ex101-113007.htm


    EMPLOYMENT
      AGREEMENT

    CAROL
      KOBUKE NELSON

    


    THIS
      EMPLOYMENT AGREEMENT (“Agreement”) is made this 27th day of November, 2007, by
      and between CASCADE FINANCIAL CORPORATION and CASCADE BANK (hereinafter jointly
      referred to as “Cascade”) and CAROL KOBUKE NELSON (“Nelson”) and will become
      effective upon execution.  Cascade and Nelson are sometimes
      collectively referred to herein as “the Parties.”

     

    RECITALS

     

    WHEREAS,
      Nelson currently serves as the President and Chief Executive Officer of Cascade
      under the terms of an Employment Agreement last amended on July 12, 2005;
      and

     

    WHEREAS,
      the Parties wish to replace that Employment Agreement with this
      Agreement;

     

    NOW
      THEREFORE, in consideration of the mutual covenants and agreements contained
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which is hereby acknowledged, the Parties agree as follows:

     

    1.  Term.  Nelson’s
      term of employment (“Term”) under this Agreement shall commence on the date of
      execution of this Agreement and continue until terminated as provided in the
      Termination provision of this Agreement.

     

    2.  Duties.  Nelson
      is engaged as President and Chief Executive Officer of Cascade Financial
      Corporation and Cascade Bank, and is responsible for the overall operation
      and
      conduct of Cascade’s business, in accordance with the laws of the State of
      Washington and the federal government and pursuant to the general guidelines
      and
      directions as established from time to time by the Board of Directors of Cascade
      (the “Board”).  Subject to any required approval by the shareholders
      of Cascade, the Board of Directors of Cascade Bank and Cascade Financial
      Corporation shall appoint or nominate and recommend Nelson for election as
      a
      member of their respective Boards of Directors and, if so appointed or elected,
      Nelson shall serve in that capacity as long as she is employed as the President
      and Chief Executive Officer of Cascade Financial Corporation and Cascade
      Bank.

     

    3.  Exclusive
      Services and Best Efforts.  Nelson shall render services solely on
      behalf of Cascade, and in no event shall she render services directly to a
      customer of Cascade for the individual gain of Nelson, without Cascade’s prior
      written consent.  Nelson shall devote her full time, attention and
      energies, during regular business hours, to the business of
      Cascade.  Nelson further agrees that she shall perform any and all
      duties to the best of her abilities.  In addition to any other
      responsibilities which Cascade may from time to time require her to perform,
      Nelson shall:

     

            (a)  Use
      her
      diligent efforts to promote the business and further the goals of
      Cascade;

    
      
         

      

      
        -
          1
          -

        
          

        

      

      
         
        (b)  Conduct
        her business and regulate her habits so as to maintain and increase the goodwill
        and reputation of both Cascade and its business and to abide by all codes
        of
        ethics and other professional duties which are binding upon or applicable
        to
        general good business practices;

    

     

            (c)  Not
      render to others, during her employment with Cascade, services of any kind
      or
      promote, participate or engage in any other business activity which would
      interfere with the performance of her duties under this Agreement, including,
      without limitation, providing consulting services or otherwise engaging in
      business with any person or entity which directly or indirectly competes with
      Cascade, unless she first obtains Cascade’s prior written consent to engage in
      such outside activities.

     

    Although
      Nelson is required to devote her entire time, attention and energies to the
      business of Cascade and cannot, during the term of this Agreement, be engaged
      in
      any other business activity which interferes with her duties hereunder, whether
      or not such business activity is pursued for gain, profit or other pecuniary
      advantage, this shall not be construed as preventing Nelson from investing
      her
      assets in such manner as will not require any services on her part in the
      operation of the affairs of the companies in which such investments are made,
      or
      in making other investments which do not interfere with her duties under this
      Agreement.

     

    4.  Compensation.  Cascade
      shall pay Nelson, as compensation for her full-time services during the Term
      of
      Employment, the following:

     

            (a)  Base
      Compensation.  Nelson will receive a monthly salary, the amount of
      which will be set annually by the Board (“Base Compensation”), payable in
      accordance with Cascade’s regular payroll schedule. Base Compensation will be
      reviewed annually by the Compensation Committee. Nelson will receive no
      additional compensation for serving as a member of the Board of Directors of
      Cascade.

     

            (b)  Bonus.  Nelson
      shall receive an annual bonus set by the Compensation Committee
      (“Bonus”).  In determining the amount of the Bonus, the Compensation
      Committee shall consider earnings, asset quality, factors affecting shareholder
      value and such other factors as the Compensation Committee shall deem
      appropriate.

     

            (c)  Benefit
      Plans.  During the Term, Nelson shall be entitled to participate
      in any and all employee benefit plans, including, but not be limited to, 401(k)
      Plan, Stock Option Plan, Deferred Compensation Plan and employee welfare and
      health benefit plans, established by Cascade from time to time for the benefit
      of all executives of Cascade.  Nelson shall be required to comply with
      the conditions attendant to coverage by such plans and shall comply with and
      be
      entitled to benefits only in accordance with the terms and conditions of such
      plans as they may be amended from time to time.

     

    5.  Business
      Expenses.  Cascade will pay or reimburse Nelson for reasonable and
      necessary business expenses incurred by Nelson, which are directly related
      to
      the performance of her duties of employment, including travel, professional
      memberships and professional development, subject to documentation by Nelson
      and
      approval of the Chairman of the Audit Committee.  Cascade will pay
      Nelson’s current monthly club membership dues at the Everett Golf and Country
      Club.

    
      
         

      

      
        -
          2
          -

        
          

        

      

      
         

      

    

    6.  Automobile.  Nelson
      shall provide her own automobile, and Cascade shall provide her an automobile
      allowance of $700 per month for use of such automobile incident to her duties
      as
      President and Chief Executive Officer of Cascade.  The automobile
      allowance may be increased from time to time as deemed appropriate by the
      Board.

     

    7.  Working
      Facilities.  Nelson shall be furnished with such working
      facilities as are reasonably required by Nelson to perform her duties as
      President and Chief Executive Officer of Cascade, which working facilities
      shall
      include, but not be limited to, an office and secretarial and staff
      support.

     

    8.  Termination.  This
      Agreement may be terminated by Cascade upon written notice to Nelson, and by
      Nelson upon 90 days written notice to Cascade.  If Nelson resigns from
      Cascade, except for Good Reason as defined in paragraph 8(a)
      or Retirement as defined in paragraph 8(d)
      hereafter, she will receive only her
      compensation, benefits earned and expenses reimbursable through the date this
      Agreement is terminated.  If Nelson’s employment is terminated by
      Cascade or by Nelson for Good Reason, she shall receive the compensation
      provided hereafter.

     

            (a)  Termination
      Without Cause/For Good Reason.  If Nelson’s employment is
      terminated by Cascade, except for cause as provided in paragraph 8(b),
      or by Nelson for Good Reason, Nelson
      shall be entitled to receive a severance benefit equal to two (2) times her
      Base
      Compensation plus Bonus before salary deferrals over the twelve (12) months
      preceding the month of termination, less statutory payroll deductions. Such
      payment shall, at the option of Cascade, be made in a lump sum or in accordance
      with Cascade’s regular payroll schedule and shall be paid or payments commenced
      as soon as practicable, but not less than six (6) months, after the date that
      Nelson’s entitlement to such payment arose.  For purposes of this
      Agreement, “Good Reason” means any one or more of the following: Reduction of
      Nelson’s Base Compensation during the term of this Agreement without Nelson’s
      consent (other than as part of an overall program applied uniformly to all
      members of senior management of the Bank); the assignment to Nelson without
      her
      consent of any duties materially inconsistent with Nelson’s position as of the
      date of this Agreement; or a relocation or transfer of Nelson’s principal place
      of employment that would require Nelson to commute on a regular basis more
      than
      30 miles each way from Cascade’s main office as of the date of this
      Agreement.

     

            (b)  Termination
      for Cause. The compensation payable on termination as provided in paragraph
8(a)
      shall not be payable in the event
      Nelson’s employment is terminated for cause.  Termination shall be
      determined to be for cause only in the event: (i) Nelson is convicted of a
      felony or crime involving moral turpitude, or charged with a felony or crime
      involving moral turpitude if the Board, in its sole discretion, determines
      that
      the adverse publicity/notoriety stemming from such charge will make it difficult
      for Nelson to perform her duties and/or Cascade to carry on its normal business
      activities; or (ii) Nelson fails or refuses, after written request, to
      comply with any material policies adopted by the Board; (iii) Nelson is
      terminated for fraud, embezzlement, or willful misconduct (including, but not
      limited to, violation of Cascade’s anti-discrimination and harassment policies);
      or (iv) Nelson is removed from office by the Board in order to comply with
      a requirement, request or recommendation from the Supervisor of Banking for
      the
      State of Washington or the Federal Deposit Insurance Corporation
      (“FDIC”).

    
      
         

      

      
        -
          3
          -

        
          

        

      

      
         

      

    

            (c)  Death
      or Disability.  This Agreement will terminate immediately upon
      Nelson’s death.  If Nelson is unable to perform her duties and
      obligations under this Agreement for an aggregate period of ninety (90) days
      as
      a result of a physical or mental disability and cannot continue to perform
      her
      duties with reasonable accommodation, the Board may terminate this
      Agreement.  If termination occurs due to Nelson’s death, her estate
      will be entitled to receive only the compensation, benefits earned, and expenses
      reimbursable through the date this Agreement is terminated.  If
      termination occurs due to Nelson’s disability, she shall continue to receive her
      Salary until payments under Cascade’s long-term disability plan commence, or in
      the event Cascade has no long-term disability plan on the date of disability,
      Nelson’s salary shall continue for a period of six (6) months.  In the
      event of Nelson’s death or disability while employed by Cascade, all of her then
      outstanding stock-based compensation  which has not vested will be
      accelerated and fully vested.  For purposes of this paragraph,
“disability” shall be determined using the definition of that term in the
      Cascade long-term disability plan in effect at the time of the disability,
      or if
      no such plan is then in effect, the definition of “disability” contained in such
      other plan providing a disability benefit.  If there is no such plan
      then in effect, the definition of “disability” found in Internal Revenue Code
      Section 22(e), as may be amended from time to time, shall apply.

     

            (d)  Retirement.  If
      Nelson retires from Cascade after attaining age fifty-seven (57), she will
      receive as a severance benefit: (1) payment in an amount equal to two (2) times
      her Base Compensation plus Bonus before salary deferrals over the twelve (12)
      months prior to her retirement, with such amounts payable in twenty-four (24)
      consecutive, equal monthly installments, with the first such payment due on
      the
      first day of the seventh month following retirement; (2) vesting of all
      stock-based compensation; and (3) the following health benefit coverage for
      her
      and her spouse:

     

                (i)  Cascade
      will pay all premiums for benefits to Nelson and her spouse under and subject
      to
      the term of the Consolidated Omnibus Budget Reconciliation Act
      (“COBRA”);

     

                (ii)  Upon
      expiration of any applicable COBRA coverage period, if Nelson and/or her spouse
      are not then entitled to enroll for Medicare, Cascade shall provide at its
      expense an individual health insurance policy for Nelson and her spouse which
      will provide them with health care benefits as nearly equivalent as possible
      to
      those provided Nelson by Cascade prior to Nelson’s retirement.

     

                (iii)  Upon
      reaching an age when Nelson and her spouse are entitled to receive Medicare,
      but
      in no event after Nelson reaches age 65, this benefit shall
      terminate.

     

    If
      Nelson
      receives benefits under this paragraph, she foregoes any entitlement to receive
      any other benefits under any other provisions of this Agreement, including
      any
      right to receive a “Change of Control” payment.

    
      
         

      

      
        -
          4
          -

        
          

        

      

      
         

      

    

    9.  Change
      of Control. If there is a Change of Control of Cascade as hereinafter
      defined, all Nelson’s equity grants/benefits shall become fully vested upon the
      effective date of the Change of Control.  If Nelson leaves the
      employment of Cascade, whether voluntarily or involuntarily, within twelve
      (12)
      months after such Change of Control, Nelson shall be entitled to receive an
      amount equal to two (2) times her Base Compensation plus Bonus before salary
      deferrals over the twelve (12) month period prior to the Change of Control.
      Such
      payment shall not be made less than six (6) months after Nelson’s entitlement to
      the payment arose.  “Change of Control” as used herein will be deemed
      to have occurred when there is a Change in the Ownership of Cascade or a Change
      in the Ownership of a Substantial Portion of the Assets of Cascade, as defined
      below:

     

            (a)  Change
      in the Ownership of Cascade. For the purposes of this Agreement, a Change in
      the Ownership of Cascade shall be deemed to occur when any one person, or more
      than one person acting as a group, acquires ownership of Cascade stock that,
      together with stock held by such person or group, constitutes more than fifty
      percent (50%) of the total fair market value or total voting power of
      Cascade.  A Change in Ownership of Cascade will not occur when any one
      person, or more than one person acting as a group, owning more than fifty
      percent (50%) of the total fair market value or total voting power of the stock
      of Cascade acquires additional stock. For the purposes of this section, an
      increase in the percentage of stock owned by any one person, or more than one
      person if acting as a group, as a result of a transaction in which Cascade
      acquires its stock in exchange for property will be treated as an acquisition
      of
      stock.

     

            (b)  Change
      in the Ownership of a Substantial Portion of the Assets of Cascade. For the
      purposes of this Agreement, a Change in the Ownership of a Substantial Portion
      of the Assets of Cascade shall be deemed to occur on the date that any one
      person, or more than one person acting as a group, acquires (or has acquired
      during the twelve (12) month period ending on the date of the most recent
      acquisition by such person or persons) assets from the corporation that have
      a
      total gross fair market value equal to or more than forty percent (40%) of
      the
      total gross fair market value of all of the assets of Cascade immediately prior
      to such acquisition or acquisitions.  For the purpose of this section,
      gross fair market value means the value of the assets of Cascade or the value
      of
      the assets being disposed of, determined without regard to any liabilities
      associated with such assets.  A Change in the Ownership of a
      Substantial Portion of the Assets of Cascade shall not be deemed to occur where
      the assets transferred by Cascade are transferred to (1) a shareholder of the
      corporation (immediately before the asset transfer) in exchange for or with
      respect to its stock; (2) an entity fifty percent (50%) or more of the total
      value or voting power of which is owned, directly or indirectly, by Cascade;
      (3)
      a person, or more than one person acting as a group, that owns directly or
      indirectly, fifty percent (50%) or more of the total value or voting power
      of
      all the outstanding stock of Cascade; or (4) an entity, at least fifty percent
      (50%) of the total value or voting power of which is owned, directly or
      indirectly, by a person or more than one persons acting as a group, that owns,
      directly or indirectly, fifty percent (50%) or more of the total value or voting
      power of all the outstanding stock of Cascade.

     

            (c)  Nelson
      shall, under no circumstances, receive a payment under 8(d) and a Change of Control
      payment.

    
      
         

      

      
        -
          5
          -

        
          

        

      

      
         

      

    

    10.  Federal
      Regulatory Provisions.

     

            (a)  If
      Nelson
      is suspended and/or temporarily prohibited from participating in the conduct
      of
      Cascade's affairs by a notice served under section 8 (e)(3) or (g)(1) of Federal
      Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)) Cascade’s obligations
      under this Agreement shall be suspended as of the date of service unless stayed
      by appropriate proceedings. If the charges in the notice are dismissed, Cascade
      may in its discretion (i) pay Nelson all or part of the compensation withheld
      while its obligations under this Agreement were suspended, and (ii) reinstate
      (in whole or in part) any of its obligations which were suspended.

     

            (b)  If
      Nelson
      is removed and/or permanently prohibited from participating in the conduct
      of
      Cascade’s affairs by an order issued under section 8 (e)(4) or (g)(1) of the
      U.S.C. 1818 (e)(4) or (g)(1)), all obligations of Cascade under this Agreement
      shall terminate as of the effective date of the order, but vested rights of
      the
      Parties shall not be affected.

     

            (c)  If
      Cascade is in default (as defined in section 3(x)(1) of the Federal Deposit
      Insurance Act), all obligations under this Agreement shall terminate as of
      the
      date of default, but this paragraph (c) shall not affect any vested rights
      of
      the Parties.

     

            (d)  All
      obligations under this Agreement shall be terminated, except to the extent
      determined that continuation of this Agreement is necessary to the continued
      operation of Cascade:

     

                (i)           By
      the Director of the Federal Deposit Insurance Corporation ("Director") or his
      or
      her designee, at the time the Federal Deposit Insurance Corporation enters
      into
      an agreement to provide assistance to or on behalf of Cascade under the
      authority contained in 13(c) of the Federal Deposit Insurance Act;
      or

     

                (ii)           By
      the Director or his or her designee, at the time the Director or his or her
      designee approves a supervisory merger to resolve problems related to operation
      of Cascade or when Cascade is determined by the Director to be in an unsafe
      or
      unsound condition.

     

    11.  Confidentiality.  Nelson
      acknowledges that she will have access to certain proprietary and confidential
      information of Cascade and its clients.  Nelson will not, after
      signing this Agreement, including during and after its Term, use for her own
      purposes or disclose to any other person or entity any confidential information
      concerning Cascade or its business operations or customers, unless: (i) Cascade
      consents to the use or disclosure of said confidential information, (ii) the
      use
      or disclosure is consistent with Nelson’s duties under this Agreement, or (iii)
      disclosure is required by law or court order.

     

    12.  Competition
      Restriction.  During the Term and for twenty-four (24) months
      thereafter, if Nelson receives compensation under paragraph 8(d), she shall not become or serve as
      an
      officer, director, founder or employee of any financial institution with its
      main office in King, Snohomish or Pierce Counties, or any other financial
      institution which, in the judgment of the Board, is in substantial competition
      with Cascade, unless Nelson has first obtained the Board’s written
      consent.  In the event Nelson breaches this condition, which breach is
      not corrected within fifteen (15) days of notice to Nelson of such breach,
      Nelson shall forfeit all right to receive all benefits or other payments
      remaining unpaid on the date of any such breach, and shall refund any payments
      received pursuant to paragraph 8(d)
      hereof, and all unexercised stock options which will be forfeited.

    
      
         

      

      
        -
          6
          -

        
          

        

      

      
         

      

    

    13.  No
      Solicitation.  During the Term and for twenty-four (24) months
      thereafter, if Nelson receives compensation under paragraphs 8(d) or 9, she will not, directly or
      indirectly, solicit or attempt to solicit: (i) any employees of Cascade to
      leave
      their employment, or (ii) any customers of Cascade to remove their business
      from
      Cascade to participate in any manner in a competing business (“Competing
      Business”).  “Competing Business” means any financial institution or
      trust company that competes with or will compete with Cascade in King, Snohomish
      or Pierce County, or any start-up or other financial institution or trust
      company in King, Snohomish or Pierce County.

     

    14.  Return
      of Bank Property.  If and when Nelson ceases, for any reason, to
      be employed by Cascade, Nelson must return to Cascade all keys, pass cards,
      identification cards and any other property of Cascade.  At the same
      time, Nelson also must return to Cascade 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 Cascade.  The
      obligations in this paragraph include the return of documents and other
      materials which may be in Nelson’s desk at work, in Nelson’s car or place of
      residence, or in any other location under Nelson’s control.

     

    15.  Enforcement
      of Confidentiality and Non-Competition Covenants.  Cascade and
      Nelson stipulate that, in light of all of the facts and circumstances of the
      relationship between them, the covenants referred to in paragraphs 10, 12,
13,
      and 14 above, including, without limitation,
      their scope, duration and geographic extent, are fair and reasonably necessary
      for the protection of Cascade’s confidential information, goodwill and other
      protectable interests.  If a court of competent jurisdiction should
      decline to enforce any of those covenants and agreements, Nelson and Cascade
      request the court to reform these provisions to restrict Nelson’s use of
      confidential information and Nelson’s ability to compete with Cascade, to the
      maximum extent, in time, scope of activities, and geography, as the court finds
      enforceable.

     

    Nelson
      acknowledges that Cascade will suffer immediate and irreparable harm that will
      not be compensable by damages alone, if Nelson repudiates or breaches any of
      the
      provisions in paragraphs 10, 12,
13,
      and 14 above or threatens or attempts to
      do
      so.  For this reason, under these circumstances, Cascade, 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 Cascade
      will not be required to post a bond as a condition for the granting of this
      relief.

     

    16.  Adequate
      Consideration.  Nelson specifically acknowledges the receipt of
      adequate consideration for the covenants contained in paragraphs 10, 12,
13,
      and 14 above and that Cascade is entitled
      to
      require her to comply with these paragraphs.  These paragraphs will
      survive termination of this Agreement.  Nelson represents that if her
      employment is terminated, whether voluntarily or involuntarily, she has the
      experience and capabilities sufficient to enable her to obtain employment in
      areas which do not violate this Agreement and that Cascade’s enforcement of a
      remedy by way of injunction will not prevent Nelson from earning a
      livelihood.

    
      
         

      

      
        -
          7
          -

        
          

        

      

      
         

      

    

    17.  No
      Employee Contract Rights.  Nothing contained in this Agreement
      shall be construed to abrogate, limit or affect the powers, rights and
      privileges of the Board to remove Nelson as President or Chief Executive Officer
      of Cascade, with or without the cause.

     

    18.  Regulatory
      Agencies.  The Parties fully acknowledge and recognize that
      Cascade and Nelson (insofar as she conducts Cascade’s business) are regulated
      and governed by the Division of Banks for the State of Washington and the
      FDIC.  In the event the Division of Banks, the FDIC or any other
      governmental agency with authority to regulate Cascade objects to, and requires
      modification of, any of the terms of this Agreement, the Parties agree that
      they
      shall abide by and modify the terms of this Agreement to comply with any and
      all
      requirements of that governmental agency.

     

    19.  Dispute
      Resolution.  The Parties agree to attempt to resolve all disputes
      arising out of this Agreement by mediation.  Any party desiring
      mediation may begin the process by giving the other party a written Request
      to
      Mediate, describing the issues involved and inviting the other party to join
      with the calling party to name a mutually agreeable mediator and a timeframe
      for
      the mediation meeting.  The Parties and mediator may adopt any
      procedural format that seems appropriate for the particular
      dispute.  The contents of all discussions during the mediation shall
      be confidential and non-discoverable in subsequent arbitration or litigation,
      if
      any.  If the Parties can, through the mediation process, resolve the
      dispute(s), the agreement reached by the Parties shall be reduced to writing,
      signed by the Parties, and the dispute shall be at an end.

     

    If
      the
      result of the mediation is a recognition that the dispute cannot be successfully
      mediated, or if either party believes mediation would be unproductive or too
      slow, then either party may seek to resolve the dispute in accordance with
      the
      procedures established by Judicial Arbitration and Mediation Services,
      Inc.

     

    The
      award
      rendered by the arbitrator (whether through Judicial Arbitration and Mediation
      Services, Inc. or otherwise) shall be final, and judgment may be entered upon
      it
      in accordance with applicable law in any court having jurisdiction
      thereof.

     

    The
      arbitrator shall allocate the costs charged by Judicial Arbitration and
      Mediation Services, Inc., or other arbitrator as the case may be, for the
      arbitration between the Parties in a manner which the arbitrator considers
      equitable.  It is agreed that the arbitrator shall award to the
      prevailing or substantially prevailing party all fees incurred by such party
      with regard to such arbitration, including reasonable legal and accounting
      fees.  If the arbitrator determines that there is no prevailing or
      substantially prevailing party, the legal and accounting fees shall be the
      responsibility of each party.

     

    20.  Governing
      Law.  All proceedings will be held at a place designated by the
      arbitrator in Snohomish County, Washington.  The arbitrator, in
      rendering a decision as to any state law claims, will apply Washington
      law.

    
       

    

    21.  Exception
      to Arbitration.  Notwithstanding the above, if Nelson violates
      paragraphs 10, 12,
13,
      and 14 above, Cascade will have the right
      to
      initiate the court proceedings described in paragraph 15 above, in lieu of an arbitration
      proceeding.  Cascade may initiate these proceedings wherever
      appropriate within Washington state, but Nelson will consent to venue and
      jurisdiction in Snohomish County, Washington.

    
      
         

      

      
        -
          8
          -

        
          

        

      

      
         

      

    

    22.  Notice.  Any
      notice to be delivered under this Agreement shall be given in writing and
      delivered personally or by certified mail, postage prepaid, addressed to Cascade
      or to Nelson at their last known address.

     

    23.  Independent
      Legal Counsel.  Nelson acknowledges that she has had the
      opportunity to review and consult with her own personal legal counsel regarding
      this Agreement.

     

    24.  Non-Waiver.  No
      delay or failure by either party to exercise any right under this Agreement,
      and
      no partial single exercise of that right, shall constitute a waiver of that
      or
      any other right.

     

    25.  Severability.  If
      any provision of this Agreement shall be held by a court of competent
      jurisdiction to be invalid or unenforceable, the remaining provisions shall
      continue to be fully effective.

     

    26.  Entire
      Agreement.  This Agreement represents the entire agreement of the
      Parties.  This Agreement supersedes any prior oral or written
      agreement between the Parties on the subject matter hereof.  This
      Agreement may be superseded by another written agreement entered into between
      Nelson and Cascade on mutually agreeable terms, provided such agreement
      expressly by its terms supersedes this Agreement.  The offer by
      Cascade to enter into any such agreement, or the entering into such agreement,
      shall not be considered to have terminated this Agreement, triggering the
      payment of benefits under paragraph 8
      hereof.

     

    27.  Binding
      Effect.  It is agreed that all covenants, terms and conditions of
      this Agreement shall extend, apply to and firmly bind the heirs, executors,
      administrators, assigns and successors in interest of the respective parties
      hereto as fully as the respective parties themselves are bound.  It is
      specifically understood that in the event of Nelson’s death prior to the full
      payment of any benefit to which she is entitled under this Agreement, such
      payment(s) shall be made to her spouse and/or heirs as the case may
      be.

     

    28.  Compliance
      with Internal Revenue Code Section 409A.  Where required, the
      provisions of this Agreement are intended to comply with the requirements of
      Section 409A of the Internal Revenue Code. Notwithstanding any other
      provision of this Agreement, this Agreement shall be interpreted and
      administered in accordance with the requirements of Section 409A of the
      Internal Revenue Code.

     

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

     

    
      	
              CASCADE
                FINANCIAL CORPORATION

               

              By:
                /s/ Janice
                Halladay                                                                

              Title:
                Director

               

            	
               

               

              /s/
                Carol
                Nelson                                                                   

              CAROL
                KOBUKE NELSON

            
	
              CASCADE
                BANK

               

              By:
                s/ Janice
                Halladay                                                                

              Title:
                Director

            	 


    


    
      
         

      

      
        -
          9
          -