Exhibit 10.13

AMENDED AND RESTATED

TERMS OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT

This AMENDED AND RESTATED TERMS OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT
(“Agreement”) by and among COWLITZ BANCORPORATION, a Washington corporation and
COWLITZ BANK (together, the “Employer”), and LYNDA LARRABEE (“Executive”), is
dated as of December 1, 2008 and amends, restates and replaces that certain
TERMS OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT dated as of June 21, 2006 by
and between Cowlitz Bancorporation and Executive.

1. Terms of Employment. Employer, either directly or through one of its wholly
owned subsidiaries, employs Executive and Executive accepts that employment on
the terms and conditions contained in this Agreement. The employment of
Executive by Employer is “at will” and Executive’s employment may be terminated
at any time for any lawful reason or for no reason at all.

2. Termination Related to Change in Control.

2.1 A “Change in Control” shall be deemed to have occurred on the date that a
“change in the ownership,” “a change in the effective control,” or “a change in
the ownership of a substantial portion of the assets” (as those terms are
defined in Section 1.409A-3(i)(5) of the Treasury Regulations promulgated under
the Internal Revenue Code of 1986, as amended) of the Employer occurs and
includes:

 

  (i) the date on which any one person, or more than one person acting as a
group (as set forth in Section 1.409A-3(i)(5) of the Treasury Regulations),
acquires ownership of stock of Employer that, together with stock held by such
person or group, constitutes more than 50% of the total fair market value or
total voting power of the stock of Employer;

 

  (ii) the date on which the Employer merges or consolidates with another entity
and as a result less than 50% of the total fair market value or total voting
power of the stock of the resulting entity immediately after the merger or
consolidation is held by any one person, or more than one person acting as a
group, who were the holders of the Employer’s voting securities immediately
before the merger or consolidation;

 

  (iii) the date on which any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) ownership of stock of
Employer possessing 30% or more of the total voting power of the stock of
Employer;

 

  (iv) the date on which a majority of members of the Employer’s board of
directors is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of Employer’s board of
directors before the date of the appointment or election; or

 

  (v) the date on which any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Employer that have a total gross fair market value (the value of the assets of
the Employer, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets) equal to or more than 40%
of the total gross fair market value of all of the assets of the Employer
immediately before such acquisition or acquisitions.

 

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2.2 After announcement of a proposed Change in Control and for a period
continuing for one year following a Change in Control, instead of receiving the
Severance Benefit set forth in Section 3 below, in the event Employer terminates
Executive’s employment without Cause or Executive terminates his or her
employment for Good Reason, Executive shall receive:

 

  (i) 12 months of base salary, based on Executive’s highest base salary in the
two years preceding termination,

 

  (ii) an amount equal to Executive’s highest annual bonus paid in the two years
preceding termination, and

 

  (iii) continuing insurance benefits for the shorter of 12 months or the full
COBRA period, (items 2.2(i) through (iii), collectively referred to herein as
the “Change in Control Benefit”).

If the Employer benefit plans do not permit continued participation by the
Executive following termination of employment, Employer shall include in the
lump sum cash payment of the Change in Control Benefit an amount equal to the
premiums (estimated in good faith by Employer) that Employer would have paid
under such benefit plans for Executive’s continued participation for a 12-month
period. Subject to Section 5 (if applicable), the cash portion of the Change in
Control Benefit shall be paid in a lump sum upon Employer’s receipt of the
Executive’s Separation Agreement and the revocation period having expired
without Executive having revoked the Separation Agreement. Receipt of the Change
in Control Benefit is further conditioned on Executive not being in violation of
any material term of this Agreement or in violation of any material term of the
Separation Agreement. An example of the calculation of the cash Change in
Control Benefit is attached hereto as Addendum A, which is part of this
Agreement.

2.3 “Cause” for termination of employment means any one or more of the
following:

 

  (i) willful misfeasance, gross negligence, or conduct involving dishonesty in
the performance of Executive’s duties, as determined by either of the board of
directors of Employer or any subsidiary of Employer or by the Executive’s
supervisor;

 

  (ii) conviction of any felony or of a crime in connection with Executive’s
duties;

 

  (iii) conduct significantly harmful to Employer or the Bank, as reasonably
determined by either of the Boards of Directors or by the Supervisor, including
but not limited to intentional violation of law or of any significant policy or
procedure of the Employer or the Bank;

 

  (iv) refusal or failure to act in accordance with a stipulation, requirement,
or directive of either of the Boards of Directors or the Supervisor (provided
such directive is lawful);

 

  (v) failure to faithfully or diligently perform any of the duties of
Executive’s employment which are specified in this Agreement, articulated by
either of the Boards of Directors or the Supervisor, or are usual and customary
duties of Executive’s employment, if Executive has not corrected the problem or
formulated a plan for its correction with the Supervisor (if such failure is not
susceptible to immediate correction) within thirty (30) days after notice to
Executive; or

 

  (vi) removal of Executive from office or permanent prohibition of Executive
from participating in the conduct of Employer’s affairs by an order issued by a
bank regulatory authority.

 

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2.4 For the purposes of this Agreement, “Good Reason” for Executive’s
resignation will exist if

 

  (i) Without the written consent of Executive, any one or more of the following
occurs: (A) a material diminution of Executive’s base compensation; (B) a change
of 20 or more miles in, or a change to a location in the State of Oregon (if
Executive’s principal geographic location is in Washington) as, the principal
geographic location at which Executive must perform services for Cowlitz, which
Executive and Cowlitz agree is a material breach of this Agreement; (C) a
material diminution in the Executive’s authority, duties or responsibilities;
(D) a material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report, including a requirement
that Executive report to a corporate officer or employee instead of reporting
directly to the Board of Directors; or (E) any other action or inaction by
Cowlitz that constitutes a material breach of this Agreement;

 

  (ii) Executive provides notice to Cowlitz of the existence of the condition
within 90 days of the initial existence of the condition;

 

  (iii) Cowlitz has 30 days following receipt of such notice to remedy the
condition and fails to do so; and

 

  (iv) Executive resigns within twelve months of such event occurring.”

3. Termination Without Cause or For Good Reason Unrelated to Change in Control.
Executive’s employment may be terminated as described in this Section, in which
event Executive will receive payments for all Base Salary and benefits earned as
of the date of Executive’s termination, which shall be paid in accordance with
applicable law. All compensation and benefits shall terminate as of the date of
termination, except as otherwise provided in this Agreement.

3.1 For Cause or Without Good Reason. If Executive’s employment is terminated by
Employer for Cause or by Executive without Good Reason, Executive will have no
right to receive compensation or other benefits after termination under this
Section.

3.2 Without Cause or Good Reason. If Executive’s employment is terminated by
Employer without Cause, or by Executive for Good Reason, the Bank will pay
Executive a severance benefit equal to 12 months of Base Salary, based on the
highest Base Salary paid to Executive in the preceding twelve months (the
“Severance Benefit”), subject to statutory payroll deductions. The Severance
Benefit will be paid in installments over 12 months, starting the month
following termination, in accordance with Employer’s standard payroll
procedures. Receipt of the Severance Benefit is conditioned on Executive having
executed the Separation Agreement in substantially the form attached hereto as
Exhibit A and the revocation period having expired without Executive having
revoked the Separation Agreement. Receipt and continued receipt of the Severance
Benefit is further conditioned on Executive not being in violation of any
material term of this Agreement or in violation of any material term of the
Separation Agreement.

4. “Excess Parachute Payment” Restrictions; Limitation on Change in Control
Benefit and Severance Benefit.

4.1 If the benefits under Section 2 or Section 3, either alone or together with
other payments to which Executive is entitled to receive from Employer, would
constitute an “excess parachute payment” as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), these benefits shall be
reduced to the largest amount that will result in no portion of the benefits
being subject to the excise tax imposed by Section 4999 of the Code. The
determination of any reduction in the benefits pursuant to the foregoing
provisions, shall be made by mutual agreement of Employer and Executive or if no
agreement is possible, by Employer’s accountants.

 

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4.2 Notwithstanding any other provision in this Agreement, Executive shall not
be entitled to any benefit provided for herein to the extent that the payment of
such benefit would be prohibited or restricted by (i) the applicable provisions
of the Emergency Economic Stabilization Act of 2008, if any, and its
implementing regulations and guidelines, (ii) the provisions of Part 359 of the
regulations of the Federal Deposit Insurance Corporation, as they may be amended
from time to time, or (iii) any other applicable statute or regulation. If any
such payment is so prohibited or restricted, Cowlitz and its successors and
assigns shall use its best efforts to secure the consent of the appropriate
regulatory agencies to make such payment in the highest amount permissible, up
to the amount provided for in this Agreement. Upon removal of any prohibition or
restriction on payment of benefits, Cowlitz or its successor or assign shall
immediately pay all amounts due to Executive pursuant to this Agreement together
with interest on the amounts owed accrued at the rate of Prime plus 2% per
annum.

5. 409A.

5.1 For purposes of this Agreement, the term “termination” or “resignation”
means a termination of employment that meets the definition of “separation of
service” as defined in Section 409A of the Internal Revenue Code and regulations
promulgated thereunder.

5.2 Notwithstanding any provision of this Agreement to the contrary, if, at the
time of Executive’s “separation of service” with Cowlitz, he or she is a
“specified employee” and one or more of the payments or benefits received or to
be received by Executive pursuant to this Agreement would constitute an item of
“deferred compensation” subject to Section 409A of the Internal Revenue Code and
regulations promulgated thereunder, no such payment or benefit will be provided
under this Agreement until the earlier of: (a) the date that is six (6) months
following Executive’s termination of employment with Cowlitz or (b) the
Executive’s death, unless the payment or distribution is exempt from the
application of Section 409A. The terms “separation of service,” “specified
employee,” and “deferred compensation” have the meanings set forth in
Section 409A of the Internal Revenue Code and regulations promulgated
thereunder. In the event any of Executive’s benefits that are paid in
installments under this Agreement are subject to the six-month delay set forth
in this Section 5, the first installment payment shall be made on the first
business day of the seventh month following termination of employment and shall
equal the aggregate installment payments Executive would have received during
the first six months plus the payment Executive is otherwise entitled to receive
for the seventh month plus interest for the period of any such delay calculated
using the six month Treasury bill rate in effect on the date on which the
payment is delayed pursuant to this Section and compounded daily. If the
conditions of the severance exception under Treasury Regulation
Section 1.409A-1(b)(9)(iii) (or any successor Regulation thereto) are satisfied,
payment of benefits shall not be delayed for six (6) months following
termination of employment to the extent permitted under the severance
exception.”

6. Restrictive Covenants.

(a) Confidential Information. Executive acknowledges that in the course of
Executive’s employment, Executive will have or obtain knowledge of confidential
information and secrets concerning Employer and its business, plans and
strategies, its actual and prospective customers, and other matters which are
valuable to Employer and which Employer does not want disclosed. Executive will
not during and after the Term, disclose to any other person or entity any
confidential information concerning Employer, its business operations or
customers, or use for his own purposes or permit or assist others in the use of
such confidential information, unless (i) either of the Boards of Directors
consents to the use or disclosure of the information, (ii) the use or disclosure
is consistent with Executive’s duties under this Agreement, or (iii) disclosure
is required by law or court order.

 

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(b) Nonsolicitation. During employment and for a period of 12 months following
termination (whether voluntary or not), Executive will not solicit any customer
of Employer or of any of Employer’s subsidiaries for services or products then
provided by Employer or any of its subsidiaries. For purpose of this Section,
“customers” are defined as (i) all customers serviced by Employer or any of
Employer’s subsidiaries at any time within 12 months before termination of
Executive’s employment, (ii) all customers and potential customers whom Employer
or Employer’s subsidiaries, with the knowledge or participation of Executive,
actively solicited at any time 12 months before termination of Executive’s
employment, and (iii) all successors, owners, directors, partners and management
personnel of the customers described in (i) or (ii).

(c) Nonraiding of Employees. Executive recognizes that the Employer’s workforce
is a vital part of its business; therefore, Executive agrees that for 12 months
following termination, Executive will not directly or indirectly solicit any
employee to leave his or her employment with Employer or any of Employer’s
subsidiaries. This includes that Executive will not (i) disclose to any third
party the names, backgrounds, or qualifications of any of the employees or
otherwise identify them as potential candidates for employment, or
(ii) personally or through any other person approach, recruit, interview or
otherwise solicit employees to work for any other employer. For purposes of this
Section, employees include all employees working for Employer or any of
Employer’s subsidiaries at the time of termination of Executive’s employment.

(d) Injunctive Relief. Executive acknowledges that it is impossible to measure
in money the damages that will accrue to Employer if Executive fails to observe
the covenants in this Section 6 (the “Restrictive Covenants”); therefore, the
Restrictive Covenants may be enforced by an action at law for damages and by an
injunction to prohibit the restricted activity. Executive hereby waives the
claim or defense that an adequate remedy at law is available to Employer.
Nothing set forth herein shall prohibit Employer from pursuing all remedies
available to it.

(e) Reasonableness. The parties agree that this Agreement in its entirety, and
in particular the Restrictive Covenants, are reasonable both as to time and as
to area. The parties additionally agree (i) that the Restrictive Covenants are
necessary for the protection of Employer’s business and goodwill; (ii) that the
Restrictive Covenants are not any greater than are reasonably necessary to
secure Employer’s business and goodwill; and (iii) that the degree of injury to
the public due to the loss of the service and skill of Executive or the
restrictions placed upon Executive’s opportunity to make a living with
Executive’s skills upon enforcement of said restraints, does not and will not
warrant non-enforcement of said restraints. The parties agree that if any
portion of the Restrictive Covenants set is adjudged unreasonably broad, then
the parties authorize said court or arbitrator to narrow same so as to make it
reasonable, given all relevant circumstances, and to enforce the same.

(f) Survival. This Section 6 shall survive the termination of this Agreement.

(g) Return of Property. If and when Executive ceases for any reason to be
employed by Employer, Executive must return to Employer all keys, pass cards,
identification cards and any other property of Employer. At the same time,
Executive also must return to Employer all originals and copies (whether in hard
copy, electronic or other form) of any documents, drawings, notes, memoranda,
designs, devices, diskettes, tapes, manuals, and specifications which constitute
proprietary information or material of Employer. The obligations in this
paragraph include the return of documents and other materials that may be in
Executive’s desk at work, Executive’s car or place of residence, or in any other
location under Executive’s control.

(h) Creative Work. Executive agrees that all creative work and work product,
including but not limited to all technology, business management tools,
processes, software, patents, trademarks, and copyrights developed by Executive
during employment with Employer, regardless of when or where such work or work
product was produced, constitutes work made for hire, all rights of which are
owned by

 

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Employer. Executive hereby assigns to the Employer and the Bank all rights,
title, and interest, whether by way of copyrights, trade secret, trademark,
patent, or otherwise, in all such work or work product, regardless of whether
the same is subject to protection by patent, trademark, or copyright laws.

6. Arbitration. Any dispute arising under this agreement shall be settled by
final, binding, private arbitration in Cowlitz County, Washington, unless the
arbitrator is unwilling to travel to Cowlitz County, in which case the
arbitration will be held in Seattle, Washington or Portland, Oregon, at the
discretion of the Employer. This includes disputes about the meaning of the
agreement and performance under the agreement. The arbitration will be conducted
by Judicial Dispute Resolution LLC with the arbitrator appointed and the
arbitration conducted in accordance with Judicial Dispute Resolution rules and
procedures. The arbitrator will have full authority to determine all issues,
including arbitrability. The arbitrator’s award may be reduced to final judgment
in Cowlitz County Superior Court. Each party shall bear its own costs in
connection with the arbitration and shall share equally the fees and expenses of
the arbitrator, except that the arbitrator may award the prevailing party fees
and costs. Notwithstanding the foregoing, an aggrieved party may seek a
temporary restraining order or preliminary injunction in Cowlitz County Superior
Court to preserve the status quo during the arbitration proceeding, provided
however, that the party seeking relief agrees that ultimate resolution of the
dispute will still be determined through arbitration and not through court
process. The filing of the court action for injunctive relief shall not hinder
or delay the arbitration process.

7. Expenses/Attorneys’ Fees. Cowlitz shall indemnify, hold harmless and defend
Executive against (i) any tax penalties or increased tax liability of Executive
due to Cowlitz’s failure to comply with the terms of this Agreement or breach of
this Agreement, and (ii) costs, including legal fees and expenses, incurred by
Executive in connection with or arising out of any action, suit or proceeding
(including any tax controversy) in which Executive may be involved, as a result
of Executive’s efforts, in good faith, to defend or enforce the terms of this
Agreement. For purposes of this Agreement, any settlement agreement that
provides for payment of any amounts in settlement of Cowlitz’s obligations
hereunder shall be conclusive evidence of Executive’s entitlement to
indemnification hereunder, and any such indemnification payments shall be in
addition to amounts payable pursuant to such settlement agreement, unless such
settlement agreement expressly provides otherwise. Cowlitz’s obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which Cowlitz may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not Executive obtains other employment.
Unless it is determined that Executive has acted in bad faith, Cowlitz shall pay
as incurred, to the full extent permitted by law, all legal fees and expenses
that Executive may reasonably incur as a result of or in connection with his
consultation with legal counsel or arising out of any action, suit, proceeding,
tax controversy or contest (regardless of the outcome thereof) by Cowlitz,
Executive or others regarding the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment (except a six-month delay required under Section 5 of this Agreement,
which shall bear interest as set forth therein), all payments due and
outstanding shall bear interest at the rate of 1 1/2% per month until such
payment is made.

8. Notices. Any notice to be delivered under this Agreement shall be given in
writing and delivered, personally or by certified mail, postage prepaid,
addressed to the Employer or to Executive at their last known addresses.

9. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Washington.

 

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10. Waiver/Amendment. This Agreement may not be amended, released, discharged,
abandoned, changed, or modified in any manner, except by an instrument in
writing signed by each of the parties hereto. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of any party
thereafter to enforce each and every such provision. No waiver or any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.

11. Severability. If any provision of this Agreement shall be held by a court or
arbitrator to be invalid or unenforceable, the remaining provisions shall
continue to be fully effective. If any part of this Agreement is held to be
unenforceable as written, it shall be enforced to the maximum extent allowed by
applicable law.

12. Entire Agreement. This Agreement represents the entire employment agreement
between the parties regarding the subject matter hereof and together with
Employer’s employee handbook governs the terms of Executive’s employment. Where
there is a conflict between this Agreement and the employee handbook, the terms
of this Agreement shall govern. This Agreement supersedes any other prior oral
or written employment agreement between the parties on the subject matter
hereof. This Agreement does not supersede any incentive compensation agreement
(including stock option agreements) entered into separately by the parties to
this Agreement.

13. Assignment. Executive shall not assign or transfer any of Executive’s rights
pursuant to this Agreement, wholly or partially, to any other person or to
delegate the performance of its duties under the terms of this Agreement. Upon
Executive’s death, Executive’s rights under this agreement shall inure to
Executive’s heirs, executors, administrators or assigns. The rights and
obligations of Employer under this Agreement shall inure to the benefit of and
be binding in each and every respect upon the direct and indirect successors and
assigns of Employer, regardless of the manner in which the successors or assigns
succeed to the interests or assets of Employer. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of Employer, by any
merger, consolidation or acquisition where Employer is not the surviving
corporation, by any transfer of all or substantially all of Employer’s assets,
or by any other change in Employer’s structure or the manner in which Employer’s
business or assets are held. Executive’s employment shall not be deemed
terminated upon the occurrence of one of the foregoing events. In the event of
any merger, consolidation or transfer of assets, this Agreement shall be binding
upon and shall inure to the benefit of the surviving corporation or the
corporation to which the assets are transferred.

14. Survival. If any benefits provided to Executive under this Agreement are
still owed or claims under the Agreement are still pending, at the time of
termination of this Agreement, this Agreement shall continue in force with
respect to those obligations or claims, until such benefits are paid in full or
claims are resolved in full. The Restrictive Covenants and dispute resolution
provisions of this Agreement shall survive after termination of this Agreement,
and shall be enforceable regardless of any claim Executive may have against
Employer.

15. ADVICE OF COUNSEL. Executive acknowledges that, in executing this Agreement,
Executive has had the opportunity to seek the advice of independent legal
counsel, and has read and understood all of the terms and provisions of this
Agreement. This Agreement shall not be construed against any party be reason of
the drafting or preparation hereof.

IN WITNESS WHEREOF, the parties have signed this Agreement effective on the day
and year first above written.

 

EXECUTIVE: /S/ Lynda Larrabee Lynda Larrabee

 

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COWLITZ BANCORPORATION By:    /S/ Richard J. Fitzpatrick   Richard J.
Fitzpatrick, President and CEO COWLITZ BANK By:    /S/ Richard J. Fitzpatrick  
Richard J. Fitzpatrick, President and CEO

 

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ADDENDUM A

Example of Change in Control Payment

If a change in control had been announced or occurred prior to December 31, 2007
and termination occurred as of December 31, 2007 Executive would have received
the following, subject to 280G cutback, if any, in the form of a lump sum
payment:

$82,572 (highest annual base salary in two years (2007))

$20,460 (highest annual performance bonus within past two years (2007))

Total = $103,032

[NOTE: does not include continuing insurance benefits for the Executive and
dependents substantially similar to benefits received immediately prior to the
Change in Control and with the same contribution rate towards the premium
applicable at the Date of Termination or at the date of Change in Control, if
greater, for 12 months]

 

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Exhibit A

EMPLOYMENT SEPARATION AGREEMENT AND RELEASE OF CLAIMS

This is a confidential agreement (this “Separation Agreement”) between you,
Cowlitz Bancorporation and Cowlitz Bank (collectively, “Employer”). This
Separation Agreement is dated for reference purposes _____________, 20___, which
is the date we delivered this Separation Agreement to you for your
consideration.

1. Termination of Employment. Your employment terminates [or was terminated] on
_______________, 20___ (the “Separation Date”).

2. Payments. In exchange for your agreeing to the release of claims and other
terms in this Separation Agreement, we will pay you the Change in Control
Benefit or Severance Benefit, as appropriate, set forth in the Agreement between
you and Employer dated ____________, 200__ (the “Change in Control Agreement”).
Such provisions of the Change in Control Agreement are incorporated herein by
reference. You acknowledge that we are not obligated to make these payments to
you unless you comply with the material terms of the Change in Control Agreement
and of this Separation Agreement.

3. COBRA Continuation Coverage. Your normal employee participation in the Bank’s
group health coverage will terminate on the Separation Date and continuation of
group health coverage thereafter will be made available to you and your
dependents pursuant to federal law (COBRA) and, except as provided under
Section 2 of the Change in Control Agreement, at your expense as provided under
COBRA.

4. Termination of Benefits. Except as provided in Section 3 above, your
participation in all employee benefit plans and programs ended on the Separation
Date. Your rights under any pension benefit or other plans in which you may have
participated will be determined in accordance with the written plan documents
governing those plans.

5. Full Payment. You acknowledge having received full payment of all
compensation of any kind (including wages, salary, vacation, sick leave,
commissions, bonuses and incentive compensation) that you earned as a result of
your employment by us.

6. No Further Compensation. Any and all agreements to pay you bonuses or other
incentive compensation are terminated. You understand and agree that you have no
right to receive any further payments for bonuses or other incentive
compensation. We owe no further compensation or benefits of any kind, except as
described in Section 2 above.

7. Release of Claims.

(a) You hereby release (i) Employer and its subsidiaries, affiliates, and
benefit plans, (ii) each of Employer’s past and present shareholders,
executives, directors, agents, employees, representatives, administrators,
fiduciaries and attorneys, and (iii) the predecessors, successors, transferees
and assigns of each of the persons and entities described in this sentence, from
any and all claims of any kind, known or unknown, that arose on or before the
date you signed this Separation Agreement.

(b) The claims you are releasing include, without limitation, claims of wrongful
termination, claims of constructive discharge, claims arising out of employment
agreements, representations or policies related to your employment, claims
arising under federal, state or local laws or ordinances prohibiting
discrimination or harassment or requiring accommodation on the basis of age,
race, color, national origin, religion, sex, disability, marital status, sexual
orientation or any other status, claims of failure to accommodate a disability
or religious practice, claims for violation of public policy, claims of
retaliation, claims of failure to assist you in applying for

 

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future position openings, claims of failure to hire you for future position
openings, claims for wages or compensation of any kind (including overtime
claims), claims of tortious interference with contract or expectancy, claims of
fraud or negligent misrepresentation, claims of breach of privacy, defamation
claims, claims of intentional or negligent infliction of emotional distress,
claims of unfair labor practices, claims arising out of any claimed right to
stock or stock options, claims for attorneys’ fees or costs, and any other
claims that are based on any legal obligations that arise out of or are related
to your employment relationship with us.

(c) You specifically waive any rights or claims that you may have under the
Title 49 of the Revised Code of Washington, the Civil Rights Act of 1964
(including Title VII of that Act), the Equal Pay Act of 1963, the Age
Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities
Act of 1990 (ADA), the Fair Labor Standards Act of 1938 (FLSA), the Family and
Medical Leave Act of 1993 (FMLA), the Worker Adjustment and Retraining
Notification Act (WARN), the Employee Retirement Income Security Act of 1974
(ERISA), the National Labor Relations Act (NLRA), and all similar federal, state
and local laws.

(d) You agree not to seek any personal recovery (of money damages, injunctive
relief or otherwise) for the claims you are releasing in this Separation
Agreement, either through any complaint to any governmental agency or otherwise.
You agree never to start any lawsuit or arbitration asserting any of the claims
you are releasing in this Separation Agreement. You represent and warrant that
you have not initiated any complaint, charge, lawsuit or arbitration involving
any of the claims you are releasing in this Separation Agreement. Should you
apply for future employment with Employer, Employer has no obligation to
consider you for future employment.

(e) You represent and warrant that you have all necessary authority to enter
into this Separation Agreement (including, if you are married, on behalf of your
marital community) and that you have not transferred any interest in any claims
to your spouse or to any third party.

(f) This Separation Agreement does not affect your rights, if any, to receive
pension plan benefits, medical plan benefits, unemployment compensation benefits
or workers’ compensation benefits. This Separation Agreement also does not
affect your rights, if any, under agreements, bylaw provisions, insurance or
otherwise, to be indemnified, defended or held harmless in connection with
claims that may be asserted against you by third parties.

(g) You understand that you are releasing potentially unknown claims, and that
you have limited knowledge with respect to some of the claims being released.
You acknowledge that there is a risk that, after signing this Separation
Agreement, you may learn information that might have affected your decision to
enter into this Separation Agreement. You assume this risk and all other risks
of any mistake in entering into this Separation Agreement. You agree that this
release is fairly and knowingly made.

(h) You are giving up all rights and claims of any kind, known or unknown,
except for the rights specifically given to you in this Separation Agreement.

8. No Admission of Liability. Neither this Separation Agreement nor the payments
made under this Separation Agreement are an admission of liability or wrongdoing
by Employer.

9. Employer Materials. You represent and warrant that you have, or no later than
the Separation Date will have, returned all keys, credit cards, documents and
other materials that belong to us, in accordance with Section 4(g) of the Change
in Control Agreement, which is incorporated herein by reference.

10. Nondisclosure Agreement. You will comply with the covenant regarding
confidential information in Section 4(a) of the Change in Control Agreement,
which covenant is incorporated herein by reference.

 

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11. No Disparagement. You may not disparage Employer or Employer’s business or
products, and may not encourage any third parties to sue Employer.

12. Cooperation Regarding Other Claims. If any claim is asserted by or against
Employer as to which you have relevant knowledge, you will reasonably cooperate
with us in the prosecution or defense of that claim, including by providing
truthful information and testimony as reasonably requested by us.

13. Nonsolicitation; No interference. You will comply with Sections 4(b) and
(c) of the Change in Control Agreement, incorporated herein by reference, and
Employer will have the right to enforce those provisions under the terms of
Section 4(d) of the Change in Control Agreement, incorporated herein by
reference. After the restrictive periods in Section 4(b) and 4(c) of the Change
in Control Agreement, you will not, apart from good faith competition, interfere
with Employer’s relationships with customers, employees, vendors, or others.

14. Independent Legal Counsel. You are advised and encouraged to consult with an
attorney before signing this Separation Agreement. You acknowledge that you have
had an adequate opportunity to do so.

15. Consideration Period. You have 21 days from the date this Separation
Agreement is given to you to consider this Separation Agreement before signing
it. You may use as much or as little of this 21-day period as you wish before
signing. If you do not sign and return this Separation Agreement within this
21-day period, you will not be eligible to receive the benefits described in
this Separation Agreement.

16. Revocation Period and Effective Date. You have 7 calendar days after signing
this Separation Agreement to revoke it. To revoke this Separation Agreement
after signing it, you must deliver a written notice of revocation to Employer’s
President before the 7-day period expires. This Separation Agreement shall not
become effective until the 8th calendar day after you sign it. If you revoke
this Separation Agreement it will not become effective or enforceable and you
will not be entitled to the benefits described in this Separation Agreement.

17. Governing Law. This Separation Agreement is governed by the laws of the
State of Washington that apply to contracts executed and to be performed
entirely within the State of Washington.

18. Dispute Resolution.

(a) Arbitration. Any dispute arising under this agreement shall be settled by
final, binding, private arbitration in Cowlitz County, Washington, unless the
arbitrator is unwilling to travel to Cowlitz County, in which case the
arbitration will be held in Seattle, Washington. This includes disputes about
the meaning of the agreement and performance under the agreement. The
arbitration will be conducted by Judicial Dispute Resolution LLC with the
arbitrator appointed and the arbitration conducted in accordance with Judicial
Dispute Resolution rules and procedures. The arbitrator will have full authority
to determine all issues, including arbitrability. The arbitrator’s award may be
reduced to final judgment in Cowlitz County Superior Court. Each party shall
bear its own costs in connection with the arbitration and shall share equally
the fees and expenses of the arbitrator, except that the arbitrator may award
the prevailing party fees and costs. Notwithstanding the foregoing, an aggrieved
party may seek a temporary restraining order or preliminary injunction in
Cowlitz County Superior Court to preserve the status quo during the arbitration
proceeding, provided however, that the party seeking relief agrees that ultimate
resolution of the dispute will still be determined through arbitration and not
through court process. The filing of the court action for injunctive relief
shall not hinder or delay the arbitration process.

(b) Expenses/Attorneys’ Fees. The prevailing party shall be awarded all costs
and expenses of the proceeding, including but not limited to, attorneys’ fees,
filing and service fees, witness fees and arbitrator’s fees. If arbitration is
commenced, the arbitrator will have full authority and complete discretion to
determine the “prevailing party” and the amount of costs and expenses to be
awarded.

 

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19. Saving Provision. If any part of this Separation Agreement is held to be
unenforceable, it shall not affect any other part. If any part of this
Separation Agreement is held to be unenforceable as written, it shall be
enforced to the maximum extent allowed by applicable law.

20. Final and Complete Agreement. Except for the Change in Control Agreement to
the extent it is expressly incorporated herein by reference, this Separation
Agreement is the final and complete expression of all agreements between us on
all subjects and supersedes and replaces all prior discussions, representations,
agreements, policies and practices. You acknowledge you are not signing this
Separation Agreement relying on anything not set out herein.

 

COWLITZ BANCORPORATION     COWLITZ BANK By:         By:     Title:        
Title:    

I, the undersigned, having been advised to consult with an attorney, hereby
agree to be bound by this Separation Agreement and confirm that I have read and
understood each part of it.

 

  __________________________    Date

 

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