EXHIBIT
10.14





AMENDED
AND RESTATED


CHANGE
OF CONTROL/SEVERANCE AGREEMENT





THIS
AMENDED AND RESTATED CHANGE OF CONTROL/SEVERANCE AGREEMENT (this “Agreement”)
dated this 30thday of November, 2007 by and between
CASCADE FINANCIAL CORPORATION and CASCADE BANK (hereinafter jointly referred to
as “Cascade”) and Debbie E.
McLeod (“Executive”) amends and restates the Change of Control/Severance
Agreement entered into between Cascade Bank and Debbie E. McLeod on December 17,
2001.  Upon execution of this Agreement, the Change of
Control/Severance Agreement entered into in 2001 shall be null and void and of
no further force and effect.




WHEREAS,
Executive is currently serving as EVP/Retail Banking Executive
and has agreed to continue to serve in the employ of Cascade; and




WHEREAS,
the Board of Directors of Cascade recognizes the substantial contribution
Executive has made to Cascade and wishes to provide Executive with certain
benefits for the period provided in this Agreement in the event of a change of
control (as defined herein) of Cascade;




NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein, the parties hereto agree as
follows:




1.  Certain
Definitions.




(a)  “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:




(i)  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.




(ii)  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 Cascade 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 purposes 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 Cascade (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.


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(b)  “Good
Reason” as used in this Agreement means the occurrence, without Executive’s
express written consent, of a material diminution of Executive’s duties,
responsibilities or benefits, including (without limitation) any of the
following circumstances:




(i)  A
requirement that Executive be based at any location not within forty (40) miles
of Executive’s then existing job location, providing that such new location is
not closer to Executive’s home;




(ii)  A
material demotion, or loss of title or loss of significant authority of
Executive, excluding for this purpose, an isolated, insubstantial or inadvertent
action not taken in bad faith which is remedied by Cascade immediately after
notice thereof is given by Executive;




(iii)  A
reduction in Executive’s salary or a material adverse change in Executive’s
perquisites, benefits or vacation, other than as part of an overall program
applied uniformly and with equitable effect to all members of the senior
management of Cascade; or




(iv)  A
successor bank or company fails or refuses to assume Cascade’s obligations under
this Agreement, as required in Section4(a)
hereof.




(c)  “Cause”
as used in this Agreement means termination of the employment of Executive
because of Executive’s personal dishonesty, incompetence, willful misconduct,
breach of a fiduciary duty involving personal profit, intentional failure to
perform stated duties, insubordination, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement or
any other agreement between Executive and Cascade. Executive shall not be
entitled to any payment or benefit hereunder in the event a termination occurs
by reason of a voluntary retirement, voluntary termination (other than for
reasons specified in Section1(b) hereof),
disability or for Cause.




(d)  “Change
of Control Period” as used in this Agreement shall mean the period of time
starting six (6) months prior to the date the Change of Control is effected and
ending twenty-four (24) months following such Change of Control.




2.  At-Will
Employment.  Executive’s relationship with Cascade continues to
be an at-will employment relationship.  Cascade or Executive shall
have the right to terminate Executive’s employment with Cascade at any time with
or without Cause and with or without notice.  Nothing in this
Agreement shall confer upon Executive any right to continue in the employ of
Cascade prior to or after a Change of Control of Cascade or shall in any way
limit the rights of Cascade, except as expressly stated herein, to discharge
Executive at any time prior to or after the date of a Change of Control of
Cascade for any reason whatsoever with or without Cause.




3.  Change of Control/Severance
Benefits.




(a)  If during
the Change of Control Period Cascade shall terminate Executive’s employment
other than for Cause, or Executive shall terminate employment with Cascade for
Good Reason, Cascade shall: (i) pay Executive (or in the event of Executive’s
subsequent death, Executive’s beneficiary or estate, as the case may be), as
severance pay, a sum equal to two (2) times the salary and bonus paid by Cascade
to Executive during the twelve (12) month period ending on the last day of the
month preceding the effective date of a Change of Control (excluding any gains
resulting from exercise of stock options or vesting of restricted stock awards
or other similar forms of stock compensation); (ii) cause to be continued
for twenty-four (24) months after the effective date of a Change of Control,
life, medical, dental, and disability coverage substantially identical to the
coverage maintained by Cascade for Executive prior to the effective date of a
Change of Control, except to the extent such coverage may be changed in its
application to all Cascade employees on a nondiscriminatory basis; and (iii)
accelerate any unvested stock-based compensation so any such stock-based
compensation shall be 100% vested and immediately exercisable in full as of the
date of such termination.  Payments due under (i) above shall be paid
to Executive in a lump sum no sooner than six (6) months after the date of
Executive’s termination.


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(b)  Notwithstanding
the provisions of Section1(a) above, if a
payment to Executive who is a “disqualified individual” shall be in an amount
which includes an “excess parachute payment,” the payment hereunder to Executive
shall be reduced to the maximum amount which does not include an “excess
parachute payment.”  The terms “disqualified individual” and “excess
parachute payment” shall have the meaning defined in Section 280G of the
Internal Revenue Code of 1986, as amended.




(c)  Executive
shall not be required to mitigate the amount of any payment or benefit provided
for in Section1(a) of this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for in Section1(a) of this
Agreement be reduced by any compensation earned or benefit received by Executive
as the result of employment by another employer.  This Agreement shall
not be construed as a contract of employment or as providing Executive any right
to be retained in the employ of Cascade or any affiliate thereof.




(d)  Prior to
Executive’s gaining the right to receive, and in exchange for, the severance
compensation, benefits and option acceleration provided in Section 3(a), above,
to which Executive would not otherwise be entitled, Executive shall first enter
into and execute a release substantially in the form attached hereto as Exhibit
A (the “Release”) upon Executive’s termination of employment.  Unless
the Release is executed by Executive and delivered to Cascade within twenty-one
(21) days after the termination of Executive’s employment with Cascade,
Executive shall not receive any severance benefits provided under this
Agreement, acceleration, if any, of Executive’s equity grants/benefits as
provided in this Agreement shall not apply and Executive’s equity
grants/benefits in such event may be exercised following the date of Executive’s
termination only to the extent provided under their originals terms in
accordance with the applicable equity plans and agreements.




4.  Assignment.




(a)  This
Agreement is personal to each of the parties hereto, and neither party may
assign or delegate any of its rights or obligations hereunder without first
obtaining the written consent of the other party; provided,however, that Cascade shall
require any successor or assignee of (whether direct or indirect, by purchase,
merger, consolidation, operation of law or otherwise) to all or substantially
all of the business and/or assets of Cascade, to expressly assume and agree to
perform Cascade’s obligations under this Agreement.




(b)  This
Agreement shall be binding upon and inure to the benefit of Executive and
Cascade, and their respective successors and assigns.




5.  Required Regulatory
Provisions.  Any payments made to Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon compliance with 12
U.S.C. Section 1828(k) and any rules and regulations promulgated thereunder,
including 12 C.F.R. Part 359.




6.  Notices.  Any
notices provided hereunder must be in writing and shall be deemed effective upon
personal delivery (including personal delivery by facsimile transmission) or the
third day after mailing by first class mail, to Cascade at its primary office
location and to Executive at their address as listed on Cascade’s payroll (which
address may be changed by written notice).




7.  Amendments.  No
amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties, except as herein otherwise provided.




8.  Headings.  The
headings used in this Agreement are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this
Agreement.




9.  Severability.  The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity of the other
provisions hereof.


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10.  Governing
Law.  This Agreement shall be governed by the laws of the State
of Washington.




11.  Arbitration.  Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by binding arbitration, conducted before a panel of three
arbitrators in a location selected by Executive within 50 miles of the location
of Cascade, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrators’ award in any court
having jurisdiction.




12.  Reimbursement of
Fees.  All reasonable legal fees and expenses paid or incurred
by Executive pursuant to any dispute or question of interpretation relating to
this Agreement shall be paid or reimbursed by Cascade if Executive is successful
on the merits pursuant to an arbitration award or legal judgment.




13.  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 executed this Agreement as of the day and year
first above written.




THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.




CASCADE
      FINANCIAL CORPORATION
              CASCADE
      BANK
            EXECUTIVEBy:
              
              Its:
              Address:
            /s/ Carol K.
      Nelson
              Carol
      K. Nelson
              President
      and CEO
              2828
      Colby Avenue
              Everett,
      WA 98201
            By:
              
              Its:
              Address:
            /s/ Debbie E.
      McLeod
              Debbie
      E. McLeod
              EVP,
      Retail Banking Executive
              2828
      Colby Avenue
              Everett,
      WA 98201


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