Document:

formofcontract.htm

    

      EXHIBIT
10.1

      EMPLOYMENT
CONTRACT

       

       

      
        THIS EMPLOYMENT CONTRACT ("Contract")
made and effective this 1st
day of June,  2009, by and between _______________________________
("Employee") and UNITED BANCORP, INC., 205 E. Chicago
Blvd., P.O. Box 248, Tecumseh, Michigan 49286 ("UBI").

         

        RECITALS

      

       

      
        	
                A.

              	
                UBI
      desires to continue to employ
Employee.

              

      

       

      
        	
                B.

              	
                Employee
      desires to continue to be employed by
UBI.

              

      

       

      
        	
                C.

              	
                There
      is continued activity by multi-bank holding companies in the acquisition
      of independent community banks, which often jeopardizes the continued
      employment of senior officers of the acquired bank, and UBI wishes to
      minimize the uncertainty and distraction caused by such activity, which
      would detract from Employee's ability to perform his/her duties, by
      providing Employee with some transition assistance if Employee's
      employment is terminated under circumstances entitling Employee to
      payments under paragraph 3 or 11 of this
  Contract.

              

      

       

      NOW, THEREFORE, UBI and Employee hereby
enter into this Employment Contract on the following terms and
conditions:

       

      
        	
                1.  

              	
                Employment.  UBI
      hereby employs Employee, and Employee accepts this employment and agrees
      to devote his/her full-time attention and energies to the performance of
      his/her employment duties.  UBI retains the right to terminate
      Employee's employment at will subject to the terms of this
      Contract.

              

      

      

       

      
        	
                2.  

              	
                Term of
      Contract.  The Initial Term of this Contract shall be
      from June 1, 2009 through March 31, 2010.  Beginning on April 1,
      2010, this contract shall automatically renew for additional one year
      terms from April 1 through March 31 (“Renewal Term”) unless either party
      gives the other written notice of nonrenewal not later than 60 days before
      the expiration of the Initial Term or any Renewal Term; if such notice of
      nonrenewal is given this Contract will expire at the end of its
      then-current term.  If Employee's employment terminates before
      expiration of this Contract: (A) Employee will be entitled to the payments
      under paragraph 3 or 11, if applicable, notwithstanding such expiration
      and (B) Employee will remain subject to paragraphs 9, 12, 13 and 14
      notwithstanding such expiration.  The confidentiality provisions
      in paragraph 12 shall survive termination of Employee's employment and
      expiration of this Contract, and will remain in effect permanently as
      provided in paragraph 12.

              

      

      

       

      
        	
                3.  

              	
                Payment Upon
      Termination in Certain Circumstances.  If UBI terminates
      Employee's employment other than for "Cause," as defined in paragraph 6,
      below, under circumstances constituting an involuntary separation from
      service, as those terms are defined under Section 409A of the Internal
      Revenue Code and related regulations (the "Code"), Employee will be
      entitled to the payments provided in this paragraph, subject to the
      conditions in this paragraph.  Provided, however, that if
      Employee is entitled to payments under paragraph 11, this paragraph will
      not apply.

              

      

      
        
           

        

        
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                a.  

              	
                Payments.

              

      

      

      
        	
                i.  

              	
                Employee
      shall continue to receive his/her regular salary (the salary in effect
      immediately prior to such termination) in accordance with UBI's regular
      payroll practices and subject to required payroll withholding, for 6
      months after the date of Employee's separation from
    service.

              

      

      

       

      
        	
                ii.  

              	
                 Provided
      that Employee elects and remains eligible for COBRA continuation coverage,
      UBI will pay the COBRA continuation premiums to continue Employee's
      employee and dependent coverage under the Company's health insurance
      program for 6 months after the date of Employee's separation from
      service.

              

      

      

       

      
        	
                b.  

              	
                Conditions.  Employee's
      entitlement to the payments in subparagraph a. above is subject to the
      following conditions.

              

      

      

       

      
        	
                i.  

              	
                Employee
      must sign within a time period designated by UBI (which shall be at least
      7 days and not more than 45 days after Employee's separation from
      service), and must not revoke or purport to revoke, a general release, in
      a form prepared by UBI, of any claims that the Employee might otherwise
      have against UBI, any entity owning, owned by, or under common ownership
      with UBI ("Affiliate"), and the officers, directors, employees and agents
      of UBI and each Affiliate, provided that such general release will not
      release Employee's right to any payments under this Contract, any vested
      benefits to which Employee is entitled under the terms of UBI's benefit
      programs with respect to Employee's service through the date of separation
      from service, any rights of Employee under the terms of any applicable UBI
      equity compensation programs with respect to outstanding stock options or
      restricted stock, or any rights of Employee to indemnification under the
      Articles of Incorporation of Bylaws of UBI or any
    Affiliate.

              

      

      

       

      
        	
                ii.  

              	
                Employee's
      entitlement to the payments under this paragraph is conditioned on
      Employee's compliance with Employee's obligations under paragraphs 9, 12,
      13 and 14.

              

      

      

       

      
        	
                iii.  

              	
                The
      continuation of salary and COBRA premiums shall immediately cease if
      Employee secures employment before the end of the 6 month period following
      Employee's separation from service.

              

      

      

       

      
        	
                iv.  

              	
                The
      payments under this paragraph are subject to paragraph
  16.

              

      

      

       

      
        	
                v.  

              	
                In
      no event shall the total salary amounts paid under paragraph 3.a.i. or
      11.a.i. exceed twice the compensation limit under Code Section 401(a)(17)
      in effect at the time the payments are
made.

              

      

      

       

      
        	
                4.  

              	
                Duties.  The
      duties, responsibilities and authority of Employee shall be as determined
      by UBI from time to time.

              

      

      
        
           

        

        
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                5.  

              	
                Compensation.  Employee's annual salary for the
      Initial Term shall be $______________, unless adjusted pursuant to the
      following provisions:

              

      

      

       

      
        	
                a.  

              	
                It
      is contemplated that Employee will be eligible for an annual bonus as a
      participant in both the Management Committee Incentive Compensation Plan
      and the Stakeholder Incentive Compensation Plan, subject to the terms of
      those plans.  Any annual bonus shall be paid not later than 21⁄2
      months following the end of the applicable fiscal
  year.

              

      

      

       

      
        	
                b.  

              	
                Employee
      shall receive the standard employee benefits of employees of
      UBI.

              

      

      

       

      
        	
                c.  

              	
                Changes
      may be made to the salary and fringe benefits herein set forth and such
      changes shall be set forth in Attachment A.  Changes to the
      salary and fringe benefits are effective only after Attachment A has been
      signed by the Chairman of the Board of UBI and by the
      Employee.  UBI retains the right to modify its benefit programs
      as applicable to all participating employees, and such changes will not
      require an Attachment A.

              

      

      

       

      
        	
                6.  

              	
                Termination for
      Cause.  UBI may terminate this Contract for "Cause," such
      termination to be immediate, without notice, at any time, and with
      compensation and benefits only to the date of the termination of
      Employee.  The term "Cause" shall include the following
      enumerated and substantially equivalent
matters:

              

      

      

       

      
        	
                a.  

              	
                the
      death of Employee;

              

      

      

       

      
        	
                b.  

              	
                the
      disability of Employee rendering him/her unable to perform the services
      required under the Contract for a period of 180
  days;

              

      

      

       

      
        	
                c.  

              	
                known
      substance abuse by Employee;

              

      

      

       

      
        	
                d.  

              	
                felony
      conviction or plea (including a plea of guilty, nolo contendere or similar
      plea) of Employee;

              

      

      

       

      
        	
                e.  

              	
                misdemeanor
      conviction or plea (including a plea of guilty, nolo contendere or similar
      plea) of Employee, if the misdemeanor involves moral
      turpitude;

              

      

      

       

      
        	
                f.  

              	
                Employee's
      repeated unprofessional, irresponsible or disruptive language or conduct
      in the performance of his duties;

              

      

      

       

      
        	
                g.  

              	
                Employee's
      dishonesty, breach of professional or corporate ethics, or criticism by a
      regulatory agency involving a serious violation of law or
      regulations;

              

      

      

       

      
        	
                h.  

              	
                Employee's
      substantial breach of any significant term of this Contract, including,
      but not limited to, continued unsatisfactory job performance (other than
      as provided in paragraph 8), or repeated uncooperative
      conduct.

              

      

      
        
           

        

        
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                7.  

              	
                Suspension.  UBI may suspend the employment of Employee
      resulting in the cessation of the performance of duties and the cessation
      of all compensation and benefits, in accordance with the following
      provisions:

              

      

      

       

      
        	
                a.  

              	
                If
      criminal charges as described in subparagraph 6.d. or e. are made against
      Employee, then UBI, acting in its discretion, may suspend Employee for any
      period of time, provided that the suspension shall end if such charges do
      not result in a conviction of a plea (of guilty or nolo contendere, etc.)
      of either the original charge(s) or any lesser
  charge(s).

              

      

      

       

      
        	
                b.  

              	
                 If
      a regulatory agency criticizes Employee for regulatory violations as set
      forth in paragraph 6.g. above, UBI shall have the discretion to suspend
      Employee for any period of time, provided that if the alleged violations
      are resolved in the Employee's favor, the suspension shall
      end.

              

      

      

       

      The
discretion invested in UBI as set forth in this paragraph 7 shall be exercised
by the Chairman of its Board of Directors (as to suspension of UBI’s Chief
Executive Officer) or by UBI’s Chief Executive Officer (as to suspension of any
other employee).

       

      

       

      
        	
                8.  

              	
                Failure to Meet Goals
      and Objectives.  In the event of Employee's repeated
      failure to meet goals and objectives which are established by the Board of
      Directors of UBI from time to time, Employee's employment may be
      terminated immediately, without notice, at any time, provided that upon
      such termination Employee shall receive the payments provided in paragraph
      3 (or paragraph 11 if applicable) subject to the conditions in such
      paragraph.

              

      

      

       

      
        	
                9.  

              	
                Employee
      Responsibilities Following Termination.  Termination of
      this Contract shall not relieve Employee of his/her responsibilities to
      complete any records, cooperate with UBI on any litigation, audits,
      regulatory reviews, claims or investigations, and otherwise to fulfill all
      responsibilities under this Contract which should have been rendered prior
      to its termination.

              

      

      

       

      
        	
                10.  

              	
                Change in
      Control.  For purposes of this Contract, a Change in
      Control of UBI shall mean:

              

      

      

       

      
        	
                a.  

              	
                the
      acquisition by any individual, entity, or group (a "Person"), including
      any "person" within the meaning of Sections 13(d)(3) or 14(d)(2) of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), of
      beneficial ownership within the meaning of Rule 13d-3 promulgated under
      the Exchange Act, of 20% or more of either (i) the then outstanding shares
      of common stock of UBI (the "Outstanding Company Common Stock") or (ii)
      the combined voting power of the then outstanding securities of UBI
      entitled to vote generally in the election of directors (the "Outstanding
      Company Voting Securities"); provided, however, that the following
      acquisitions shall not constitute a Change in Control: (A) any acquisition
      by UBI or a UBI subsidiary, (B) any acquisition by an employee benefit
      plan (or related trust) sponsored or maintained by UBI or a UBI subsidiary
      or any Person controlled by UBI or a UBI subsidiary, (C) any acquisition
      by any corporation pursuant to a reorganization, merger, or consolidation
      involving UBI or a UBI subsidiary, if, immediately after such
      reorganization, merger, or consolidation, each of the conditions described
      in clauses (i), (ii), and (iii) of subsection c. shall be satisfied, or
      (D) any acquisition by the Employee or any group of persons including the
      Employee;

              

      

      
        
           

        

        
          Page
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                b.  

              	
                individuals
      who, as of the date hereof, constitute the Board of Directors of UBI (the
      "Incumbent Board") cease for any reason to constitute at least a majority
      of such Board; provided, however, that any individual who becomes a
      director of UBI subsequent to the date hereof whose election, or
      nomination for election by the shareholders of UBI, was approved by the
      vote of at least a majority of the directors then comprising the Incumbent
      Board (either by a specific vote or by approval of the proxy statement of
      UBI in which such person is named as a nominee for director, without
      objection to such nomination) shall be deemed to have been a member of the
      Incumbent Board; and provided further, that no individual who was
      initially elected as a director of UBI as a result of an actual or
      threatened election contest, as such terms are used in Rule 14a-11 of
      Regulation 14A promulgated under the Exchange Act, or any other actual or
      threatened solicitation of proxies or consents by or on behalf of any
      Person other than the Board, shall be deemed to have been a member of the
      Incumbent Board;

              

      

      

       

      
        	
                c.  

              	
                approval
      by the shareholders of UBI of a reorganization, merger, or consolidation
      unless, in any such case, immediately after such reorganization, merger,
      or consolidation, (i) more than 50% of the then outstanding shares of
      common stock of the corporation resulting from such reorganization,
      merger, or consolidation and more than 50% of the combined voting power of
      the then outstanding securities of such corporation entitled to vote
      generally in the election of directors is then beneficially owned,
      directly or indirectly, by all or substantially all of the individuals or
      entities who were the beneficial owners, respectively, of the Outstanding
      Company Common Stock and the Outstanding Company Voting Securities
      immediately prior to such reorganization, merger, or consolidation and in
      substantially the same proportions relative to each other as their
      ownership, immediately prior to such reorganization, merger, or
      consolidation, of the Outstanding Company Common Stock and the Outstanding
      Company Voting Securities, as the case may be, (ii) no Person (other than
      (A) UBI or a UBI subsidiary, any employee benefit plan (or related trust)
      sponsored or maintained by UBI or a UBI subsidiary or the corporation
      resulting from such reorganization, merger, or consolidation (or any
      corporation controlled by UBI or a UBI subsidiary), or (B) any Person
      which beneficially owned, immediately prior to such reorganization,
      merger, or consolidation, directly or indirectly, 20% or more of the
      Outstanding Company Common Stock or the Outstanding Company Voting
      Securities, as the case may be, beneficially owns, directly or indirectly,
      20% or more of the then outstanding shares of common stock of such
      corporation or 20% or more of the combined voting power of the then
      outstanding securities of such corporation entitled to vote generally in
      the election of directors, and (iii) at least a majority of the members of
      the board of directors of the corporation resulting from such
      reorganization, merger, or consolidation were members of the Incumbent
      Board at the time of the execution of the initial agreement or action of
      the Board providing for such reorganization, merger, or consolidation;
      or

              

      

      

       

      
        	
                d.  

              	
                approval
      by the shareholders of UBI of (i) a plan of complete liquidation or
      dissolution of UBI or (ii) the sale or other disposition of all or
      substantially all of the assets of
UBI.

              

      

      

       

      
        	
                11.  

              	
                Provisions Applicable
      in the Event of a Change in Control.  Employee will be
      entitled to the payments in this paragraph, subject to the conditions in
      this paragraph, if, within 12 months following the effective date of a
      Change in Control (A) Employee's employment is terminated by UBI (or a
      successor) for any reason (other than for a cause described in
      subparagraphs 6.a, b, c, d or e) and such termination constitutes an
      involuntary separation from service, as those terms are defined under
      Section 409A of the Code or (B) Employee resigns for "Good Reason" (as
      defined

              

      

       

      
        
           

        

        
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      below)
and such resignation constitutes an involuntary separation from service as those
terms are defined in Section 409A of the Code.

      

       

      
        	
                a.  

              	
                Payments.

              

      

      

       

      
        	
                i.  

              	
                UBI
      will pay Employee, within 15 days after the effective date of the release
      of claims referred to in paragraph 11.b. and 3.b.i., a lump sum in cash
      equal to 12 months of Employee's salary (at a rate equal to Employee's
      regular base pay in effect immediately prior to such termination and
      subject to required payroll
withholding).

              

      

      

       

      
        	
                ii.  

              	
                Provided
      that Employee elects and remains eligible for COBRA continuation coverage,
      UBI will pay the COBRA continuation premiums to continue Employee's
      employee and dependent coverage under UBI's health insurance program for
      12 months after the date of Employee's separation from
      service.

              

      

      

       

      
        	
                b.  

              	
                Conditions.  Employee's
      entitlement to the payments in (a) above is subject to the conditions in
      paragraph 3.b.i., ii., iv. and v. and paragraph
  17.

              

      

      

       

      
        	
                c.  

              	
                "Good Reason"
      Defined.  Employee’s separation from service will be
      considered an involuntary separation from service for Good Reason if
      Employee resigns as a result of any of the conditions in i. below, UBI has
      had the opportunity to correct such condition and has failed to do so
      within the period provided in ii. below and Employee resigns as provided
      in ii. below.

              

      

      

       

      
        	
                i.  

              	
                Any
      one or more of the following conditions arises in the 12 months following
      the Change in Control without the consent of
  Employee:

              

      

      

       

      
        	
                1.  

              	
                A
      material diminution in Employee's base
  compensation;

              

      

      
        	
                2.  

              	
                A
      material diminution in Employee's authority, duties, or
      responsibilities;

              

      

      
        	
                3.  

              	
                A
      material diminution in the authority, duties or responsibility of the
      supervisor to whom Employee reports, including (if Employee reports to
      UBI's Board of Directors) a requirement that Employee report to a
      corporate officer or employee instead of reporting directly to the Board
      of Directors;

              

      

      
        	
                4.  

              	
                A
      material diminution in the budget over which Employee retains
      authority;

              

      

      
        	
                5.  

              	
                A
      material change in the geographic location at which Employee must perform
      services; or

              

      

      
        	
                6.  

              	
                Any
      other action or inaction by UBI or its successor that constitutes material
      breach of this Contract.

              

      

      

       

      
        	
                ii.  

              	
                Employee
      notifies UBI or its successor in writing of the existence of the condition
      described in paragraph 11.c.i. within 90 days of the initial existence of
      the condition, UBI or its successor fails to remedy the condition and make
      Employee whole within 30 days after such notification by Employee and
      Employee resigns by written notice within 30 days
    thereafter.

              

      

      
        
           

        

        
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                12.  

              	
                Confidential
      Information.  The following confidentiality provisions
      are a material part of the consideration relied upon by UBI in entering
      into this Contract:

              

      

      

       

      
        	
                a.  

              	
                In
      connection with Employee's employment with UBI, Employee will have access
      to information or materials of UBI and/or its subsidiaries that are
      considered trade secret, confidential and/or proprietary
      ("Information").  Information includes, but is not limited to,
      compilations of data, strategic plans, sales and marketing plans, customer
      and supplier information, financial information, and proposed agreements,
      and applies to such Information whether communicated orally, in writing,
      electronically, or by any other
means.

              

      

      

       

      
        	
                b.  

              	
                Information
      created by Employee during Employee's employment with UBI that relates to
      the business of UBI and its subsidiaries (or prospective business
      opportunities), or uses by UBI and/or its subsidiaries of Information
      created with resources of UBI and/or its subsidiaries (including staff,
      premises and equipment), belongs to UBI.  The term "Information"
      includes copyrightable works of original authorship (including but not
      limited to reports, analyses, and compilations, business plans, new
      product plans), ideas, inventions (whether patentable or not), know-how,
      processes, trademarks and other intellectual property.  All
      works of original authorship created during Employee's employment are
      "works for hire" as that term is used in connection with the U.S.
      Copyright Act.  Employee hereby assigns to UBI all rights, title
      and interest in work product, including copyrights, patents, trade
      secrets, trademarks and know-how.

              

      

      

       

      
        	
                c.  

              	
                Employee
      shall use Information only for the benefit of UBI and/or its subsidiaries
      and not for Employee's own benefit.  Employee shall not take
      Information or the materials of UBI and/or its subsidiaries upon
      termination of Employee's
employment.

              

      

      

       

      
        	
                d.  

              	
                Information
      shall be disclosed and used only by staff members of UBI and/or its
      subsidiaries who have a need to access it in order to do their jobs, shall
      be maintained in secure physical locations, and shall not be disclosed to
      any other company or person except in connection with the business
      activities of UBI and/or its
subsidiaries.

              

      

      

       

      
        	
                e.  

              	
                The
      confidentiality provisions of this paragraph will survive termination of
      the employment relationship with UBI and expiration of this Contract, and
      shall continue in effect permanently for so long a period of time as the
      Information is maintained by UBI and/or its subsidiaries as
      confidential.

              

      

      

       

      
        	
                13.  

              	
                Nonsolicitation of
      Employees and Customers.  The following nonsolicitation
      provisions form a material part of the consideration relied upon by UBI in
      entering into this Contract:

              

      

      

       

      
        	
                a.  

              	
                During
      the term of Employee's employment and for a period of one year after
      Employee's last day of employment, Employee agrees not to hire, and not to
      solicit for hire, any then-current employees of UBI and/or its
      subsidiaries, or to contact them for the purpose of inducing them to leave
      UBI and/or its subsidiaries.

              

      

      

       

      
        	
                b.  

              	
                During
      the term of Employee's employment and for a period of one year after
      Employee's last day of employment, Employee agrees not to contact any
      then-current customers of UBI and/or its subsidiaries for the purpose of
      inducing them to leave UBI and/or its subsidiaries
  or

              

      

      
        
           

        

        
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      to
discourage them from doing business with UBI and/or its
subsidiaries.  Employee agrees that, for such time period, Employee
will not provide the type of services Employee provided under this Contract to
any person or business customer who was a customer of UBI and/or its
subsidiaries at the time of Employee's departure.

      

       

      
        	
                14.  

              	
                Noncompete.  UBI
      and Employee acknowledge and agree that by virtue of his/her past
      experience in the banking industry and his/her knowledge of the business
      of UBI and its subsidiaries, Employee is uniquely qualified to
      successfully compete with UBI and/or its subsidiaries.  In
      recognition of these circumstances, and in consideration of UBI's
      continued employment of Employee in accordance with the terms of this
      Contract, Employee covenants and agrees that during the term of Employee's
      employment and for  a period of one year after Employee's last
      day of employment, Employee will not engage in the counties of Lenawee,
      Monroe and/or Washtenaw in any business which is competitive with a
      business then regularly conducted by UBI and/or its subsidiaries in either
      or both of said counties, as an owner, employee, independent contractor or
      in any other capacity; provided, however, that the forgoing covenants
      shall not prohibit the Employee from owning, directly or indirectly, 1% or
      less of any publicly traded class of securities of a financial services
      corporation.

              

      

      

       

      
        	
                15.  

              	
                Enforcement of
      Contract; Injunctive Relief; Attorney Fees and
      Expenses.  Employee acknowledges that violation of
      paragraph 12, 13, or 14 of this Contract would cause irreparable damage to
      UBI and/or its subsidiaries, and that they shall be entitled to injunctive
      relief for any such violation, in addition to any other available
      remedy.  If Employee violates this Contract, in addition to all
      other remedies available to UBI and/or its subsidiaries at law, in equity,
      and under Contract, Employee agrees that he/she is obligated to pay all of
      the costs enforcement of this Contract incurred by UBI and/or its
      subsidiaries, including attorney fees and expenses.  The parties
      agree that venue concerning this Contract shall be Lenawee County,
      Michigan.

              

      

      

       

      
        	
                16.  

              	
                TARP
      Restrictions.  Notwithstanding any other provision of this
      Contract:

              

      

      

       

      
        	
                a.  

              	
                During
      the period in which any obligation arising from financial assistance
      provided under the Troubled Assets Relief Program ("TARP") remains
      outstanding  no payments shall be made for Employee's departure
      from UBI for any reason, including payments under paragraph 3 or 11, to
      the extent such payments are prohibited to Employee or any other UBI
      employee under Section 111 of the Emergency Economic Stabilization Act of
      2008 ("EESA"), as amended by Section 7001 of the American Recovery and
      Reinvestment Act of 2009 ("ARRA");
and 

              

      

      

       

      
        	
                b.  

              	
                UBI
      may recover and Employee shall repay to UBI any bonus or incentive
      compensation based on statements of earnings, revenues, gains or other
      criteria that are later found to be materially
  inaccurate.

              

      

      

       

      
        	
                17.  

              	
                Code Section 280G
      Cap.  Notwithstanding any other provision of this
      Contract, if (a) part or all of any compensation and benefits to be paid
      to Employee by or on behalf of UBI or any affiliate, whether under this
      Contract or otherwise, constitute a "parachute payment" (or payments)
      under Section 280G or any other similar provision of the Code, and (b) if
      the aggregate present value of such parachute payments (the "Parachute
      Amount") exceeds 2.99 times Employee's "base amount" as defined in Section
      280G of the Code, then the amounts otherwise payable to or for the benefit
      of Employee under this Contract and taken into account in calculating the
      Parachute

              

      

      

       

      
        
          
          

        

        
          Page
8

          
            

          

        

        
          
          

        

      

      

      
         

        
          	
                   

                	
                  Amount shall be adjusted to the extent necessary to equate the
      Parachute Amount with 2.99 times Employee's "base amount."  The
      adjustments permitted under this paragraph may include the elimination of
      payments and the reduction of the amount of any
    payments.

                

        

      

       

      
        	
                18.  

              	
                Notice.  For
      purposes of this Contract, notices and all other communications provided
      for in this Contract shall be in writing and shall be deemed to have been
      duly given when delivered or mailed by United States registered mail,
      return receipt requested, postage prepaid, as
  follows:

              

      

      

       

      
        	
                If
      to UBI:

                Chairman
      of the Board

                United
      Bancorp, Inc.

                P.O.
      Box 248

                Tecumseh,
      Michigan 49286

              	
                If
      to Employee:

                _______________________
      (Name)

                _______________________
      (Street
      Address)

                _______________________
      (City, State,
      Zip)

              

      

      

       

      or such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

       

      

       

      
        	
                19.  

              	
                Miscellaneous
      Provisions.  The following miscellaneous provisions form
      a part of this Contract:

              

      

      

       

      
        	
                a.  

              	
                Applicable
      Law.  This Contract and the rights of the parties
      hereunder shall be interpreted, construed and performed in accordance with
      the laws of the State of Michigan.

              

      

      

       

      
        	
                b.  

              	
                Entire
      Agreement.  This Contract as it may be modified in
      writing from time to time, constitutes the entire agreement between the
      parties, and supersedes any and all other agreements, oral or in writing,
      with respect to the subject matter contained
  herein.

              

      

      

       

      
        	
                c.  

              	
                Amendments.  This
      Contract may be altered, amended or modified at any time, but only by
      written agreement executed by the parties hereto, except that UBI may
      unilaterally amend the Contract to the extent required by law or to the
      extent the Compensation Committee of UBI's Board of Directors determines
      is necessary to comply with any restrictions, requirements or conditions
      under EESA, ARRA or any other law, regulation or other federal
      guidance.  Notwithstanding the preceding, no amendment or
      modification may be made to the Contract, even by mutual agreement, that
      would cause any Contract payments to violate the requirements of Section
      409A of the Code.  No waiver of any provision of this Contract
      shall be valid unless made in writing and signed by the party against whom
      such waiver is sought.

              

      

      

       

      
        	
                d.  

              	
                Paragraph
      Headings.  Any paragraph title or caption contained in
      this Contract is for convenience only, and shall not be deemed a part of
      this Contract.

              

      

      

       

      
        	
                e.  

              	
                Invalid
      Provisions.  The invalidity or unenforceability of any
      particular provision of this Contract shall not affect any other provision
      hereof.  If any provision or portion of a provision of this
      Contract is determined by a court of competent jurisdiction to be
      unenforceable as written, it is the intent of the parties that the court
      should modify such provision, including modifications to the activities
      covered, duration, or geographic scope of such provision, to the extent
      necessary to allow its enforcement as so
  modified.

              

      

      
        
           

        

        
          Page
9

          
            

          

        

        
           

        

      

      
        	
                f.  

              	
                 Successors and
      Assigns.  This Contract shall be binding upon, and shall
      inure to the benefit of the successors and assigns, including purchasers
      of UBI, and for purposes of realizing any benefits payable hereunder to
      Employee prior to his/her death, the heirs and personal representative of
      Employee.  In no event shall Employee assign or delegate any of
      Employee's rights, powers, duties and obligations under this Contract
      without prior written consent of UBI.  If Employee dies after a
      termination of Employee's employment entitling Employee to payments under
      paragraph 3 or 11, any remaining salary payments otherwise payable under
      paragraph 3 or 11 will be made to the beneficiary designated by Employee
      in writing to receive such payments (or if none, to Employee's estate),
      and COBRA premium payments will continue for the remainder of the period
      called for by paragraph 3 or 11 for the benefit of Employee's eligible
      dependents.  UBI shall have the right to assign and delegate any
      or all of its rights, powers, duties and obligations under this Contract
      to any of its subsidiaries.

              

      

      

      
        	
                20.  

              	
                Waiver of Jury
      Trial.  UBI and Employee specifically and knowingly waive
      their rights to a jury trial.

              

      

      

       

      
        	
                21.  

              	
                Arbitration.  The
      parties agree that any dispute or controversy arising out of or in
      connection with this Contract shall be resolved by arbitration in
      accordance with the following
provisions:

              

      

      

       

      
        	
                a.  

              	
                The
      arbitration proceeding shall be conducted under the Employment Dispute
      Resolution Rules of the American Arbitration Association in effect at the
      time a demand for arbitration of the dispute is made.  The
      decision and award of the arbitrator made under the AAA rules shall be
      exclusive, final and binding on all parties, their heirs, representatives,
      successors and assigns.  Judgment upon the award rendered by the
      arbitrator may be rendered in any circuit court having jurisdiction of the
      matter.  In the event Employee or UBI shall require equitable
      relief prior to the selection of an arbitrator to resolve the dispute,
      either party may seek temporary equitable relief from any court having
      jurisdiction of the dispute, subject to any final relief awarded by the
      arbitrator.

              

      

      

       

      
        	
                b.  

              	
                Limited
      civil discovery shall be permitted for the production of documents and the
      taking of depositions, provided, however, that no party is permitted to
      take the deposition of more than three witnesses except by agreement of
      the other party or upon order of the arbitrator pursuant to the motion of
      a party.  Subject to the foregoing limitations, discovery shall
      be conducted in accordance with the Federal Rules of Civil Procedure with
      any enforcement issues resolved by the
  arbitrator.

              

      

      

       

      
        	
                c.  

              	
                The
      arbitration and all proceedings, discovery and any award of the
      arbitrator, is confidential.  Neither the parties nor the
      arbitrator shall disclose any information gained during the course of the
      arbitration to any person or entity who is not a party to the arbitration
      unless permitted by law.  Attendance at the arbitration shall be
      limited to the parties and those called as
  witnesses.

              

      

      

       

      
        	
                d.  

              	
                The
      arbitration provisions of this paragraph shall not apply to any alleged
      violation by Employee of paragraph 12, 13 or 14, and UBI shall be entitled
      to seek judicial injunctive and other relief for any such alleged
      violation.

              

      

      
        
           

        

        
          Page
10

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties have
executed this Contract, effective as of the date first above
written.

       

      

       

      
        	
                UNITED
      BANCORP, INC.

                 

                By:
      ____________________________

                   Chairman of
      the Board

              	
                 

                 

                ____________________________________

                Employee

              

      

      

       

      

       

      
        
           

        

        
          Page
11

          
            

          

        

        
           

        

      

      ATTACHMENT
A

       

      

       

      
        	
                Employee:  ___________________________

              	
                Effective
      Date: __________________

              

      

      

      

      Salary
Per Annum: $___________________

      

      

      

      
        	
                ___________________________

              	
                _____________________

              

      

      
        	
                 Employee
      

              	
                Date

              

      

      

      

      
        	
                ___________________________

              	
                _____________________

              

      

      Chairman,
United Bancorp,
Inc.                                                                      Date

      

       

      

      
        
           

        

        
          Page
12ex101.htm

    EXHIBIT
10.1

      SECOND
AMENDED AND RESTATED

      EXECUTIVE
SUPPLEMENTAL COMPENSATION AGREEMENT

      (By
and Between Columbia State Bank and Columbia Banking System, Inc.
and

      Melanie
J. Dressel)

      

      

      THIS
SECOND AMENDED AND RESTATED EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT
(hereinafter “Agreement”)  is made and entered into effective as of
this May 27, 2009 by and between COLUMBIA STATE BANK and COLUMBIA BANKING
SYSTEM, INC., its parent holding company (jointly hereafter the “Employer”), and
Melanie J. Dressel, an individual residing in the State of Washington
(“Executive”).

      

      This
Second Amended and Restated Executive Supplemental Compensation Agreement now
hereby amends, supersedes and replaces the First Amended and Restated Executive
Supplemental Compensation Agreement by and between these same parties, effective
as of  December 31, 2008 (which, in turn, amended, superseded and
replaced the Executive Supplemental Compensation Agreement, entered into as of
August 1, 2001).

      

      WHEREFORE,
the parties hereby agree as follows:

      

      
        	
                1.0  

              	
                DEFINITIONS

              

      

      

      For the
purposes of this Agreement, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise:

      

      1.1           Administrator.  The
Employer shall be the "Administrator" and, solely for the purposes of ERISA, the
"fiduciary" of this Agreement where a fiduciary is required by
ERISA.

      

      1.2           Agreement.
The term “Agreement” shall refer to this Second Amended and Restated Executive
Supplemental Compensation Agreement.

      

      1.3           Change in
Control.   A Change in Control
shall be deemed to have occurred upon any of the following events, as such terms
are defined in IRC 409A:

      

      
        	
                 
      

              	
                A.

              	
                A Change in the
      Ownership of a Corporation. A change in the ownership of a
      corporation occurs on the date that any one person or persons acting as a
      group (as defined in IRC 409A), acquires ownership of stock of the
      corporation that, together with stock held by such person or group,
      constitutes more than fifty percent (50%) of the total fair market value
      or total voting power of the stock of such corporation. The acquisition of
      additional stock by the same person or group is not considered to cause a
      change in the ownership of the
corporation.

              

      

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                B.

              	
                Change in the
      Effective Control of a Corporation. A change in the effective
      control of the corporation shall be deemed to occur on either of the
      following dates:

              

      

      

      (i)           The
date any one person, or persons acting as a group  acquires (or has
acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or group) ownership of stock of the
corporation possessing thirty  percent (30%) or more of the total
voting power of the stock of such corporation; or

      

      (ii)  The
date a majority of members of the corporation’s board of directors  is
replaced during any  twelve (12) month period by directors whose
appointment or election is not endorsed by a majority of the members of the
corporation’s board of directors before the date of the appointment or
election.

      

      
        	
                 
      

              	
                C

              	
                Change in the
      Ownership of a Substantial Portion of a Corporation’s Assets. A
      change in the ownership of a substantial portion of a corporation’s assets
      shall be deemed to occur on the date that any one person or group acquires
      (or has acquired during the twelve (12) month period ending on the date of
      the most recent acquisition by such person or persons) assets from the
      corporation that have a total gross fair market value equal to or more
      than forty percent (40%) of the total gross fair market value of all of
      the assets of the corporation immediately before such acquisition or
      acquisitions. No Change in Control shall result if the assets are
      transferred to certain entities controlled directly or indirectly by the
      shareholders of the transferring
corporation.

              

      

      

      In
addition to the forgoing, and in accordance with IRC 409A, in order to
constitute a Change in Control event with respect to a specific Executive, the
Change in Control must relate to (i) the corporation for whom Executive is
performing services at the time of the Change in Control; (ii) the corporation
that is liable for the payment of the deferred compensation (or all corporations
liable for the payment if more than one corporation is liable) but only if
either the deferred compensation is attributable to the performance of service
by Executive for such corporation (or corporations) or there is a bona fide
business purpose for such corporation or corporations to be liable for such
payment and no significant purpose of making such corporation or corporations
liable for such payment is the avoidance of Federal income tax; or (iii) a
corporation that is a majority shareholder of a corporation identified above, or
any corporation in a chain of corporations in which each corporation is a
majority shareholder of another corporation in the chain, ending in a
corporation identified above. (A majority shareholder is a shareholder owning
more than fifty (50%) percent of the total fair market value and total voting
power of such corporation).

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      1.4           Disability/Disabled.  For the purpose of this
Agreement, Executive will be considered disabled if:

      

      A.           He
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

      

      B.           He
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 an accident and
health plan covering employees of the Executive’s employer.

      

      1.5           Early
Commencement Reduction Factor. The term “Early Commencement Reduction
Factor” is the amount by which Executive’s benefit shall be reduced based on the
benefit being paid prior to Executive’s attaining the Normal Retirement Age. The
amount of the Early Commencement Reduction Factor shall be determined as
follows: for each year (or partial year) that an Executive’s benefit hereunder
is paid prior to his attainment of the Normal Retirement Age, then the benefit
amount shall be reduced by a factor of Five Percent (5%). Thus, if an executive
with a Normal Retirement Age of Sixty-Two (62) begins receiving payments at age
Fifty-Nine (59), the amount of the annual benefit shall be reduced by 15% (62-
59 = 3; 3 x 5%= 15%).

      

      1.6           Early
Retirement Age.  The term “Early
Retirement Age” shall mean the Executive’s attainment of the age of Fifty-Five
(55).

       

      1.7           Early
Retirement Date. The term “Early Retirement Date” shall mean a date which
satisfies the following: (a) it shall be a date on or after Executive has
attained the Early Retirement Age, and before he attains the Normal Retirement
Age; and (b) and it shall be the date on which Executive Separates From Service
(for any reason other than for Cause).

       

      1.8           Effective
Date.   The term
"Effective Date" shall mean the date identified as such in the opening paragraph
of this Agreement.

      

      1.9           ERISA.  The term "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as
amended.

      

      1.10        
Executive
Benefit. The term
"Executive Benefit" shall mean the actual amount to be paid to Executive
pursuant to this Agreement, which shall include any reductions or adjustments
(a) required under the other provisions of this Agreement; or  (b)
required by reason of the lawful order of any regulatory agency or body having
jurisdiction over the Employer; or (c) required in order for the Employer to
comply with any and all applicable state and federal laws, including, but not
limited to, income, employment and disability income tax laws (e.g. FICA, FUTA,
SDI).

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      1.11         Involuntary
Separation From Service. In accordance with IRC 409A, the
term

      “Involuntary
Separation from Service” shall mean a Separation from Service due to the
independent exercise of the unilateral authority of Employer to terminate
Executive’s services, other than due to Executive’s implicit or explicit
request, where Executive was willing and able to continue performing
services.

      

      1.12         IRC and
IRC 409A. The term “IRC” shall mean the Internal Revenue Code of 1986, as
amended. The term “IRC 409A” shall mean Internal Revenue Code Section 409A and
the Treasury Regulations promulgated thereunder, including any subsequent and
related notices or clarifications.

      

      1.13         Normal
Retirement Age. The term “Normal Retirement Age” shall mean Executive’s
attainment of the age Sixty-Five (65). In the event Executive Separates From
Service pursuant to the provisions of Paragraph 3.4, however, and for the
purposes of calculating the Early Commencement Reduction Factor, Executive’s
Normal Retirement Age shall be the age of Sixty-Two (62).

      

      1.14         Normal
Retirement Date. The term “Normal Retirement Date” shall mean a date
which satisfies the following: (a) it shall be a date on or after Executive
attains the Normal Retirement Age, and (b) it shall be the date on which
Executive Separates From Service (for any reason other than For
Cause).

      

      1.15         Specified
Employee. The term “Specified Employee” means an employee who, as of the
date of his Separation from Service, is a key employee of an employer of which
any stock is publicly traded on an established securities market or otherwise.
An employee is a key employee if the employee meets the requirements of 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 a specified employee identification date. If
Executive is a key employee as of a specified employee identification date, then
Executive shall be treated as a key employee for the entire twelve (12) month
period beginning on the specified employee effective date.

      

      1.16         Supplemental
Retirement Benefit. The term “Supplemental Retirement Benefit” shall be
an annual amount equal to Two Hundred Ninety-Four Thousand, Six Hundred and
Eighty-Eight Dollars ($294,688).

      

      1.17         Termination
for Cause.  The term “Termination for Cause” shall mean a
Termination of Employment of Executive by Employer by reason of any of the
following:

      

      
        	
                 
      

              	
                A.

              	
                Willful
      misfeasance or gross negligence in the performance of Executive’s duties;
      or

              

      

      

      
        	
                 
      

              	
                B.

              	
                Conduct
      demonstrably and significantly harmful to Employer or a financial
      institution subsidiary; or

              

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      C.           Conviction
of a felony.

      

      1.18         Termination
for Good Reason.  For the purposes of this Agreement, a
Voluntary

      Termination
by Executive following a Change in Control Event shall be deemed “for Good
Reason” if one or more of the following conditions arise without the consent
of  Executive:

      

      A.           A
material diminution in Executive’s base compensation;

      

      
        	
                 
      

              	
                B.

              	
                A
      material diminution in Executive’s authority, duties, or
      responsibilities;

              

      

      

      
        	
                 
      

              	
                C.

              	
                A
      material diminution in the authority, duties, or responsibilities of the
      supervisor to whom Executive is required to report, including a
      requirement that an Executive report to a corporate officer or employee
      instead of reporting directly to the board of directors of a corporation
      (or similar governing body with respect to an entity other than a
      corporation);

              

      

      

      
        	
                 
      

              	
                D.

              	
                A
      material diminution in the budget over which Executive retains
      authority;

              

      

      

      
        	
                 
      

              	
                E.

              	
                A
      material change in the geographic location at which Executive must perform
      the services;

              

      

      

      
        	
                 
      

              	
                F.

              	
                Any
      other action or inaction that constitutes a material breach
      by  Employer of the agreement under which the Executive provides
      services.

              

      

      

      1.19         Termination
of Employment and Separation From Service. The
terms  “Termination of Employment” (or “Terminate” or “Terminates”) as
used in this Agreement shall be used interchangeably with the term “Separation
From Service”, and shall be interpreted in accordance with the provisions of IRC
409A and any related notices, guidance or regulations. Under the current
provisions of IRC 409A, whether a Separation From Service (or a Termination of
Employment) has occurred is determined based on whether the facts and
circumstances indicate that employer and employee reasonably anticipate that no
further services will be performed after a certain date or that the level of
bona fide services the employee will perform after such date (whether as an
employee or as an independent contractor) will permanently decrease to no more
than twenty (20%) percent of the average level of bona fide services performed
(as an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period (or the full period of services to the employer if
the employee has been providing services to the employer less than 36
months).  There shall be no Separation From Service while the
Executive is on military leave, sick leave or other bona fide leave of absence,
as long as such leave does not exceed six (6) months, or if longer, so long as
the individual retains a right to reemployment with the service recipient under
an applicable statute or by contract.

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      1.20           Voluntary
Termination. The
term “Voluntary Termination” shall mean a voluntary resignation of employment by
Executive, and not as a result of Disability or a Termination for Good
Reason.

      

      2.0           SCOPE,
PURPOSE AND EFFECT.

      

      2.1           Not
a Contract
of Employment.  Although this
Agreement and the benefit provided herein is intended to provide Executive with
additional incentive to remain in the employ of Employer, this Agreement shall
not constitute a contract of employment between Executive and Employer, nor
shall any provision of this Agreement be applied to restrict or expand the right
of Employer to terminate Executive’s Employment, with or without cause. This
Agreement shall have no impact or effect upon any separate written employment
agreement which Executive may have with Employer, it being the parties’
intention and agreement that unless this Agreement is specifically referenced in
such employment agreement, then this Agreement (and Employer’s
obligations hereunder) shall stand separate and apart and shall have no effect
on, or be affected by, the terms and provisions of any employment agreement.
Events of Termination of Employment shall be characterized, for purposes of
interpreting this Agreement, in accord with the definitions herein.

      

      2.2           Fringe
Benefit.  The benefits
provided by this Agreement are granted by the Employer as a fringe benefit to
Executive and are not a part of any salary reduction Agreement or any
arrangement deferring a bonus or a salary increase.  Executive has no
option to take any current payments or bonus in lieu of the benefits provided by
this Agreement.

      

      2.3           Prohibited
Payments. Notwithstanding anything
in this Agreement to the contrary, if any payment made under this Agreement is a
“golden parachute payment” as defined in Section 28(k) of the Federal Deposit
Insurance Act (12 U.S.C. section 1828(k) and Part 359 of the Rules and
Regulations of the Federal Deposit Insurance
Corporation  (collectively, the “FDIC Rules”) or is otherwise
prohibited, restricted or subject to the prior approval of a Bank Regulator, no
payment shall be made hereunder without complying with said FDIC
Rules.

      

      3.0           SUPPLEMENTAL RETIREMENT
BENEFITS

      

      3.1           Separation
From Service on or After Attaining the Normal Retirement Age. In the
event Executive Separates From Service on or after attaining the Normal
Retirement Age (and other than for Cause), then he shall receive an annual
Executive Benefit equal to the Supplemental Retirement Benefit (reduced as
required under Paragraph 1.10 and subject to the non-compete provisions of
Paragraph 3.8). This annual Executive Benefit shall be paid in substantially
equal monthly installments, with payments commencing on the first day of the
first month following Executive’s Separation From Service, and continuing
thereafter until Executive’s death. In addition to the forgoing, the annual
Executive benefit amount shall be increased each year by two percent (2 %).
These annual increases shall take effect each year on the anniversary of the
first payment date and shall continue for as long as the Executive receives a
benefit.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

      3.2           Separation
From Service on a Date which Constitutes an Early Retirement Date.  In the event
Executive Separates From Service on a date which constitutes an Early Retirement
Date (and other than pursuant to the provisions of Paragraph 3.4), then he shall
receive an annual Executive Benefit equal to the Supplemental Retirement Benefit
(reduced as required under Paragraph 1.10 and subject to the non-compete
provisions of Paragraph 3.8), reduced by the Early Commencement Reduction Factor
(determined as of the date payments of benefits are to begin). This annual
Executive Benefit shall be paid in substantially equal monthly installments,
with payments commencing on the first day of the first month following
Executive’s Separation From Service, and continuing until Executive’s death. In
addition to the forgoing, the annual Executive benefit amount shall be increased
each year by two percent (2 %). These annual increases shall take effect each
year on the anniversary of the first payment date and shall continue for as long
as the Executive receives a benefit.   

      

      3.3           Disability. In the event Executive
becomes Disabled before Terminating Employment, then, subject to the non-compete
provisions of Paragraph 3.8, Executive shall be entitled to receive an annual
amount equal to the Supplemental Retirement Benefit. Payments shall be made in
substantially equal monthly installments, commencing on the first day of the
first month following the determination of Disability in compliance with IRC
409A, and continuing until death. The annual Executive Benefit amount shall be
increased each year by two percent (2 %). To the extent benefits are duplicated
or paid under Employer’s long term disability plan, then such benefits hereunder
shall be forfeited.

       

      3.4           Involuntary
Termination or Termination for Good Reason Following a Change in Control
. In the event Executive is Involuntarily Terminated or Terminates for
Good Reason following a Change in Control, (and for any reason other than for
cause), then he shall be entitled to an annual amount equal to the Supplemental
Retirement Benefit, reduced by the Early Commencement Reduction Factor. This
annual Executive Benefit shall be paid in substantially equal monthly
installments, with payments commencing on the first day of the first month
following Executive’s Separation From Service. The annual Executive Benefit
amount shall be increased each year by two percent (2 %). These annual increases
shall take effect each year on the anniversary of the first payment date and
shall continue for as long as the Executive receives a benefit.

       

      3.5           Termination
For Cause. If Executive’s Employment with Employer is Terminated For
Cause, then Executive shall forfeit any and all rights and benefits he may have
under this Agreement, and he shall have no right to be paid any of the amounts
which would otherwise be due or paid to Executive by Employer pursuant to the
terms of this Agreement. 

      

      3.6           Death of
Executive. In the
event Executive dies while employed by Employer, then no death benefits shall be
payable under this Agreement. Death benefits, if any, shall be paid pursuant to
a Joint Beneficiary Designation Agreement, if such plan exists. 

       

      3.7         
Supplemental
Retirement Benefit Payable Pursuant to Single Paragraph. Executive’s Supplemental
Retirement Benefit shall be payable under this Agreement pursuant to only one of
paragraphs 3.1 through 3.6 above and shall not be payable under more than one
such

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      provision.
The time and circumstances of Executive’s Separation From Service shall
determine which paragraph shall be used to calculate the Supplemental Retirement
Benefit.

       

             
3.8           Forfeiture
in the Event of Breach of Non-Competition Agreement. Notwithstanding any
other provision of this Agreement, the Executive Benefit due the Executive
pursuant hereto (if any) shall be forfeited and no Executive Benefit shall be
due the Executive hereunder if the Executive enters into competitive activity in
the Employer's market area within the three (3) year period beginning on the
date of the Executive's termination of Employment.  Competitive
activity means acting directly or indirectly as an employee, agent, stockholder
(other than passive holdings of less than one percent (1%) of the outstanding
shares of a publicly-traded company), member, director, co-partner or in any
other individual or representative capacity on behalf of any bank or financial
institution (including without limitation trust company, finance company,
leasing company or any entity that provides credit). The Employer's market area
is defined as the following counties in the State of Washington and all counties
bordering on any such county and any county in which the Employer maintains a
branch or other office, now or at the time of the Executive's termination of
Employment:  Cowlitz, King, Kitsap, Pierce and Thurston.

      

      4.0           FORM AND PAYMENT OF
BENEFITS

       

      
        	
                 
      

              	
                4.1

              	
                Compliance With IRC
      409A

              

      

      

      It is the
intent of the parties to comply with all applicable Internal Revenue Code
Sections, including but not limited to, IRC 409A. Thus, when required by IRC
409A, any benefits payable pursuant to this Agreement and as a result of a
Separation From Service shall be withheld for six (6) months following such
Separation From Service if Executive is a Specified Employee (as defined herein
and/or by the Internal Revenue Service) and Employer is publicly traded at the
time of Separation From Service. For any individual affected by this six (6)
month delay in payment imposed by IRC 409A, and when applicable, the aggregate
amount of the first seven (7) months of installments shall be paid on the first
day of the seventh month following the date of Separation From Service. Monthly
installment payments shall continue thereafter as called for.

      

      In
addition, and in accordance with and subject to IRS Notices 2006-79, 2007-78 and
2007-86, no payment scheduled to be made in 2008 may be delayed to a date later
than 2008, no payment which would not otherwise be scheduled to occur in 2008
may be accelerated into 2008, and no payment scheduled to be made in 2008 may be
delayed to a date later than 2008. If any payout to Executive in this Agreement
is affected by this prohibition, then such payouts shall only be made in
compliance with IRC 409A.

      

      In the
event any provision of this Agreement is ambiguous, then, whenever possible, it
shall be interpreted in a manner that is consistent with
IRC 409A.

      

      4.2           Reduction
for Early Commencement of Benefits. If Executive receives an Executive
Benefit under this Agreement before attaining the Normal Retirement Age, then
the

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      annual
Benefit shall be reduced by the Early Commencement Reduction Factor (other than
in the event of Disability).

       

      4.3           Withholding
of Payroll Taxes.  Employer shall withhold from payments made
hereunder, any taxes required to be withheld from Executive’s benefits under
federal, state or local law. 

       

      5.0.           IRS 280G
ISSUES

      

      If all or
any portion of the amounts payable to Executive under this Agreement, either
alone or together with other payments which Executive has the right to receive
from Employer, constitute "excess parachute payments" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), that
are subject to the excise tax imposed by Section 4999 of the Code (or similar
tax and/or assessment), Executive shall be responsible for the payment of such
excise tax and Employer (and its successor) shall be responsible for any loss of
deductibility related thereto; provided, however, that Employer and Executive
shall cooperate with each other and use all reasonable efforts to minimize to
the fullest extent possible the amount of excise tax imposed by Section 4999 of
the Code.  If, at a later date, it is determined (pursuant to final
regulations or published rulings of the Internal Revenue Service, final judgment
of a court of competent jurisdiction, or otherwise) that the amount of excise
taxes payable by Executive is greater than the amount initially so determined,
then Executive shall pay an amount equal to the sum of such additional excise
taxes and any interest, fines and penalties resulting from such
underpayment.  The determination of the amount of any such excise
taxes shall be made by the independent accounting firm employed by the Employer
immediately prior to the change in control or such other independent accounting
firm or advisor as may be mutually agreeable to Employer and Executive in the
exercise of their reasonable good faith judgment.

      

      6.0           FUNDING AND STATUS AS
UNSECURED CREDITOR

      

      6.1           Right To
Determine Funding Methods. Employer reserves the right to determine, in
its sole and absolute discretion, whether, to what extent and by what method, if
any, to provide for the payment of the amounts which may be payable to
Executive, under the terms of this Agreement.  In the event that
Employer elects to fund this Agreement, in whole or in part, through the use of
life insurance or annuities, or both, Employer shall determine the ownership and
beneficial interests of any such policy of life insurance or
annuity.  Employer further reserves the right, in its sole and
absolute discretion, to terminate any such policy, and any other device used to
fund its obligations under this Agreement, at any time, in whole or in part.
Consistent with Paragraph 6.2 below, Executive shall have no right, title or
interest in or to any funding source or amount utilized by Employer pursuant to
this Agreement, and any such funding source or amount shall not constitute
security for the performance of Employer’s obligations pursuant to this
Agreement.  In connection with the foregoing, Executive agrees to
execute such documents and undergo such medical examinations or tests which
Employer may request and which may be reasonably necessary to facilitate any
funding for this Agreement including, without limitation, Employer’s acquisition
of any policy of insurance or annuity.

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      6.2           Status as
an Unsecured General Creditor.  Except as
provided below in this Paragraph, Executive agrees that:  (i) he shall
have no legal or equitable rights, interests or claims in or to any specific
property or assets of Employer as a result of this Agreement; (ii) none of
Employer’s assets shall be held in or under any trust for the benefit of
Executive or held in any way as security for the fulfillment of the obligations
of Employer under this Agreement; (iii) all of Employer’s assets shall be and
remain the general unpledged and unrestricted assets of the Employer; (iv)
Employer’s obligation under this Agreement shall be that of an unfunded and
unsecured promise by Employer to pay money in the future; and (v) Executive
shall be an unsecured general creditor with respect to any benefits which may be
payable under the terms of this Agreement.

      

      Notwithstanding
provisions (i) through (v) above, Employer and Executive acknowledge and agree
that, in the event that Employer signs a definitive agreement calling for a
transaction that would result in a Change in Control, then upon request of
Executive, or in Employer’s discretion if Executive does not so request and
Employer nonetheless deems it appropriate, Employer shall establish, not later
than the effective date of the Change in Control, a Rabbi Trust or multiple
Rabbi Trusts (the "Trust" or "Trusts") upon such terms and conditions as
Employer, in its sole discretion, deems appropriate. In compliance with
applicable provisions of the Code, and, pursuant to the Trusts, Employer shall
promptly make contributions and/or transfer assets to the Trusts which
facilitate and are appropriate to the discharge of the Trusts’ obligations
pursuant to this Agreement.  The principal of the Trust or Trusts and
any earnings thereon shall be held separate and apart from other funds of
Employer to be used for discharge of Employer’s obligations pursuant to this
Agreement and shall continue to be subject to the claims of Employer’s general
creditors until paid to Executive in such manner and at such times as specified
in this Agreement.

      

      7.0           CLAIMS
PROCEDURE

      

      7.1           Named
Fiduciary and Agreement Administrator. The "Named Fiduciary and Agreement
Administrator" of this plan shall be the Employer until its removal by the board
of directors.  As Named Fiduciary and Administrator, Employer shall be
responsible for the management, control and administration of the executive
supplemental compensation plan as established herein. The Named Fiduciary may
delegate to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.

      

      7.2           Claims
Procedure.  In the event a dispute arises over the benefits
under this Agreement and benefits are not paid to Executive (or to Executive’s
beneficiary[ies], if applicable) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the Named Fiduciary
and Plan Administrator named above  in accordance with the following
procedures:

      

      
        	
                 
      

              	
                A.

              	
                Written
      Claim.  The claimant may file a written request for such
      benefit to the Plan
Administrator.

              

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                B.

              	
                Claim
      Decision.  Upon receipt of such claim, 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
for reasonable cause 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.

      

      If the
claim is denied in whole or in part, 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:

      

      (i)           The
specific reasons for the denial;

      
        	
                 
      

              	
                (ii)

              	
                The
      specific reference to pertinent provisions of the Agreement on which the
      denial is based;

              

      

      
        	
                 
      

              	
                (iii)

              	
                A
      description of any additional information or material necessary for the
      claimant to perfect the claim and an explanation of why such material or
      information is necessary;

              

      

      
        	
                 
      

              	
                (iv)

              	
                Appropriate
      information as to the steps to be taken if the claimant wishes to submit
      the claim for review and the time limits applicable to such procedures;
      and

              

      

      
        	
                 
      

              	
                (v)

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

              

      

      

      
        	
                 
      

              	
                C.

              	
                Request for
      Review.  Within sixty (60) days after receiving notice
      from the Plan Administrator that a claim has been denied (in part or all
      of the claim), then  claimant (or their duly authorized
      representative) may file with the Plan Administrator, a written request
      for a review of the denial of the
claim.

              

      

      

      The
claimant (or his duly authorized representative) 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.

      

      
        	
                 
      

              	
                D.

              	
                Decision on
      Review.  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 an

              

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      extension
of time for processing the claim, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial sixty (60) day
period. In no event shall such extension exceed a period of sixty (60) days from
the end of the initial period. The notice of extension must set forth the
special circumstances requiring an extension of time and the date by which the
Plan Administrator expects to render its decision.

      

      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.

      

      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:

      

      
        	
                 
      

              	
                (i)

              	
                The
      specific reasons for the denial;

              

      

      
        	
                 
      

              	
                (ii)

              	
                A
      reference to the specific provisions of the Agreement on which the denial
      is based;

              

      

      
        	
                 
      

              	
                (iii)

              	
                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

              

      

      
        	
                 
      

              	
                (iv)

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

              

      

      

      7.3           Arbitration
of Disputes.  All claims,
disputes and other matters in question arising out of or relating to this
Agreement and Agreement or the breach or interpretation thereof, other than
those matters which are to be determined by the Employer in its sole and
absolute discretion, shall be resolved by binding arbitration before a
representative member, selected by the mutual agreement of the parties, of the
Judicial Arbitration and Mediation Services, Inc. ("JAMS") located in Tacoma,
Washington.  In the event JAMS is unable or unwilling to conduct the
arbitration provided for under the terms of this paragraph, or has discontinued
its business, the parties agree that a representative member, selected by the
mutual agreement of the parties of the American Arbitration Association ("AAA")
shall conduct the binding arbitration referred to in this paragraph. Notice of
the demand for arbitration shall be filed in writing with the other party to
this Agreement and with JAMS (or AAA, if necessary).  In no event
shall the demand for arbitration be made after the date when institution of
legal or equitable proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of
limitations.  The arbitration shall be subject to such rules of
procedure used or established by JAMS, or if there are none, the rules of
procedure used or established by AAA. Any award rendered by JAMS or AAA shall be
final and binding upon the parties, and as applicable, their respective heirs,
beneficiaries, legal representatives, agents, successors and assigns, and may
be

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      entered
in any court having jurisdiction thereof.  The obligation of the
parties to arbitrate pursuant to this clause shall be specifically enforceable
in accordance with, and shall be conducted consistently with, the provisions of
the Washington Code of Civil Procedure.  Any arbitration hereunder
shall be conducted in Tacoma, Washington, unless otherwise agreed to by the
parties. The parties hereto agree that they and their heirs, personal
representatives, successors and assigns shall be bound by such arbitration with
respect to any controversy properly submitted to it for
determination.

      

      7.4           Attorneys’
Fees.  In the event of
any arbitration or litigation concerning any controversy, claim or dispute
between the parties hereto, arising out of or relating to this Agreement or the
breach hereof, or the interpretation hereof, (a) each party shall pay his own
attorneys’ arbitration Fees incurred pursuant to 7.3 hereof; (b) if Executive
prevails, he shall be entitled to recover from the other party reasonable
expenses, attorneys’ Fees and costs incurred in the enforcement or collection of
any judgment or award rendered.  The term “prevails” applies if the
arbitrator(s) or court finds that Executive is entitled to contested money
payments from the other, but does not necessarily imply a judgment rendered in
favor of Executive.

      

      7.5           Notice.  Any
notice required or permitted of either Executive or Employer under this
Agreement shall be deemed to have been duly given, if by personal delivery, upon
the date received by the party or its authorized representative; if by
facsimile, upon transmission to a telephone number previously provided by the
party to whom the facsimile is transmitted as reflected in the records of the
party transmitting the facsimile and upon reasonable confirmation of such
transmission; and if by mail, on the third day after mailing via U.S. first
class mail, registered or certified, postage prepaid and return receipt
requested, and addressed to the party at the address given below for the receipt
of notices, or such changed address as may be requested in writing by a
party.

      

      If
to  Employer:                     Columbia
Banking System, Inc.

      Attn:  Corporate
Secretary

      1301 A Street

      Tacoma,
WA  98402

      

      If  to  Executive:                    __________________________

      __________________________

      __________________________

      

      

      8.0           MISCELLANEOUS

      

      8.1           Binding
Effect/Merger or Reorganization.  This Agreement shall be
binding upon and inure to the benefit of the Executive and
Employer.  Accordingly, the Employer shall not merge or consolidate
into or with another corporation, or reorganize or sell substantially all of its
assets to another corporation, firm or person, unless and until such succeeding
or continuing corporation, firm or person agrees to assume and discharge the
obligations of the Employer under this Agreement.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      8.2           Effect on
Other Benefit Plans. Nothing contained in this Agreement shall affect the
right of the Executive to participate in or be covered by any qualified or
non-qualified pension, profit-sharing, group, bonus or other supplemental
compensation or fringe benefit plan constituting a part of the Employer’s
existing or future compensation structure.

      

      8.3           12 U.S.C.
§ 1828(k). Any payments made
to Executive pursuant to this Agreement, or otherwise, are subject to and
conditioned upon his compliance with 12 U.S.C. § 1828(k) or any regulations
promulgated thereunder.

      

      8.5           Opportunity
To Consult With Independent Advisors. Executive acknowledges that
he has been afforded the opportunity to consult with independent advisors of his
choosing including, without limitation, accountants or tax advisors and counsel
regarding both the benefits granted to him under the terms of this Agreement and
the (i) terms and conditions which may affect Executive’s right to these
benefits and (ii) personal tax effects of such benefits including, without
limitation, the effects of any federal or state taxes, Section 280G of the Code,
and any other taxes, costs, expenses or liabilities whatsoever related to such
benefits, which in any of the foregoing instances the Executive acknowledges and
agrees shall be the sole responsibility of Executive notwithstanding any other
term or provision of this Agreement.  Executive further acknowledges
and agrees that Employer shall have no liability whatsoever related to any such
personal tax effects or other personal costs, expenses, or liabilities
applicable to Executive and further specifically waives any right for himself or
herself, and his or her heirs, beneficiaries, legal representatives, agents,
successor and assign to claim or assert liability on the part of the Employer
related to the matters described herein.  Executive further
acknowledges that he has read, understands and consents to all of the terms and
conditions of this Agreement, and that he enters into this Agreement with a full
understanding of its terms and conditions.

      

      8.6           Assignment.  Executive
shall have no power or right to transfer, assign, anticipate, hypothecate,
modify or otherwise encumber any part or all of the amounts payable hereunder,
nor, prior to payment in accordance with the terms of this Agreement, shall any
portion of such amounts be:  (i) subject to seizure by any creditor of
Executive, by a proceeding at law or in equity, for the payment of any debts,
judgments, alimony or separate maintenance obligations which may be owed by
Executive; or (ii) transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. Any such attempted assignment or transfer shall be
void.

      

      8.7           Non-waiver.  The
failure of either party to enforce at any time or for any period of time any one
or more of the terms or conditions of this Agreement shall not be a waiver of
such term(s) or condition(s) or of that party's right thereafter to enforce each
and every term and condition of this Agreement.

      

      8.8           Partial
Invalidity.  If any terms,
provision, covenant, or condition of this Agreement is determined by an
arbitrator or a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other term, provision,
covenant or condition invalid, void or unenforceable, and the Agreement shall
remain in full force and effect notwithstanding such partial
invalidity.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      

      

      8.9           Entire
Agreement.  This Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties with respect to the subject matter of this Agreement and contains all of
the covenants and agreements between the parties with respect
thereto.  Each party to this Agreement acknowledges that no other
representations, inducements, promises, or

      agreements,
oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not set forth herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or binding
on either party.

      

      8.10           Modifications.  Any modification
of this Agreement shall be effective only if it is in writing and signed by each
party or such party's authorized representative.

      

      8.11           Paragraph
Headings.  The paragraph headings used in this Agreement are
included solely for the convenience of the parties and shall not affect or be
used in connection with the interpretation of this Agreement.

      

      8.12           No Strict
Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any
person.

      

      8.14           Governing
Law.  The laws of the State of Washington, other than those
laws denominated choice of law rules, and where applicable, the rules and
regulations of the Board of Governors of the Federal Reserve System, Federal
Deposit Insurance Corporation, Office of the Comptroller of the Currency, or any
other regulatory agency or governmental authority having jurisdiction over the
Employer, shall govern the validity, interpretation, construction and effect of
this Agreement.

      

      8.15           Gender.  Whenever
in this Agreement words are used in the masculine, feminine or neuter gender,
they shall be read and construed as in the masculine, feminine or neuter gender,
whenever they should so apply.

      

      IN WITNESS WHEREOF, the Employer and
the Executive have executed this Agreement on the date first above-written in
the City of Tacoma, Washington.

      

      EMPLOYER:

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	 	 	 	 
	COLUMBIA
      STATE BANK	COLUMBIA
      BANKING SYSTEM, INC.
	By:	
                                                           

                                                        	By:	
                                                        
	Title: 	
                                                           

                                                        	Title: 	
                                                           

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
 

      EXECUTIVE

       

       

        
          

      

      
        
           

        

        
          15

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