**Exhibit 10.18**

 

**EMPLOYMENT AGREEMENT**

 

This Employment Agreement (“*Agreement*”) is entered into and effective (subject to regulatory approval) as of January 25, 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 R. Blair Reynolds (“*Executive*”). 

 

**RECITALS**

 

WHEREAS, Executive iscurrently employed by Employer as the Senior Vice President and General Counsel 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 for other good and valuable consideration, the receipt and sufficiency of whichis hereby acknowledged, the parties hereto agree as follows: 

 

**AGREEMENT**

 

1. **Definitions; Construction.** Definedterms used in this Agreement are capitalized and, where not expressly defined in a separate section of this Agreement, are defined as set forth in *Section 16*. The headings of Sections in this Agreement are provided for convenience only andwill 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 termsand conditions set forth in this Agreement. Executive’s title shall be “Senior Vice President and General Counsel” of AWBC and of the Bank. 

 

3. **Term of Employment.** The term of this Agreement (“*Term*”) is one year, commencing on the Effective Date. Unless earlier terminatedpursuant to the provisions hereof, this Agreement shall be automatically renewed for successive one-year terms (each a “*Renewal Term*”) unless either party gives written notice of non-renewal to the other not less than six (6) monthsprior to the end of the Term. If this Agreement is not renewed or the parties 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 deemedan at-will employee of Employer, (ii) Executive shall cease to have any right to continued employment under this Agreement, and (iii) upon termination of his employment, Executive shall only be entitled to receive the salary and bonuses earned andreimbursable 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 ofany such grant; provided, however, that *paragraphs (b) and (c) of Section 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 andEmployer’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 and Chief ExecutiveOfficer, and will perform and discharge well and faithfully the duties that may be assigned to him from time to time by the Chief Executive Officer in connection with the conduct of Employer’s business. Executive will conduct himself so as tomaintain 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 his capacity as Senior Vice President and General Counsel, Executive shallperform the customary duties of Senior Vice President and General Counsel of a Washington commercial bank holding company, including but not limited to: 

 

(a) Coordinate and oversee legal and regulatory compliance affairs of Employer; 

 

(b) Render advice to Employer’s Board, executive officers and staff on legal issues relating to the business ofEmployer; 

 

(c) Maintain a good relationship with regulatoryauthorities; 

 

(d) Maintain a good relationship withEmployer’s Board, management and shareholders; 

 

(e)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 be assigned from time to time by Employer’s Board or Chief Executive Officer. 

 

5. **Extent of Service.** Executive shall devote his entire business time,attention and energies to the business of Employer. The foregoing, however, shall not preclude Executive from engaging in appropriate 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 on the boards of directors of other entities, as long as such activities and services do not interfere or conflict with his responsibilities to Employer. 

 

6. **Compensation.**

 

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

 

(b) Incentive Programs. Executive shall be entitled toparticipate in any annual and longer-term incentive programs that are adopted by Employer and that cover employees in positions comparable to that of Executive. 

 

2 

(c) Performance Stock Awards and Stock Options. 

 

(i) Discretionary Performance Shares. Employer mayfrom 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 such DiscretionaryPerformance 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 Agreement shall apply to anysuch 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 stock on the date of grant as Employer, atEmployer’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 option agreement, except that the provisionsfor 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 ofthe Code. 

 

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

 

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

 

7. **Employee Benefits.** Executive shall be entitled to participate in employeebenefit plans or programs (including but not limited to retirement plans) of Employer, if any, to the extent that his position, tenure, salary, age, health and other qualifications make him eligible to participate, subject to the rules andregulations applicable thereto. 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 peryear, at full salary, at the discretion of Executive and as time allows, so long as it is reasonable and does not jeopardize his responsibilities; provided, that at least once each year Executive must be absent from his duties with Employerfor 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 Chief Executive Officer.

 

9. **Surety Bond.** Executive agrees to furnish all information andtake 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 the custody, charge or possession ofExecutive during the Term. The surety company issuing such bond and the amount of the bond must be acceptable to Employer. All premiums on the 

 

3 

bond shall be paid by Employer. If Executive cannot personally qualify for a surety bond at any time during the Term, Employer may terminate this Agreementimmediately and such termination shall be deemed to be a termination for Cause. 

 

10. **Termination.** Notwithstanding the provisions of *Section 3*, Executive’s employment may be terminated without any breach of this Agreement (provided that any required payments under *Section 11* are dulymade) 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 him written notice thereof, and such termination will be effective upon delivery of such notice. 

 

(c) Resignation without Good Reason. Executive may terminate hisemployment with Employer at any time without 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 thelast day on which Executive performs services for Employer. 

 

(d) Resignation for Good Reason. Executive may terminate his employment with Employer for Good Reason (as defined in *Section 16*) by giving Employer thirty (30) days’ written notice thereof. Such notice must describe thematter or matters which, in Executive’s opinion, form the basis for Good Reason and include a statement of his intent to terminate his employment on such basis. If the basis for Good Reason is an alleged breach of this Agreement by Employer,such notice shall describe in reasonable 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, Executiveshall either rescind his notice of intent to terminate and continue his employment under this Agreement, or terminate his employment under *Section 10(c),* in which case his notice of breach under this *Section 10(d)* shall be deemed tosatisfy 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 period following 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 his employment as provided in *Section 10(c)*, his employment shall terminate effective on the earlier of the lastday 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 giving thirty (30) days’ written notice thereof to Executive. Executive’semployment 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 may terminate Executive’s employment for Cause by giving Executive written notice of suchtermination and the reasons therefor. Executive’s employment shall terminate immediately upon receipt of the notice. 

 

4 

11. **Benefits on Termination of Employment.** If Executive’s employment 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 of death, 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) his base salary through the date his employment terminates; 

 

(2) the pro rata portion of any incentive compensation earned but not yet paid, which shall be calculated inthe 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 one (1) year following the effective date ofa Change of Control (as defined in *Section 16*), Executive terminates his 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) one (1) year or (B) the number of months remaining in the Term, including any Renewal Term then in effect; 

 

(ii) An amount equal to the total amount of bonus paid to Executive during the calendar year immediatelypreceding 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 he 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), 

 

5 

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 thecontrary, if the total of the payments made to Executive under this *Section 11(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 themeaning of Section 280G(b)(2)(A) of the Code (the “*Parachute Payment Amount*”), 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 withoutCause. 

 

(1) If Executive terminates hisemployment for Good Reason pursuant to *Section 10(d)* or Employer terminates Executive without Cause pursuant to *Section 10(e)*, and such termination is not within one (1) year following a Change of Control, Executive shall receive:

 

(i) Continued payment, in accordance withEmployer’s standard 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; 

 

(ii) 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 practices; 

 

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

 

(iv) Immediate acceleration of vesting of allDiscretionary Performance 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 Good Reason pursuantto *Section 10(d)*or Employer’s termination of Executive without Cause pursuant to *Section 10(e)*, Executive (and, where applicable, his dependents) shall be entitled to continue participation in the group insurance plans maintainedby Employer, including life, disability and health insurance programs, as if he were still an employee of Employer. Where applicable, Executive’s salary for purposes of such plans shall be deemed to be equal to his annual salary in effectimmediately 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 individual policies whichoffer at least the same level of coverage and which impose not more than the 

 

6 

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 his own cost and expense and that failure by him to submit timely payment of premiums therefor will result in cancellation of COBRAcoverage. Executive’s rights under other employee benefit plans in which he may have participated will be determined in accordance with the written plan documents governing those plans. 

 

(e) No Other Payments or Benefits. Except as otherwise expresslyprovided 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 he performs services as an employee of Employer. 

 

12. **Proprietary Information****.**

 

(a) Executive agrees to comply fully with Employer’s policies relatingto non-disclosure of Employer’s trade secrets and proprietary information and processes, including information regarding Employer’s subsidiaries, affiliates, customers and prospective customers. Without limiting the generality of theforegoing, Executive will not, whether during or after his 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 shallExecutive make use of any such property for his own purposes or for the benefit of any person, firm, corporation or other entity (except Employer) under any circumstances during or after his employment; provided, that after his employmentceases, this provision 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 publicdomain without Employer’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. 

 

7 

(c) Executive agrees that in 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 materials of 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 place of residence, or in any other location under Executive’s control.

 

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

 

13. **Noncompetition**. 

 

(a) Participation in a Competing Business. While Executive isemployed pursuant to this Agreement and for the longer of (i) one year following termination of his 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 become involved 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.

 

(b) No Solicitation. While Executive is employedpursuant to this Agreement and during 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 theirbusiness from the Bank (or any successor 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 statesof Washington or Idaho from a Competing Business, as long as Executive 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 theCompeting Business’s operations within the states of Washington or Idaho. 

 

(d) Competing Business. “*Competing Business*” means any financial institution or trust company (including without limitation, any start-up or other financial institution or trust company information) that competes with, or will compete in the states 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 Executiveand Employer, the agreements referred to in *Sections 12 and 13* (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 competent 

 

8 

jurisdiction should decline to enforce any of those covenants and agreements, Executive and Employer request the court to reform these provisions to restrictExecutive’s use of confidential information and Executive’s ability to compete with Employer to the maximum extent, in time, scope of activities and geography, the court finds enforceable. 

 

(b) Injunctive Relief. Executive acknowledges that Employer willsuffer immediate and irreparable harm that will not be compensable by 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 other rights, 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, andEmployer will not be required to post a bond as a condition for 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 him tocomply with those Sections. *Sections 12, 13*and this *Section 14*will survive termination of this Agreement. Executive represents that if his employment is terminated, whether voluntarily or involuntarily, Executive has experience andcapabilities sufficient to enable Executive 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. 

 

15. **Successors**. 

 

(a) Employer’s Successors. Employer shall require any successor to all or substantially all of Employer’sbusiness 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 as Employer would berequired 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 breach of Employer’sobligations 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 and all rights ofExecutive 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 by Executive thatExecutive 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 following meanings: 

 

(a) “*Board of Directors*” means AWBC’s board ofdirectors. 

 

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

 

(1) Executive’swillful misfeasance or gross negligence in the performance of his duties; 

 

9 

(2) Executive’s conviction of a crime in connection with his duties; 

 

(3) Executive’s conduct that is demonstrably andsignificantly 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 theownership 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 internal reorganization of AWBCand 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 his job underthis Agreement, with or without reasonable accommodation, for a period of three (3) consecutive months as the result of his incapacity due to physical or mental illness. 

 

(f) “*Good Reason*” means any of: 

 

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

 

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

 

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

 

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

 

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

 

17. **Miscellaneous**. 

 

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

 

(b) Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered mail toExecutive at his residence address as maintained on Employer’s records, or to Employer at its executive offices (care of the President 

 

10 

and 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 anydelay or failure to perform hereunder, which delay or failure is 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 of Columbia; fires; floods; epidemics; quarantine restrictions; strikes; or freight embargoes. Notwithstanding the foregoing provisions of this *Section 16(c)*, in every case thedelay or failure to perform must be beyond the control and without the 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 andsupersedes all prior or contemporaneous agreements other than that 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 or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto. 

 

(e) Waiver. Failure or delay on the part of either party hereto toenforce any right, 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 awaiver of any subsequent 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 to Contract.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 a party or bywhich 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 in accordancewith Employer’s corporate organization. 

 

(h) DisputeResolution. 

 

(1) Any controversy or claimbetween 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 alleged dispute, breach, default or misrepresentation in connection with anyof the provisions of this Agreement, shall, at the option of Executive or Employer, be submitted to arbitration, using either the American Arbitration Association 

 

11 

(“*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 beapplicable shall apply to any arbitration proceeding under this *Section 16(h)*. The parties agree that related arbitration proceedings may be consolidated. The arbitrator shall prepare written reasons for the award. Judgment upon the awardrendered may be entered in any court having jurisdiction. 

 

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

 

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

 

(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but allof 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 his independent legal counsel in respect to the legal nature and operation of this Agreement, including its impact onhis rights, privileges and obligations, or (ii) freely and voluntarily decided not to have the benefit of such consultation and advice with legal counsel. 

 

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

 
**EXECUTIVE**   **AMERICANWEST BANCORPORATION**
By
 
/s/ R. Blair Reynolds
   
By
 
/s/ Robert M. Daugherty
  
R. Blair Reynolds
     
Robert M. Daugherty

President and Chief Executive Officer
    **AMERICANWEST BANK**      
By
 
/s/ Robert M. Daugherty
        
Robert M. Daugherty

President and Chief Executive Officer

 

12