Document:

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                                                                   EXHIBIT 10(e)

                          AMENDED EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered by and
between Columbia State Bank, a Washington banking corporation ("Columbia Bank")
together with Columbia Banking System, Inc., a Washington corporation ("CBSI")
(collectively, the "Employer"), and MELANIE J. DRESSEL (the "Executive"). This
Agreement shall become effective as of July 1, 1999.

                                    RECITALS

     A.   Executive is currently serving as Executive Vice President of CBSI and
          President and Chief Operating Officer of Columbia Bank.

     B.   Employer considers the continuance of sound and vital management
          essential to protecting and enhancing Employer's best interests.

     C.   Employer desires to assure itself of retaining the exclusive services
          of Executive and to continue the Employment of Executive under the
          terms of this Agreement, and to reward Executive for her valuable,
          dedicated service to Employer should her employment be terminated
          under the circumstances described in this Agreement. Executive and
          Employer have entered into an Employment Agreement effective July 1,
          1999.

     D.   Effective January 1, 2000, Executive was appointed to serve as
          President and Chief Operating Officer of CBSI and President and Chief
          Executive Officer of Columbia Bank. Executive and Employer desire to
          amend and restate this Agreement to reflect this change in position.

     In consideration of the mutual promises made in this Agreement, the parties
agree as follows:

                                   AGREEMENT

     1.   Employment.

     Employer employs Executive and Executive accepts employment with Employer
on the terms and conditions set forth in this Agreement.

     2.   Term.

     The term of this Agreement will commence as of July 1, 1999, and will
continue until June 30, 2004, unless extended or sooner terminated as provided
in this Agreement.
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     3.   Duties.

               (a)  Executive will be President and Chief Executive Officer of
Columbia Bank and President and Chief Operating Officer of CBSI. In such
capacities, and subject to the authority of the Vice Chairman and Chief
Executive Officer of CBSI and the Boards of Directors of Columbia Bank and CBSI
(separately or collectively, the "Board" as applicable), as appropriate,
Executive will render the executive management services and perform such tasks
in connection with the affairs of Columbia Bank and CBSI that are normal and
customary to the positions that she holds.

               (b)  Executive will perform such other duties as may be
appropriate to her position and as may be prescribed from time to time by the
Vice Chairman and Chief Executive Officer of CBSI or the Board of Columbia Bank,
as appropriate, or that are provided in the Bylaws of Columbia Bank or CBSI.

               (c)  Executive will devote her best efforts and all necessary
time, attention, and effort to the business and affairs of Employer and its
affiliates, as such business and affairs now exist or hereafter may be changed
or supplemented, in order to properly discharge her responsibilities under this
Agreement. She may delegate such of her duties as she sees fit to the other
officers of CBSI or its subsidiaries.

     4.   Salary, Bonus, and Other Compensation.

          4.1  Salary.

               (a)  During the term of this Agreement, Employer will pay
Executive an annual (calendar year) base salary of not less than $150,000 per
year (payable at the rate of $12,500.00 per month) beginning July 1, 1999 and
$175,000 per year (payable at the rate of $14,583.33 per month) beginning
January 1, 2000.

               (b)  Columbia Bank will guarantee payment of any portion of
Executive's compensation that may be allocated to a subsidiary of CBSI.

               (c)  If this Agreement terminates prior to June 30, 2004, then
Employer will pay Executive such greater or lesser amount of the agreed
compensation as provided in Section 5.

          4.2  Bonus.  Executive will be eligible to participate in the bonus
pools, if any, that the Board of Columbia Bank or CBSI may establish for senior
executives, either under an executive incentive plan or otherwise.

          4.3  Benefits.  In addition to the base salary and bonus payable or
potentially payable to Executive pursuant to this Section 4, Executive will be
entitled to receive benefits similar to those offered to other senior executives
of Employer.

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     5.   Termination of Agreement.

          5.1  Early Termination.

               (a)  This Agreement may be terminated at any time by the Board of
Employer or by Executive, and it shall terminate upon Executive's death or
disability. Any termination by the Board of Employer other than termination for
cause (as defined below) shall not prejudice Executive's right to compensation
or other benefits under this Agreement. Except as provided in Section 7, if
Executive voluntarily terminates her employment before June 30, 2004 she will be
entitled to such payments as she would have the right to receive upon
termination for cause under subsection 5.l(b).

               (b)  Except as provided in Section 7, if Employer terminates this
Agreement without cause, Employer shall pay Executive upon the effective date of
such termination all salary earned, benefits accrued and all reimbursable
expenses hereunder incurred through such termination date and, in addition,
liquidated damages in an amount equal to the greater of (i) two years' salary,
or (ii) salary for the then-remaining term of the Agreement payable hereunder.
If Employer terminates this Agreement for cause, Employer shall pay Executive
upon the effective date of such termination only such salary earned, benefits
accrued and expenses reimbursable hereunder incurred through such termination
date. Executive shall have no right to receive compensation or other benefits
for any period after termination for cause.

               (c)  For purposes of this Agreement, the term "cause" shall mean
(i) willful misfeasance or gross negligence in the performance of her duties;
(ii) conduct demonstrably and significantly harmful to Employer (including
willful violation of any final cease and desist order applicable to Employer or
a financial institution subsidiary); or (iii) conviction of a felony. For
purposes of this Agreement, "disability" shall mean a medically reimbursable
physical or mental impairment that may be expected to result in death, or to be
of long, continued duration, and that renders Executive incapable of performing
the duties required under this Agreement. The Board or the Committee, acting in
good faith, shall make the final determination of whether Executive is suffering
under any disability as herein defined and, for purposes of making such
determination, may require Executive to submit himself to a physical examination
by a physician mutually agreed upon by Executive and the Board or the Committee
at Employer's expense.

          5.2  Obligations.  Except as otherwise provided in Section 7 or in a
particular option grant, Executive's rights, if any, to vested but unexercised
stock options will continue for a period of one year after early termination,
other than termination for cause. In the case of termination for cause,
Executive's unvested stock options, if any, shall terminate immediately.

     6.   Restrictive Covenant.

          6.1  Noncompetition.

               (a)  Executive agrees that except as otherwise set forth in this
Agreement, she will not, during the term of this Agreement and for a period of
two years after

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the later of (i) expiration of the term of this Agreement, or (ii) completion of
service as an active executive officer and/or Board member of CBSI or Columbia
Bank, directly or indirectly, become interested in, as principal shareholder,
director, or officer, any financial institution (other than an institution
controlled by, controlling, or under common control with Employer and its
affiliates) that competes within the State of Washington with Employer or any of
its affiliates, with respect to activities of the type performed by such
companies within such service area immediately prior to Executive's termination.

               (b)  The restrictions concerning competition after termination as
contained in this Section 6.1 shall apply only in the event that Executive
voluntarily terminates her employment with Employer without good reason. For
purposes of this Agreement, termination for "good reason" shall mean termination
by Executive as a result of any material breach of this Agreement by Employer,
or any diminution of duties of Executive by the Board of either Columbia Bank or
CBSI. The provisions restricting competition by Executive may be waived by the
Employer.

          6.2  Noninterference.  During the noncompetition period described in
Section 6.1, Executive shall not solicit or attempt to solicit any other
employee of Employer or its affiliates to leave the employ of those companies,
or in any way interfere with the relationship between Employer and any other
employee of Employer or its affiliates.

          6.3  Interpretation.  If a court or any other administrative body with
jurisdiction over a dispute related to this Agreement should determine that the
restrictive covenants set forth above is unreasonably broad, the parties
authorize such court or administrative body to narrow the covenants so as to
make it reasonable, given all relevant circumstances, and to enforce such
revised covenants. The covenants in this paragraph shall survive termination of
this Agreement.

     7.   Change of Control.

          7.1  Benefits.  The parties recognize that a "change of control" of
Employer (as defined in Section 7.2) could be detrimental to Executive's
continued employment. Accordingly, in order to give further assurances to the
Executive to enter into this Agreement, if:

               (a)  There is a change of control; and either;

               (b)  Within 730 days of such change in control, Executive
terminates her employment with Employer; or

               (c)  At any time from and after sixty days prior to the public
announcement by Employer of a transaction that will result in the change of
control, Employer (or its successor) terminates Executive's employment without
cause, then Executive, as of the date of termination of her employment, subject
to the remaining provisions of this Section 7.1, shall be paid or provided with:
(i) continued payment of her base salary and all benefits provided for in this
Agreement until two years following termination or June 30, 2004, whichever is
longer; and (ii) vesting of all stock options shall occur. The provisions of
this Section 7.1 shall survive expiration of the term of the Agreement.

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          7.2  Definitions.  For purposes of this Agreement, the term "change of
control" shall mean the occurrence of one or more of the following events:

               (a)  One person or entity acquiring or otherwise becoming the
owner of twenty-five percent or more of CBSI's outstanding common stock;

               (b)  Replacement of a majority of the incumbent directors of CBSI
or Columbia Bank by directors whose elections have not been supported by a
majority of the Board of either company, as appropriate; or

               (c)  Dissolution or sale of fifty percent or more in value of the
assets, of either CBSI or Columbia Bank.

          7.3  Reimbursement.  In the event the provisions of this Section 7.3
result in imposition of a tax on Executive under the provisions of Internal
Revenue Code (S) 4999, Employer agrees to reimburse Executive for the same,
exclusive of any tax imposed by reason of receipt of reimbursement under this
Section 7.3.

     8.   Miscellaneous.

          8.1  This Agreement contains the entire agreement between the parties
with respect to Executive's employment with Employer and her covenant not to
compete with Employer and its affiliates, and is subject to modification or
amendment only upon amendment in writing signed by both parties.

          8.2  This Agreement shall bind and inure to the benefit of the heirs,
legal representatives, successors, and assigns of the parties, except that
Employer's rights and obligations may not be assigned. The provisions of Section
6.1 of this Agreement are intended to confer upon CBSI and its subsidiaries and
affiliates the benefits of Executive's covenant not to compete.

          8.3  If any provision of this Agreement is invalid or otherwise
unenforceable, all other provisions shall remain unaffected and shall be
enforceable to the fullest extent permitted by law.

          8.4  This Agreement is made with reference to and is intended to be
construed in accordance with the laws of the State of Washington. Venue for any
action arising out of or concerning this Agreement shall lie in Pierce County,
Washington. In the event of a dispute under this Agreement not involving
injunctive relief, the dispute shall be arbitrated pursuant to the Superior
Court Mandatory Arbitration Rules ("MAR") adopted by the Washington State
Supreme Court, irrespective of the amount in controversy. This Agreement shall
be deemed as stipulation to that effect pursuant to MAR 1.2 and 8.1. The
arbitrator, in his or her discretion, may award attorney's fees to the
prevailing party or parties.

          8.5  Any notice required to be given under this Agreement to either
party shall be given by personal service or by depositing a copy thereof in the
United States registered or certified mail, postage prepaid, addressed to the
following address, or such other address as addressee shall designate in
writing:

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              Employer:                 1102 Broadway
                                        Tacoma, WA  98402

              Executive:                10924 Bliss Cochrane KPN
                                        Gig Harbor, WA  98329

     IN WITNESS WHEREOF, the parties have executed this Agreement effective on
July 1, 1999.

                                        COLUMBIA STATE BANK

                                        By:  /s/  W.W. Philip
                                           -------------------------------------
                                             W.W. Philip
                                             Its Chairman

                                        COLUMBIA BANKING SYSTEM, INC.

                                        By:  /s/ W.W. Philip
                                           -------------------------------------
                                             W.W. Philip
                                             Its Chairman

                                        EXECUTIVE

                                        /s/ Melanie J. Dressel
                                        ----------------------------------------
                                        Melanie J. Dressel

                                       6<PAGE>

                                                                   EXHIBIT 10(l)

                         COLUMBIA BANKING SYSTEM, INC.

                          DEFERRED COMPENSATION PLAN

                              September 22, 1999

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                         Columbia Banking System, Inc.

                          DEFERRED COMPENSATION PLAN

                               Table of Contents

ARTICLE I-RECITALS.......................................................   5
ARTICLE II-DEFINITIONS...................................................   5
     2.01  Account.......................................................   5
     2.02  Account Balance...............................................   6
     2.03  Annual Bonus..................................................   6
     2.04  Annual Deferral Amount........................................   6
     2.05  Base Annual Salary............................................   6
     2.06  Beneficiary...................................................   7
     2.07  Beneficiary Designation Form..................................   7
     2.08  Change in Control.............................................   7
     2.09  Code..........................................................   7
     2.10  Compensation..................................................   7
     2.11  Deduction Limitation..........................................   8
     2.12  Deferral Amount...............................................   8
     2.13  Disability....................................................   8
     2.14  Discretionary Employer Contribution...........................   9
     2.15  Election Form.................................................   9
     2.16  Eligible Employee.............................................   9
     2.17  Enrollment Form...............................................   9
     2.18  ERISA.........................................................  10
     2.19  Hardship Distribution.........................................  10
     2.20  Matching Contribution.........................................  10
     2.21  Monthly Payments..............................................  11
     2.22  Participant...................................................  11
     2.23  Plan Year.....................................................  11
     2.24  Preretirement Death Benefit...................................  12
     2.25  Retirement....................................................  12

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     2.26  Retirement Benefit............................................  12
     2.27  Rules and Procedures..........................................  12
     2.28  Termination Benefit...........................................  12
     2.29  Termination of Employment.....................................  12
     2.30  Total Monthly Deferrals.......................................  12
     2.31  Unforeseeable Financial Emergency.............................  13
ARTICLE III-ELIGIBILITY AND PARTICIPATION................................  14
     3.01  Eligibility...................................................  14
     3.02  Enrollment Requirements.......................................  14
     3.03  Commencement of Participation.................................  14
     3.04  Change of Employment Category.................................  14
ARTICLE IV-CONTRIBUTIONS AND CREDITS.....................................  15
     4.01  Deferral Election.............................................  15
     4.02  Election to Defer.............................................  15
     4.03  Withholding of Deferrals......................................  16
     4.04  Payment to Plan...............................................  16
     4.05  Credits to Accounts...........................................  16
     4.06  Withholding Taxes.............................................  17
ARTICLE V-INVESTMENT CREDITS.............................................  17
     5.01  Allocation of Earnings or Losses..............................  17
     5.02  Investment Directions.........................................  18
ARTICLE VI-ENTITLEMENT TO BENEFITS.......................................  19
     6.01  Retirement Benefit............................................  19
     6.02  Termination Benefit...........................................  20
     6.03  Hardship Distributions........................................  21
     6.04  Preretirement Death Benefit...................................  21
     6.05  Nontransferable...............................................  21
ARTICLE VII-BENEFICIARY DESIGNATION......................................  22
     7.01  Beneficiary...................................................  22
     7.02  Method of Designation.........................................  22
     7.03  Acknowledgment of Designation.................................  22

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     7.04  No Beneficiary Designation....................................  22
     7.05  Beneficiary Dispute...........................................  23
     7.06  Discharge of Obligations......................................  23
ARTICLE VIII-ADMINISTRATION..............................................  23
     8.01. Administrative Authority......................................  23
     8.02. Mutual Exclusion..............................................  24
     8.03. Uniformity of Acts............................................  24
     8.04. Litigation....................................................  24
     8.05. Payment of Administration Expenses............................  25
ARTICLE IX-TERMINATION AND AMENDMENT.....................................  25
     9.01. Discretionary Termination.....................................  25
     9.02  Automatic Plan Termination....................................  25
     9.03  Individual Termination........................................  26
     9.04  Amendment.....................................................  26
ARTICLE X-ERISA..........................................................  26
     10.01 Terms.........................................................  26
     10.02 Procedure.....................................................  27
ARTICLE XI-ARBITRATION...................................................  27
ARTICLE XII-GENERAL PROVISIONS...........................................  28
     12.01.Notice........................................................  28
     12.02 Inurement.....................................................  28
     12.03 Governing Law.................................................  28
     12.04 Construction..................................................  29
     12.05 Severability..................................................  29
     12.06 Termination...................................................  29
     12.07.Compliance With Code..........................................  29

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<PAGE>

                         Columbia Banking System, Inc.

                          DEFERRED COMPENSATION PLAN

     This Columbia Banking System, Inc. Deferred Compensation Plan (the "Plan")
is adopted as of the date on the signature page by Columbia Banking System,
Inc., and its subsidiaries, a Washington corporation ("Employer").

                              ARTICLE I-RECITALS

Employer presently has a select group of senior management and highly
compensated employees who contribute materially to the continued growth,
development, and business success of Employer. Each member of this select group
has experience and knowledge in the conduct of Employer's business that is of
great value to Employer. In the future, Employer expects that it will employ
additional senior management and highly compensated individuals who will
contribute materially to the continued growth, development, and business success
of Employer and who will have experience and knowledge in the conduct of
Employer's business that is of great value to Employer. In recognition of the
value of Employer's present and future senior management and highly compensated
employees, the purpose of this Plan is to provide specified benefits to a select
group of Employer's senior management and highly compensated employees. The Plan
is intended to be a top-hat plan (i.e., an unfunded deferred compensation plan
maintained for a select group of management or highly compensated employees)
under ERISA (S)(S)201(2), 301(a)(3), and 401(a)(1).

                            ARTICLE II-DEFINITIONS

     The following capitalized terms shall have the meanings specified in this
article, unless otherwise clearly apparent from the context. 2.01 Account.

"Account" means the record maintained by Employer for each Participant under the
Plan. The Account shall be a bookkeeping entry only and shall be utilized solely
as a device for the

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<PAGE>

measurement and determination of the amounts to be paid to a Participant
pursuant to the Plan.

2.02  Account Balance.

"Account Balance" means (a) the Deferral Amount, plus (b) any Matching
Contributions made by Employer, plus (c) any Discretionary Employer
Contributions made by Employer, plus (d) income, gains, and losses credited in
accordance with the applicable provisions of the Plan, less (e) all related
expenses, including without limitation investment, management, transaction, and
mortality expenses, less (f) all distributions to the Participant or the
Participant's Beneficiary.

2.03  Annual Bonus.

"Annual Bonus" means any compensation, in addition to Base Annual Salary, which
would be payable in cash to a Participant as an employee of Employer under any
of Employer's bonus or incentive plans.

2.04  Annual Deferral Amount .

"Annual Deferral Amount" means that portion of a Participant's Base Annual
Salary or Annual Bonus that a Participant elects to have deferred and, in fact,
is deferred in accordance with Article IV for any Plan Year. In the event a
Participant's deferrals cease, for any reason, prior to the end of a Plan Year,
that Participant's Annual Deferral Amount for that Plan Year shall be the actual
amount withheld prior to the cessation of such deferrals.

2.05  Base Annual Salary.

"Base Annual Salary" means the annual compensation payable in cash to a
Participant by Employer, excluding bonuses, relocation expenses, incentive plan
payments, director's fees and other fees, severance allowances, pay in lieu of
vacations, Employer contributions to qualified or nonqualified plans, and
automobile and other allowances paid to a Participant for employment services
rendered (whether or not such allowances are included in the Participant's gross
income for tax purposes). Base Annual Salary also specifically does not include
nonmonetary awards and fringe benefits not payable in cash. Base Annual Salary
shall be calculated before reduction for compensation voluntarily deferred or
contributed by a Participant pursuant to all qualified or nonqualified plans and
shall be calculated to include amounts not otherwise included in the
Participant's gross income under Code (S)(S)125, 402(e)(3), 402(h), or 403(b)
pursuant to any plans

                                      -6-
<PAGE>

established by Employer; provided, however, that all such amounts will be
included in Base Annual Salary only to the extent that, had there been no such
plan, the amount would have been payable in cash to the Participant.

2.06  Beneficiary.

"Beneficiary" means one or more persons or estates that are entitled to receive
a Participant's remaining benefits under the Plan upon the death of a
Participant.

2.07  Beneficiary Designation Form.

"Beneficiary Designation Form" means the form established from time to time by
Employer to be used by a Participant to designate one or more Beneficiaries

2.08  Change in Control.

A "Change in Control" shall be deemed to have occurred if any person (including
a "Group" as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934) acquires shares of Employer either (a) having a majority of the
total number of votes that may be cast for the election of directors of Employer
or (b) possessing, directly or indirectly, the power to control the direction of
management or policies of Employer; provided, however, that no Change in Control
shall be deemed to occur in the event of a merger, consolidation, or
reorganization of Employer where the shareholders of Employer are substantially
the same as before such merger, consolidation, or reorganization.

2.09  Code.

"Code" means the Internal Revenue Code of 1986 and the Treasury Regulations
adopted thereunder, as each is amended from time to time.

2.10  Compensation.

"Compensation" means the total Annual Bonus and Base Annual Salary paid by
Employer to a

                                      -7-
<PAGE>

Participant in any Plan Year.

2.11  Deduction Limitation.

"Deduction Limitation" means the following described limitation on a benefit
that may otherwise be distributable to a Participant pursuant to the provisions
of the Plan. Except as otherwise provided, this limitation shall be applied to
all distributions that are "subject to the Deduction of Limitation" under the
Plan. If Employer determines in good faith prior to a Change in Control that
there is a reasonable likelihood that any compensation paid to a Participant for
a taxable year of Employer would not be deductible by Employer solely by reason
of the limitation under Code (S)162(m), then to the extent deemed necessary by
Employer to ensure that the entire amount of any distribution to such
Participant pursuant to the Plan prior to a Change in Control is deductible,
Employer may defer all or any portion of a distribution under the Plan. Any
amounts deferred pursuant to this limitation shall continue to accrue income,
gains, and losses as otherwise provided in the Plan. The amounts so deferred and
the income, gains, and losses accrued thereon shall be distributed to such
Participant or such Participant's Beneficiary, in the event of the Participant's
death, at the earliest possible date, as determined by Employer in good faith,
on which the deductibility of compensation paid or payable to the Participant
for the taxable year of Employer during which the distribution is made will not
be limited by Code (S)162(m) or, if earlier, the effective date of a Change in
Control. Notwithstanding anything to the contrary in the Plan, the Deduction
Limitation shall not apply to any distributions made after a Change in Control.

2.12  Deferral Amount.

"Deferral Amount" means the sum of all of a Participant's Annual Deferral
Amounts.

2.13  Disability.

"Disability" means a period of disability during which a Participant qualifies
for benefits under Employer's long-term disability plan or, if a Participant
does not participate in such plan, a period of disability during which the
Participant would have qualified for benefits under such

                                      -8-
<PAGE>

plan had the Participant been a participant in such plan. If Employer does not
sponsor such a plan, Disability shall be determined by Employer in its
discretion.

2.14  Discretionary Employer Contribution.

"Discretionary Employer Contribution" means contributions made by Employer, in
Employer's sole discretion, to the Account of one or more Participants in such
amount as Employer shall determine. Employer is under no obligation to make any
Discretionary Employer Contributions at any time under this Plan. If Employer
makes any Discretionary Employer Contributions, Employer shall be free to
allocate them among Participants in any way Employer deems appropriate and
Employer shall be free to omit any Participants from the allocation of such
Discretionary Employer Contributions. Any Discretionary Employer Contributions
shall be credited to a Participant's Account upon delivery of the contribution
to the Plan Administrator for credit to the Participant's Plan Account.

2.15  Election Form.

"Election Form" means the form established from time to time by Employer that a
Participant completes, signs, and returns to Employer to make an election under
the Plan.

2.16  Eligible Employee.

"Eligible Employee" means an Director of Employer or Employee of Employer who is
a member of senior management or, in Employer's sole discretion, a highly
compensated employee and who is designated by Employer, in Employer's sole
discretion, to be eligible to participate in the Plan.

2.17  Enrollment Form.

"Enrollment Form" means the form established from time to time by Employer that
an Eligible Employee completes, signs, and returns to Employer in order to
enroll in, and become a Participant in, the Plan.

                                      -9-
<PAGE>

2.18  ERISA.

"ERISA" means the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

2.19  Hardship Distribution.

"Hardship Distribution" means the distribution provided for in paragraph (b) of
Section 6.03. A Participant may petition for a Hardship Distribution if the
Participant experiences an Unforeseeable Financial Emergency or suffers a
Disability. Employer shall consider the circumstances of each such case and the
best interests of the Participant and the Participant's family and shall have
the right, in Employer's sole discretion, to allow the entire distribution
requested by the Participant, to allow only a portion of the distribution
requested by the Participant, or to refuse to allow any distribution to the
Participant. Upon determining that a Participant is entitled to a Hardship
Distribution, Employer shall instruct the Plan Administrator to make the
appropriate distribution to the Participant from the Participant's Plan Account.
In no event shall the aggregate amount of any Hardship Distribution exceed
either the full value of the Participant's Account or the amount determined by
Employer to be necessary to alleviate the Participant's Unforeseeable Financial
Emergency or the costs of the Participant's Disability. In determining the
amount to be distributed to a Participant as a Hardship Distribution, Employer
may consider any taxes due because of the Hardship Distribution to the
Participant.

2.20  Matching Contribution.

"Matching Contribution" means an amount determined in writing by Employer prior
to the beginning of each Plan Year, designated as a percentage which may be zero
or greater, of the Annual Deferral Amount for each Participant during that Plan
Year. Employer shall contribute to each Participant's Account during that Plan
Year an amount equal to that Plan Year's designated percentage, if any, times
the Participant's Annual Deferral Amount for that Plan Year. Unless Employer
determines a Matching Contribution for a Plan Year in the manner provided in
this section, there shall be no Matching Contribution for that Plan year. If
Employer establishes a Matching Contribution for any Plan Year, then such
Matching Contributions shall be paid to the Plan Administrator on a quarterly
basis, within fifteen (15) days after the close of each

                                     -10-
<PAGE>

calendar quarter. Each Participant's share of any declared Matching Contribution
shall be credited to the Participant's Account effective upon receipt by the
Plan Administrator of each such Matching Contribution.

2.21  Monthly Payments.

"Monthly Payments" means monthly installments equal to 1/N of the Participant's
Account Balance, where "N" is the number of monthly installments remaining to be
paid. Employer, in Employer's sole discretion, may recalculate a Participant's
or a Beneficiary's Monthly Payment on a monthly, quarterly, semi-annual, or
annual basis. If Employer recalculates the Monthly Payment on other than a
monthly basis, the Monthly Payments shall terminate when the Participant's
Account Balance reaches zero, even if this occurs prior to the last scheduled
Monthly Payment as a result of investment losses debited to the Participant's
Plan Account. The last scheduled Monthly Payment shall include the entire
balance in the Participant's Account, even if it is larger than the scheduled
amount of the Monthly Payment.

2.22  Participant.

"Participant" means any Eligible Employee who is selected by Employer to
participate in the Plan, who elects to participate in the Plan, who signs an
Enrollment Form, an Election Form, and a Beneficiary Designation Form, all of
which are accepted by Employer, and whose participation in the Plan has not
terminated. A spouse or former spouse of a Participant shall not be treated as a
Participant in the Plan, even if such spouse has an interest in the
Participant's benefits under the Plan under any applicable law or as a result of
any property settlement resulting from legal separation or divorce.

2.23  Plan Year.

"Plan Year" means a calendar year ending each December 31. The first Plan Year
shall commence on the effective date of this Plan and end on December 31 of that
year.

                                     -11-
<PAGE>

2.24  Preretirement Death Benefit.

"Preretirement Death Benefit" means the benefit provided for in Section 6.04.

2.25  Retirement.

"Retirement" means severance from employment with Employer after age sixty-five
(65) for any Employee, and age 75 for any Director for any reason other than
death or Disability.

2.26  Retirement Benefit.

"Retirement Benefit" means the benefit provided for in Section 6.01.

2.27  Rules and Procedures.

"Rules and Procedures" means such rules of procedure and regulations as
Employer, in Employer's opinion, deems necessary or appropriate for the proper
and efficient administration of the Plan. Any Rules and Procedures must be
consistent with the Plan. Employer may modify, amend, or revoke the Rules and
Procedures, or any portion of them, at any time and from time to time.

2.28  Termination Benefit.

"Termination Benefit" means the benefit provided for in Section 6.02.

2.29  Termination of Employment.

"Termination of Employment" means a Participant's severance from employment with
Employer, voluntarily or involuntarily, for any reason other than Retirement,
Disability, or death.

2.30  Total Monthly Deferrals.

"Total Monthly Deferrals" means the total deferrals withheld from all
Participants' Compensation during any calendar month.

                                     -12-
<PAGE>

2.31  Unforeseeable Financial Emergency.

"Unforeseeable Financial Emergency" means an unanticipated emergency that is
caused by an event beyond the control of the Participant that would cause severe
financial hardship to the Participant resulting from (a) a sudden and unexpected
illness or accident of the Participant or a dependant of the Participant, (b) a
loss of the Participant's property due to casualty, or (c) such other
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined in the sole discretion
of Employer.

                                     -13-
<PAGE>

                   ARTICLE III-ELIGIBILITY AND PARTICIPATION

3.01  Eligibility

Eligible participants will come from a group of senior management, Directors,
and other highly compensated employees. From that group, Employer shall select,
in Employer's sole discretion, those individuals who shall be Eligible
Employees.

3.02  Enrollment Requirements

As a condition to participation in the Plan, each Eligible Employee shall
complete, execute, and return to Employer, within thirty (30) days of being
notified by Employer that he or she is an Eligible Employee, an Enrollment Form,
an Election Form, and a Beneficiary Designation Form. In addition, Employer may
establish from time to time any other enrollment requirements that Employer
determines, in Employer's sole discretion, are necessary or convenient to the
implementation and administration of the Plan. Participation in the Plan is
voluntary and an Eligible Employee shall be under no obligation to elect to
participate in the Plan.

3.03  Commencement of Participation.

Provided that an Eligible Employee has met all enrollment requirements set forth
in this Plan and established by Employer, including returning all required
documents to Employer in a timely manner, that Eligible Employee shall commence
participation in the Plan upon the timely completion of those requirements and
Employer's acceptance of all submitted documents. If an Eligible Employee fails
to meet all such requirements within the required thirty (30)-day period, that
Eligible Employee shall not be eligible to participate in the Plan until the
first day of the Plan Year which begins after the delivery to Employer of the
required documents, provided that those documents are accepted by Employer.

3.04  Change of Employment Category.

If Employer determines in good faith that a Participant no longer qualifies as
an Eligible

                                     -14-
<PAGE>

Employee, Employer shall have the right, in Employer's sole discretion, to:

(a) Terminate deferral. Terminate any deferral election the Participant has made
for the Plan Year in which the Participant's employment status changes;

(b) Prohibit future elections. Prevent the Participant from making future
deferral elections; and/or

(c) Terminate participation. Immediately distribute the Participant's then
Account Balance as a Termination Benefit and terminate the Participant's
participation in the Plan.

If Employer chooses not to terminate the Participant's participation in the
Plan, Employer may, in Employer's sole discretion, reinstate the Participant to
full participation in the Plan at any future time when the Participant again
becomes an Eligible Employee.

                     ARTICLE IV-CONTRIBUTIONS AND CREDITS

4.01  Deferral Election.

In accordance with the Rules and Procedures, a Participant may elect to defer
Base Annual Salary or Annual Bonus that is due to be earned and that would
otherwise be paid to the Participant, up to the maximum percentages for each
established in the Rules and Procedures.

4.02  Election to Defer.

In connection with a Participant's initial participation in the Plan, the
Participant shall make a deferral election by delivering to Employer a completed
and signed Election Form. An Election Form shall be valid only if it is timely
delivered to, and accepted by, Employer. A Participant may change his or her
deferral election effective as of the first day of a Plan Year by delivering a
new completed and signed Election Form to Employer. In order to be effective,
the new Election Form must be received and accepted by Employer prior to the
beginning of the Plan Year. If a new Election Form is received and accepted by
Employer after the beginning of a new Plan Year, such new Election Form shall
not be effective until the beginning of the next Plan Year. Once accepted by
Employer, an Election Form shall continue in force indefinitely, until changed
by the Participant on a subsequent Election Form submitted to, and accepted by,
Employer.

                                     -15-
<PAGE>

4.03  Withholding of Deferrals.

The portion of the Annual Deferral Amount attributable to Base Annual Salary
shall be withheld each payroll period in equal amounts from the Participant's
Base Annual Salary. If a Participant's Base Annual Salary increases or
decreases, the amounts withheld shall be adjusted to take into consideration
such increases or decreases, if the Annual Deferral Amount is expressed as a
percentage of Base Annual Salary. The portion of the Annual Deferral Amount
attributable to the Annual Bonus shall be withheld at the time each Annual Bonus
is, or otherwise would be, paid to the Participant.

4.04  Payment to Plan.

On or before the fifteenth day of each month, Employer shall contribute to the
Plan the Total Monthly Deferrals withheld during the prior month. Employer shall
provide the Plan Adminstrator with the proper allocation of the Total Monthly
Deferrals among the Participants' Accounts. Each Participant's portion of the
Total Monthly Deferrals shall be allocated to that Participant's Plan Account
upon receipt by the Plan Administrator and shall begin to accrue income, gains,
and losses as of that time.

4.05  Credits to Accounts.

Employer shall establish and maintain a separate Account in the name of each
Participant, which shall at all times be one hundred percent (100%) vested in
the Participant. Each Participant's Account shall be credited or debited with
the following:

          (a) Deferrals. Amounts equal to the Participant's Deferral Amount,
     effective upon the date it is withheld from the Participant's Compensation;

          (b) Matching Contribution. Any Matching Contributions allocable to the
     Participant, effective as of the date each portion of the Participant's
     Annual Deferral Amount subject to such Matching Contribution is withheld
     from the Participant's Compensation;

          (c) Discretionary Employer Contribution. Any Discretionary Employer
     Contributions allocated by Employer to the Participant, effective upon
     receipt by the Plan Administrator of each such Discretionary Employer
     Contribution;

          (d) Investment income. Amounts equal to any income, gains, or losses
     (to the extent realized, based upon the investment performance of the
     Participant's Plan

                                     -16-
<PAGE>

     Account) attributable or allocable to the amounts under paragraphs (a),
     (b), and (c) above (Employer shall have the discretion to allocate such
     income, gains, or losses among Accounts pursuant to such allocation rules
     as Employer deems to be reasonable and administratively practicable);

          (e) Expenses. All related expenses, including without limitation
     investment, management, transaction, and mortality expenses; and

          (f) Distributions. Any distributions made to the Participant or the
     Participant's Beneficiary.

4.06  Withholding Taxes.

     For each Plan Year in which an Annual Deferral Amount is being withheld
from a Participant, Employer shall withhold from that portion of the
Participant's Compensation that is not being deferred, in a manner determined by
Employer, the Participant's share of FICA and other employment taxes. If
necessary, Employer shall reduce the Annual Deferral Amount in order to comply
with this Section 4.06. In addition, Employer or the Plan shall withhold from
any payment made to a Participant under this Plan all federal, state, and local
income, employment, and other taxes required to be withheld by Employer or the
Plan in connection with such payments, in amounts and in a manner to be
determined in the sole discretion of Employer or the Plan.

                         ARTICLE V-INVESTMENT CREDITS

5.01  Allocation of Earnings or Losses

Pursuant to Section 5.02, each Participant shall have the right to direct
Employer how amounts in the Participant's Plan Account shall be invested among
the various investment alternatives available under the Plan from time to time,
as determined by Employer, in Employer's sole discretion. Any such direction
given by a Participant to Employer shall be in writing. Employer shall then
direct the Plan Administrator to invest the Plan Account maintained on behalf of
the Participant pursuant to the direction provided by the Participant to
Employer. Employer, in Employer's sole discretion, may authorize Participants to
directly give investment instructions to the Plan Administrator. The
Participant's Account shall be credited or debited with the increase or decrease
in the realizable net asset value or credited with interest, as applicable, from
the

                                     -17-
<PAGE>

designated investments in the Participant's Plan Account. The Participant's
Account shall be debited with any investment, management, transaction, or
mortality costs or expenses attributable or allocable to the designated
investments in the Participant's Plan Account.

5.02  Investment Directions.

Subject to any limitations that may from time to time be required by law,
imposed by Employer, imposed by the Plan Administrator, or contained elsewhere
in the Plan, and subject to the Rules and Procedures, each Participant may
communicate to Employer or, if permitted by the Rules and Procedures, to the
Plan Administrator, written directions as to how the Participant's Plan Account
should be invested among such investments as may be made available under the
Plan by Employer. A Participant's written directions shall designate the
percentage (in any whole percentage multiples) of the current balance in the
Participant's Plan Account that is to be invested in each investment and the
percentage (in any whole percentage multiples) of each subsequent addition to
the Participant's Plan Account that is to be invested in each investment, and
shall be subject to the following rules:

     (a) Written directions. The initial and each subsequent investment
     direction shall be in writing, on a form supplied by and filed with
     Employer or, if permitted by the Rules and Procedures, the Plan
     Administrator, and shall be effective on or before the fifth business day
     following receipt of such written direction by Employer or the Plan
     Administrator, as the case may be.

     (b) Effect of investment directions. All Compensation deferrals, Matching
     Contributions, and Discretionary Employer Contributions credited to a
     Participant's Plan Account shall be invested in accordance with the then
     effective investment directions provided by such Participant. As of the
     effective date of any new investment directions, all or a portion of the
     Participant's Plan Account on that date shall be reallocated among the
     designated investment funds according to the percentages specified in the
     new investment directions for the investment of the current balance in the
     Participant's Plan Account. A written direction concerning investment
     choices shall continue indefinitely, unless and until a subsequent written
     investment direction shall be filed and become effective.

     (c) Deficient investment directions. If Employer or, if permitted by the
     Rules and Procedures, the Plan Administrator receives an initial or revised
     investment direction that

                                     -18-
<PAGE>

     it deems to be incomplete, unclear, or improper, the Participant's
     investment direction then in effect shall remain in effect (or, in the case
     of a deficiency in an initial investment direction, the Participant shall
     be deemed to have filed no investment direction) until such deficiency in
     the investment direction is corrected by the Participant.

     (d) Undesignated investment. If at any time Employer or, if permitted by
     the Rules and Procedures, the Plan Administrator, possesses no investment
     directions for, or investment directions covering less than all of, a
     Participant's Plan Account, the Participant shall be deemed to have
     directed that the undesignated portion of the Participant's Plan Account be
     invested in a money market, fixed income, or similar fund made available
     under the Plan, as determined by Employer, in Employer's sole discretion.

     (e) Indemnity. Each Participant under the Plan, as a condition to the
     Participant's participation in the Plan, agrees to indemnify and hold
     harmless Employer, the Plan Administrator, and their agents and
     representatives from any losses or damages of any kind relating to the
     investment of the Participant's Plan Account and the resulting income,
     gains, or losses credited to the Participant's Account under the Plan.

     (f) Beneficiary as Participant. Each reference in this Section 5.02 to a
     Participant shall be deemed to include, where applicable, a reference to a
     Beneficiary.

                      ARTICLE VI-ENTITLEMENT TO BENEFITS

6.01  Retirement Benefit.

Subject to the Deduction Limitation, upon Retirement a Participant shall
receive, as a Retirement Benefit, the Participant's Account Balance.

     (a) Payment of Retirement Benefit. A Participant, upon enrollment in the
     Plan, shall elect on the Election Form to receive the Retirement Benefit in
     a lump sum, in Monthly Payments over a period of sixty (60), one hundred
     twenty (120), one hundred eighty (180), or two hundred forty (240) months,
     or in a fixed or variable annuity payable over the Participant's lifetime
     or the joint and survivor lifetimes of the Participant and the
     Participant's spouse. The Participant may change this election to any
     allowable alternative payout by submitting a new Election Form to Employer,
     provided that any

                                     -19-
<PAGE>

     such Election Form must be submitted at least six (6) months prior to the
     Participant's Retirement. The Election Form most recently accepted by
     Employer shall govern the payout of the Retirement Benefit. If a
     Participant does not make any election with respect to the payment of the
     Retirement Benefit, the Participant's Retirement Benefit shall be paid in a
     lump sum. The lump sum payment shall be made, or Monthly Payments shall
     commence, no later than two (2) months from the date of the Participant's
     Retirement. Any payment of a Retirement Benefit shall be subject to the
     Deduction Limitation.

     (b) Death prior to payout. If a Participant dies after Retirement, but
     before the Retirement Benefit is paid in full, the Participant's unpaid
     Retirement Benefit shall continue and shall be paid as follows:

     1. In Monthly Payments to the Participant's Beneficiary over the remaining
     number of months that the benefit would have been paid to the Participant
     had the Participant survived;

     2. To the Participant's spouse for the balance of the spouse's lifetime, if
     the Participant had elected to receive the Retirement Benefit in the form
     of an annuity payable over the joint and survivor lifetimes of the
     Participant and the Participant's spouse; or

     3. At Employer's discretion, in a lump sum that is equal to the
     Participant's remaining unpaid Account Balance.

6.02  Termination Benefit.

Subject to the Deduction Limitation, upon a Termination of Employment by a
Participant prior to the Participant's Retirement or death, the Participant
shall receive a Termination Benefit which shall be equal to the Participant's
Account Balance. The Termination Benefit shall be paid in a lump sum within two
(2) months of the Termination of Employment, unless the Participant was eligible
for Retirement at the time of Termination of Employment. If the Participant was
eligible for Retirement at the time of Termination of Employment, then the
Termination Benefit shall be paid in the same manner as a Retirement Benefit,
with the Termination of Employment being treated as Retirement. Any payment of
the Termination Benefit shall be subject to the Deduction Limitation.

                                     -20-
<PAGE>

6.03  Hardship Distributions.

     If a Participant experiences an Unforeseeable Financial Emergency or if a
Participant suffers a Disability, the Participant may petition Employer to do
the following:

          (a) Suspend deferrals. Suspend any deferrals required to be made by
     the Participant; or

          (b) Receive payout. Receive a Hardship Distribution from the
     Participant's Account.

     If the petition for suspension or a Hardship Distribution is approved by
Employer, in Employer's sole discretion, suspension shall take effect upon the
date of approval by Employer and the Hardship Distribution shall be made, or
shall commence, within sixty (60) days of Employer's approval. A Hardship
Distribution shall not be subject to the Deduction Limitation.

6.04  Preretirement Death Benefit.

     Subject to the Deduction Limitation, if a Participant dies before the
Participant's Retirement or Termination of Employment, the Participant's
Beneficiary shall receive a Preretirement Death Benefit equal to the
Participant's Account Balance. The Preretirement Death Benefit shall be paid in
a lump sum. However, if the Preretirement Death Benefit exceeds fifty thousand
dollars ($50,000), Employer, in Employer's sole discretion, may make payment in
Monthly Payments over a period of time not to exceed the period of time elected
by the Participant for the Participant's Retirement Benefit. The lump sum
payment shall be made, or the Monthly Payments shall commence, within two (2)
months after Employer's receipt of proof of the Participant's death. Any
Preretirement Death Benefit paid shall be subject to the Deduction Limitation.

6.05  Nontransferable.

     A Participant and a Participant's Beneficiary shall have no right to
assign, transfer, or otherwise convey the right to receive any payments under
this Plan. Such payments and the right to receive such payments are expressly
declared to be nonassignable and nontransferable. In the event of any attempted
assignment or transfer, Employer shall have no further liability in respect of
such payment under this Plan.

                                     -21-
<PAGE>

                      ARTICLE VII-BENEFICIARY DESIGNATION

7.01  Beneficiary.

     Each Participant shall have the right, at any time, to designate one or
more primary and one or more contingent Beneficiaries to receive any benefits
payable under the Plan to a Beneficiary upon the death of a Participant. The
Beneficiary designated under the Plan may be the same as or different from the
beneficiary designated under any other plan maintained by Employer in which the
Participant participates.

7.02  Method of Designation.

     A Participant shall designate the Participant's Beneficiary by completing
and signing the Beneficiary Designation Form and returning it to Employer. A
Participant shall have the right to change a Beneficiary by completing, signing,
and otherwise complying with the terms of the Beneficiary Designation Form and
the Rules and Procedures. If a Participant is married and names someone other
than the Participant's spouse as a primary Beneficiary, a spousal consent, on a
form adopted by Employer, must be signed by that Participant's spouse and
returned to Employer. Upon Employer's acceptance of a Beneficiary Designation
Form, all prior Beneficiary designations shall be canceled. Employer shall be
entitled to rely on the last Beneficiary Designation Form filed by a Participant
and accepted by Employer prior to the Participant's death.

7.03  Acknowledgment of Designation.

     No designation, or change in designation, of a Beneficiary shall be
effective until received, accepted, and acknowledged in writing by Employer.

7.04 No Beneficiary Designation.

     If a Participant fails to designate a Beneficiary as provided in this
article or if all Beneficiaries designated by a Participant predecease the
Participant, then the Participant's designated Beneficiary shall be deemed to be
the Participant's surviving spouse; if the Participant has no surviving spouse,
then the Participant's designated Beneficiary shall be deemed to be the
Participant's surviving issue, on the principle of representation; if the
Participant has no surviving spouse and no surviving issue, then the
Participant's designated Beneficiary shall be deemed to be the Participant's
estate.

                                     -22-
<PAGE>

7.05  Beneficiary Dispute.

     If Employer has any doubt as to the proper Beneficiary to receive payments
pursuant to this Plan, Employer shall have the right, exercisable in Employer's
sole discretion, to withhold such payments until this matter is resolved to
Employer's satisfaction.

7.06  Discharge of Obligations.

     The payment of benefits under the Plan to a Beneficiary shall fully and
completely discharge Employer from all further obligations under this Plan with
respect to the Participant and that Participant's participation in the Plan
shall terminate upon such full payment of benefits.

                          ARTICLE VIII-ADMINISTRATION

8.01.  Administrative Authority.

Except as otherwise specifically provided in this Plan, Employer shall have the
sole responsibility for, and the sole control of, the operation and
administration of the Plan and Employer shall have the power and authority to
take all actions and to make all decisions and interpretations that may be
necessary or appropriate in order to administer and operate the Plan, including,
but not limited to, the power, duty, and responsibility to:

          (a) Resolve disputes. Resolve and determine all disputes or questions
     arising under the Plan, including the power to determine the rights and
     respective benefits of Eligible Employees, Participants, and Beneficiaries,
     and to remedy any ambiguities, inconsistences, or omissions in the Plan.

          (b) Rules and Procedures. Adopt any Rules and Procedures that, in
     Employer's opinion, may be appropriate for the proper and efficient
     administration of the Plan.

          (c) Implement Plan. Implement the Plan in accordance with its terms
     and the Rules and Procedures.

          (d) Eligibility, crediting, and distribution decisions. Make
     determinations with respect to the eligibility of any Eligible Employee as
     a Participant and make determinations concerning the crediting to and
     distribution of Accounts.

          (e) Agents. Appoint any persons or firms or otherwise act to secure
     specialized advice or assistance deemed necessary or desirable by Employer
     in connection with the administration and operation of the Plan. Employer
     shall be entitled to rely conclusively

                                     -23-
<PAGE>

     upon, and shall be fully protected in any action or omission taken by
     Employer in good faith reliance upon, the advice or opinion of such firms
     or persons. Employer shall have the power and authority to delegate from
     time to time by written instrument all or any part of Employer's duties,
     powers, or responsibilities under the Plan, both ministerial and
     discretionary, as Employer deems appropriate, to any person or committee.
     Employer shall have the power and authority, in the same manner, to revoke
     any such delegation of duties, powers, or responsibilities. Any action
     taken by any such person or committee in the exercise of such delegated
     duties, powers, or responsibilities shall have the same force and effect
     for all purposes under this Plan as if such action had been taken by
     Employer. Further, Employer may authorize one or more persons to execute
     any certificate or document on behalf of Employer, in which event any
     person notified by Employer of such authorization shall be entitled to
     accept and conclusively rely upon any such certificate or document executed
     by such person as representing an action by Employer until such third
     person has been notified of the revocation of such authority.

8.02.  Mutual Exclusion.

Neither the Plan Administrator nor the Employer shall be obligated to inquire
into or be responsible for any act or failure to act on the part of the other.

8.03.  Uniformity of Acts.

Whenever discretionary actions by Employer are required or permitted in the
administration or operation of the Plan, such actions shall be consistently and
uniformly applied to all persons similarly situated and no such action shall be
taken that shall discriminate in favor of any particular person or group of
persons. Nothing in this section shall limit Employer's discretion to designate
Eligible Employees or to allocate any Discretionary Employer Contributions in
any manner deemed appropriate by Employer. Employer shall be free to exclude any
employee otherwise eligible from designation as an Eligible Employee and to
exclude any Participant from any such Discretionary Employer Contributions.

8.04.  Litigation.

     Except as may otherwise be required by law, in any action, judicial
proceeding, or arbitration affecting the Plan, no Participant or Beneficiary
shall be entitled to any notice or service of process and any final judgment
entered in such action shall be binding on all persons

                                     -24-
<PAGE>

interested in or claiming under the Plan.

8.05.  Payment of Administration Expenses.

     All expenses incurred in the administration and operation of the Plan,
including any taxes payable by Employer in respect of the Plan or payable by or
from the Plan pursuant to its terms, but excluding investment, management,
transaction, and mortality costs or expenses associated with the investments in
the Participants' Plan Accounts, shall be paid by Employer.

                     ARTICLE IX-TERMINATION AND AMENDMENT

9.01.  Discretionary Termination.

     Employer reserves the right, at any time, to terminate the Plan. Upon any
such discretionary termination of the Plan by Employer, each Participant's
Account Balance shall be paid out in accordance with the benefits that the
Participant would have received if there had been a Termination of Employment
for the Participant on the date the Plan terminates; provided, however, if the
Plan terminates after the date upon which a Participant was eligible for
Retirement, that Participant's Account Balance shall be paid out in accordance
with the benefits that the Participant would have received if the Participant's
Retirement had occurred on the date the Plan terminates. Any benefits payable as
a result of a discretionary termination shall be subject to the Deduction
Limitation.

9.02  Automatic Plan Termination.

The Plan shall automatically terminate upon the occurrence of any of the
following:

          (a) Change in Control. A Change in Control of Employer;

          (b) Dissolution. The dissolution of Employer; or

          (c) Financial change. The ratio of Employer's current assets to
     Employer's current liabilities falls below .9 to 1.0 for three (3)
     consecutive calendar months.

     Upon any such automatic termination of the Plan, Employer shall distribute
to each Participant his or her Account Balance in a lump sum, within fifteen
(15) days after such automatic termination. All benefits payable pursuant to
this Plan after any such automatic termination shall not be subject to the
Deduction Limitation.

                                     -25-
<PAGE>

9.03  Individual Termination.

     The full payment of a Participant's Account Balance to the Participant or
the Participant's designated Beneficiaries, as otherwise provided for in this
Plan, shall terminate the Participant's participation in the Plan.

9.04  Amendment.

     Employer may, at any time, amend or modify the Plan, in whole or in part,
in a written instrument executed by Employer; provided, however, that no
amendment or modification shall be effective to decrease or restrict a
Participant's Account Balance in existence at the time the amendment or
modification is made. Any amendment or modification of the Plan shall not affect
any Participant or Beneficiary who has become entitled to the payment of
benefits under the Plan as of the date of the amendment or modification;
provided, however, that Employer shall have the right to accelerate Monthly
Payments by paying the Participant's then unpaid Account Balance.

                                ARTICLE X-ERISA

     The following provisions are part of this Plan and are intended to meet the
requirements of ERISA:

10.01  Terms.

          (a) Fiduciary. The named fiduciary under this Plan is Employer.

          (b) Funding policy. The funding policy under this Plan is that
     Employer shall contribute all Deferral Amounts, Matching Contributions, and
     Discretionary Employer Contributions to the Plan. The Plan Administrator
     shall create segregated Plan Accounts for each Participant and those Plan
     Accounts shall be invested by the Plan Administrator. The income, gains,
     and losses on each Participant's segregated Plan Account shall be credited
     or debited to each Participant's Account. No Participant shall have any
     interest in the assets in the Plan other than as a general unsecured
     creditor of Employer. Employer shall be responsible for paying any and all
     benefits under this Plan, regardless of whether or not the Plan has
     sufficient assets to pay such benefits.

          (c) Benefit payment. Direct payment by Employer, the Plan
     Administrator, or their designated agent is the basis of payment of
     benefits under this Plan.

                                     -26-
<PAGE>

          (d) Claims Manager. For claims procedure purposes, the "Claims
     Manager" shall be Corporate secretary unless changed by Employer.

10.02  Procedure.

          (a) Explanation of denial. If for any reason a claim for benefits
     under this Plan is denied by Employer, the Claims Manager shall deliver to
     the claimant a written explanation setting forth the specific reasons for
     the denial, pertinent references to the Plan's or the Rules and Procedures'
     section(s) on which the denial is based, such other data as may be
     pertinent, and information on the procedures to be followed by the claimant
     in obtaining a review of the claim. All of these items shall be written in
     a manner calculated to be understood by the claimant. For this purpose:

               1. The claimant's claim shall be deemed filed when presented
          orally or in writing to the Claims Manager.

               2. The Claims Manager's explanation shall be in writing and shall
          be delivered to the claimant within ninety (90) days of the date the
          claim is filed.

          (b) Request for review. The claimant shall have sixty (60) days
     following receipt of the denial of the claim to file with the Claims
     Manager a written request for review of the denial. The claimant or the
     claimant's representative may submit pertinent documents and written issues
     and comments in connection with such review.

          (c) Decision on review. The Claims Manager shall decide the issue on
     review and furnish the claimant with a copy of the decision within sixty
     (60) days of receipt of the request for review. The decision on review
     shall be in writing and shall include specific reasons for the decision, as
     well as specific references to the pertinent Plan or Rules and Procedures
     provisions on which the decision is based. The decision shall be written in
     a manner calculated to be understood by the claimant. If a copy of the
     decision is not furnished to the claimant within the allotted sixty (60)
     days, the claim shall be deemed denied on review.

                            ARTICLE XI-ARBITRATION

     Any controversy between Employer and any Participant or Beneficiary or any
other person interested in the Plan involving any element of this Plan shall be
submitted to arbitration on the written request of any party to the controversy
served on the other(s). The arbitration shall

                                     -27-
<PAGE>

be governed by the then current commercial arbitration rules of the American
Arbitration Association. Unless the parties can agree in writing within ten (10)
days of a party's written request for arbitration upon a single mutually
acceptable arbitrator, the parties shall each appoint one person to hear and
determine the dispute and those two (2) individuals shall select a third
impartial arbitrator. The decision of a majority of the arbitrators shall be
final and conclusive upon all parties. If one of the parties fails to name that
party's arbitrator within fifteen (15) days of being notified of the other
party's selection of an arbitrator, then the party who has failed to designate
an arbitrator shall be conclusively presumed to have consented to use the
arbitrator nominated by the other party as a single arbitrator. The cost of
arbitration shall be borne by the losing party or in such proportion as the
arbitrator(s) shall decide.

                        ARTICLE XII-GENERAL PROVISIONS

12.01  Notice.

     Any notice, consent, or demand required or permitted to be given under the
provisions of this Plan shall be in writing, shall be signed by the party giving
or making the notice, consent, or demand, and may be given either by delivering
the same to the other party or by mailing it to the other party by United States
certified mail, return receipt requested, postage prepaid, addressed to the
party's last known address as shown on the records of Employer. If mailed, the
notice, consent, or demand shall be deemed given two (2) days after mailing. Any
party may change that party's address by notifying Employer of such new address
pursuant to this section.

12.02  Inurement.

     Subject to the restrictions against transfer or assignment above, this Plan
shall bind Employer and its successors, transferees, and assigns, and each
Participant or Participant's Beneficiary, heirs, executors, administrators,
successors, transferees, and assigns.

12.03  Governing Law.

     This Plan and the rights of the parties under this Plan shall be governed
by and construed pursuant to the laws of the State of Washington.

                                     -28-
<PAGE>

12.04  Construction.

     The article and section headings used in this Plan are for convenience of
reference only and shall not be used as an aid to interpret this Plan. Whenever
the context so requires, the masculine shall include the feminine and the neuter
and the singular shall include the plural and vice versa.

12.05  Severability.

     If any of the provisions of this Plan, or portions of any of them, are held
to be unenforceable or invalid by any court of competent jurisdiction, the
validity or enforceability of the remaining provisions, or portions of them,
shall not be affected.

12.06  Termination.

     Nothing in this Plan shall confer on any Eligible Employee or Participant
any rights to continued employment with Employer nor shall this Plan in any way
restrict or abridge any right Employer may otherwise have to terminate any
Eligible Employee's or Participant's employment.

12.07  Compliance With Code.

It is intended that this Plan comply with provisions of the Code so that no
federal or state income tax liability shall arise until such time as a
Participant actually receives a distribution from the Participant's Account. If,
at any time, the Code or the applicable portion of the taxation provisions of
any state are construed in such a way as to cause taxation to a Participant
prior to that time, then this Plan shall be given effect in such manner as will
best carry out the purposes and intentions expressed above. Notwithstanding
anything to the contrary contained in this Plan, if this Plan shall ever be
interpreted by the Internal Revenue Service as ineffective with regard to the
deferral of a Participant's income and such interpretation shall become final
and unappealable, then each Participant shall be paid a lump sum equal to the
portion of the Participant's Account Balance which is treated as taxable income
by the Internal Revenue Service at the time of such final interpretation. The
balance, if any, in each Participant's Account at the time of such final
interpretation shall be distributed according to the other provisions of this
Plan.

                                     -29-
<PAGE>

This Plan is adopted by Employer effective as of September 22, 1999.

                                    "EMPLOYER"

                                    Columbia Banking System, Inc.,
                                    a Washington Corporation

                                    By: /s/ Jill L Myers
                                       ---------------------------
                                        CorporateSecretary

                                     -30-

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