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                                                                    Exhibit 10.4

                         FIRST SECURITY BANK OF MISSOULA
                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT ("Agreement"), signed as of July 14, 2005,
between FIRST SECURITY BANK OF MISSOULA ("FSB-Missoula") and Katherine Kovarik
("Executive") and ratified by GLACIER BANCORP, INC. ("Glacier"), takes effect on
the effective date of the pending Merger ("Effective Date") referenced below.

                                    RECITALS

A.    Glacier has entered into an Agreement and Plan of Merger ("Merger
      Agreement") with THOMPSON FALLS HOLDING CO. ("TFHC") the parent company of
      FIRST STATE BANK ("FSB-Thompson Falls"), pursuant to which TFHC will merge
      with and into Glacier, and FSB-Thompson Falls will merge with and into
      FSB-Missoula (collectively, the "Merger"). Upon consummation of the
      Merger, the former FSB-Thompson Falls offices will operate under the name
      "First State Bank, a division of First Security Bank of Missoula."

B.    Executive presently serves as Cashier and Corporate Secretary/Treasurer of
      FSB-Thompson Falls and will continue to do so until the Effective Date.

C.    Glacier and FSB-Missoula desire Executive to be employed by FSB-Missoula
      from and after the Effective Date, under the terms and conditions of this
      Agreement.

D.    Executive desires to be employed by FSB-Missoula from and after the
      Effective Date, under the terms and conditions of this Agreement.

E.    This Agreement supercedes any and all other employment or similar
      agreements that may currently be in effect for Executive.

                                    AGREEMENT

      In consideration of the promises set forth in this Agreement, the parties
agree as follows.

1.    EMPLOYMENT. FSB-Missoula agrees to employ Executive, and Executive accepts
      employment by FSB-Missoula on the terms and conditions set forth in this
      Agreement. Executive's title will be "Assistant Vice President and
      Operations Officer, First State Bank, a division of First Security Bank of
      Missoula."

2.    EFFECTIVE DATE AND TERM.

      a.    Term. The term of this Agreement ("Term") is five years, beginning
            on the Effective Date.

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      b.    Abandonment or Termination of the Merger. This Agreement is void if
            the Merger Agreement is terminated for any reason.

3.    DUTIES. FSB-Missoula will employ Executive as its Assistant Vice President
      and Operations Officer of FSB-Thompson Falls. Executive will be
      responsible for the total operations of FSB-Thompson Falls, and will
      faithfully and diligently perform the duties assigned to her, which duties
      will be consistent with her title and position. Executive will report
      directly to FSB-Missoula's President and/or the Senior Vice President of
      Operations. FSB-Missoula may, from time to time, modify Executive's
      performance responsibilities to accommodate management objectives of
      FSB-Missoula. Executive will assume any additional positions, duties, and
      responsibilities as may reasonably be requested of her with or without
      additional compensation, as appropriate and consistent with her title and
      position.

4.    EXTENT OF SERVICES. Executive will devote all of her working time,
      attention and skill to the duties and responsibilities referenced in
      Section 3. To the extent that such activities do not interfere with her
      duties under Section 3, Executive may participate in other businesses as a
      passive investor, but (a) Executive may not actively participate in the
      operation or management of those businesses, and (b) Executive may not,
      without FSB-Missoula's prior written consent, make or maintain any
      investment in a business with which FSB-Missoula and/or Glacier has an
      existing competitive or commercial relationship.

5.    SALARY. Executive will receive an initial annual salary of $60,000, to be
      paid in accordance with FSB-Missoula's regular payroll schedule.
      Subsequent salary increases are subject to FSB-Missoula's annual review of
      Executive's compensation and performance.

6.    INCENTIVE COMPENSATION. For 2005, the amount of bonus to be paid to
      Executive will be determined under FSB-Thompson Fall's customary and usual
      bonus criteria. For 2006 and each year thereafter, Executive will be
      eligible to receive bonuses under FSB-Missoula's bonus plan(s), as in
      effect at that time. In making such bonus determinations, FSB-Missoula's
      board of directors will consider factors such as Executive's performance
      of her duties and the safety, soundness and profitability of FSB-Missoula.
      Executive's bonus will reflect Executive's contribution to the performance
      of FSB-Missoula during the year.

7.    VACATION AND BENEFITS.

      a.    Vacation and Holidays. Executive will receive three weeks of paid
            vacation each year. Executive's ability to carry over or accumulate
            vacation will be governed by FSB-Missoula's and/or Glacier's
            applicable policies.

      b.    Benefits. Executive will be entitled to participate in any group
            life insurance, disability, health and accident insurance plans,
            profit sharing plan and in other employee fringe benefit programs
            FSB-Missoula or Glacier may have in effect

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            from time to time for its similarly situated employees, in
            accordance with and subject to any policies adopted by
            FSB-Missoula's or Glacier's board of directors with respect to the
            plans or programs, including without limitation, any incentive or
            employee stock incentive plan, deferred compensation plan and 401(k)
            plan. Neither FSB-Missoula nor Glacier through this Agreement
            obligates itself to make any particular benefits available to its
            employees.

      c.    Business Expenses. FSB-Missoula will reimburse Executive for
            ordinary and necessary expenses which are consistent with
            then-current practice at FSB-Missoula (including, without
            limitation, travel, entertainment, and similar expenses) and which
            are incurred in performing and promoting FSB-Missoula's business.
            Executive will present from time to time itemized accounts of these
            expenses, subject to any limits of FSB-Missoula policy or the rules
            and regulations of the Internal Revenue Service.

      d.    Automobile. For one year following the Effective Date, Executive
            will continue to have exclusive use of the automobile she is
            currently using at FSB-Thompson Falls, and FSB-Missoula will pay for
            all standard maintenance. No later than the first anniversary of the
            Effective Date, Executive may purchase such automobile at the
            then-current book value. After the first anniversary of the
            Effective Date, Executive will be responsible for owning and
            maintaining her own vehicle and will be eligible for mileage
            reimbursement from FSB-Missoula.

8.    TERMINATION OF EMPLOYMENT.

      a.    Termination By FSB-Missoula for Cause. If FSB-Missoula terminates
            Executive's employment for Cause (defined below) before this
            Agreement terminates, FSB-Missoula will pay Executive the salary
            earned and expenses reimbursable under this Agreement incurred
            through the date of her termination. Executive will have no right to
            receive compensation or other benefits for any period after
            termination under this Section 8(a).

      b.    Other Termination By FSB-Missoula. If FSB-Missoula terminates
            Executive's employment without Cause before this Agreement
            terminates, or Executive terminates her employment for Good Reason
            (defined below), FSB-Missoula will pay Executive a lump sum payment
            equal to one times Executive's annual base salary at the time of
            termination.

      c.    Death or Disability. This Agreement terminates (1) if Executive dies
            or (2) if Executive is unable to perform her duties and obligations
            under this Agreement for a period of 90 consecutive days as a result
            of a physical or mental disability arising at any time during the
            term of this Agreement, unless with reasonable accommodation
            Executive could continue to perform her duties under this Agreement
            and making these accommodations would not pose an undue hardship on
            FSB-Missoula. If termination occurs under this Section 8(c),
            Executive or her

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            estate will be entitled to receive all compensation and benefits
            earned and expenses reimbursable through the date Executive's
            employment terminated.

      d.    Return of FSB-Missoula Property. If and when Executive ceases, for
            any reason, to be employed by FSB-Missoula, Executive must return to
            FSB-Missoula all keys, pass cards, identification cards and any
            other property of FSB-Missoula or Glacier (including the bank-owned
            automobile referenced in Section 7(d), if still in use by
            Executive). At the same time, Executive also must return to
            FSB-Missoula 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 FSB-Missoula or Glacier. The obligations in this paragraph
            include the return of documents and other materials that may be in
            her desk at work, in her car, in place of residence, or in any other
            location under her control.

      e.    Cause. "Cause" means any one or more of the following:

            (1)   Willful misfeasance or gross negligence in the performance of
                  Executive's duties;

            (2)   Conviction of a crime in connection with her duties; or

            (3)   Conduct demonstrably and significantly harmful to
                  FSB-Missoula, as reasonably determined on the advice of legal
                  counsel by FSB-Missoula's board of directors.

      f.    Good Reason. "Good Reason" means only any one or more of the
            following:

            (1)   Reduction of Executive's salary or reduction or elimination of
                  any compensation or benefit plan benefiting Executive, unless
                  the reduction or elimination is generally applicable to
                  substantially all FSB-Missoula employees (or employees of a
                  successor or controlling entity of FSB-Missoula) formerly
                  benefited;

            (2)   The assignment to Executive without her consent of any
                  authority or duties materially inconsistent with Executive's
                  position as of the date of this Agreement;

            (3)   A relocation or transfer of Executive's principal place of
                  employment that would require Executive to commute on a
                  regular basis more than sixty (60) miles each way from
                  FSB-Thompson Falls's present main office location.

9.    CONFIDENTIALITY. Executive will not, after the date this Agreement was
      signed, including during and after its Term, use for her own purposes or
      disclose to any other person or entity any confidential business
      information concerning FSB-Missoula or Glacier or their business
      operations, unless (a) FSB-Missoula or Glacier consents to the use or
      disclosure

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      of their respective confidential information; (b) the use or disclosure is
      consistent with Executive's duties under this Agreement; (c) disclosure is
      required by law or court order; or (d) the information is made or
      otherwise becomes public. For purposes of this Agreement, confidential
      business information includes, without limitation, trade secrets, various
      confidential information concerning all aspects of current and future
      operations, nonpublic information on investment management practices,
      marketing plans, pricing structure and technology of either FSB-Missoula
      or Glacier. Executive will also treat the terms of this Agreement as
      confidential business information.

10.   RESTRICTIVE COVENANTS.

      a.    Competitive Activities. During the period of her employment and for
            one (1) year after Executive's employment with FSB-Missoula and/or
            Glacier has ended, Executive will not, directly or indirectly, as a
            shareholder, director, officer, employee, partner, agent,
            consultant, lessor, creditor or otherwise, provide management,
            supervisory or other similar services to any person or entity
            engaged in any business within Sanders County, Montana, which is
            competitive with the business of FSB-Missoula or Glacier as
            conducted during the term of this Agreement or as conducted as of
            the date of termination of employment, including any preliminary
            steps associated with the formation of a new bank.

      b.    Non-Interference. For so long as Executive is employed by
            FSB-Missoula or Glacier and for one year following termination of
            Executive's employment, Executive will not, directly or indirectly,
            persuade or entice, or attempt to persuade or entice, (i) any
            employee of FSB-Missoula or Glacier to terminate his/her employment
            with FSB-Missoula or Glacier, or (ii) any person or entity to
            terminate, cancel, rescind or revoke its business or contractual
            relationships with FSB-Missoula or Glacier.

11.   ENFORCEMENT.

      a.    FSB-Missoula and Executive stipulate that, in light of all of the
            facts and circumstances of the relationship between Executive and
            FSB-Missoula, the agreements referred to in Sections 9 and 10
            (including without limitation their scope, duration and geographic
            extent) are fair and reasonably necessary for the protection of
            FSB-Missoula's and Glacier's confidential information, goodwill and
            other protectable interests. If a court of competent jurisdiction
            should decline to enforce any of those covenants and agreements,
            Executive and FSB-Missoula request the court to reform these
            provisions to restrict Executive's use of confidential information
            and Executive's ability to compete with FSB-Missoula and Glacier to
            the maximum extent, in time, scope of activities, and geography, the
            court finds enforceable.

      b.    Executive acknowledges FSB-Missoula and Glacier will suffer
            immediate and irreparable harm that will not be compensable by
            damages alone if Executive repudiates or breaches any of the
            provisions of Sections 9 or 10 or threatens or

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            attempts to do so. For this reason, under these circumstances,
            FSB-Missoula, 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, and
            FSB-Missoula will not be required to post a bond as a condition for
            the granting of this relief.

12.   COVENANTS. Executive specifically acknowledges the receipt of adequate
      consideration for the covenants contained in Sections 9 and 10 and that
      FSB-Missoula is entitled to require her to comply with these Sections.
      These Sections 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
      enable Executive to obtain employment in areas which do not violate this
      Agreement and that FSB-Missoula's enforcement of a remedy by way of
      injunction will not prevent Executive from earning a livelihood.

13.   ARBITRATION.

      a.    Arbitration. At either party's request, the parties must submit any
            dispute, controversy or claim arising out of or in connection with,
            or relating to, this Agreement or any breach or alleged breach of
            this Agreement, to arbitration under the American Arbitration
            Association's rules then in effect (or under any other form of
            arbitration mutually acceptable to the parties). A single arbitrator
            agreed on by the parties will conduct the arbitration. If the
            parties cannot agree on a single arbitrator, each party must select
            one arbitrator and those two arbitrators will select a third
            arbitrator. This third arbitrator will hear the dispute. The
            arbitrator's decision is final (except as otherwise specifically
            provided by law) and binds the parties, and either party may request
            any court having jurisdiction to enter a judgment and to enforce the
            arbitrator's decision. The arbitrator will provide the parties with
            a written decision naming the substantially prevailing party in the
            action. This prevailing party is entitled to reimbursement from the
            other party for its costs and expenses, including reasonable
            attorneys' fees.

      b.    Venue and Governing Law. All proceedings will be held at a place
            designated by the arbitrator in Missoula, Montana. The arbitrator,
            in rendering a decision as to any state law claims, will apply
            Montana law.

      c.    Exception to Arbitration. Notwithstanding the above, if Executive
            violates Section 9 or 10, FSB-Missoula will have the right to
            initiate the court proceedings described in Section 11(b), in lieu
            of an arbitration proceeding under that Section 13.

14.   MISCELLANEOUS PROVISIONS.

      a.    Entire Agreement. This Agreement constitutes the entire
            understanding and agreement between the parties concerning its
            subject matter and supersedes all

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            prior agreements, correspondence, representations, or understandings
            between the parties relating to its subject matter.

      b.    Binding Effect. This Agreement will bind and inure to the benefit of
            FSB-Missoula's, Glacier's and Executive's heirs, legal
            representatives, successors and assigns.

      c.    Litigation Expenses. If either party successfully seeks to enforce
            any provision of this Agreement or to collect any amount claimed to
            be due under it, that party will be entitled to reimbursement from
            the other party for any and all of its out-of-pocket expenses and
            costs including, without limitation, reasonable attorneys' fees and
            costs incurred in connection with the enforcement or collection.

      d.    Waiver. Any waiver by a party of its rights under this Agreement
            must be written and signed by the party waiving its rights. A
            party's waiver of the other party's breach of any provision of this
            Agreement will not operate as a waiver of any other breach by the
            breaching party.

      e.    Assignment. The services to be rendered by Executive under this
            Agreement are unique and personal. Accordingly, Executive may not
            assign any of her rights or duties under this Agreement.

      f.    Amendment. This Agreement may be modified only through a written
            instrument signed by both parties.

      g.    Severability. The provisions of this Agreement are severable. The
            invalidity of any provision will not affect the validity of other
            provisions of this Agreement.

      h.    Governing Law and Venue. This Agreement will be governed by and
            construed in accordance with Montana law, except to the extent that
            certain regulatory matters may be governed by federal law. The
            parties must bring any legal proceeding arising out of this
            Agreement in Missoula, Montana.

      i.    Counterparts. This Agreement may be executed in one or more
            counterparts, each of which will be deemed an original, but all of
            which taken together will constitute one and the same document.

      j.    Counsel Review. Executive acknowledges that she has had the
            opportunity to consult with independent counsel with respect to the
            negotiation, preparation, and execution of this Agreement.

                      [SIGNATURES APPEAR ON FOLLOWING PAGE]

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      This Employment Agreement is signed as of July 14, 2005:

                                  FIRST SECURITY BANK OF MISSOULA:

                                  By       /s/ William L. Bouchee
                                     -------------------------------------------
                                     William L. Bouchee, Chief Executive Officer

                                  EXECUTIVE:

                                           /s/ Katherine Kovarik
                                     -------------------------------------------
                                     Katherine Kovarik

      Ratified as of July 14, 2005:

                                  GLACIER BANCORP, INC.

                                  By       /s/ Michael J. Blodnick
                                    --------------------------------------------
                                    Michael J. Blodnick
                                    President & Chief Executive Officer

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