**Exhibit10.25**

 

**FIRST AMENDMENT TO**

 

**SEVERANCE/CHANGEOF CONTROL AGREEMENT**

 

***Patrick M. Fahey***

 

This FirstAmendment to Severance/Change of Control Agreement (this “Amendment”) datedthis 22nd day of July, 2002, is made by and between PACIFIC NORTHWEST BANCORPand PACIFIC NORTHWEST BANK (hereinafter referred to jointly as the “Company”)and PATRICK M. FAHEY******(the“Executive”), who agree as follows:

 

Recitals

 

This Amendment is made with reference to the following facts andobjectives:

 

A.            The parties entered into aSeverance/Change of Control Agreement dated November 21, 2000 (the “Agreement”)in which the Company agreed to provide benefits to the Executive in the eventof severance or change of control.

 

B.            The parties desire to amend theAgreement to change its name to “Severance/Change of Control/Health InsuranceAgreement” and to provide for health insurance benefits upon termination ofemployment.

 

Amendment

 

1.             Paragraph 5, “Termination of theAgreement,” shall be deleted in its entirety and there shall be inserted in itsplace the following:

 

5.             Termination ofthe Agreement.  Except for Paragraph6, “Health Care Insurance,” which shall survive the termination of thisAgreement, this Agreement shall terminate if the Executive shall voluntarilyresign, retire, become permanently and totally disabled, or die; *provided,however*, if the Executive becomes permanently and totally disabledor dies after the Board of Directors has authorized proceeding withnegotiations which result in a Change of Control or within twelve (12) monthsafter a Change of Control, if the Executive is then employed by the Company,the Executive or his personal or legal representatives, executors,administrators, successors, heirs, distributees, devisees and legatees, as thecase may be, shall be entitled to receive the Change of Control payment underParagraph 1(c) hereof.

 

2.             The following new paragraph shallbe added as Paragraph 6 of the Agreement:

 

6.             Health CareInsurance. Upon termination of the Executive’s employment by Company (otherthan discharge for cause as defined above) whether such termination is underParagraph 1, “Severance Benefits,” or voluntary resignation, retirement,disability or death, the Executive and/or his spouse shall receive thefollowing health benefit coverage following such termination of employment.

 

(a)         TheCompany will pay all premiums for benefits to the Executive and his coveredspouse and dependent children under and subject to the term of the ConsolidatedOmnibus Budget Reconciliation Act (“COBRA”).

 

(b)           Upon expiration ofany applicable COBRA coverage period, if the Executive and/or his spouse arenot then entitled to enroll for Medicare, the Company shall provide, at itsexpense, an individual health insurance policy for the Executive and/or hisspouse which will provide them with health care benefits as nearly equivalentas possible to those provided the Executive and his spouse by the Company priorto the Executive’s termination of employment.

 

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(c)           Upon reaching an agewhen the Executive and his spouse are entitled to receive Medicare, theExecutive and his spouse shall enroll to receive Medicare and the Company shallpay the premiums due on a Medicare supplement insurance policy so that thecoverage provided through Medicare and the Medicare supplement insurance policyshall be as nearly equivalent as possible to the coverage provided theExecutive and his spouse prior to the Executive’s termination of employment.

 

The purpose of this paragraph is to provide, to the extent possible,that upon termination of the Executive’s employment with the Company (otherthan discharge for cause as defined above), the Executive and his spouse shallhave, following termination of the Executive’s employment, seamless health carecoverage provided at the Company’s expense that is comparable to the coverageprovided the Executive and his spouse prior to the Executive’s termination ofemployment.  The foregoingnotwithstanding, after termination of the Executive’s employment with theCompany, if the Executive should be employed by another company which providesgroup health benefits for the Executive, the coverage provided herein shall besecondary and supplemental to any such coverage.

 

3.             Paragraphs 6 through 11 of theAgreement shall be re-numbered Paragraphs 7 through 12.

 

IN WITNESSWHEREOF, the Executive and the Company have executed this Amendment, as of theday and year first above written.

 
| PACIFIC  NORTHWEST BANCORP |                          |   |
|----------------------------|-------------------------------|--------|
|                       |                          |   |
| By:                        |  /s/ Michael T. Crawford |   |  /s/ Patrick M. Fahey |
|                       | Michael T.  Crawford          |   | PATRICK M.  FAHEY |

 

 

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