shall be considered a Change in Control unless it meets the requirements of Code Section 409A(a)(2)(A)(v).


 


		1.7	“Code” means the Internal Revenue Code of 1986, as amended.



 


		1.8	“Disability” means the Executive: (i) is 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 can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months
under a long-term disability plan covering employees of the Bank. Medical determination of Disability may be made by either the
Social Security Administration or by the provider of disability insurance covering employees of the Bank provided that the definition
of “disability” applied under such insurance program complies with the requirements of the preceding sentence. Upon
the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s
or the provider’s determination.



 


		1.9	“Early Termination” means Separation from Service before Normal Retirement Age
except when such Separation from Service occurs within eighteen (18)
months following a Change in Control or due to death or Termination for Cause.



 


		1.10	“Normal Retirement Age” means the Executive attaining age sixty-two (62).



 



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Supplemental Employee Retirement Plan



    

 


		1.11	“Plan Administrator” means the Board or such committee or person as the Board
shall appoint.



 


		1.12	“Plan Year” means each twelve (12) month period commencing on January 1 and
ending on December 31 of each year.



 


		1.13	“Schedule A” means the schedule attached to this Agreement and made a part hereof.
Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3.



 


		1.14	“Separation from Service” means termination of the Executive’s employment
with the Bank for reasons other than death or Disability. Whether a Separation from Service has occurred is determined in
accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank
and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona
fide services the Executive would perform after such date would permanently decrease to no more than twenty percent (20%) of the
average level of bona fide services performed as an employee or thirty-three percent (33%) of the average level of bona fide services
performed as an independent contractor over the immediately preceding thirty-six (36) month period (or the full period of services
to the Bank if the Executive has been providing services to the Bank less than thirty-six (36) months).



 


		1.15	“Specified Employee” means an employee who at the time of Separation from Service
is a key employee of the Bank, if any stock of the Bank is publicly traded on an established securities market or otherwise. For
purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i),
(ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the
twelve (12) month period ending on December 31 (the “identification period”). If the employee is a key employee during
an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month
period that begins on the first day of April following the close of the identification period.



 


		1.16	“Termination for Cause” means Separation from Service for:



 


		(a)	gross negligence or gross neglect of duties to the Company;



 


		(b)	commission of a felony or of a gross misdemeanor involving moral turpitude;



 



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Supplemental Employee Retirement Plan



    

 


		(c)	fraud, disloyalty, dishonesty, or willful violation of any law or significant Company policy committed
in connection with Executive’s employment and resulting in a material adverse effect on the Company; or



 


		(d)	issuance of an order for removal of the Executive by the Company’s banking regulators.



 


		1.17	“Year of Service” means the twelve (12) consecutive month period beginning on
the Executive’s date of hire and any twelve (12) month anniversary thereof during the entirety of which time the Executive
is an employee of the Bank.



 


Article 2


Distributions During Lifetime






		2.1	Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the
Bank shall distribute the benefit described in this Section 2.1 in lieu of any other benefit under this Article.



 


		2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is Seventy Three Thousand Five
Hundred Dollars ($77,150). 



 


		2.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in
twelve (12) equal monthly installments commencing on the first day of the month following Separation from Service. The annual benefit
shall be distributed to the Executive for twenty (20) years.



 


		2.1.3	Benefit Inflator. Commencing on the first anniversary of the first benefit payment under
this Section 2.1 and continuing on each subsequent anniversary, the benefit shall increase by two and one-half percent (2.5%) from
the previous anniversary date.



 


		2.2	Early Termination Benefit. Upon Early Termination, the Bank shall distribute the benefit
described in this Section 2.2 in lieu of any other benefit under this Article.



 


		2.2.1	Amount of Benefit. The benefit under this Section 2.2 is the amount shown on Schedule A.



 


		2.2.2	Distribution of Benefit. The Bank shall distribute the benefit to the Executive in a lump
sum within thirty (30) days following Separation from Service.



 



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Supplemental Employee Retirement Plan



    

 


		2.3	Disability Benefit. Upon Disability prior to Normal Retirement Age, the Bank shall
distribute the benefit described in this Section 2.3 in lieu of any other benefit under this Article.



 


		2.3.1	Amount of Benefit. The benefit under this Section 2.3 is the amount shown on Schedule
A.



 


		2.3.2	Distribution of Benefit. The Bank shall distribute the benefit to the Executive in two hundred
forty (240) equal monthly installments commencing on the first day of the month following Disability.



 


		2.4	Change in Control Benefit. If a Change in Control occurs followed by Separation from Service
prior to Normal Retirement Age (provided the Separation from Service occurs within eighteen (18) months following a Change in Control),
the Bank shall distribute the benefit described in this Section 2.4 in lieu of any other benefit under this Article.



 


		2.4.1	Amount of Benefit. The benefit under this Section 2.4 is the amount shown on Schedule
A.



 


		2.4.2	Distribution of Benefit.  The Bank shall distribute the benefit to the Executive
in a lump sum within thirty (30) days following Separation from Service.



 


		2.5	Restriction on Commencement of Distributions.  Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.5 shall govern
all distributions hereunder. If benefit distributions which would otherwise be made to the Executive due to Separation from Service
are limited because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months
following Separation from Service. Any distribution which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service. All
subsequent distributions shall be paid in the manner specified.



 


		2.6	Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the
Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred
hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code
Section 409A. Any such distribution will decrease the Executive’s benefits distributable under this Agreement.



 


		2.7	Change in Form or Timing of Distributions.  For distribution of benefits under this
Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend this Agreement to delay the timing or change
the form of distributions.  Any such amendment:



 



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Supplemental Employee Retirement Plan



    

 


		(a)	may not accelerate the time or schedule of any distribution, except as provided in Code Section
409A;



		(b)	must, for benefits distributable under Sections 2.1, 2.2 and 2.4, delay the commencement of distributions
for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and



		(c)	must take effect not less than twelve (12) months after the amendment is made.



 


Article 3


Distribution at Death


 


		3.1	Death During Active Service. If the Executive dies prior to Separation from Service and
Disability, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed
in lieu of any benefit under Article 2.



 


		3.1.1	Amount of Benefit. The benefit under this Section 3.1 is the Normal Retirement Benefit amount
described in Section 2.1.1.



 


		3.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Beneficiary
in twelve (12) equal monthly installments for twenty (20) years commencing on the first day of the fourth month following the Executive’s
death. The Beneficiary shall be required to provide the Executive’s death certificate to the Bank.



 


		3.1.3	Benefit Inflator. Commencing on the first anniversary of the first benefit payment under
this Section 3.1 and continuing on each subsequent anniversary, the benefit shall increase by two and one-half percent (2.5%) from
the previous anniversary date.



 


		3.2	Death During Distribution of a Benefit. If the Executive dies after any benefit distributions
have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the
remaining benefits at the same time and in the same amounts as the benefits would have been distributed to the Executive had the
Executive survived.



 



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Supplemental Employee Retirement Plan



    

 


		3.3	Death after Separation from Service and prior to Commencement of Benefit Distributions.
If the Executive is entitled to benefit distributions under this Agreement but dies prior to the date that commencement of
any benefit distributions is scheduled to be made under this Agreement, the Bank shall distribute to the Beneficiary the same benefits
to which the Executive would have been entitled prior to death, except that the benefit distributions shall be paid in the manner
specified in Section 3.1.2 and shall commence on the first day of the fourth month following the Executive’s death.



 


Article 4


Beneficiaries


 


		4.1	In General. The Executive shall have the right, at any time, to designate a Beneficiary
to receive any benefit distributions under this Agreement upon the death of the Executive. The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive
participates.



 


		4.2	Designation. The Executive shall designate a Beneficiary by completing and signing the Beneficiary
Designation Form and delivering it to the Plan Administrator or its designated agent. If the Executive names someone other than
the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent
is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned
to the Plan Administrator. The Executive's beneficiary designation shall be deemed automatically revoked with respect to a Beneficiary
if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently
dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms
of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures. Upon the acceptance by the Plan Administrator
of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator
shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator
prior to the Executive’s death.



 


		4.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.



 


		4.4	No Beneficiary Designation. If the Executive dies without an acknowledged beneficiary designation,
or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.
If the Executive has no surviving spouse, any benefit shall be paid to the Executive's estate.



 


		4.5	Facility of Distribution. If the Plan Administrator determines in its discretion that a
benefit is to be distributed to a Beneficiary who is a minor, incapacitated, under legal disability or considered by the Plan Administrator
to be incapable of handling receipt of the benefits hereunder if paid to the Beneficiary directly, the Plan Administrator may direct
distribution of such benefit to the guardian, legal representative or person having the care or custody of such individual. The
Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution
of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as
the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.



 



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Supplemental Employee Retirement Plan



    

 


Article 5


General Limitations


 


		5.1	Termination for Cause. Notwithstanding any provision of this Agreement to the contrary,
the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated
by the Bank or an applicable regulator due to a Termination for Cause.



 


		5.2	Misstatement. No benefit shall be distributed if an insurance company which issued a life
insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the
Executive on an application for such life insurance, or (ii) for any other reason.



 


		5.3	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank
shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued
by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.



 


		5.4	Golden Parachute Indemnification Payments. Notwithstanding anything herein to the contrary,
any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance
with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or
guidance promulgated thereunder.



 


		5.5	Forfeiture Provisions.



 


(a)     Prior
to Separation from Service and during the eighteen (18) month period thereafter, if the Executive breaches the Confidentiality
and Nonsolicitation Agreement between the Executive and Bank, the Executive shall forfeit any benefits hereunder and shall be obligated
to repay any benefits already paid.


 


(b)     Prior
to Separation from Service and during the eighteen (18) month period thereafter, if the Executive transacts business of a nature
similar to the Bank’s or Bancorp’s business with customers of the Bank or Bancorp, the Executive shall forfeit any
benefits hereunder and shall be obligated to repay any benefits already paid.


 



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Supplemental Employee Retirement Plan



    

 


Article 6


Administration of Agreement


 


		6.1	Plan Administrator Duties. The Plan Administrator shall
administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret
and enforce rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including
interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion
and authority does not conflict with Code Section 409A.



 


		6.2	Agents. In the administration of this Agreement, the Plan
Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting
through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Bank.



 


		6.3	Binding Effect of Decisions. Any decision or action of
the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or
application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in this Agreement. 



 


		6.4	Indemnity of Plan Administrator. The Bank shall indemnify
and hold harmless the Plan Administrator and its agents against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.



 


		6.5	Bank Information. The Bank shall supply full and timely information to the Plan Administrator
on all matters relating to the date and circumstances of the Executive’s death, Disability or Separation from Service, and
such other pertinent information as the Plan Administrator or its agents may reasonably require.



 


		6.6	Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred
twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.



 


Article 7


Claims And Review Procedures


 


		7.1	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received
benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:



 


		7.1.1	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan
Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the
claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within
one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the claimant.



 



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Supplemental Employee Retirement Plan



    

 


		7.1.2	Timing of Plan Administrator Response. The Plan Administrator shall respond to such
claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days
by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required.
The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render
its decision.



 


		7.1.3	Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan
Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:



 


		(a)	The specific reasons for the denial;



		(b)	A reference to the specific provisions of this Agreement on which the denial is based;



		(c)	A description of any additional information or material necessary for the claimant to perfect the
claim and an explanation of why it is needed;



		(d)	An explanation of this Agreement’s review procedures and the time limits applicable to such
procedures; and



		(e)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following
an adverse benefit determination on review.



 


		7.2	Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant
shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows:



 


		7.2.1	Initiation – Written Request. To initiate the review, the claimant, within sixty (60)
days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for
review.



 


		7.2.2	Additional Submissions – Information Access. The claimant shall then have the opportunity
to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide
the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.



 



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Supplemental Employee Retirement Plan



    

 


		7.2.3	Considerations on Review. In considering the review, the Plan Administrator shall take into
account all materials and information the claimant submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.



 


		7.2.4	Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to
such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional
sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60) day period, that an additional
period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator
expects to render its decision.



 


		7.2.5	Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision
on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification
shall set forth:



 


		(a)	The specific reasons for a denial;



		(b)	A reference to the specific provisions of this Agreement on which the a denial is based;



		(c)	A statement that the claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits; and



		(d)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).



 


Article 8


Amendments and Termination


 


		8.1	Amendments. This Agreement may be amended only by a written agreement signed by the Bank
and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from
its auditors or banking regulators or to comply with legislative changes or tax law.



 


		8.2	Plan Termination Generally. This Agreement may be terminated only by a written agreement
signed by the Bank and the Executive. The benefit shall be the Account Value as of the date this Agreement is terminated. Except
as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.
Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or
Article 3.



 



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Supplemental Employee Retirement Plan



    

 


		8.3	Plan Terminations Under Code Section 409A. Notwithstanding anything to the contrary in Section
8.2, if this Agreement in the following circumstances:



 


		(a)	Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all
distributions are made no later than twelve (12) months following such termination of this Agreement and further provided that
all the Bank's arrangements which are substantially similar to this Agreement are terminated so the Executive
and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of such termination;



		(b)	Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the
amounts deferred under this Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which
this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture;
or (iii) the first calendar year in which the distribution is administratively practical; or



		(c)	Upon the Bank’s termination of this and all other arrangements that would be aggregated with
this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial
health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four
(24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement
for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate
the Agreement;



 


the Bank may distribute the Account
Value, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms.


 


Article 9


Miscellaneous


 


		9.1	Binding Effect. This Agreement shall bind the Executive and the Bank and their beneficiaries,
survivors, executors, administrators and transferees.



 


		9.2	No Guarantee of Employment. This Agreement is not a contract for employment. It does not
give the Executive the right to remain as an employee of the Bank nor interfere with the Bank's right to discharge the Executive.
It does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any
time.



 


		9.3	Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any manner.



 



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Supplemental Employee Retirement Plan



    

 


		9.4	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Agreement. The Executive acknowledges that the Bank’s sole liability regarding
taxes is to forward any amounts withheld to the appropriate taxing authorities. The Bank shall satisfy all applicable reporting
requirements.



 


		9.5	Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of
the State of Oregon without giving effect to any conflict-of-law principle that would result in the laws of any other jurisdiction
governing this Agreement, except to the extent preempted by the laws of the United States of America.



 


		9.6	Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors
of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute
such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors. Any insurance on the Executive's life or other informal funding asset is a
general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.



 


		9.7	Reorganization. The Bank shall not merge or consolidate into or with another bank,
or reorganize, or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank,
firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such an
event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor entity.



 


		9.8	Entire Agreement. This Agreement constitutes the entire agreement between the Bank
and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than
those specifically set forth herein.



 


		9.9	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires
and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.



 


		9.10	Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator
to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Plan Administrator may perform
such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank,
provided that such alternative act does not violate Code Section 409A.



 


		9.11	Headings. Article and section headings are for convenient reference only and shall not control
or affect the meaning or construction of any provision herein.



 


		9.12	Validity. If any provision of this Agreement shall be illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as
if such illegal or invalid provision had never been included herein.



 



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    	Bank of the Cascades
Supplemental Employee Retirement Plan



    

 


		9.13	Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator
under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the address
below:



 


	 
	 
	 


 


Such notice shall be deemed given
as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration
or certification.


 


Any notice or filing required
or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by
mail to the last known address of the Executive.


 


		9.14	Deduction Limitation on Benefit Payments. If the Bank reasonably anticipates that the Bank’s
deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m),
then to the extent deemed necessary by the Bank to ensure that the entire amount of any distribution from this Agreement is deductible,
the Bank may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be
distributed to the Executive (or the Beneficiary in the event of the Executive's death) at the earliest date the Bank reasonably
anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).



 


IN WITNESS WHEREOF,
the Executive and a duly authorized representative of the Bank have signed this Agreement.


 





	EXECUTIVE	 	BANK
	 	 	 
	/s/ Gregory D. Newton	 	By:	/s/ Peggy L.
    Biss 
	Gregory D. Newton	 	Title:
	EVP 




 






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