3.2.2. Employee’s complete disability. “Complete disability” as used herein shall mean theinability of Employee, due to illness, accident, or other physical or mental incapacity, to performthe services required under the Agreement for an aggregate of ninety (90) days within any period of180 consecutive days during the term hereof, provided, however, that disability shall notconstitute a basis for discharge for cause;3.2.3. The discharge of Employee by Bank for cause. “Cause” as used herein shall mean (i)Employee’s gross negligence or willful misconduct as shall constitute, as a matter of law, a breachof the covenants and obligations of Employee hereunder; (ii) failure or refusal of Employee tocomply with the provisions of the Agreement; (iii) Employee’s conviction by any duly constitutedcourt with competent jurisdiction of a crime (other than traffic offenses); (iv) Employee’smalfeasance or incompetence, provided that in applying this criteria Bank shall not be unreasonableor arbitrary, and provided further that prior to effecting a dismissal under this Section (iv) Bankshall afford Employee with fair and reasonable warning and with a fair and reasonable opportunityto cure any defects in Employee’s performance.3.3. Termination by Employee. Employee may terminate Employee’s employment with Bank with orwithout cause by giving thirty (30) days written notice of termination. “Cause” as used hereinshall include Bank’s failure or refusal to comply with the provisions of the Agreement.3.4. Effect of Termination. The termination of Employee’s employment shall constitute a tender byEmployee of Employee’s resignation as an officer of Bank, and as a member of any board of directorsor board committees of Bancorp or its affiliates if Employee is a member thereof at the time oftermination.3.5. Payment on Termination. If Employee’s employment is terminated by Employee with or withoutcause, or by Bank with or without cause, Employee shall be paid all base salary and benefitsaccrued under the Agreement as of the termination date.3.6. Performance Bonus. If Employee’s employment is terminated by Employee with cause, or by Bankwithout cause, Employee shall be paid, in addition to the amounts payable under Section 3.5 of theAgreement: (i) all non-forfeitable deferred compensation, if any; and (ii) unpaid performance bonuspayments, if any, payable under Section 4.2 of the Agreement, which shall be declared earned andpayable based upon performance up to, and shall be pro-rated as of, the date of termination.Employee shall not be entitled to such unpaid performance bonus payments if Employee’s employmentis terminated by Bank with cause or by Employee without cause.4. Compensation.4.1. Base Salary. For the period beginning November 3, 2008 and ending April 14, 2010 Employeeshall be paid an annual base salary of $135,000, payable in equal bimonthly installments andsubject to any deductions required by law.4.2. Performance Bonus. Employee shall be entitled to consideration for annual performance bonuscompensation for each calendar year constituting a percentage of annual base salary earned fromEmployee’s employment by Bank during such calendar year. Bonus compensation shall be subject to anydeductions required by law. The Bank or Bancorp Board shall timely, and at least once yearly,determine the amount of and the formulas and methods for establishing such bonus compensation. Theamount of such bonus compensation shall at all times be discretionary, and Bank may decline toaward a performance bonus to Employee in any year.4.2.1. Employee shall be entitled to a pro-rata performance bonus for less than a full year ofperformance if Employee’s employment is terminated by Employee with cause, or by the Bank withoutcause (including termination following a change of control as described in Section 7.4 of theAgreement), prior to the date on which Employee would otherwise be entitled to consideration forEmployee’s annual performance bonus. In such circumstances, such pro-rata performance bonus shallbe declared earned and payable as of the date of termination.
 

 
5. Benefits; Purchase of Shares.5.1. Eligibility for General Benefits. Employee shall be eligible to participate in any plan ofBank or its affiliates relating to stock options, stock purchases, profit sharing, group lifeinsurance, medical coverage, education and other retirement or employee benefits that Bank or itsaffiliates may adopt for the benefit of employees.5.2. Additional Benefits. Employee shall be eligible to participate in any other benefits which maybe or become applicable to Bank’s executive employees of similar rank. In addition, Employee shallbe entitled to: (i) a reasonable expense account for use in connection with Bank business; and (ii)any other benefits which in Bank’s judgment are commensurate with the responsibilities andfunctions to be performed by Employee under the Agreement, including the payment of reasonableexpenses for attendance by Employee and Employee’s spouse at annual meetings of the Oregon BankersAssociation.5.3. Share Ownership. During the term of the Agreement, including extensions, Employee shallpurchase shares of Bancorp Stock, including purchases through the exercise of stock options, inaccordance with the share ownership policies and requirements established by Bancorp or Bankmanagement in effect from time to time for employees of comparable rank.6. Vacations and Leaves.6.1. Paid Vacation. During the term of the Agreement, Employee shall be entitled to annual paidvacation benefits identical to those offered to employees of Bank holding executive vice presidentor higher positions. The timing of vacations shall be scheduled in a reasonable manner by Employee.Employee shall not be entitled to receive any additional compensation from Bank on account ofEmployee’s failure to take a vacation, and may not accumulate unused vacation time from onecalendar year to the next.6.2. Leaves With or Without Pay. The Bank Board may grant Employee a leave or leaves of absence,with or without pay, at such time or times and upon such terms and conditions as the Board maydetermine.6.3. Mandatory Absence. In each calendar year Employee shall be absent from Bank for one period oftwo consecutive weeks. Such period may include vacation, leave, sick leave, attendance at seminarsor conventions, or any combination thereof.7. Change of Control.7.1. Survival of Rights. Employee’s rights on termination of employment under Section 3 of theAgreement, as well as all other rights of Employee under the Agreement or applicable law, shallsurvive a change of control of Bancorp or Bank whether or not Employee opposed or favored thechange of control.*7.2.*Rights on Change of Control. If a change of control of Bancorp or Bank occurs while theAgreement is in effect, Employee shall have ninety (90) days following the date such change ofcontrol becomes effective to elect to terminate Employee’s employment with cause. If Employee soelects to terminate, such termination shall constitute a termination by Employee with cause, andEmployee shall be paid all base salary and benefits accrued under the Agreement as of thetermination date, and in addition, shall be entitled to a severance payment equal to the lesser of(i) four month’s base salary as of the date of termination multiplied by the number of fullcalendar years Employee has been employed by Bank or any predecessor thereof, or (ii) one month’sbase salary as of the date of termination multiplied by twenty-four (24). For purposes of thisSection a period of continuous full-time employment for six months or more in a calendar year shallcount as a full calendar year. If for any period Employee has been employed simultaneously by Bankand by one or more of its affiliates, such period shall count only once in determining theseverance payment. The severance payment provided herein shall be paid in full within thirty (30)days of the date of Employee’s termination. Notwithstanding the foregoing, if following such changeof control Employee is offered a position of employment either substantially equivalent toEmployee’s compensation and position prior to the change of control, or an executive officerposition with
 

 
significant responsibility and compensation commensurate (and substantially equivalent toEmployee’s previous compensation) with such responsibility, and Employee elects nevertheless totermination Employee’s employment under this Section 7.2, Employee shall be entitled to a minimumseverance payment under this Section equal to one month’s base salary as of the date of terminationmultiplied by nine (9).7.3. Base Compensation. Following a change of control, Bank shall not reduce Employee’s basecompensation in effect prior to the effective date of the change of control for a period of timeequal to the greater of (i) twenty four (24) months from the effective date of the change ofcontrol; (ii) one (1) month for each full calendar year Employee has been employed by Bank; or(iii) the remaining term of the Agreement, including any extensions thereof. For purposes of thisSubsection 7.3, a period of continuous full-time employment for six months or more in a calendaryear shall count as a full calendar year.7.4. Termination Without Cause. If following a change of control Bank terminates Employee’semployment within two (2) years of the effective date of the change of control because of areduction in force or for any other reason, other than for cause pursuant to Section 3.3 of theAgreement, such termination shall constitute a termination by Bank without cause, and Employeeshall receive all payments and benefits due to Employee on termination under Section 7.2 of theAgreement, plus: (i) all non-forfeitable deferred compensation, if any; and (ii) unpaid performancebonus payments, if any, payable under Section 4.2 of the Agreement, which shall be declared earnedand payable based upon performance up to, and shall be pro-rated as of, the date of termination.7.5. Options and Stock. If Employee is a participant in a restricted stock plan or share optionplan, and such plan is terminated involuntarily as a result of the change of control, all stock andoptions shall be declared fully vested and shall be paid, awarded or otherwise distributed. Withrespect to any unexercised options under any stock option plan, such options may be exercisedwithin the period provided in such plan. Effective as of the date of the change of control, anyholding period established for stock paid as bonus or other compensation shall be deemedterminated, except as otherwise provided by law.7.6. Relocation. If relocation is required by the acquiring institution the relocation packageoption will be at the choice of the Employee. He/She may pick Columbia’s relocation package at thetime of the merger or the package offered by the acquiring company. This option is available forone year from the merger date.7.7. Definition. As used in this Section, “control” shall mean the acquisition during Employee’semployment of twenty-five percent (25%) or more of the voting securities of Bancorp or Bank by anyperson, or persons acting as a group within the meaning of Section 13(d) of the Securities ExchangeAct of 1934, or to such acquisition of a percentage between ten percent (10%) and twenty-fivepercent (25%) if the Board or the Comptroller of the Currency, the FDIC, or the Federal ReserveBank have made a determination that such acquisition constitutes or will constitute control ofBancorp or Bank. The term “person” refers to an individual, corporation, bank, bank holdingcompany, or other entity, but excludes any Employee Stock Ownership Plan established for thebenefit of employees of Bancorp or any of its subsidiaries or other affiliates.8. Post Termination Covenants.8.1. Non-Compete Covenants. If Employee terminates Employee’s employment without cause, or ifEmployee’s employment is terminated by Bank for cause, then for one year from the date of suchtermination Employee will not, without the prior written consent of Bank:8.1.1. Undertake full or part-time work, either as an employee or as a consultant, for anotherfinancial institution if such work is to be done, in whole or in part, in or from an office orother work site in Yamhill, Wasco, Hood River, Jefferson, Deschutes, Sherman or Gilliam Counties,Oregon, in Clark and Klickitat Counties, Washington, or in any other county ill Oregon orWashington in which Bancorp or any of its affiliates has a place of business at the time oftermination; or8.1.2. Hire for any financial institution or other employer any employee of Bancorp or any of itsaffiliates, or directly or indirectly cause such an employee to leave Employee’s employment to workfor another employer, if such employee is to work in or from an office or other work site inYamhill, Wasco, Hood
 

 
River, Jefferson, Deschutes, Sherman or Gilliam Counties, Oregon, in Clark and Klickitat Counties,Washington, or in any other county in Oregon or Washington in which Bancorp or any of itsaffiliates has a place of business at the time of termination.8.2. Liquidated Damages for Breach of Non-Compete Covenants; Other Remedies. If Employee breachesthe covenants of Section 8.1, Employee shall be liable to Bank for liquidated damages equal to thelesser of (i) $18,000, or (ii) $1,500 multiplied by the number of months (including fractionsthereof) between the date of breach and one year from the date of Employee’s termination ofemployment. For example, if the date of breach occurs six months after the date of Employee’stermination, liquidated damages shall be $9,000 (6 x $1,500). The parties agree that Bank’s actualmoney damages upon Employee’s breach will be difficult to compute, and further agree that theliquidated damages formula provided herein reasonably represents Bank’s actual money damages.Employee shall pay the liquidated damages required hereunder within ten (10) days of the date Bankmakes written demand for such payment. Nothing herein shall preclude Bank from enforcing any otherlegal or equitable remedies it may have upon Employee’s breach, including injunctive relief. Suchother remedies may be enforced in addition to Bank’s right to liquidated damages under thisSection.8.3. Limitation. The covenants in Sections 8.1 and 8.2 do not apply if Employee terminatesEmployee’s employment for cause, if Employee terminates Employee’s employment for any reason withinninety (90) days after the effective date of a change of control within the meaning of Section 7 ofthe Agreement, or if Employee’s employment is terminated by Bank without cause.8.4. Additional Covenants. The following provisions shall apply and be binding on Employeefollowing Employee’s termination of employment under all circumstances, whether terminationoccurred with cause, without cause, following illness or disability, because of a change ofcontrol, or for any other reason:8.4.1. Employee shall fully cooperate in the defense or prosecution of any litigation arising fromor relating to matters about which Employee has knowledge based on Employee’s employment or otherwork, paid or unpaid, for Bank and its affiliates. To the extent allowed by law Employee shallreceive reasonable compensation in connection with Employee’s performance under this Section 8.4.1;8.4.2. Employee shall at all times keep all confidential and proprietary information gained fromEmployee’s employment by Bank, or from other previous, present or subsequent paid or unpaid workfor Bank and its affiliates, in strictest confidence, and will not disclose or otherwisedisseminate such information to anyone, other than to employees of Bank or its affiliates, exceptas may be required by law, regulation or subpoena; and8.4.3. Employee shall not take or use for any purpose confidential or proprietary information ofBank or its affiliates, including without limitation customer or potential customer lists and tradesecrets.8.5. Compliance with ORS 653.295. Employee acknowledges and agrees that the Agreement constituteseither the initial employment of Employee, or a bona fide advancement of Employee with the Bankunder ORS 653.295 in several respects, including without limitation an increase in base salary andbenefits.9. Miscellaneous.9.1. Recitals; Law; Amendments. Each and every portion of the Agreement is contractual and not amere recital, and all recitals shall be deemed incorporated into the Agreement. The Agreement shallbe governed by and interpreted according to Oregon law and any applicable federal law. TheAgreement may not be amended except by a subsequent written agreement signed by all parties hereto.9.2. Entire Agreement. The Agreement contains the entire understanding and agreement of thepat-ties with respect to the parties’ relationship, and all prior negotiations, discussions orunderstandings, oral or written, are hereby integrated herein. No prior negotiations, discussionsor agreements not contained herein or in such documents shall be binding or enforceable against theparties.9.3. Counterparts. The Agreement may be signed in several counterparts. The signature of one partyon any counterpart shall bind such party just as if all parties had signed that counterpart. Eachcounterpart
 

 
shall be considered an original. All counterparts of the Agreement shall together constitute oneoriginal document.9.4. Successors and Assigns. All rights and duties of Bank under the Agreement shall be binding onand inure to the benefit of Bank’s successors and assigns, including any person or entity whichacquires a controlling interest in Bank and any person or entity which acquires all orsubstantially all of Bank’s assets. Bank and any such successor or assign shall be and remainjointly and severally liable to Employee under the Agreement. Employee may not assign or transferEmployee’s rights or interests in or under the Agreement other than by a will or by the laws ofdescent and distribution. The Agreement shall inure to the benefit of and be enforceable byEmployee’s estate or legal representative.9.5. Waiver. Any waiver by any party hereto of any provision of the Agreement, or of any breachthereof, shall not constitute a waiver of any other provision or of any other breach. If anyprovision, paragraph or subparagraph herein shall be deemed invalid, illegal or unenforceable inany respect, the validity and enforceability of the remaining provisions, paragraphs andsubparagraphs shall not be affected.9.6. Arbitration. Any dispute, controversy, claim or difference concerning or arising from theAgreement or the rights or performance of either party under the Agreement, including disputesabout the interpretation or construction of the Agreement, shall be settled through bindingarbitration in the State of Oregon and in accordance with the rules of the American ArbitrationAssociation. A judgment upon the award rendered in such arbitration may be entered in any court ofcompetent jurisdiction.9.7. Employee Handbook. Employee agrees to be bound by the terms and conditions of any employeehandbook of Bank or its affiliates as may be in effect from time to time, except that in the eventof a conflict between such employee handbook and the Agreement, the Agreement shall control.9.8. Captions. All captions, titles and headings in the Agreement are for convenience only, andshall not be construed to limit any term of the Agreement.9.9. Definition. When used herein in reference to a corporation, “affiliate” shall mean, withoutlimitation, any parent or subsidiary of the corporation and any entity controlled by thecorporation.9.10. Exceptions. The Bank Board or the management of Bank may, in its discretion, make exceptionsto one or more of the conditions contained in the Agreement, provided that any such exceptions mustbe approved in writing.9.11. Prior Contracts. The Agreement replaces and supersedes all prior written employmentagreements and amendments thereof between the parties./s/ Staci Coburn