**Exhibit 10.17**

 

**EMPLOYMENT AGREEMENT**

 

This Employment Agreement (“*Agreement*”) is entered into and effective (subject to regulatory approval) as of June 6, 2005 (the “*EffectiveDate*”) by and between AmericanWest Bancorporation, a Washington corporation (“*AWBC*”), its wholly owned subsidiary AmericanWest Bank, a Washington state-chartered bank (the “*Bank*” and, together with AWBC,“*Employer*”), and Diane Kelleher (“*Executive*”). 

 

**RECITALS**

 

WHEREAS, Executive is beingemployed by Employer, and Executive is accepting such employment, as Executive Vice President/Chief Financial Officer of AWBC and the Bank; and 

 

WHEREAS, Employer and Executive each desire to formalize the employment relationship by entering into this Employment Agreement; 

 

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and forother good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 

 

**AGREEMENT**

 

1. **Definitions; Construction.** Defined terms used in this Agreement are capitalized and, where not expressly defined in a separate section ofthis Agreement, are defined as set forth in *Section 16*. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or“Sections” refer to the corresponding Section or Sections of this Agreement. 

 

2. **Employment; Title.** Employer hereby employs Executive, and Executive hereby accepts employment with Employer, upon the terms and conditions set forth in this Agreement. Executive’s title shall be“Executive Vice President/Chief Executive Officer”. 

 

3. **Term of Employment.**The term of this Agreement (“*Term*”) is two years, commencing on the Effective Date. Unless earlier terminated pursuant to the provisions hereof, this Agreement shall be automaticallyrenewed for successive two-year terms (each a “*Renewal Term*”) unless either party gives written notice of non-renewal to the other not less than six (6) months prior to the end of the Term. If this Agreement is not renewed or theparties do not enter into a new employment agreement at the end of the Term, then at that time, to the extent Executive remains employed by Employer, (i) Executive shall be deemed an at-will employee of Employer, (ii) Executive shall cease to haveany right to continued employment under this Agreement, and (iii) upon termination of her employment, Executive shall only be entitled to receive the salary and bonuses earned and reimbursable expenses incurred through the date of such termination,together with such other benefits such as, by way of example but not limited to, Performance Stock awards and/or Stock Options granted to Executive, consistent with the terms of any such grant; provided, however, that *paragraphs (b) and (c) ofSection 11* of this Agreement shall survive this Agreement in the event of written notice of non-renewal by Employer without Cause such that Executive’s rights and Employer’s obligations thereunder 

shall continue with respect to any subsequent termination of Executive’s employment with Employer as described therein. 

 

4. **Duties.** Executive will report directly to the President andChief Executive Officer, and will perform and discharge well and faithfully the duties that may be assigned to her from time to time by the Chief Executive Officer in connection with the conduct of Employer’s business. Executive will conductherself so as to maintain and increase the goodwill and reputation of Employer and its business and abide by all codes of ethics or other professional duties applicable to Executive. In her capacity as Executive Vice President/Chief ExecutiveOfficer, Executive shall perform the customary duties of Executive Vice President/Chief Executive Officer of a Washington commercial bank and bank holding company, including but not limited to: 

 

(a) Oversee and direct fiscal operations for AWBC and theBank, including budgeting, tax, accounting, purchasing, real estate, long range forecasting and insurance; 

 

(b) Supervise the Controller relating to providing and directing procedures and computer systems necessary to maintain proper records andto afford adequate accounting controls and services, and direct the accounts payable, payroll and fixed assets accounting activities of AWBC and the Bank; 

 

(c) Appraise on an on-going basis Employer’s financial position and issue periodic reports on Employer’s financial stability,liquidity and growth; 

 

(d) Oversee and directthe preparation and issuance of AWBC’s annual report; 

 

(e) Direct and analyze studies of general economic, business and financial conditions and their impact on the policies and operations of AWBC and the Bank; analyze operational issues affecting functional groups andthe corporate group, and determine their financial impact; 

 

(f) Direct and coordinate the establishment of budget programs; coordinate tax reporting programs and investor relations activities; analyze, consolidate and direct all cost accounting procedures together with otherstatistical and routine reports; . 

 

(g)Maintain a good relationship with Employer’s Board, management, shareholders, other financial institutions and the investment community; 

 

(h) Coordinate with other executive officers in the development of strategic plans and objectives for Employer; 

 

and such other duties as are set forth in Executive’s job description or as may beassigned from time to time by Employer’s Board or Chief Executive Officer. 

 

5. **Extent of Service.** Executive shall devote her entire business time, attention and energies to the business of Employer. The foregoing, however, shall not preclude Executive from engaging inappropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments (subject to the limitations of *Section 13*) or from serving 

 

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on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with her responsibilities to Employer.

 

6. **Compensation.**

 

(a) Salary. Employer shall pay Executive a basesalary at the annual rate of $150,000 payable in accordance with the standard payroll procedures of Employer but not less than monthly. Executive’s base salary may be increased annually, taking into consideration Executive’s performancefor the most recent performance period and other relevant factors. 

 

(b) Incentive Programs. Executive shall be entitled to participate in any annual and longer-term incentive programs that are adopted by Employer and that cover employees in positions comparable to that ofExecutive. At the discretion of the Chief Executive Officer, Executive may be awarded a bonus of up to fifty percent (50%) of her base salary, subject to the Bank’s overall performance and her specific contributions towards profitability.

 

(c) Performance Stock Awards and StockOptions. 

 

(i) Discretionary PerformanceShares. Employer may from time to time grant Executive shares of AWBC common stock (the “*Discretionary Performance Shares*”) as a Performance Stock award as Employer, at Employer’s sole discretion, may see fit. Any suchDiscretionary Performance Shares shall vest in accordance with the terms of the grant thereof, except that the provisions for immediate vesting thereof set forth in *subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11* of this Agreementshall apply to any such Discretionary Performance Shares. 

 

(ii) Stock Options. Employer may from time to time grant Executive stock options to purchase shares of AWBC common stock (the “*Stock Options*”) at the closing price of AWBC’s common stockon the date of grant as Employer, at Employer’s sole discretion, may see fit. Any such grant shall be evidenced by a separate stock option agreement and shall become exercisable (i.e., vest) in accordance with the terms of such stock optionagreement, except that the provisions for immediate vesting thereof set forth in *subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11* of this Agreement shall apply to any such Stock Options. All such Stock Options shall be“incentive stock options” within the meaning of the Code. 

 

(d) Expenses. Executive shall be entitled to prompt reimbursement of all reasonable business expenses incurred by her in the performance of her duties during the Term, subject to the timely presentment ofappropriate vouchers and receipts in accordance with Employer’s policies. 

 

(e) Relocation Expenses. Executive shall be entitled to reimbursement of reasonable relocation expenses incurred in her relocationto Spokane, including but not limited to the cost of temporary housing for a period not to exceed two (2) months. 

 

(f) Deferred Compensation. Executive may, at her option, defer income from all or part of her base salary and bonuses through aDeferred Compensation Plan that is acceptable to Employer, which acceptance shall not be unreasonably withheld. 

 

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7. **Employee Benefits.** Executive shall be entitled to participate in employee benefit plansor programs (including but not limited to retirement plans) of Employer, if any, to the extent that her position, tenure, salary, age, health and other qualifications make her eligible to participate, subject to the rules and regulations applicablethereto. Employer shall have no duty under this Agreement to give Executive any additional compensation to cover life insurance premiums or to maintain any life insurance on Executive’s life. 

 

8. **Vacation.** Executive shall be entitled to vacation of four(4) weeks per year, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize her responsibilities; provided, that at least once each year Executive must be absent from her dutieswith Employer for a period of at least ten (10) consecutive business days, all or any portion of which may be vacation leave. The length of vacation at any one time should not exceed two (2) weeks without the approval of the President and ChiefExecutive Officer. 

 

9. **Surety Bond.** Executiveagrees to furnish all information and take any other steps necessary to enable Employer to obtain and maintain a fidelity bond conditioned on the rendering of a true account by Executive of all moneys, goods or other property which may come into thecustody, charge or possession of Executive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Employer. All premiums on the bond shall be paid by Employer. If Executive cannot personally qualifyfor a surety bond at any time during the Term, Employer may terminate this Agreement immediately and such termination shall be deemed to be a termination for Cause. 

 

10. **Termination.** Notwithstanding the provisions of *Section 3*, Executive’s employment may beterminated without any breach of this Agreement (provided that any required payments under *Section 11* are duly made) under the following circumstances: 

 

(a) Death. This Agreement shall terminate upon Executive’s death. 

 

(b) Disability. If Executive becomes Disabled,Employer may terminate Executive’s employment hereunder by providing her written notice thereof, and such termination will be effective upon delivery of such notice. 

 

(c) Resignation without Good Reason. Executive may terminate her employment with Employer at any timewithout Good Reason (as defined in *Section 16*) by giving Employer two (2) months’ written notice thereof. Such termination will be effective on the earlier of the last day of the notice period or the last day on which Executive performsservices for Employer. 

 

(d) Resignation forGood Reason. Executive may terminate her employment with Employer for Good Reason (as defined in *Section 16*) by giving Employer thirty (30) days’ written notice thereof. Such notice must describe the matter or matters which, inExecutive’s opinion, form the basis for Good Reason and include a statement of her intent to terminate her employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Employer, such notice shall describe inreasonable detail the alleged breach. If Employer cures such breach or the basis for Good Reason otherwise ceases to exist within the thirty (30) day period following Employer’s receipt of such notice, Executive shall either rescind her notice

 

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of intent to terminate and continue her employment under this Agreement, or terminate her employment under *Section 10(c),* in which case her notice ofbreach under this *Section 10(d)* shall be deemed to satisfy the notice requirement under *Section 10(c)*. If Employer fails to cure its breach within, or other bases for Good Reason continue to the end of, the thirty (30) day periodfollowing Employer’s receipt of such notice, Executive’s employment shall terminate effective on the last day of such 30-day period. If Executive decides to terminate her employment as provided in *Section 10(c)*, her employment shallterminate effective on the earlier of the last day of the notice period or the last day on which Executive performs services for Employer. 

 

(e) Involuntary Termination Without Cause. Employer may terminate Executive’s employment at any time without Cause by givingthirty (30) days’ written notice thereof to Executive. Executive’s employment shall terminate effective on the last day of the notice period or on such earlier date as Employer specifies in the notice. 

 

(f) Involuntary Termination for Cause. Employer mayterminate Executive’s employment for Cause by giving Executive written notice of such termination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice. 

 

11. **Benefits on Termination of Employment**. If Executive’semployment is terminated during the Term, Executive shall be entitled to receive payments and benefits as follows: 

 

(a) Death; Disability; Resignation without Good Reason; Termination for Cause. 

 

If Executive’s employment is terminated as a result ofdeath, Disability, resignation without Good Reason or termination for Cause pursuant to *subparagraphs (a), (b), (c) or (f)*, respectively, of *Section 10*, Executive shall receive: 

 

(1) her base salary through the date her employmentterminates; 

 

(2) the pro rata portion of anyincentive compensation earned but not yet paid, which shall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll procedures; and 

 

(3) reimbursement of expenses described in *Section 6(d)*incurred but not yet reimbursed. 

 

(b) Change of Control. 

 

(1) If, within two (2) years following the effective date ofa Change of Control (as defined in *Section 16*), Executive terminates her employment for Good Reason pursuant to *Section 10(d)* or Employer terminates Executive without Cause pursuant to *Section 10(e)*, Executive shall receive:

 

(i) An amount equal to Executive’sthen-current annual base salary for the greater period of (A) two (2) years or (B) the number of months remaining in the Term, including any Renewal Term then in effect; 

 

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(ii) An amount equal to the total amount of bonus paid to Executive during the calendaryear immediately preceding any such termination, less any bonus paid Executive during the calendar year in which such termination occurs; 

 

(iii) The pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated in the ordinary course andpaid in accordance with Employer’s standard payroll practices; 

 

(iv) Reimbursement of expenses described in *Section 6(d)* incurred but not yet reimbursed; and 

 

(v) Immediate acceleration of vesting of all Discretionary Performance Shares and/or Stock Options granted to Executive. 

 

(2) The payment to which Executive is entitled pursuant to*subparagraphs (i), (ii) and (iii) of**Section 11(b)(1)* shall be paid in a single installment within forty-five (45) days following the last day on which she performs services as an employee of Employer (with no percent value or otherdiscount) or, at Executive’s option, on a deferred basis (with no premium). 

 

(3) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this *Section 11(b)* (whether byseeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source. 

 

(4) Notwithstanding anything in this Agreement to the contrary, if the total of the payments made to Executive under this *Section11(b)*, together with any other payments or benefits received from Employer, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “*Parachute PaymentAmount*”), then the payment due under *Section 11(b)(1)(i)*shall be reduced so that the amount thereof is $1 less than the Parachute Payment Amount. 

 

(c) Resignation for Good Reason; Termination without Cause. 

 

(1) If Executive terminates her employment for Good Reasonpursuant to *Section 10(d)* or Employer terminates Executive without Cause pursuant to *Section 10(e)*, and such termination is not within two (2) years following a Change of Control, Executive shall receive: 

 

(i) Continued payment, in accordance with Employer’sstandard payroll practices, of Executive’s then-current base salary from the effective date of termination through the remainder of the Term, including any Renewal Term then in effect, but not less than for a period of one (1) year; 

 

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(ii) The pro rata portion of any incentive compensation earned but not yet paid, whichshall be calculated in the ordinary course and paid in accordance with Employer’s standard payroll practices; 

 

(iii) Reimbursement of expenses described in *Section 6(d)* incurred but not yet reimbursed; and 

 

(iv) Immediate acceleration of vesting of all DiscretionaryPerformance Shares and/or Stock Options which have been granted to Executive prior to the date of termination. 

 

(2) Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this *Section 11(c)* (whether byseeking new employment or otherwise), and no such payment or benefit shall be reduced by earnings that Executive may receive from any other source. 

 

(d) Benefits. For the three (3) calendar months immediately following the effective date of Executive’s resignation for GoodReason pursuant to *Section 10(d)*or Employer’s termination of Executive without Cause pursuant to *Section 10(e)*, Executive (and, where applicable, her dependents) shall be entitled to continue participation in the group insuranceplans maintained by Employer, including life, disability and health insurance programs, as if she were still an employee of Employer. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to her annualsalary in effect immediately prior to such termination. To the extent that Employer finds it not feasible to obtain coverage for Executive under its group insurance policies during such 90-day period, Employer shall provide Executive with individualpolicies which offer at least the same level of coverage and which impose not more than the same costs on Executive. The foregoing notwithstanding, in the event that Executive becomes eligible for comparable group insurance coverage in connectionwith new employment, Employer’s obligation to provide coverage under this *Section 11(d)* shall terminate immediately upon Executive’s eligibility for such coverage. Any group health continuation coverage that Employer is required tooffer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“*COBRA*”) shall commence upon Executive’s election to participate therein at such time as coverage under this *Section 11(d)* terminates, and continuefor such period of time as allowed under the COBRA regulations. Executive acknowledges that COBRA coverage will be at her own cost and expense and that failure by her to submit timely payment of premiums therefor will result in cancellation of COBRAcoverage. Executive’s rights under other employee benefit plans in which she may have participated will be determined in accordance with the written plan documents governing those plans. 

 

(e) No Other Payments or Benefits. Except asotherwise expressly provided in this *Section 11* or as required by law, all of Executive’s employee benefits and compensation shall cease on the last day on which she performs services as an employee of Employer. 

 

12. **Proprietary Information.**

 

(a) Executive agrees to comply fully with Employer’spolicies relating to non-disclosure of Employer’s trade secrets and proprietary information and processes, including 

 

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information regarding Employer’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of the foregoing,Executive will not, whether during or after her employment with Employer, disclose any such secrets, information or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall Executivemake use of any such property for her own purposes or for the benefit of any person, firm, corporation or other entity (except Employer) under any circumstances during or after her employment; provided, that after her employment ceases, thisprovision shall not apply to secrets, information and processes that are then in the public domain (provided that Executive was not responsible, directly or indirectly, for such secrets, information or processes entering the public domain withoutEmployer’s consent). 

 

(b) Trade secrets,proprietary information, and processes shall not be deemed to include information which is: 

 

(1) publicly known (or becomes publicly known) without the fault or negligence of Executive; 

 

(2) received from a third party without restriction andwithout breach of this Agreement; 

 

(3)approved for release by written authorization of Employer; or 

 

(4) required to be disclosed by law; provided, however, that in the event of a proposed disclosure pursuant to this *Section 12(b)(4)*, Executive shall give Employer prior written notice before suchdisclosure is made. 

 

(c) Executive agrees thatin the event that Executive’s employment terminates for any reason, Executive shall promptly deliver to Employer all property belonging to Employer, including all keys, pass cards, identification cards and all documents, equipment and materialsof any nature pertaining to Executive’s employment with Employer. The obligations in this paragraph include the return of documents, equipment and other materials which may be in Executive’s desk at work, in Executive’s car or placeof residence, or in any other location under Executive’s control. 

 

(d) This Section shall survive the expiration or any earlier termination of this Agreement. 

 

13. **Noncompetition.**

 

(a) Participation in a Competing Business. While Executive is employed pursuant to this Agreement and for the longer of (i) oneyear following termination of her employment for any reason or (ii) the balance of the Term remaining (not including any Renewal Term), if any (such longer period of time being the “*Restricted Period*”), Executive will not becomeinvolved with a Competing Business or serve, directly or indirectly, a Competing Business in any manner, including, without limitation, as a shareholder, member, partner, director, officer, manager, investor, organizer, “founder,”employee, consultant or agent; provided, however, that Executive may acquire and passively own an interest not exceeding 3% of the total equity interest in a Competing Business. 

 

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(b) No Solicitation. While Executive is employed pursuant to this Agreement andduring the Restricted Period, Executive will not directly or indirectly solicit or attempt to solicit (1) any employees of AWBC or the Bank to leave their employment or (2) any customers of the Bank to remove their business from the Bank (or anysuccessor thereto), or to participate in any manner in a Competing Business. 

 

(c) Employment Outside Washington and Idaho. Nothing in this *Section 13* shall prevent Executive from accepting employment outside the states of Washington or Idaho from a Competing Business, as long asExecutive will not (a) act as an employee or other representative or agent of the Competing Business within the states of Washington or Idaho, or (b) have any responsibilities for the Competing Business’s operations within the states ofWashington or Idaho. 

 

(d) CompetingBusiness. “*Competing Business*” means any financial institution or trust company (including without limitation, any start-up or other financial institution or trust company in formation) that competes with, or will compete in thestates of Washington or Idaho, with AWBC or the Bank (or any successor thereto). 

 

14. **Enforcement.**

 

(a) Scope of Covenants. Employer and Executive stipulate that, in light of all of the facts and circumstances of the relationship between Executive and Employer, the agreements referred to in *Sections 12 and13* (including without limitation their scope, duration and geographic extent) are fair and reasonably necessary for the protection of Employer’s confidential information, goodwill and other protectable interests. If a court of competentjurisdiction should decline to enforce any of those covenants and agreements, Executive and Employer request the court to reform these provisions to restrict Executive’s use of confidential information and Executive’s ability to competewith Employer to the maximum extent, in time, scope of activities and geography, the court finds enforceable. 

 

(b) Injunctive Relief. Executive acknowledges that Employer will suffer immediate and irreparable harm that will not be compensableby damages alone if Executive repudiates or breaches any of the provisions of *Sections 12 or 13* or threatens or attempts to do so. For this reason, under these circumstances, Employer, in addition to and without limitation of any otherrights, remedies or damages available to it at law or in equity, will be entitled to obtain temporary, preliminary and permanent injunctions in order to prevent or restrain the breach, and Employer will not be required to post a bond as a conditionfor the granting of this relief. 

 

(c)Adequate Consideration. Executive specifically acknowledges the receipt of adequate consideration for the covenants contained in *Sections 12 and 13* and that Employer is entitled to require her to comply with those Sections. *Sections12, 13*and this *Section 14*will survive termination of this Agreement. Executive represents that if her employment is terminated, whether voluntarily or involuntarily, Executive has experience and capabilities sufficient to enableExecutive to obtain employment in areas which do not violate this Agreement and that Employer’s enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. 

 

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15. **Successors.**

 

(a) Employer’s Successors. Employer shall require any successor to all or substantially all ofEmployer’s business and/or assets and liabilities (whether by purchase, merger, consolidation, reorganization, liquidation or otherwise) to assume and expressly agree to perform this Agreement in the same manner and to the same extent asEmployer would be required to perform if there were no succession. Employer’s failure to obtain an assumption agreement in form and substance reasonably acceptable to Executive by the effective date of such succession shall constitute a breachof Employer’s obligations to Executive under this Agreement as of the effective date of such succession and shall entitle Executive to all of the payments and other benefits described in *Section 11(b)*. 

 

(b) Executive’s Successors. This Agreement andall rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, it being agreed byExecutive that Executive cannot assign or make subject to an option any of Executive’s rights, including rights to payments and benefits, under this Agreement. 

 

16. **Definition of Terms.** The following terms used in this Agreement when capitalized have the followingmeanings: 

 

(a) “*Board ofDirectors*” means AWBC’s board of directors. 

 

(b) “*Cause*” means any one or more of the following: 

 

(1) Executive’s willful misfeasance or gross negligence in the performance of her duties; 

 

(2) Executive’s conviction of a crime in connectionwith her duties; 

 

(3) Executive’s conductthat is demonstrably and significantly harmful to AWBC or the Bank, as reasonably determined by the Board of Directors on advice from legal counsel; or 

 

(4) Executive cannot personally qualify for a surety bond as required by *Section 9*. 

 

(c) “*Change of Control*” means a change“in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of AWBC or the Bank, within the meaning of Section 280G of the Code; provided, however, that an internalreorganization of AWBC and its subsidiaries shall not constitute a Change of Control. 

 

(d) “*Code*” means the United States Internal Revenue Code of 1986, as amended. 

 

(e) “*Disability*” and“*Disabled*” means that Executive has been unable to perform the essential functions of her job under this Agreement, with or without reasonable 

 

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accommodation, for a period of three (3) consecutive months as the result of her incapacity due to physical or mental illness. 

 

(f) “*Good Reason*” means any of: 

 

(1) a material reduction in Executive’s compensationunder *Section 6* or benefits under *Sections 7 or 8*, 

 

(2) a material reduction in Executive’s title or responsibilities, 

 

(3) a relocation of Executive’s principal office so that Executive’s one-way commute distance from her residence in Spokane,Washington is increased by more than forty (40) miles, 

 

(4) failure of Employer’s successor to assume and perform this Agreement as contemplated by *Section 15(a),* or 

 

(5) any material breach by Employer of this Agreement. 

 

17. **Miscellaneous.**

 

(a) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable taxes.

 

(b) Notices. Any notice required orpermitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail to Executive at her residence address as maintained on Employer’s records, or to Employer at its executive offices (care of the Presidentand Chief Executive Officer), or such other addresses as either party shall notify the other in accordance with the foregoing procedure. 

 

(c) Force Majeure. Neither party shall be liable to the other for any delay or failure to perform hereunder, which delay or failureis due to causes beyond the control of said party, including, but not limited to: acts of God; acts of the public enemy; terrorism; acts of the United States of America, or any State, territory or political subdivision thereof or of the District ofColumbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this *Section 16(c)*, in every case the delay or failure to perform must be beyond the control and withoutthe fault or negligence of the party claiming excusable delay. 

 

(d) Integration; Amendment. This Agreement comprises the entire agreement and understanding between the parties as to the subject matter hereof and supersedes all prior or contemporaneous agreements other thanthat certain Agreement for Grant of Performance Shares entered into as of June 6, 2005, whether written or oral, regarding Executive’s employment with Employer and all rights, privileges and benefits related thereto. No waiver, alteration ormodification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto. 

 

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(e) Waiver. Failure or delay on the part of either party hereto to enforce anyright, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party of a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of anysubsequent breach by such other party. 

 

(f)Savings Clause. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term,covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforced to the fullestextent permitted by law. 

 

(g) Authority toContract. Employer warrants and represents that it has full authority to enter into this Agreement and to consummate the transactions contemplated hereby, and that this Agreement is not in conflict with any other agreement to which Employer is aparty or by which it may be bound. Employer further warrants and represents that the individual executing this Agreement on behalf of Employer has the full power and authority to bind Employer to the terms hereof and has been authorized to do so inaccordance with Employer’s corporate organization. 

 

(h) Dispute Resolution. 

 

(1) Any controversy or claim between Employer and Executive arising from or relating to this Agreement or any agreement or instrument delivered under or in connection with this Agreement, including any allegeddispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, shall, at the option of Executive or Employer, be submitted to arbitration, using either the American Arbitration Association(“*AAA*”) or Judicial Arbitration and Mediation Services, Inc. (“*JAMS*”) in accordance with the rules of either JAMS or AAA (at the option of the party initiating the arbitration) and Title 9 of the United State Code.Any such arbitration shall take place in Spokane, Washington. All statutes of limitations or any waivers contained herein which would otherwise be applicable shall apply to any arbitration proceeding under this *Section 16(h)*. The partiesagree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the award rendered may be entered in any court having jurisdiction. 

 

(2) If any arbitration, legal action or other proceeding isbrought for the enforcement of this Agreement or any agreement or instrument delivered under or in connection with this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions ofthis Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

 

(i) Governing Law. This Agreementshall be governed by and construed in accordance with the laws of the State of Washington. 

 

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(j) Counterparts. This Agreement may be executed in counterparts, each of whichshall be deemed an original but all of which together shall constitute one and the same instrument. 

 

(k) Advice of Counsel. Before signing this Agreement, Executive either (i) consulted with and obtained advice from her independentlegal counsel in respect to the legal nature and operation of this Agreement, including its impact on her rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legalcounsel. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreementthis 6th day of June, 2005, effective as of the day herein first above written. ****

 
**EXECUTIVE**   **AMERICANWEST BANCORPORATION**
By
 
/s/ Diane Kelleher
   
By
 
/s/ Robert M. Daugherty
  
Diane Kelleher
     
Robert M. Daugherty
        
President and Chief Executive Officer
    **AMERICANWEST BANK**      
By
 
/s/ Robert M. Daugherty
        
Robert M. Daugherty
        
President and Chief Executive Officer

 

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