S-8

As filed with the Securities and Exchange Commission on November 1, 2004

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

COLUMBIA BANKING SYSTEM, INC.

(Exact name of registrant as specified in its charter)

WASHINGTON	91-1422237
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

1301 A Street, Tacoma, Washington 98402 (253) 305-1900

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Bank of Astoria Amended and Restated Nonemployee Director Stock Option Plan

Bank of Astoria Amended and Restated Combined Incentive and Non-Qualified Stock Option Plan

(Full title of plan)

Copies of communications to:

STEPHEN M. KLEIN ESQ. Graham & Dunn PC 2801 Alaskan Way, Suite 300 Seattle, Washington 98121 (206) 340-9648 MELANIE J. DRESSEL President and Chief Executive Officer 1301 A Street Tacoma, WA 98402 (253) 305-1900

CALCULATION OF REGISTRATION FEE

Title of securities to be registered	Amount to be registered (1)		Proposed maximum offering price per share (2)		Proposed maximum Aggregate offering price (2)		Amount of registration fee
Common shares	161,452	(1)	$	25.11	$	4,054,060	$	513.65

Notes:

1. Shares of Registrant’s Common Stock issuable upon exercise of options outstanding under Bank of Astoria’s Amended and Restated Nonemployee Director Stock Option Plan and Amended and Restated Combined Incentive and Non-Qualified Stock Option Plan (collectively, the “Plans”), together with an indeterminate number of additional shares which may be necessary to adjust the number of shares reserved for issuance under the Plans as a result of any future stock split, stock dividend or similar adjustment of the outstanding Common Stock, as provided in Rule 416(a) under the Securities Act.

2. Estimated solely for the purpose of calculating the amount of the registration fee. Pursuant to Rule 457(h) under the Securities Act of 1933, as amended (“Securities Act”), the price per share is estimated to be $25.11 based upon the average of the high ($25.80) and the low ($24.42) trading prices of the common stock, no par value per share of Columbia Banking System, Inc. as reported on the Nasdaq National Market on October 28, 2004.

PART I

INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

Columbia Banking System, Inc. (“Company” or “Registrant”) will send or give the documents containing the information required by Part I of this registration statement on Form S-8 (the “Registration Statement”) to each participant in the Plans as specified by Rule 428(b)(1) under the Securities Act of 1933 (the “Securities Act”). Such documents, and the documents incorporated by reference into this Registration Statement pursuant to Item 3 of Part II, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.

Item 1. Plan Information*

Item 2. Registrant Information and Employee Plan Annual Information*

* Information required by Part I of Form S-8 is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act, and the Note to Part I of Form S-8.

PART II

INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The documents listed below are incorporated by reference in the Registration Statement. In addition, all documents subsequently filed by Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) prior to Registrant’s filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.

(a) The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

(b) All reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Registrant’s Form 10-K referred to in (a) above.

(c) The description of the Registrant’s Common Stock contained in the Registration Statement on Form S-4 (No. 333-117345) filed with the SEC on July 13, 2004, and Amendment No. 1 to the Form S-4 filed with the SEC on August 3, 2004.

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Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

The validity of the shares offered pursuant to the Plans will be passed upon by Graham & Dunn PC, Pier 70, 2801 Alaskan Way, Suite 300, Seattle, Washington 98121-1128.

Item 6. Indemnification of Directors and Officers.

Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation Act (“WBCA”) contain specific provisions relating to indemnification of directors and officers of Washington corporations. In general, the statute provides that (i) a corporation must indemnify a director or officer who is wholly successful in his defense of a proceeding to which he is a party because of his status as such, unless limited by the articles of incorporation, and (ii) a corporation may indemnify a director or officer if he is not wholly successful in such defense, if it is determined as provided in the statute that the director meets a certain standard of conduct, provided that when a director is liable to the corporation, the corporation may not indemnify him. The statute also permits a director or officer of a corporation who is a party to a proceeding to apply to the courts for indemnification or advance of expenses, unless the articles of incorporation provide otherwise, and the court may order indemnification or advancement of expenses under certain circumstances set forth in the statute. The statute further provides that a corporation may in its articles of incorporation or bylaws or by resolution provide indemnification in addition to that provided by statute, subject to certain conditions set forth in the statute.

The articles of incorporation of the Company provide, among other things, for the indemnification of directors (including directors of subsidiaries), and authorize the board of directors to pay reasonable expense incurred by, or to satisfy a judgment or fine against, a current of former director in connection with any personal legal liability incurred by the individual while acting for the Company within the scope of his employment, and which was not the result of conduct finally adjudged to be “egregious” conduct. “Egregious” conduct is defined as intentional misconduct, a knowing violation of law, or participation in any transaction from which the person will personally receive a benefit in money, property or services to which that person is not legally entitled. The articles of incorporation also include a provision that limits the liability of directors of the Company from any personal liability to the Company or its shareholders for conduct not found to have been egregious.

The Company has entered into Indemnification Agreements with each of its directors. The Indemnification Agreements codify procedural mechanisms pursuant to which directors may enforce the indemnification rights that such directors are granted under the Company’s articles of incorporation and the WBCA.

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Item 7. Exemption from Registration Claimed

Not applicable.

Item 8. Exhibits.

Exhibit Number	Description
5.1	Opinion of Graham & Dunn PC regarding legality of the Common Stock being registered
23.1	Consent of Graham & Dunn PC (included in Exhibit 5.1)
23.2	Consent of Deloitte & Touche LLP
24.1	Powers of Attorney (included in the Signature Page)
99.1	Amended and Restated Nonemployee Director Stock Option Plan
99.2	Form of Nonemployee Director Stock Option Agreement
99.3	Amended and Restated Combined Incentive and Non-qualified Stock Option Plan
99.4	Form of Employee Stock Option Agreement

Item 9. Undertakings.

A. The undersigned Registrant hereby undertakes:

1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;

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(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated by reference in the Registration Statement.

2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer of controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tacoma, State of Washington on October 27, 2004.

COLUMBIA BANKING SYSTEM, INC.
By:	/s/ Melanie J. Dressel
	Melanie J. Dressel
	President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints Melanie J. Dressel, William T. Weyerhaeuser and Gary R. Schminkey, and each of them, with full power of substitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this Registration Statement, including any and all post-effective amendments.

Pursuant to the requirements of the Securities Act, this Power of Attorney has been signed by the following persons in the capacities indicated on October 27, 2004.

Signature	Title
/s/ Melanie J. Dressel Melanie J. Dressel	President, Director and CEO (Principal Executive Officer)
/s/ Gary R. Schminkey Gary R. Schminkey	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ William T. Weyerhaeuser	Chairman of the Board of Directors
William T. Weyerhaeuser
/s/ John P. Folsom	Director
John P. Folsom

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/s/ Frederick M. Goldberg	Director
Frederick M. Goldberg
/s/ Thomas M. Hulbert	Director
Thomas M. Hulbert
	Director
Thomas L. Matson
/s/ Daniel C. Regis	Director
Daniel C. Regis
/s/ Donald Rodman	Director
Donald Rodman
/s/ James M. Will	Director
James M. Will

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INDEX OF EXHIBITS

Exhibit Number	Description
5.1	Opinion of Graham & Dunn PC regarding legality of the Common Stock being registered
23.1	Consent of Graham & Dunn PC (included in Exhibit 5.1)
23.2	Consent of Deloitte & Touche LLP
24.1	Powers of Attorney (included in the Signature Page)
99.1	Amended and Restated Nonemployee Director Stock Option Plan
99.2	Form of Nonemployee Director Stock Option Agreement
99.3	Amended and Restated Combined Incentive and Non-qualified Stock Option Plan
99.4	Form of Employee Stock Option Agreement

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EX-5.1

Exhibit 5.1

November 1, 2004

The Board of Directors

Columbia Banking System, Inc.

1301 “A” Street

Tacoma, WA 98402

Re:      Legal Opinion Regarding Validity of Securities Offered

Ladies and Gentlemen:

We have acted as counsel to you in connection with the preparation of a Registration Statement on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), which you are filing with the Securities and Exchange Commission (the “Commission”) with respect to 161,452 shares of no par value common stock (the “Shares”), of Columbia Banking System, Inc., a Washington corporation (“Company”), authorized for issuance upon exercise of options granted under the Bank of Astoria Amended and Restated Nonemployee Director Stock Option Plan and the Bank of Astoria Amended and Restated Combined Incentive and Non-Qualified Stock Option Plan (collectively, the “Plans”) that were assumed by the Company as a result of the acquisition of Bank of Astoria.

In connection with the offering of the Shares, we have examined: (i) the Plans and related option agreements, listed as Exhibits 99.1 - 99.4 in the Registration Statement; (ii) the Registration Statement, including the remainder of the exhibits; and (iii) such other documents as we have deemed necessary to form the opinions hereinafter expressed. As to various questions of fact material to such opinions, where relevant facts were not independently established, we have relied upon statements of officers of the Company.

Our opinion assumes that the Shares are issued in accordance with the terms of the Plans after the Registration Statement has become effective under the Act.

Based upon and subject to the foregoing, we are of the opinion that the Shares, or any portion of the Shares, have been duly authorized and that, upon registration of the Shares, issuance by the Company of and receipt of the consideration for the Shares, consistent with the terms of the Plans, the Shares will be validly issued, fully paid, and nonassessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. This consent shall not be construed to cause us to be in the category of persons whose consent is required to be filed pursuant to Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

Graham & Dunn PC

/s/ Graham & Dunn PC

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement of Columbia Banking System, Inc. on Form S-8 of our report dated March 12, 2004, appearing in the Annual Report on Form 10-K of Columbia Banking System, Inc. for the year ended December 31, 2003.

/s/ Deloitte & Touche LLP

Seattle, Washington

October 27, 2004

EX-99.1

Exhibit 99.1

BANK OF ASTORIA

AMENDED AND RESTATED NONEMPLOYEE DIRECTOR

STOCK OPTION PLAN

1. Purpose

The purpose of the Bank of Astoria Nonemployee Director Stock Option Plan (the “Plan”) is to secure for Bank of Astoria (the “Bank”) and its shareholders the benefits of the long-term incentives inherent in increased common stock ownership by the members of the Board of Directors (the “Board”) of the Bank who are not employees of the Bank or its Affiliates, by strengthening the identification of such directors with the interests of all Bank of Astoria shareholders.

2. Definitions

The terms defined in this Section 2 shall have the following meanings, unless the context otherwise requires.

a. Acceleration Event shall mean an event specified in Section 11 which results in each Option then outstanding under the Plan becoming exercisable in accordance with the terms of Section 11.

b. Affiliate shall mean any corporation, partnership, joint venture or other entity in which the Bank holds an equity, profit or voting interest of more than fifty percent (50%).

c. Annual Meeting of Shareholders shall mean the annual meeting of shareholders of the Bank held each calendar year.

d. Bank shall mean Bank of Astoria, an Oregon banking corporation.

e. Code shall mean the Internal Revenue Code of 1986, as amended to date and as it may be amended from time to time.

f. Committee shall mean the Board of Directors as a committee of the whole or the committee, if any, appointed by the Board in accordance with Section 3 of the Plan.

g. Common Stock shall mean shares of the Bank’s common stock, subject to adjustment pursuant to Section 13, “Adjustment and Changes in Stock,” hereunder.

h. Employee shall mean an employee of the Bank or an Affiliate and shall not include a person engaged for periodic consulting assignments for the Bank or an Affiliate.

i. ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended to date and as it may be amended from time to time.

1 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

j. Exercise Price shall mean the Fair Market Value per share of the Option Shares on the date an Option is granted times the number of Option Shares with respect to which such Option is exercised.

k. Fair Market Value per Share shall mean as of any day

(1) The fair market value of a share of the Bank’s common stock is the last sale price reported by NASDAQ on the business day immediately preceding the date as of which fair market value is being determined or, if there were no sales of shares of the Bank’s common stock reported by Nasdaq on such day, on the most recently preceding day on which there were sales, or

(2) if the shares of the Bank’s stock are not listed or admitted to trading on Nasdaq on the day as of which the determination is made, the amount determined by the Board or its delegate to be the fair market value of a share on such day.

l. Mature Stock shall mean shares of the Bank’s common stock which have been owned by the Participant without a substantial risk of forfeiture (within the meaning of Section 83 of the Internal Revenue Code of 1986, as amended, and Treasury Regulations promulgated thereunder) for at least six months (or such longer period as the Financial Accounting Standards Board may subsequently determine to be required to avoid variable plan accounting treatment for the Plan and options granted in accordance with it).

m. Nonstatutory Stock Option (“NSO”) shall mean a stock option, which does not qualify for special tax treatment under Sections 421 or 422 of the Internal Revenue Code.

n. Option shall mean either a First Option or an Annual Option granted pursuant to the provisions of Section 4 of this Plan.

o. Option Shares shall mean the number of shares of the Bank’s common stock which the Participant may acquire by exercise of an Option.

p. Participant shall mean any person who holds an Option granted under this Plan.

q. Plan shall mean this Bank of Astoria Nonemployee Director Stock Option Plan.

r. SEC Director shall mean a director who:

(1) Is not currently an officer of the Bank or a parent or subsidiary of the Bank, or otherwise currently employed by the Bank or a parent or subsidiary of the Bank;

(2) Does not receive compensation, either directly or indirectly, from the Bank or a parent or subsidiary of the Bank, for services rendered as a consultant or in any capacity other than as a director, except for an amount that does not exceed the dollar amount for which disclosure would be required pursuant to Item 404(a) or regulation S-K;

(3) Does not possess an interest in any other transaction for which disclosure would be required pursuant to Item 404(a) of Regulation S-K; and

2 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

(4) Is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K.

s. Stock Option shall mean the right to purchase Common Stock under this Plan in a specified number of shares, at a price and upon the terms and conditions determined by the Board of Directors. The maximum term of each option granted shall be 10 years from date of grant.

t. Withholding Taxes shall mean all income taxes, FICA, FUTA, or similar employment taxes and any other taxes or assessments payable by the Bank as the result of an exercise of the Option.

3. Administration

a. The Committee. The Plan shall be administered by the Board directly, acting as a Committee of the whole, or if the Board elects, by a separate Committee appointed by the Board for that purpose and consisting solely of three or more SEC Directors. All references in the Plan to the “Board” shall refer to such separate Committee, if any is established, or if none is then in existence, shall refer to the Board as a whole. Once appointed, any such Committee shall continue to serve until otherwise directed by the Board. From time to time the Board may increase the size of the committee and appoint additional members thereof, remove members (with or without cause), appoint new members in substitution therefor, and fill vacancies however caused provided; however, that all existing members shall continue to be and any new members shall be SEC Directors. The Committee shall select one of its members as chairman, and shall hold meetings at such times and places as the chairman or a majority of the Committee may determine.

Members of the Committee who are either eligible for Options or who have been granted Options shall be counted for all purposes in determining the existence of a quorum at any meetings of the Committee and shall be eligible to vote on all matters before the Board respecting the granting of Options or administration of the Plan.

At least annually, the Committee shall present a written report to the Board indicating the Directors to whom Options have been granted since the date of the last such report, and in each case the date or dates of Options granted, the number of shares optioned, and the Option price per share.

At all times, the Board shall have the power to remove all members of the Committee and thereafter to directly administer the Plan as a Committee of the whole.

b. Powers of the Committee. Subject to all provisions and limitations of the Plan and consistent with any requirements of Rule 16b-3 of the Securities and Exchange Commission, the Committee shall have the authority and discretion:

(1) to determine the then Fair Market Value per Share for the shares of each Option granted under the Plan;

(2) to determine the then Fair Market Value per Share for the shares of Common Stock to be issued pursuant to each Option;

3 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

(3) to modify or amend the terms of any Option previously granted, subject to the provisions of Section 13 of the Plan;

(4) to interpret the Plan;

(5) to authorize any person or persons to execute and deliver Option agreements or to take any other actions deemed by the Committee to be necessary or appropriate to effectuate the grant of Options;

(6) to make all other determinations and take all other actions which the Committee deems necessary or appropriate to administer the Plan in accordance with its terms and conditions.

(7) the Committee may authorize any one or more of their number or the Secretary or any other officer of the Bank to execute and deliver documents on behalf of the Committee. The Board hereby authorizes the Secretary to execute and deliver all documents to be delivered by the Committee pursuant to the Plan.

All actions of the Committee shall be either by (i) a majority vote of the members of the full Committee at a meeting of the Committee, or (ii) by unanimous written consent of all members of the full Committee without a meeting thereof.

All decisions, determinations and interpretations of the Committee shall be final and binding upon all persons, including all Participants and any other holders or persons interested in any Options, unless otherwise expressly determined by a vote of the majority of the entire Board. No member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Option.

4. Automatic Grants to Certain Directors

As of the date of adoption of this Plan by the shareholders of the Bank (the “Adoption Date”), each director who is not currently an employee of the Bank or a parent or subsidiary of the Bank shall be granted an option to purchase two thousand one hundred (2,100) shares of the Bank’s common stock under this Plan. Thereafter, at the close of business at each Annual Meeting of Shareholders, each such director shall be granted an additional option to purchase six hundred (600) shares of the Bank’s common stock under this Plan.

a. Each director who is not currently an employee of the Bank or a parent or subsidiary of the Bank first elected to the Board following the Adoption Date shall be granted an option to purchase eighteen hundred (1800) shares of the Bank’s common stock under this Plan as of the close of business at the Annual Meeting of Shareholders next succeeding the date such director has served as a director for the immediately preceding three (3) years. Thereafter, at the close of business at each Annual Meeting of Shareholders, each such director shall be granted an additional option to purchase six hundred (600) shares of the Bank’s common stock under this Plan.

b. The automatic grants to directors who are not currently employees of the Bank or a parent or subsidiary of the Bank shall not be subject to the discretion of any person.

4 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

c. Each Option granted under the Plan shall be evidenced by a written Agreement. Each Agreement shall be subject to, and incorporate, by reference or otherwise, the applicable terms of this Plan.

d. During the lifetime of a Participant, each Option shall be exercisable only by the Participant. No Option granted under the Plan shall be assignable or transferable by the Participant, except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined by the Code or ERISA).

5. Shares of Stock Subject to the Plan

a. Subject to adjustment as provided in Section 13 of the Plan, an aggregate of sixty thousand (60,000) shares of the Bank’s common stock shall be available for issuance to directors under this Plan. No fractional shares shall be issued.

b. First Option Grants and Annual Option Grants shall reduce the shares available for issuance under the Plan by the number of shares subject thereto. The shares deliverable upon exercise of any First Option Grant or Annual Option Grant may be made available from authorized but unissued shares or shares reacquired by the Bank, including shares purchased in the open market or in private transactions. If any unexercised First Option Grant or Annual Option Grant shall terminate for any reason, the shares subject to, but not delivered under, such First Option Grant or Annual Option Grant shall be available for other First Option Grants or Annual Option Grants.

6. Nonstatutory Options

All Options granted to directors pursuant to this Plan shall be NSOs.

7. Exercise Price; Exercise

a. The price per share of the shares of the Bank’s common stock which may be purchased upon exercise of an Option shall be one hundred percent (100%) of the Fair Market Value per Share on the date the Option is granted and shall be paid in full at the time the Option is exercised in accordance with Section 9.

b. The Exercise Price per Share shall be subject to adjustment as provided in Section 13 hereof.

c. To the extent that it is exercisable, an Option shall be exercised by written notice to the Bank stating the number of shares with respect to which the Option is being exercised. The date that the written notice is received by the Bank shall be the exercise date.

d. Any person or persons exercising an Option on behalf of a Participant shall be required to furnish to the Bank appropriate documentation that such person or persons have the full legal right and power to exercise the Option on behalf of and for the Participant.

5 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

8. Taxes

Any Option granted hereunder shall provide for payment by the Participant on exercise of all federal, state, local or other Withholding Taxes payable by the Bank incident to exercise of an Option. The amount of such taxes, if any, required to be paid by the Bank shall be determined by the Bank and the Bank shall apply such flat percentage rate as may then be authorized for supplemental payments.

9. Payment by Participant

Payment by the Participant of the Exercise Price and any taxes required to be withheld on his behalf incident to exercise of the Option shall be by any combination of cash or collected funds, by assignment of Mature Stock, or any combination thereof. Payment as provided herein must be made in full in cash or collected funds or by assignment of Mature Stock concurrently with the Participant’s notification to the Bank of his intention to exercise all or part of a Stock Option. All Mature Stock must be valued at its Fair Market Value, net of any brokerage commissions, taxes, or other costs or expenses related to the sale of the Mature Stock payable by the Bank.

10. Duration and Vesting of Options

a. The term of each Option granted to a director under this Plan shall be for ten (10) years from the date of grant, unless terminated earlier pursuant to the provisions of Section 12 hereof.

b. One hundred percent (100%) of each Option shall vest and become exercisable on the date of grant of the Option.

11. Acceleration of Events

a. In the event that the Bank or its shareholders enter into one or more agreements to dispose of all or substantially all of the assets of the Bank or fifty percent (50%) or more of the outstanding capital stock of the Bank by means of sale (whether as a result of a tender offer or otherwise), merger, reorganization or liquidation in one or a series of related transactions (“Acceleration Event”), then each Option outstanding under the Plan shall continue to be exercisable during the fifteen (15) days immediately prior to the scheduled consummation of the Acceleration Event with respect to the full number of shares for which such Option has been granted and is unexercised; provided, however, that no such Acceleration Event shall occur in the event that (i) the primary purpose of the transaction is to change the Bank’s domicile solely within the United States, (ii) the terms of the agreement(s) require as a prerequisite for the consummation of the transaction that each such Option shall either be assumed by the successor corporation or parent thereof or be replaced with a comparable Option to purchase shares of capital stock of the successor corporation or parent thereof, or (iii) the transaction is approved by a majority of the members of the Board of Directors of the Bank who had either been in office for more than twelve months prior to such transaction or had been elected, or nominated for election by the Bank’s shareholders, by the vote of three-fourths of the directors then still in office who were directors at the beginning of such twelve-month period; and provided further that any such exercise of an Option during such fifteen (15) day period shall be conditioned upon the

6 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

consummation of such transaction and shall be effective only immediately before such consummation, except to the extent that an electing Participant may indicate, in writing, that such exercise is unconditional with regard to all or part of the unaccelerated portion of the Option. Upon consummation of the Acceleration Event contemplated by said agreement, all outstanding Options, whether or not accelerated, shall expire and cease to be exercisable, unless assumed by the successor corporation or parent thereof. The provisions of this subsection a. shall be subject, with respect to any particular Participant, to any provisions of such Participant’s employment agreement providing for any Options becoming exercisable at an earlier date as a result of events set forth in such employment agreement.

b. The grant of Options under the Plan shall in no way affect the right of the Bank to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

12. Effect of Termination of Membership on the Board

a. The right to exercise an Option granted to a director under this Plan shall be limited as follows, provided the actual date of exercise is in no event after the expiration of the term of the Option:

(1) If a director ceases being a director of the Bank for any reason other than the reasons identified in subparagraph (2) of this Section 12, the director shall have the right to exercise the Options as follows:

(a) The director may exercise the Options for a period of twelve months (12) from the date the director ceased being a director, provided that if the director dies before the twelve (12) month period has expired, the Options may be exercised by the director’s legal representative or any person who acquires the right to exercise an Option by reason of the director’s death for a period of six (6) months from the date of the director’s death.

(b) If the director dies while a member of the Board, the Options may be exercised by the director’s legal representative, or any person who acquires the right to exercise an Option by reason of the director’s Death, for a period of six (6) months from the date of the director’s death.

(c) In the event any Option is exercised by the executors, administrators, legatees, or distributees of the estate of a deceased optionee, the Bank shall be under no obligation to issue stock thereunder unless and until the Bank is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased optionee’s estate or the proper legatees or distributees thereof.

(2) If a director ceases being a director of the Bank due to an act of

(a) fraud or intentional misrepresentation or

(b) embezzlement, misappropriation or conversion of assets or opportunities of the Bank or any Affiliate of the Bank or

7 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

(c) any other gross or willful misconduct

as determined by the Board, in its sole and exclusive discretion, all Options granted to such director shall immediately be forfeited as of the date of the misconduct.

13. Adjustments and Changes in the Stock

a. If there is any change in the common stock of the Bank by reason of any stock dividend, stock split, spin-off, split-up, merger, consolidation, recapitalization, reclassification, combination or exchange of shares, or any other similar corporate event, the aggregate number of shares available under the Plan, and the number and the price of shares of common stock subject to outstanding Options shall be appropriately adjusted automatically.

b. No right to purchase fractional shares shall result from any adjustment in Options pursuant to this Section 13. In case of any such adjustment, the shares subject to the Option shall be rounded down to the nearest whole share.

c. Notice of any adjustment shall be given by the Bank to each Participant which shall have been so adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.

14. Effective Date of the Plan

a. The Plan shall become effective on the date it is approved by the shareholders of the Bank.

b. Any amendment to the Plan shall become effective when adopted by the Board unless specified otherwise, but no Option granted under any increase in shares authorized to be issued under this Plan shall be exercisable until the increase is approved in the manner prescribed in Section 15 of this Plan.

15. Amendment of the Plan

a. The Board of Directors may amend, suspend or terminate the Plan at any time, but without shareholder approval, no amendment shall materially increase the maximum number of shares which may be issued under the Plan (other than adjustments pursuant to Section 13 hereof), materially increase the benefits accruing to Participants under the Plan, materially modify the requirements as to eligibility for participation or extend the term of the Plan. Approval of the shareholders may be obtained, at a meeting of shareholders duly called and held, by the affirmative vote of a majority of the holders of the Bank’s voting stock who are present or represented by proxy and are entitled to vote on the Plan at a meeting or by unanimous written consent of the shareholders entitled to vote on the amendment.

b. It is intended that the Plan meet the requirements of Rule 16b-3 or any successor thereto promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Amendments to the Plan shall be subject to approval by the shareholders of the Bank to the extent determined by the Board of Directors to be necessary to satisfy such requirements as in effect from time to time.

8 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

c. Rights and obligations under any Option granted before any amendment of this Plan shall not be materially and adversely affected by amendment of the Plan, except with the consent of the person who holds the Option, which consent may be obtained in any manner that the Board or its delegate deems appropriate.

16. Termination of the Plan

a. The Plan, unless sooner terminated, shall terminate at the end of ten (10) years from the date the Plan is approved by the shareholders of the Bank. No Option may be granted under the Plan while the Plan is suspended or after it is terminated.

b. Rights or obligations under any Option granted while the Plan is in effect, including the maximum duration and vesting provisions, shall not be altered or impaired by suspension or termination of the Plan, except with the consent of the person who holds the Option, which consent may be obtained in any manner that the Board or its delegate deems a appropriate.

17. Registration, Listing, Qualification, Approval of Stock and Options

a. If the Board shall determine, in its discretion, that it is necessary or desirable that the shares of common stock subject to any Option

(1) be registered, listed or qualified on any securities exchange or Nasdaq or under any a applicable law, or

(2) be approved by any governmental regulatory body, or

(3) be approved by the shareholders of the Bank, as a condition of, or in connection with, the granting of such Option, or the issuance or purchase of shares upon exercise of the Option, the Option may not be exercised in whole or in part unless such registration, listing, qualification or approval has been obtained free of any condition not acceptable to the Board of Directors.

18. Nontransferability of Options

No Option granted under this Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined by the Code or ERISA). Further, all Options granted to a Participant under this Plan shall be exercisable during his or her lifetime only by such Participant.

19. No Right to Option or as Shareholder

a. No director or other person shall have any claim or right to be granted an Option under this Plan, except as expressly provided herein. Neither the Plan nor any action taken hereunder shall be construed as giving any director any right to be retained in the service of the Bank.

9 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

b. Neither a director, the director’s legal representative, nor any person who acquires the right to exercise an Option by reason of the director’s death shall be, or have any of the rights or privileges of, a shareholder of the Bank in respect of any shares of common stock receivable upon the exercise of any Option granted under this Plan, in whole or in part, unless and until certificates for such shares shall have been issued.

20. Governing Law

The validity, construction, interpretation, administration and effect of this Plan and any rules, regulations and actions relating to this Plan will be governed by and construed exclusively in accordance with the laws of the State of Oregon.

10 – AMENDED AND RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AS OF APRIL 13, 2004

EX-99.2

Exhibit 99.2

BANK OF ASTORIA

NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

This Agreement, including the attached Terms and Conditions, is made as of                     , 20     (the “Grant Date”) by and between Bank of Astoria, an Oregon banking corporation (the “Bank”), and:

____________________________________	(“Optionee”)
____________________________________
(Address)
____________________________________
____________________________________
(Social Security Number)

Pursuant to the Bank’s Nonemployee Director Stock Option Plan (the “Plan”), which is incorporated by reference, and subject to the attached Terms and Conditions, the Bank hereby grants to Optionee an option (the “Option”) to purchase a number of shares of Common Stock of the Bank (the “Option Shares”) during the period (the “Option Period”) beginning on the Grant Date (and ending on the expiration date ten years after the Grant Date), as follows:

	(the “Number of Shares”)
$	(the “Price per Share”)

OPTIONEE	BANK OF ASTORIA
	By:

1 – NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

BANK OF ASTORIA

NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

Terms and Conditions

1. Exercise of Option.

Subject to the limitations stated in Section 2, during the Option Period Optionee may exercise the Option with respect to all or from time to time with respect to any part of the vested Option Shares by delivery to the Bank of

(a) a written notice in a form acceptable to the Bank specifying the number of whole Option Shares being purchased; and

(b) cash or collected funds, an assignment of Mature Stock, or a combination thereof, with an aggregate Fair Market Value equal to the sum of (i) the Exercise Price for the Option Shares exercised and (ii) the Withholding Taxes, if any, payable by the Bank incident to the exercise.

2. Limitations on Exercise.

Notwithstanding any provision of this Section or any other Section of this Agreement to the contrary, following the end of the Option Period the Option shall expire and no longer be exercisable. Subject to the previous sentence, the exercisability of the Option during the Option Period shall be subject to the following limitations:

(a) If the Optionee ceases being a director of the Bank for any reason other than the reasons identified in Section 2(b), the Optionee shall have the right to exercise the Option as follows:

(i) The Optionee may exercise the Options for a period of twelve months (12) from the date the Optionee ceased being a director, provided that if the Optionee dies before the twelve (12) month period has expired, the Options may be exercised by the legal representative or any person who acquires the right to exercise an Option by reason of the Optionee’s death for period of six (6) months from the date of the Optionee’s death.

(ii) If the Optionee dies while a member of the Board of Directors, the Options, to the extent exercisable by the Optionee at the date of death, may be exercised by the Optionee’s legal representative, or any person who acquires the right to exercise an Option by reason of the Optionee’s death, for a period of six (6) months from the date of the Optionee’s death.

(iii) In the event any Option is exercised by the executors, administrators, legatees, or distributees of the estate of a deceased Optionee, the Bank shall be under no obligation to issue stock thereunder unless and until the Bank is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased Optionee’s estate or the proper legatees or distributees thereof.

2 – NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

(b) If a Optionee ceases being a director of the Bank due to an act of

(i) fraud or intentional misrepresentation or

(ii) embezzlement, misappropriation or conversion of assets or opportunities of the Bank or any Affiliate of the Bank or

(iii) any other gross or willful misconduct as determined by the Board, in its sole and exclusive discretion, all Options granted to such Optionee shall immediately be forfeited as of the date of the misconduct.

(c) In the event that the Bank or its shareholders enter into one or more agreements to dispose of all or substantially all of the assets of the Bank or fifty percent (50%) or more of the outstanding capital stock of the Bank by means of sale (whether as a result of a tender offer or otherwise), merger, reorganization or liquidation in one or a series of related transactions (“Acceleration Event”), then the Option shall continue to be exercisable during the fifteen (15) days immediately prior to the scheduled consummation of the Acceleration Event with respect to the full number of Option Shares unexercised; provided, however, that no such Acceleration Event shall occur in the event that (i) the primary purpose of the transaction is to change the Bank’s domicile solely within the United States, (ii) the terms of the agreement(s) require as a prerequisite for the consummation of the transaction that each such Option shall either be assumed by the successor corporation or parent thereof or be replaced with a comparable Option to purchase shares of capital stock of the successor corporation or parent thereof, or (iii) the transaction is approved by a majority of the members of the board of directors of the Bank who had either been in office for more than twelve months prior to such transaction or had been elected, or nominated for election by the Bank’s shareholders, by the vote of three-fourths of the directors then still in office who were directors at the beginning of such twelve-month period; and provided further that any such exercise of the Option during such fifteen (15) day period shall be conditioned upon the consummation of such transaction and shall be effective only immediately before such consummation, except to the extent that the Optionee may indicate, in writing, that such exercise is unconditional with regard to all or part of the unaccelerated portion of the Option. Upon consummation of the Acceleration Event contemplated by said agreement, the Options, whether or not accelerated, shall expire and cease to be exercisable, unless assumed by the successor corporation or parent thereof.

3. Vesting.

The Option shall vest and become exercisable on the Grant Date.

4. Bank’s Rights.

This Agreement is not an employment contract. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Bank to terminate Optionee’s employment, if Optionee is then an employee, for any reason.

3 – NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

5. Changes to Outstanding Securities.

(a) If there is any change in the common stock of the Bank by reason of any stock dividend, stock split, spin-off, split-up, merger, consolidation, recapitalization, reclassification, combination or exchange of shares, or any other similar corporate event, the aggregate number of shares available under the Plan, and the number and the price of shares of common stock subject to outstanding Options shall be appropriately adjusted automatically.

(b) No right to purchase fractional shares shall result from any adjustment in Options pursuant to this Section 5. In case of any such adjustment, the shares subject to the Option shall be rounded down to the nearest whole share.

(c) Notice of any adjustment shall be given by the Bank to the Optionee and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes.

6. Shareholder’s Rights.

Neither Optionee nor any person entitled to exercise Optionee’s rights in the event of Optionee’s death shall have any of the rights of a shareholder with respect to the Option Shares except to the extent that certificates for such shares shall have been issued upon the exercise of the Option.

7. Definitions.

(a) Capitalized terms not otherwise defined herein shall have the definitions given such terms by the Plan as in effect on the Grant Date.

(b) The term “Fair Market Value” shall mean, with respect to shares of Bank common stock, the Fair Market Value per share (as defined in the Plan as in effect on the Grant Date), as of the date of exercise of the Option, reduced by any brokerage commissions, taxes, or other costs or expenses payable by the Bank and related to its sale of assigned Mature Stock.

(c) The term “Withholding Taxes” shall mean all income taxes, FICA, FUTA or similar employment taxes, and any other taxes or assessments payable by the Bank as the result of an exercise of this Option.

(d) The term “Acceleration Event” shall have that meaning specified in Section 2(c).

8. Parents and Subsidiaries.

For purposes of this Agreement, employment with the Bank shall include employment with any parent and any subsidiary of the Bank.

4 – NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

9. Further Instruments.

The parties agree to execute such further instruments and to take such further actions as reasonably may be required to carry out the intent of this Agreement.

10. Notices.

Any notice required or permitted under this Agreement shall be in writing and shall be sent by receipted mail, postage prepaid, addressed to the Bank at its principal place of business and to Optionee at the address shown in this Agreement or at any other address Optionee indicates by notice to the Bank.

11. Nontransferability of Option.

The Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypotheticated, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Code or ERISA). The Option shall be exercisable during the Optionee’s lifetime only by the Optionee.

12. Assignability.

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Bank and, subject to the restrictions on transfer set forth in this Agreement, shall be binding upon and inure to the benefit of Optionee and Optionee’s heirs, executors, administrators, successors and assigns. The Bank may assign its rights and delegate its duties.

13. Entire Agreement.

This Agreement, including the Plan and the Exhibits, constitutes the entire agreement of the parties with respect to the subject matter hereof. In the event of a conflict between the Plan and this Agreement, the Plan shall prevail.

14. Amendments.

No representation or promise relating to and no amendment of this Agreement shall be binding unless in writing and signed by all of the parties.

15. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws (excluding the conflict of laws provisions) of the State of Oregon as applied to agreements to which an Oregon corporation is a party.

16. Taxes.

Any Withholding Taxes payable by the Bank as a result of an exercise of this Option shall be the liability of the Optionee, and Optionee shall pay such Withholding Taxes in accordance with Sections 1 and 2 of this Agreement.

5 – NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

EX-99.3

Exhibit 99.3

BANK OF ASTORIA

AMENDED AND RESTATED COMBINED INCENTIVE AND

NON-QUALIFIED STOCK OPTION PLAN

1. Purpose.

The purpose of the Bank of Astoria Combined Incentive and Non-Qualified Stock Option Plan (the “Plan”) is to strengthen Bank of Astoria (the “Bank”) and those corporations which are or may hereafter become subsidiaries (the “Subsidiaries”) by providing to Eligible Plan Participants (as defined below) added incentive for high levels of performance and for unusual efforts to increase the earnings of the Bank and any Subsidiaries. The Plan seeks to accomplish these purposes and achieve these results by providing a means whereby such persons may purchase shares of the common stock (the “Common Stock”) of the Bank pursuant to stock options (the “Stock Options”) granted in accordance with this Plan.

Stock Options granted pursuant to this Plan are intended to be either Incentive Stock Options or Non-Qualified Stock Options (defined below) as shall be designated by the Board of Directors upon the grant of each Stock Option hereunder.

2. Definitions.

The terms defined in this Section 2 shall have the following meanings, unless the context otherwise requires.

(a) Common Stock shall mean shares of the Bank’s common stock, subject to adjustment pursuant to Section 15, “Adjustment Upon Changes in Capitalization,” hereunder.

(b) Bank shall mean Bank of Astoria, an Oregon banking corporation.

(c) Committee shall mean the Board of Directors as a committee of the whole or any committee appointed by the Board of Directors and to which is delegated the authority of the Board of Directors under this Plan, all as anticipated by Section 3.

(d) Eligible Plan Participants shall mean all full-time salaried officers and employees of the Bank or any Subsidiary.

(e) Fair Market Value shall mean as of any day

(i) The fair market value of a share of the Bank’s common stock is the last sale price reported by NASDAQ on the business day immediately preceding the date as of which fair market value is being determined or, if there were no sales of shares of the Bank’s common stock reported by Nasdaq on such day, on the most recently preceding day on which there were sales, or

1 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

(ii) if the shares of the Bank’s stock are not listed or admitted to trading on Nasdaq on the day as of which the determination is made, the amount determined by the Board of Directors to be the fair market value of a share on such day.

(f) Incentive Stock Option shall mean a Stock Option which is an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

(g) Mature Stock shall mean shares of the Bank’s common stock which have been owned by the Optionee without a substantial risk of forfeiture (within the meaning of Section 83 of the Internal Revenue Code of 1986, as amended, and Treasury Regulations promulgated thereunder) for at least six months (or such longer period as the Financial Accounting Standards Board may subsequently determine to be required to avoid variable plan accounting treatment for the Plan and options granted in accordance with it).

(h) Non-Employee Director shall mean a director who:

(i) Is not currently an officer of the Bank or a parent or subsidiary of the Bank, or otherwise currently employed by the Bank or a parent or subsidiary of the Bank;

(ii) Does not receive compensation, either directly or indirectly, from the Bank or a parent or subsidiary of the Bank, for services rendered as a consultant or in any capacity other than as a director, except for an amount that does not exceed the dollar amount for which disclosure would be required pursuant to Item 404(a) or regulation S-K;

(iii) Does not possess an interest in any other transaction for which disclosure would be required pursuant to Item 404(a) of Regulation S-K; and

(iv) Is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K.

(i) Non-Qualified Stock Option shall mean a Stock Option which does not qualify as an Incentive Stock Option.

(j) Option Share shall mean Common Stock covered by and subject to any outstanding unexercised Stock Option granted pursuant to this Plan.

(k) Optionee shall mean any Eligible Plan Participant to whom a Stock Option has been granted pursuant to this Plan, provided that at least part of the Stock Option is outstanding and unexercised.

(l) Plan shall mean the Bank of Astoria Combine Incentive and Non-Qualified Stock Option Plan as embodied herein and as may be amended from time to time in accordance with the terms hereof and applicable law.

(m) Stock Option shall mean the right to purchase Common Stock under this Plan in a specified number of shares, at a price and upon the terms and conditions determined by the Board of Directors. The maximum term of each option granted shall be 10 years from date of grant.

2 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

(n) Withholding Taxes shall mean all income taxes, FICA, FUTA, or similar employment taxes and any other taxes or assessments payable by the Bank as the result of an exercise of the Option.

3. Administration.

(a) The Committee. The Plan shall be administered by the Board of Directors directly, acting as a Committee of the whole, or if the Board elects, by a separate Committee appointed by the Board for that purpose and consisting solely of at least three Non-Employee Directors. All references in the Plan to the “Committee” shall refer to such separate Committee, if any is established, or if none is then in existence, shall refer to the Board of Directors as a whole. Once appointed, any such Committee shall continue to serve until otherwise directed by the Board. From time to time the Board may increase the size of the committee and appoint additional members thereof, remove members (with or without cause), appoint new members in substitution therefor, and fill vacancies however caused provided, however, that all existing members shall continue to be and any new members shall be, Non-Employee Directors. The Committee shall select one of its members as chairman, and shall hold meetings at such times and places as the chairman or a majority of the Committee may determine.

Members of the Committee who are either eligible for Options or who have been granted Options shall not be counted for purposes in determining the existence of a quorum at any meetings of the Committee and shall not be eligible to vote on any matters before the Board respecting the granting of Options or administration of the Plan.

At least annually, the Committee shall present a written report to the Board indicating the Directors to whom Options have been granted since the date of the last such report, and in each case the date or dates of Options granted, the number of shares optioned, and the Option price per share.

At all times, the Board shall have the power to remove all members of the Committee and thereafter to directly administer the Plan as a Committee of the whole.

(b) Powers of the Committee. Subject to all provisions and limitations of the Plan and consistent with any requirements of Rule 16b-3 of the Securities and Exchange Commission, the Committee shall have the authority and discretion:

(i) to determine the then Fair Market Value per Share for the shares of each Option as of the time the Option is granted under the Plan;

(ii) to determine the then Fair Market Value per Share for the shares of Common Stock as of the time such shares are issued pursuant to each Option;

(iii) to modify or amend the terms of any Option previously granted, subject to the provisions of Section 17 of the Plan;

(iv) to interpret the Plan;

3 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

(v) to authorize any person or persons to execute and deliver Option agreements or to take any other actions deemed by the Committee to be necessary or appropriate to effectuate the grant of Options;

(vi) to make all other determinations and take all other actions which the Committee deems necessary or appropriate to administer the Plan in accordance with its terms and conditions.

(vii) to authorize any one or more of their number or the Secretary or any other officer of the Bank to execute and deliver documents on behalf of the Committee. The Board hereby authorizes the Secretary to execute and deliver all documents to be delivered by the Committee pursuant to the Plan.

All actions of the Committee shall be either by (i) a majority vote of the members of the full Committee at a meeting of the Committee, or (ii) by unanimous written consent of all members of the full Committee without a meeting thereof.

All decisions, determinations and interpretations of the Committee shall be final and binding upon all persons, including all Participants and any other holders or persons interested in any Options, unless otherwise expressly determined by a vote of the majority of the entire Board. No member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Option.

4. Participation.

All full-time salaried officers and employees of the Bank and its Subsidiaries shall be eligible for selection to receive both Incentive and Non-Qualified Stock Options. Subject to the express provisions of the Plan, the Board of Directors shall select from the eligible class and determine the individuals to whom Stock Options shall be granted, whether such Stock Options shall be Incentive or Non-Qualified Stock Options, and the terms and provisions of the respective Stock Option Agreements (which need not be identical), the times at which such Stock Options shall be granted, and the number of shares subject to each Stock Option. An individual who has been granted a Stock Option may, if such individual is otherwise eligible, be granted additional Stock Options if the Board of Directors shall so determine. However, no Stock Options may be granted to any individual who, immediately before the option is granted, owns beneficially more than ten percent (10%) of the outstanding stock of the Bank (whether acquired upon exercise of options or otherwise), unless: (i) with regard to Incentive Stock Options, the option is not exercisable by its terms after five (5) years from the date of its grant and the option price is at least one hundred ten percent (110%) of the Fair Market Value (at the time the option is granted) of the stock subject to option; or (ii) with regard to Non-Qualified Stock Options, the option price is at least one hundred ten percent (110%) of the Fair Market Value (at the time the option is granted) of the stock subject to option. For this purpose, shares of stock subject to options may be considered beneficially owned by an optionee but are not treated as outstanding stock of the Bank.

4 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

The Board of Directors shall determine the individuals who shall receive Stock Options and the terms and provisions of the Stock Options, and shall grant such Options to such individuals.

5. Shares Subject to the Plan.

Subject to adjustments as provided in Section 15 hereof, the maximum number of shares of Common Stock which may be issued upon exercise of all Stock Options, whether Incentive or Non-Qualified Stock Options, granted under this Plan is limited to two hundred thousand (200,000) shares.

If a Stock Option shall be canceled, surrendered, or expire for any reason without having been exercised in full, or an Optionee shall be terminated, whether or not for cause, die or become disabled and such Stock Option shall be deemed under this Plan to be exercisable only as to certain increments, if any, then the Option Shares represented thereby which are not purchased or which may not be purchased because the Stock Option is not fully exercisable shall again be available for grants of Stock Options under this Plan.

6. Grants of Stock Options.

(a) Grant. Subject to the express provisions of the Plan, the Board of Directors in its sole and absolute discretion, may grant Stock Options of the Bank at the price(s) and time(s), on the terms and conditions and to such Eligible Plan Participants as it deems advisable and specifies in the respective grants, subject to the limitations and restrictions set forth in the Plan and applicable approvals. All such grants must be exercisable at the rate of at least twenty percent (20%) per year over five (5) years from the date the option is granted. An Eligible Plan Participant who has been granted an Incentive or Non-Qualified Stock Option may, if otherwise eligible, be granted additional Stock Options if the Board of Directors shall so determine.

(b) Date of Grant and Rights of Optionee. The determination of the Board of Directors to grant a Stock Option shall not in any way constitute or be deemed to constitute an obligation of the Bank, or a right of the Eligible Plan Participant who is the proposed subject of the grant, and shall not constitute or be deemed to constitute the grant of a Stock Option hereunder unless and until both the Bank and the Eligible Plan Participant have executed and delivered to the other a stock option agreement (“Stock Option Agreement”) in the form then required by the Board of Directors evidencing the grant of the Stock Option, together with such other instrument or instruments as may be required by the Board of Directors pursuant to this Plan; provided, however, that the Board of Directors may fix the date of grant as any date on or after the date of its final determination to grant the Stock Option (or if no date is fixed, then the date of grant shall be the date on which the determination was finally made by the Board of Directors to grant the Stock Option), and such date shall be set forth in the Stock Option Agreement. The date of grant as so determined shall be deemed the date of grant of the Stock Option for purposes of this Plan.

(c) Shareholder-Employees. A Stock Option granted hereunder to an Eligible Plan Participant who is an employee of the Bank or any Subsidiary, who also owns (within the meaning of Section 424(d) of the Internal Revenue Code) at the date of the grant of the Stock

5 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

Option more than ten percent (10%) of the total combined voting power of all classes of capital stock of the Bank or a Subsidiary, shall not qualify as an Incentive Stock Option unless: (i) the purchase price of the Option Shares subject to said Stock Option is at least 110% of the Fair Market Value of the Option Shares, determined as of the date said Stock Option is granted; and (ii) the Stock Option by its terms is not exercisable after five (5) years from the date that it is granted.

7. Stock Option Exercise Price.

The exercise price of any Option Shares shall be determined by the Board of Directors, in its sole and absolute discretion, upon the grant of a Stock Option. Except as provided in Section 6 hereof, the exercise price of any Incentive Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock represented by the Option Shares on the date of grant of the related Stock Option. The exercise price of any Non-Qualified Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of such stock. As to any Stock Option granted to any individual who, immediately before the option is granted, owns beneficially more than ten percent (10%) of the outstanding stock of the Bank (whether acquired upon exercise of options or otherwise), the exercise price must be at least one hundred ten percent (110%) of the Fair Market Value of the stock at the time when such Stock Option is granted.

8. Exercise of Stock Option.

(a) Exercise. Except as otherwise provided elsewhere herein, each Stock Option shall be exercisable in such increments, which need not be equal, and upon such contingencies as the Board of Directors shall determine at the time of grant of the Stock Option; provided, however, that if an Optionee shall not in any given period exercise such part of the Stock Option which has become exercisable during that period, the Optionee’s right to exercise such part of the Stock Option shall continue until expiration of the Stock Option or any part thereof as may be provided in the related Stock Option Agreement. No Stock Option or part thereof shall be exercisable except with respect to whole shares of Common Stock, and fractional share interests shall be disregarded except that they may be accumulated.

(b) Notice and Payment. Stock Options granted hereunder shall be exercised by a ten (10) day written notice delivered to the Bank specifying the number of Option Shares with respect to which the Stock Option is being exercised, together with concurrent payment in full of the exercise price as hereinafter provided. If payment of the exercise price is made in whole or in part by assignment of Mature Stock, the notice must be accompanied by proof, satisfactory to the Bank, that all Common Stock assigned is Mature Stock. If the Stock Option is being exercised by any person or persons other than the Optionee, the notice shall be accompanied by proof, satisfactory to counsel for the Bank, of the right of such person or persons to exercise the Stock Option. The Bank’s receipt of notice of exercise without concurrent receipt of the full amount of the exercise price shall not be deemed an exercise of a Stock Option by an Optionee, and the Bank shall have no obligation to an Optionee for any Option Shares unless and until full payment of the exercise price is received by the Bank and all of the terms and provisions of the Plan and the related Stock Option agreement have been fully complied with.

6 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

(c) Payment of Exercise Price. The exercise price of any Option Share purchased upon the proper exercise of a Stock Option shall be paid in full at the time of each exercise of a Stock Option in cash or collected funds, by assignment of Mature Stock, or any combination thereof. Payment by an Optionee as provided herein shall be made in full in cash or collected funds or by assignment of Mature Stock concurrently with the Optionee’s notification to the Bank of his intention to exercise all or part of a Stock Option. All Mature Stock must be valued at its Fair Market Value, net of any brokerage commissions, taxes, or other costs or expenses related to sale of the Mature Stock payable by the Bank.

(d) Minimum Exercise. Not less than twenty-five (25) Option Shares may be purchased at any one time upon exercise of a Stock Option unless the number of shares purchased is the total number which remains to be purchased under the Stock Option.

(e) Compliance with Law. No shares of Common Stock shall be issued upon exercise of any Stock Option, and an Optionee shall have no right or claim to such shares, unless and until: (i) payment in full as provided hereinabove has been received by the Bank; (ii) in the opinion of the counsel for the Bank, all applicable requirements of law and of regulatory bodies having jurisdiction over such issuance and delivery have been fully complied with; and (iii) if required by federal or state law or regulation, the Optionee shall have paid to the Bank the amount, if any, required to be withheld on the amount deemed to be compensation to the Optionee as a result of the exercise of his or her Stock Option, or made other arrangements satisfactory to the Bank, in its sole discretion, to satisfy applicable income tax withholding requirements.

(f) Reorganization. Notwithstanding any provision in any Stock Option Agreement pertaining to the time of exercise of a Stock Option, or part thereof, upon adoption by the requisite holders of the outstanding shares of Common Stock of any plan of dissolution, liquidation, reorganization, merger, consolidation or sale of all or substantially all of the assets of the Bank to another bank or corporation which would, upon consummation, result in termination of a Stock Option in accordance with Section 16 hereof, all Stock Options previously granted may, in the discretion of the Board of Directors, become immediately exercisable as to all unexercised Option Shares for such period of time as may be determined by the Board of Directors, but in any event not less than 30 days, on the condition that the terminating event is consummated. If such terminating event is not consummated, Stock Options granted pursuant to the Plan shall be exercisable in accordance with their respective terms.

9. Nontransferability of Stock Options.

Each Stock Option shall, by its terms, be nontransferable by the Optionee other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee’s lifetime only by the Optionee.

10. Continuation of Affiliation.

Nothing contained in this Plan (or in any Stock Option Agreement) shall obligate the Bank or any Subsidiary to employ or continue to employ any Optionee or any Eligible Plan Participant for any period of time or interfere in any way with the right of the Bank or a Subsidiary to reduce or increase the Optionee’s or Eligible Plan Participant’s compensation.

7 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

11. Cessation of Affiliation.

Except as provided in Section 12 hereof, if for any reason other than disability or death, an Optionee ceases to be employed by or affiliated with the Bank or a Subsidiary, the Stock Options granted to such Optionee shall expire not later than 30 days thereafter. During such period after cessation of affiliation, such Stock Options shall be exercisable only as to those increments, if any, which had become exercisable as of the date on which such Optionee ceased to be affiliated with the Bank or the Subsidiary, and any Stock Options or increments which had not become exercisable as of such date shall expire and terminate automatically on such date. Except as provided in Section 12 hereof, if an Optionee ceases to be employed by or affiliated with the Bank or a Subsidiary by reason of disability, such Optionee’s Stock Options shall expire not later than one (1) year thereafter. During such period after cessation of affiliation, such Stock Options shall be exercisable only as to those increments, if any, which had become exercisable as of the date on which such Optionee ceased to be affiliated with the Bank or the Subsidiary, and any Stock Options or increments which had not become exercisable as of such date shall expire and terminate automatically on such date.

12. Termination for Cause; Removal of Optionee for Cause.

If the Stock Option Agreement so provides and if an Optionee’s employment or affiliation with the Bank or a Subsidiary is terminated for cause, the Stock Options granted to such Optionee shall automatically expire and terminate in their entirety immediately upon such termination; provided, however, that the Board of Directors may, in its sole discretion, within thirty (30) days of such termination, reinstate such Stock Options by giving written notice of such reinstatement to the Optionee. In the event of such reinstatement, the Optionee may exercise the Stock Options only to such extent, for such time, and upon such terms and conditions as if the Optionee had ceased to be employed by or affiliated with the Bank or a Subsidiary upon the date of such termination for a reason other than cause, disability or death. In the case of an employee, termination for cause shall include, but shall not be limited to, termination for malfeasance or gross misfeasance in the performance of duties or conviction of illegal activity in connection therewith and, in any event, the determination of the Board of Directors with respect thereto shall be final and conclusive. In the case of an Optionee who is a Director, termination for cause shall include removal pursuant to the exercise of regulatory authority by the Office of the Comptroller of the Currency, Federal Reserve Board or other bank supervisory agency.

13. Death of Optionee.

If an Optionee dies while employed by or affiliated with the Bank or a Subsidiary or during the thirty (30) day period referred to in Section 11 hereof or the one (1) year period referred to in Section 14 hereof, the Stock Options granted to such Optionee shall expire on the expiration dates specified for said Stock Options at the time of their grant, or one (1) year after the date of such death, whichever is earlier. After such death, but before such expiration, subject to the terms and provisions of the Plan and the related Stock Option Agreements, the person or

8 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

persons to whom such Optionee’s rights under the Stock Options shall have passed by will or by the applicable laws of descent and distribution, or the executor or administrator of the Optionee’s estate, shall have the right to exercise such Stock Options to the extent that increments, if any, had become exercisable as of the date on which the Optionee died.

14. Disability of Optionee.

If an Optionee is disabled while employed by or affiliated with the Bank or a Subsidiary or during the thirty day period referred to in Section 11 hereof, the Stock Options granted to such Optionee shall expire on the expiration dates specified for said Stock Options at the time of their grant, or one (1) year after the date such disability occurred, whichever is earlier. After such disability occurs, but before such expiration, the Optionee or the guardian or conservator of the Optionee’s estate, as duly appointed by a court of competent jurisdiction, shall have the right to exercise such Stock Options to the extent that increments, if any, had become exercisable as of the date on which the Optionee became disabled or ceased to be employed by or affiliated with the Bank or a Subsidiary as a result of the disability. An Optionee shall be deemed to be “disabled” if it shall appear to the Board of Directors, upon written certification delivered to the Bank of a qualified licensed physician, that the Optionee has become disabled within the meaning of Section 442(c)(6) of the Internal Revenue Code.

15. Adjustment Upon Changes in Capitalization.

If the outstanding shares of Common Stock of the Bank are increased or decreased, or changed into or exchanged for a different number or kind of shares or securities of the Bank, through a reorganization, merger, recapitalization, reclassification, stock split, stock dividend, stock consolidation, or otherwise, without consideration to the Bank, an appropriate and proportionate adjustment shall be made in the number and kind of shares as to which Stock Options may be granted. A corresponding adjustment changing the number or kind of Option Shares and the exercise prices per share allocated to unexercised Stock Options, or portions thereof, which shall have been granted prior to any such change, shall likewise be made. Such adjustments shall be made without change in the total price applicable to the unexercised portion of the Stock Option, but with a corresponding adjustment in the price for each Option Share subject to the Stock Option. Adjustments under this Section shall be made by the Board of Directors, whose determination as to what adjustments shall be made, and the extent thereof, shall be final and conclusive. No fractional shares of stock shall be issued or made available under the Plan on account of such adjustments, and fractional share interests shall be disregarded, except that they may be accumulated.

16. Terminating Events.

Not less than 30 days prior to dissolution or liquidation of the Bank, or upon consummation of a plan of reorganization, merger or consolidation of the Bank with one or more banks or corporations, as a result of which the Bank is not the surviving entity, or upon the sale of all or substantially all of the assets of the Bank to another bank or corporation, or in the event of any other transaction involving the Bank where there is a change in ownership of at least twenty-five percent (25%), except as may result from a transfer of shares to another corporation in exchange for at least eighty percent (80%) control of that corporation (a “Terminating

9 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

Event”), the Board of Directors shall notify each Optionee of the pendency of the Terminating Event. Upon delivery of said notice, any Option granted prior to the Terminating Event shall be, notwithstanding the provisions of Section 8 hereof, exercisable in full and not only as to those shares with respect to which installments, if any, have then accrued, subject, however, to earlier expiration or termination as provided elsewhere in the Plan. Upon the date thirty (30) days after delivery of said notice, any Option or portion thereof not exercised shall terminate, and upon the effective date of the Terminating Event, the Plan and any options granted thereunder shall terminate, unless provision is made in connection with the Terminating Event for assumption of Options or new options covering stock of a successor employer bank or corporation, or a parent or subsidiary corporation thereof, with appropriate adjustments as to number and kind of shares and prices. All Stock Options theretofore granted under the Plan shall become immediately exercisable, unless provision is made in connection with such transaction for assumption of Stock Options theretofore granted, or substitution for such Stock Options with new stock options covering stock of a successor employer bank or corporation, or a parent or subsidiary corporation thereof, with appropriate adjustments as to the number and kind of shares and prices.

17. Amendment and Termination.

The Board of Directors of the Bank may at any time and from time to time suspend, amend or terminate the Plan and may, with the consent of an Optionee, make such modifications of the terms and conditions of that Optionee’s Stock Option as it shall deem advisable; provided that, except as permitted under the provisions of Section 15 hereof, no amendment or modification may be adopted without the Bank having first obtained the approval of the holders of a majority of the Bank’s outstanding shares of Common Stock entitled to vote at a duly held meeting of shareholders of the Bank if the amendment or modification would:

(a) Materially increase the number of securities which may be issued under the Plan or increase the maximum number of shares which may be purchased pursuant to Options granted under the Plan, either in the aggregate or by an individual;

(b) Materially modify the requirements as to eligibility for participation in the Plan;

(c) Increase or decrease the exercise price of any Stock Option granted under the Plan;

(d) Increase the maximum term of Stock Options provided herein;

(e) Permit Stock Options to be granted to any person who is not an Eligible Plan Participant;

(f) Change any provision of the Plan which would affect the qualification as an Incentive Stock Option under the Internal Revenue laws then applicable of any Stock Option granted as an Incentive Stock Option under the Plan; or

(g) Materially increase benefits to any key employee who is subject to the restrictions of Section 16 of the Securities Exchange Act of 1934.

10 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

Such amendment or modification shall be deemed adopted as of the date of the action of the Board of Directors effecting such amendment or modification and shall be effective immediately, unless otherwise provided therein, subject to approval thereof within twelve (12) months before or after the effective date by shareholders of the Bank holding not less than a majority of the voting power of the Bank; provided, however, the Board of Directors may amend the Plan in total without shareholder approval if the Plan has not yet been approved by the shareholders.

Notwithstanding the above, the Board of Directors may grant to an Optionee, if such Optionee is otherwise eligible, additional Stock Options or, with the consent of the Optionee, grant a new Stock Option in lieu of an outstanding Option for a number of shares, at a purchase price and for a term which in any respect is greater or less than that of the earlier Stock Option, subject to the limitations of Sections 7 and 23 hereof.

No Stock Option may be granted during any suspension of the Plan or after termination of the Plan. Amendment, suspension, or termination of the Plan shall not (except as otherwise provided in Section 15 hereof), without the consent of the Optionee, alter or impair any rights or obligations under the Stock Option thereto granted.

18. Rights of Eligible Participants and Optionees.

No Eligible Plan Participant, Optionee or other person shall have any claim or right to be granted a Stock Option under this Plan, and neither this Plan nor any action taken hereunder shall be deemed to give or be construed as giving any Eligible Plan Participant, Optionee or other person any right to be retained in the employ of the Bank or any Subsidiary. Without limiting the generality of the foregoing, no person shall have any rights as a result of his or her classification as an Eligible Plan Participant or Optionee, such classification being made solely to describe, define and limit those persons who are eligible for consideration for privileges under the Plan.

19. Privileges of Stock Ownership; Regulatory Law Compliance; Notice of Sale.

No Optionee shall be entitled to the privileges of stock ownership as to any Option Share not actually issued and delivered. No Option Shares may be purchased upon the exercise of a Stock Option unless and until all then applicable requirements of all regulatory agencies having jurisdiction and all applicable requirements of the securities exchanges upon which securities of the Bank are listed (if any) shall have been fully complied with. The Optionee shall, not more than five (5) days after each sale or other disposition of shares of Common Stock acquired pursuant to the exercise of Stock Options, give the Bank notice in writing of such sale or other disposition. In the event that the Optionee disposes of any Common Stock acquired by the exercise of an Incentive Stock Option within the two-year period following grant of the Stock Option, or within the one-year period following exercise of the Stock Option, the Bank shall have the right to require the Optionee to remit to the Bank an amount sufficient to satisfy all federal, state and local withholding tax requirements as a condition to registration of the transfer of such Common Stock on the Bank’s books.

11 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

20. Effective Date of Plan.

(a) The Plan shall become effective on the date it is approved by the shareholders of the Bank.

(b) Any amendment to the Plan shall become effective when adopted by the Board unless specified otherwise, but no Option granted under any increase in shares authorized to be issued under this Plan shall be exercisable until the increase is approved in the manner prescribed in Section 17 of this Plan.

21. Termination.

Unless previously terminated as aforesaid, the Plan shall terminate ten (10) years from the earliest date of: (i) adoption of the Plan by the Board of Directors of the Bank; or (ii) approval of the Plan by holders of at least two-thirds of the outstanding shares of Common Stock as provided in Section 20 of this Plan. No Stock Options shall be granted under the Plan thereafter, but such termination shall not affect any Stock Options theretofore granted.

22. Option Agreement.

Each Stock Option granted under the Plan shall be evidenced by a written Stock Option Agreement executed by the Bank and the Optionee, and shall contain each of the provisions and agreements herein specifically required to be contained therein, and such other terms and conditions as are deemed desirable by the Board of Directors and are not inconsistent with this Plan.

23. Stock Option Period.

Each Stock Option and all rights and obligations thereunder shall expire on such date as the Board of Directors may determine, but not later than ten (10) years from the date such Stock Option is granted, and shall be subject to earlier termination as provided elsewhere in this Plan.

24. Exculpation and Indemnification of Board of Directors.

In addition to such other rights of indemnification which they may have as officers and/or directors of the Bank, indemnification of the present, former and future members of the Board of Directors, and each of them, with regard to the administration of this Plan, shall be equivalent to the applicable indemnification approved for the Board of Directors by the shareholders (if required).

25. Notices.

All notices and demands of any kind which the Board of Directors, any Optionee, Eligible Plan Participant, or other person may be required or desires to give under the terms of this Plan shall be in writing. Delivery by mail shall be deemed made at the expiration of the third day after the day of mailing, except for notice of the exercise of a Stock Option and payment of the Stock Option exercise price, both of which must be actually received by the Bank.

12 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

26. Limitations on Obligations of the Bank.

All obligations of the Bank arising under or as a result of this Plan or Stock Options granted hereunder shall constitute general unsecured obligations of the Bank, and shall not constitute obligations of the Board of Directors, any member thereof, any officer of the Bank, or any other person or any Subsidiary, and none of the foregoing, except the Bank, shall be liable for any debt, obligation, cost or expense hereunder.

27. Limitation of Rights.

The Board of Directors, in its sole and absolute discretion, is entitled to determine who, if anyone, is an Eligible Plan Participant under this Plan, and which, if any, Eligible Plan Participant shall receive any grant of Stock Option. No oral or written agreement by any person on behalf of the Bank relating to this Plan or any Stock Option granted hereunder is authorized, and such may not bind the Bank or the Board of Directors to grant any Stock Option to any person.

28. Severability.

If any provision of this Plan as applied to any person or to any circumstances shall be adjudged by a court of competent jurisdiction to be void, invalid, or unenforceable, the same shall in no way affect any other provision hereof, the application of any such provision in any other circumstances, or the validity of enforceability hereof.

29. Successors.

This Plan shall be binding upon the respective successors, assigns, heirs, executors, administrators, guardians and personal representatives of the Bank and Optionees.

30. Governing Law.

The validity, construction, interpretation, administration and effect of this Plan and any rates, regulations and action relating to this Plan will be governed by and construed exclusively in accordance with the laws of the State of Oregon.

Dated:                    , 2004

BANK OF ASTORIA

By:

Title:

13 – AMENDED AND RESTATED COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN – APPENDIX B (BANK OF ASTORIA)

EX-99.4

Exhibit 99.4

BANK OF ASTORIA

EMPLOYEE STOCK OPTION AGREEMENT

This Agreement, including the attached Terms and Conditions, is made as of                     , 20     (the “Grant Date”) by and between Bank of Astoria, an Oregon banking corporation (the “Bank”), and:

____________________________________	(“Optionee”)
____________________________________
(Address)
____________________________________
____________________________________
(Social Security Number)

Pursuant to the Bank’s Combined Incentive and Non-Qualified Stock Option Plan (the “Plan”), which is incorporated by reference, and subject to the attached Terms and Conditions, the Bank hereby grants to Optionee an option (the “Option”) to purchase a number of shares of Common Stock of the Bank (the “Option Shares”) during the period (the “Option Period”) beginning on the Grant Date (and ending on the expiration date ten years after the Grant Date), as follows:

	(the “Number of Shares”)
$	(the “Price per Share”)

The Option will/will not [DESIGNATE CHOICE] be treated as an incentive stock option, as defined in Section 422 of the Internal Revenue Code of 1986, as amended.

OPTIONEE	BANK OF ASTORIA
	By:

1 – EMPLOYEE STOCK OPTION AGREEMENT (BANK OF ASTORIA)

BANK OF ASTORIA

EMPLOYEE STOCK OPTION AGREEMENT

Terms and Conditions

1. Exercise of Option.

Subject to the limitations stated in Section 2, during the Option Period Optionee may exercise the Option with respect to all or from time to time with respect to any part of the vested Option Shares by delivery to the Bank of

(a) a written notice in a form acceptable to the Bank specifying the number of whole Option Shares being purchased; and

(b) cash or collected funds, an assignment of Mature Stock, or a combination thereof, with an aggregate Fair Market Value equal to the sum of (i) the Exercise Price for the Option Shares exercised and (ii) the Withholding Taxes, if any, payable by the Bank incident to the exercise.

2. Limitations on Exercise.

Notwithstanding any provision of this Section or any other Section of this Agreement to the contrary, following the end of the Option Period the Option shall expire and no longer be exercisable. Subject to the previous sentence, the exercisability of the Option during the Option Period shall be subject to the following limitations:

(a) Number of Shares. Not less than twenty-five (25) Option Shares may be purchased at any one time upon exercise of this Option unless the number of shares purchased is the total number which remain to be purchased under this Option.

(b) Termination for Cause. If the Optionee’s employment or affiliation with the Bank or a Subsidiary is terminated for cause, the Option shall automatically terminate in its entirety upon such termination; provided, however, that the Board of Directors may, in its sole discretion, within thirty (30) days of such termination, reinstate the Option by giving written notice of such reinstatement to the Optionee.

In the event of such reinstatement, the Optionee may exercise the Option only to such extent, for such time, and upon such terms and conditions as if the Optionee had ceased to be employed by or affiliated with the Bank or a Subsidiary upon the date of such termination for a reason other than cause, disability or death. In the case of an employee, termination for cause shall include, but shall not be limited to, termination for malfeasance or gross misfeasance in the performance of duties or conviction of illegal activity in connection therewith and, in any event, the determination of the Board of Directors with respect thereto shall be final and conclusive. If Optionee is a Director, termination for cause shall include removal pursuant to the exercise of regulatory authority by the office of the Comptroller of the Currency, Federal Reserve Board or other bank supervisory agency.

2 – EMPLOYEE STOCK OPTION AGREEMENT (BANK OF ASTORIA)

(c) Death of Optionee. If an Optionee dies while employed by or affiliated with the Bank or a Subsidiary or during the thirty (30) day period referred to in Section 2(e) hereof or the one (1) year period referred to in Section 2(d) hereof, the Option shall expire on the expiration date specified for the Option at the time of its grant, or one (1) year after the date of such death, whichever is earlier. After such death, but before such expiration, subject to the terms and provisions of the Plan and this Agreement, the person or persons to whom such Optionee’s rights under the Option shall have passed by will or by the applicable laws of descent and distribution, or the executor or administrator of the Optionee’s estate, shall have the right to exercise the Option to the extent that increments, if any, had become exercisable as of the date on which the Optionee died.

(d) Disability of Optionee. If an Optionee is disabled while employed by or affiliated with the Bank or a Subsidiary or during the thirty day period referred to in Section 2(e) hereof, the Option shall expire on the expiration date specified for the Stock Option at the time of its grant, or one (1) year after the date such disability occurred, which ever is earlier. After such disability occurs, but before such expiration, the Optionee or the guardian or conservator of the Optionee’s estate, as duly appointed by a court of competent jurisdiction, shall have the right to exercise the Option to the extent that increments, if any, had become exercisable as of the date on which the Optionee became disabled or ceased to be employed by or affiliated with the Bank or a Subsidiary as a result of the disability. The Optionee shall be deemed to be “disabled” if it shall appear to the Board of Directors, upon written certification delivered to the Bank of a qualified licensed physician, that the Optionee has become disabled within the meaning of Section 442(c)(6) of the Internal Revenue Code.

(e) Cessation of Affiliation. Except as provided in Section 2(b) hereof, if for any reason other than disability or death, the Optionee ceases to be employed by or affiliated with the Bank or a Subsidiary, the Option shall expire not later than 30 days thereafter. During such period after cessation of affiliation, the Option shall be exercisable only as to those increments, if any, which had become exercisable as of the date on which such Optionee ceased to be affiliated with the Bank or the Subsidiary, and the Option or increments which had not become exercisable as of such date shall expire and terminate automatically on such date. Except as provided in Section 2(b) hereof, if the Optionee ceases to be employed by or affiliated with the Bank or a Subsidiary by reason of disability, such Optionee’s Stock Options shall expire not later than one (1) year thereafter. During such period after cessation of affiliation, such Stock Options shall be exercisable only as to those increments, if any, which had become exercisable as of the date on which such Optionee ceased to be affiliated with the Bank or the Subsidiary, and the Stock Option or increment which had not become exercisable as of such date shall expire and terminate automatically on such date.

(f) Terminating Events. For purposes of this Section 2(f), a Terminating Event is defined as dissolution and liquidation of the Bank, consummation of a plan of reorganization, merger or consolidation of the Bank with one or more banks or corporations, as a result of which the Bank is not the surviving entity, or any other transaction involving the Bank where there is a change in ownership of at least twenty-five percent (25%), except as may result from a transfer of shares to another corporation in exchange for at least eighty percent (80%) control of that corporation. The Board of Directors shall notify each Optionee of the pendency of the Terminating Event at least thirty (30) days prior to the occurrence of the event.

3 – EMPLOYEE STOCK OPTION AGREEMENT (BANK OF ASTORIA)

Upon delivery to the Optionee of notice of a Terminating Event, an Option granted prior to the Terminating Event shall be exercisable in full notwithstanding the provisions of Section 3, subject to earlier expiration or termination of such Option.

Upon the date thirty (30) days after delivery of such notice, any Option or portion thereof not exercised shall terminate, unless provision is made in connection wit the Terminating Event for assumption of Options or new options covering stock of a successor employer bank or corporation, or a parent or subsidiary corporation thereof, with appropriate adjustments as to number and kind of shares and prices.

3. Vesting.

The Option shall vest and become exercisable according to the following schedule:

Stock options shall be vested (l) one year from the date the option is granted. The one year vesting requirement is effective on stock options granted from April 11, 2000 forward unless otherwise revised by the Board of Directors.

4. Bank’s Rights.

This Agreement is not an employment contract. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Bank to terminate Optionee’s employment, if Optionee is then an employee, for any reason.

5. Changes to Outstanding Securities.

(a) If the outstanding shares of Common Stock of the Bank are increased or decreased, or changed into or exchanged for a different number or kind of shares or securities of the Bank, through a reorganization, merger, recapitalization, reclassification, stock split, stock dividend, stock consolidation, or otherwise, without consideration to the Bank, an appropriate and proportionate adjustment shall be made in the number and kind of shares as to which Option may be granted. Such adjustments shall be made without change in the total price applicable to the unexercised portion of the Option, but with a corresponding adjustment in the price for each Option Share subject to the Option. Adjustments under this Section shall be made by the Board of Directors, whose determination as to what adjustments shall be made, and the extent thereof, shall be final and conclusive.

(b) No right to purchase fractional shares shall result from any adjustment in Options pursuant to this Section 5. In case of any such adjustment, the shares subject to the Option shall be rounded down to the nearest whole share.

(c) Notice of any adjustment shall be given by the Bank to the Optionee and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes.

4 – EMPLOYEE STOCK OPTION AGREEMENT (BANK OF ASTORIA)

6. Shareholder’s Rights.

Neither Optionee nor any person entitled to exercise Optionee’s rights in the event of Optionee’s death shall have any of the rights of a shareholder with respect to the Option Shares except to the extent that certificates for such shares shall have been issued upon the exercise of the Option.

7. Definitions.

(a) Capitalized terms not otherwise defined herein shall have the definitions given such terms by the Plan as in effect on the Grant Date.

(b) The term “Fair Market Value” shall mean, with respect to shares of Bank common stock, the Fair Market Value per share (as defined in the Plan as in effect on the Grant Date), as of the date of exercise of the Option, reduced by any brokerage commissions, taxes, or other costs or expenses payable by the Bank and related to its sale of assigned Mature Stock.

(c) The term “Withholding Taxes” shall mean all income taxes, FICA, FUTA or similar employment taxes, and any other taxes or assessments payable by the Bank as the result of an exercise of this Option.

8. Parents and Subsidiaries.

For purposes of this Agreement, employment with the Bank shall include employment with any parent and any subsidiary of the Bank.

9. Further Instruments.

The parties agree to execute such further instruments and to take such further actions as reasonably may be required to carry out the intent of this Agreement.

10. Notices.

Any notice required or permitted under this Agreement shall be in writing and shall be sent by receipted mail, postage prepaid, addressed to the Bank at its principal place of business and to Optionee at the address shown in this Agreement or at any other address Optionee indicates by notice to the Bank.

11. Nontransferability of Option.

The Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Code or ERISA). The Option shall be exercisable during the Optionee’s lifetime only by the Optionee.

5 – EMPLOYEE STOCK OPTION AGREEMENT (BANK OF ASTORIA)

12. Assignability.

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Bank and, subject to the restrictions on transfer set forth in this Agreement, shall be binding upon and inure to the benefit of Optionee and Optionee’s heirs, executors, administrators, successors and assigns. The Bank may assign its rights and delegate its duties.

13. Entire Agreement.

This Agreement, including the Plan and the Exhibits, constitutes the entire agreement of the parties with respect to the subject matter hereof. In the event of a conflict between the Plan and this Agreement, the Plan shall prevail.

14. Amendments.

No representation or promise relating to and no amendment of this Agreement shall be binding unless in writing and signed by all of the parties.

15. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws (excluding the conflict of laws provisions) of the State of Oregon as applied to agreements to which an Oregon corporation is a party.

16. Taxes.

Any Withholding Taxes payable by the Bank as a result of an exercise of this Option shall be the liability of the Optionee, and Optionee shall pay such Withholding Taxes in accordance with Sections 1 and 2 of this Agreement.

6 – EMPLOYEE STOCK OPTION AGREEMENT (BANK OF ASTORIA)