Exhibit 10.3

AMENDMENT

TO

SUPPLEMENTAL COMPENSATION AGREEMENT

(McDonald)

THIS AMENDMENT, effective as of December 31, 2008, is made and entered into by and between COLUMBIA STATE BANK (“Employer”) and MARK McDONALD (“Executive”).

Recitals

A. Employer and Executive are parties to a Supplemental Compensation Agreement (“Original Agreement”), entered into February 28, 2007, pursuant to which Employer is obligated to make certain payments to Executive.

B. Employer and Executive have agreed to amend the Original Agreement to conform to the requirements of § 409A of the U.S. Internal Revenue Code of 1986, as amended.

NOW, THEREFORE, for and inconsideration of the above, and the mutual covenants, terms and conditions hereof, the parties hereto agree as hereinafter set forth below.

Agreement

1. Payments on Death. The last sentence of Paragraph 5(D) of the Original Agreement is hereby amended to read as follows:

“Payments will begin immediately upon the death of the Executive and will continue for a period of one hundred twenty (120) consecutive months.”

2. Six Month Delay in Payments. The following new paragraph 8 is hereby added to the Original Agreement:

“8. Specified Employee - Delay in Payments. If Executive is a “specified employee,” then amounts payable to him under this Agreement on account of a “separation from service” that could cause him to be subject to the gross income inclusion, interest and additional tax provisions of U.S. Internal Revenue Code (“IRC”) § 409A(a)(1) shall not be paid until after the end of the sixth calendar month beginning after such separation from service (the “Suspension Period”). Within fourteen (14) calendar days after the end of the Suspension Period, the Company shall make a lump sum payment to Executive in cash in an amount equal to the sum of all payments delayed because of the preceding sentence. Thereafter, Executive shall receive any remaining payments under this Agreement as if the immediately preceding provisions of this Paragraph 8 were not a part of the Agreement. For purposes of this Agreement, the terms “specified employee” and “separation from service” shall have the meanings given to those terms in IRC § 409A and the Treasury regulations issued thereunder.”

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EMPLOYER:	COLUMBIA STATE BANK
	By
		Melanie J. Dressel Its President
EXECUTIVE:
	Andrew McDonald

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