SUPPLEMENTAL COMPENSATION AGREEMENT

EXHIBIT 10.16

SUPPLEMENTAL COMPENSATION AGREEMENT

THIS AGREEMENT, made and entered into this             day of             , 200_, by and between COLUMBIA STATE BANK, a bank organized and existing under the laws of the State of Washington (hereinafter referred to as the “Bank”), and             , an Executive of the Bank (hereinafter referred to as the “Executive”).

RECITALS

AGREEMENT

In consideration of services performed in the past and to be performed in the future, as well as, the mutual promises and covenants herein contained, it is agreed as follows:

The Bank agrees to employ the Executive in such capacity as the Bank may from time to time determine. The Executive will continue in the employ of the Bank in such capacity and with such duties and responsibilities as may be assigned to him, and with such compensation as may be determined, from time to time by the Board of Directors of the Bank.

The deferred compensation benefits provided by this Agreement are granted by the Bank as a fringe benefit to the Executive and are not (i) in lieu of base salary or a salary increase, (ii) a part of any salary reduction plan, or (iii) an arrangement deferring a bonus or a salary increase. The Executive has no option to take any current payment or bonus in lieu of these benefits except as set forth hereinafter.

The Bank shall account for benefits under this Agreement in such manner as it determines, in its discretion, is appropriate, but in any case in accordance with U.S. generally accepted accounting principals and all applicable regulatory accounting principles of the Bank’s primary federal regulator.

In the event the Executive remains in the Employment of the Bank until at least the tenth (10th) anniversary of this Agreement, then the Bank agrees to pay the Executive (or, in the event of his death, his designated beneficiary), the amount of Two Thousand, Eighty-Three Dollars ($2,083) per month for a period of One Hundred Twenty (120) months (“hereinafter Monthly Benefit Payments”). These Monthly Benefit Payments shall commence the first day of the first month following the tenth (10th) anniversary of this Agreement and shall continue monthly thereafter for a period of One Hundred Twenty (120) months, regardless of whether Executive continues his Employment with the Bank, or not.

In the event the employment of the Executive shall terminate prior to the tenth (10th) anniversary of this Agreement, by the Executive’s voluntary action, due to the Executive’s Disability (defined below) or death, or by the Executive’s discharge by the Bank with or without Cause (defined below), then notwithstanding any contrary provisions of this Agreement, the following shall apply:

For the purposes of this Agreement, Executive will be considered disabled if: (i) He is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) He is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Participant’s Employer.

The “Named Fiduciary and Administrator” of this Executive Agreement shall be the Board or a committee designated by, and which shall serve at the pleasure of, the Board. The Named Fiduciary and Administrator shall be responsible for the management, control and administration of the Executive Agreement. The Named Fiduciary and Administrator may delegate to others certain aspects of the management and operation responsibilities of the Executive Agreement, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

In the event a dispute arises over benefits under this Executive Agreement and benefits are not paid to the Executive (or to the Executive’s beneficiary(ies) in the case of the Executive’s death) and such claimants feel they are entitled to receive such benefits, then a written claim must be made to the Named Fiduciary and Administrator named above within Sixty (60) days from the date payments are refused. The Named Fiduciary and Administrator shall review the written claim and if the claim is denied, in whole or in part, they shall provide in writing, within Sixty (60) days of receipt of such claim, the specific reasons for such denial, reference to the provisions of this Executive Agreement upon which the denial is based and any additional material or information necessary to perfect the claim. Such written notice shall further indicate the additional steps to be taken by claimants if a further review of the claim denial is desired. A claim shall be deemed denied if the Named Fiduciary and Agreement Administrator fails to take any action within the aforesaid Sixty (60) day period.

If claimants desire a second review they shall notify the Named Fiduciary and Administrator in writing within Sixty (60) days of the first claim denial. Claimants may review this Executive Agreement or any documents relating thereto and submit any written issues and comments they may feel appropriate. In its sole discretion, the Named Fiduciary and Agreement Administrator shall then review the second claim and provide a written decision within Sixty (60) days of receipt of such claim. This decision shall likewise state the specific reasons for the decision and shall include reference to specific provisions of the Executive Agreement upon which the decision is based.

If claimants continue to dispute the benefit denial based upon completed performance of this Executive Agreement or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to an arbitrator for final arbitration. The arbitrator shall be selected by mutual agreement of the Bank and the claimants. If the parties are unable to agree on an arbitrator within thirty (30) days after a party first gives to the other party a written request for arbitration, then either party may thereafter petition a court of competent jurisdiction to appoint an arbitrator. The arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such arbitrator with respect to any controversy properly submitted to it for determination.

Where a dispute arises as to the Bank’s discharge of the Executive “for Cause,” such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision there-under.

IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof on the first day set forth hereinabove, and that, upon execution, each has received a conforming copy.

BENEFICIARY DESIGNATION

(You may refer to the beneficiary designation information prior to completion of this form.)

(Please indicate the percentage for each beneficiary.)

My Primary Beneficiary is The Estate of                                                                                                                                 as set forth in the last will and testament dated the              day of                     ,              and any codicils thereto.

Name of the Trust: ____________________________________________________________________________________________

Execution Date of the Trust:             /             /                     

Name of the Trustee: __________________________________________________________________________________________

Beneficiary(ies) of the Trust (please indicate the percentage for each beneficiary):

______________________________________________________________________________________________________

______________________________________________________________________________________________________

(Please indicate the percentage for each beneficiary.)

My Secondary Beneficiary is The Estate of                                                                                                                    as set forth

in my last will and testament dated the              day of                     ,              and any codicils thereto.

Name of the Trust:     ________________________________________________________________________________________

Execution Date of the Trust:             /             /                     

Name of the Trustee:    _____________________________________________________________________________________

Beneficiary(ies) of the Trust (please indicate the percentage for each beneficiary):

______________________________________________________________________________________________________

______________________________________________________________________________________________________

All sums payable under this Beneficiary Designation by reason of my death shall be paid to the Primary Beneficiary(ies), if he or she survives me, and if no Primary Beneficiary(ies) shall survive me, then to the Secondary (Contingent) Beneficiary(ies). This beneficiary designation is valid until the Executive participant notifies the Bank in writing of a change.