Document:

Exhibit 10.4

 

CONSULTING
AGREEMENT

 

Mark A. Coffey

 

This Consulting Agreement (“Agreement”) is made this
8th day of November, 2002, between PACIFIC NORTHWEST BANCORP (“Pacific”),
PACIFIC NORTHWEST BANK and MARK A. COFFEY.

 

RECITALS

 

A.            Pacific
and Pacific Northwest Bank have entered into a Plan and Agreement of Merger
(“Plan”) with Bank of the Northwest, pursuant to which Bank of the Northwest
will merge into Pacific Northwest Bank (“Merger”).  Mr. Coffey is presently Executive Vice President and Chief Financial
Officer of Bank of the Northwest, and his employment in that capacity will
terminate on the effective date of the Merger.

 

B.            Following
the Merger, Pacific and Pacific Northwest Bank (hereinafter referred to jointly
as “Pacific” unless Pacific Northwest Bank is specifically mentioned) desire to
retain Mr. Coffey as a consultant, and Mr. Coffey wishes to perform such
services.  (Mr. Coffey is referred to
hereinafter as “Consultant.”)

 

NOW, THEREFORE, in consideration of the mutual
covenants herein recited, the sufficiency of which is hereby acknowledged, the
parties agree as follows:

1.                                       Effective Date and Term.

a)             Effective Date.  This Agreement takes effect on the effective
date of the Merger(“Effective Date”).

b)             Term.  The term of this Agreement (“Term”) is six
(6) months, beginning on the Effective Date.

c)             Employment Status.  During the Term Consultant shall be an
employee of Pacific Northwest Bank.

d)             Office.  Consultant will have no specific office
following the Merger but will have access to an office at the former Main
Office of Bank of the Northwest (600 Pioneer Tower, 888 S.W. Fifth Avenue,
Portland Oregon), and necessary support staff will be available to him to
perform the duties assigned to him under this Agreement.

 

2.             Compensation.  For and in consideration of the consulting
services to be performed by Consultant, and the further covenants and
agreements made by him under this Agreement, Pacific shall:

a)             Pay to Consultant base monthly
compensation of $19,000 payable in accordance with Pacific Northwest Bank’s
regular payroll schedule (“Compensation”).

b)            Reimburse Consultant for
out-of-pocket expenses reasonably incurred by Consultant in the performance of
the services upon Consultant’s submission of any request for reimbursement in a
format consistent with Pacific’s policies from time to time in effect.

 

Any
payments made pursuant to this Agreement shall be net of (i) all amounts
required to be withheld from such payments pursuant to applicable income tax,
Social Security and unemployment insurance laws and regulations, and (ii) such
other amounts as are withheld from such payments pursuant to Consultant’s
authorization.

 

3.             Benefit Plans.  During the Term of this Agreement:

a)             Consultant shall be entitled to
participate in the Pacific group medical plan established by Pacific from time
to time for the benefit of all full-time employees of Pacific.  Consultant shall be required to comply with
the conditions attendant to coverage by such plan and shall comply with and be
entitled to 

 

 

benefits only in accordance
with the terms and conditions of such plan as they may be amended from time to
time.  Nothing herein contained shall be
construed as requiring Pacific to establish or continue any particular benefit
plan in discharge of its obligations under this Agreement.

b)            All outstanding stock options will
continue to vest, and Consultant will be permitted to exercise such options,
until the earlier to occur of: (1) the expiration date of the options, or (2)
ninety (90) days following expiration of the term of this Agreement.

 

4.             Duties. 
Consultant will perform the duties assigned to him from time to time by
the Chief Executive Officer of Pacific and the President of Pacific Northwest
Bank Oregon.  These duties will include,
without limitation, advising and consulting with the Chief Executive Officer of
Pacific and the President of Pacific Northwest Bank Oregon on an as-needed
basis only on financial issues relating to the operations of Bank of the
Northwest prior to the merger.

 

During the Term, Consultant agrees to devote such time as
necessary to discharge the duties assigned to him and to use his best efforts
to perform such duties faithfully and efficiently.  However, it is understood that the time required to complete
these duties will be limited and structured to permit Consultant to be
otherwise employed on a full-time basis. If the time requirements are
significantly greater than contemplated, Consultant’s compensation will be
adjusted by agreement between Pacific and Consultant.

 

5.             Termination.

a)             Termination By Pacific for Cause.  If, before the end of the Term, Pacific
terminates Consultant’s employment for Cause or Consultant terminates his  employment
without Good Reason (defined below), Pacific will pay Consultant, in a lump
sum, the compensation to which he would be entitled to receive for the balance
of the Term under Section a)

b)            Other Termination By Pacific.  If, before the end of the Term, Pacific
terminates Consultant’s employment without Cause or Consultant terminates his
employment for Good Reason (defined below), Pacific will pay Consultant a lump
sum payment in an amount equal to the Compensation he would have received for
the balance of the Term if his  employment had not terminated, and Pacific
will continue Consultant’s coverage under the Pacific group medical plan
established by Pacific from time to time for the benefit of all full-time
employees of Pacific (or provide Consultant with equivalent benefits) through
the expiration of the Term.

c)             Death or Disability.  This Agreement terminates (1) if Consultant
dies or (2) if Consultant is unable to perform his  duties and obligations under
this Agreement for a period of 90 days as a result of a physical or mental
disability arising at any time during the Term of this Agreement, unless with
reasonable accommodation Consultant could continue to perform his duties under
this Agreement and making these accommodations would not pose undue hardship to
Pacific.  If termination occurs under
this Section 5b), Consultant or his estate will be entitled to receive, in a
lump sum, an amount equal to the balance which would be owed Consultant under
this Agreement.

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

 

6.             Definition of “Cause”. “Cause” means any one or
more of the following, as reasonably determined by Pacific:

a)             Willful misfeasance or gross
negligence in the performance of Consultant’s duties for Pacific that continues
for more than 30 days after written notice to Consultant specifying conduct or
omission that constitutes the misfeasance or gross negligence.

 

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b)            Conviction of a crime in connection
with his duties for Pacific.

c)             Conduct demonstrably and
significantly harmful to Pacific, as reasonably determined by the Board of
Directors of Pacific on the advice of legal counsel that continues for more
than 30 days after written notice to Consultant specifying the harmful conduct.

d)            Conviction of a felony.

e)             Breach of the covenants set forth
in Sections h) and i) of this Agreement.

 

Notwithstanding
the foregoing, Consultant will not be deemed to have been terminated for Cause
unless and until there has been delivered to Consultant a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of
the entire membership of the Board of Directors of Pacific at a meeting of the
Board of Directors called and held for that purpose (after reasonable notice to
Consultant and an  opportunity for
Consultant, together with his counsel, to be heard before the Board of
Directors), finding that in the good faith opinion of the Board of Directors,
Consultant was guilty of conduct constituting Cause as defined above and
specifying the particulars for such finding in detail.

 

7.             Definition of
“Good Reason”.  “Good Reason” means
only any one or more of the following:

a)             Reduction, without Consultant’s
consent, of Consultant’s Compensation.

b)            Reduction or elimination of any
benefit plan benefiting Consultant, unless the reduction or elimination is
generally applicable to substantially all similarly situated full-time Pacific
employees formerly benefited.

c)             The assignment to Consultant
without his consent of any duties materially inconsistent with those set forth
in this Agreement.

d)            The requirement by Pacific that
Consultant’s employment be based at any office or location other than that set forth
in Section b) hereof.

 

8.             Confidentiality.  Consultant will not, after signing this
Agreement, including during and after its Term, use for his own purposes or
disclose to any other person or entity any confidential information concerning
Pacific or their business operations or customers, unless (1) Pacific consents
to the use or disclosure of their respective confidential information, (2) the
use or disclosure is consistent with Consultant’s duties under this Agreement,
or (3) disclosure is required by law or court order.

 

9.             Nonsolicitation.

 

For a
period of twelve (12) months from the Effective Date, Consultant will not
directly or indirectly solicit or attempt to solicit (1) any employees of
Pacific, or any of Pacific’s Subsidiaries, to leave their employment or (2) any
customers of Pacific, or any of Pacific’s Subsidiaries, to remove their
business from Pacific or to participate in any manner in a Competing
Business.  Solicitation prohibited under
this Section includes solicitation by any means, including, without limitation,
meetings, letters or other mailings, electronic communications of any kind, and
internet communications.

 

10.           Enforcement.

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

b)            Consultant acknowledges that Pacific
will suffer immediate and irreparable harm that will not be compensable by
damages alone, if Consultant repudiates or breaches any of the provisions of
Sections h) and i) or threatens or attempts to do so. For this reason, under
these circumstances, Pacific, in addition to and without limitation of any
other rights, remedies or damages available to it at law or in 

 

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equity, will be entitled to
obtain temporary, preliminary and permanent injunctions in order to prevent or
restrain the breach, and Pacific will not be required to post a bond as a
condition for the granting of this relief.

 

11.          Adequate
Consideration.  Consultant
specifically acknowledges the receipt of adequate consideration for the
covenants contained in Sections h) and i) and that Pacific is entitled to
require him to comply with these Sections. 
These Sections will survive termination of this Agreement.  Consultant represents that if his employment
is terminated, whether voluntarily or involuntarily, Consultant has experience
and capabilities sufficient to enable Consultant to obtain employment in areas
which do not violate this Agreement and that the Bank’s enforcement of a remedy
by way of injunction will not prevent Consultant from earning a livelihood.

 

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

c)             Exception to Arbitration.  Notwithstanding the above, if Consultant
violates Section h) or i), Pacific will have the right to initiate the court
proceedings described in Section b), in lieu of an arbitration proceeding under
this Section c) Pacific may initiate these proceedings wherever
appropriate within Washington State; but Consultant will consent to venue and
jurisdiction in King County, Washington.

 

13.           Miscellaneous
Provisions.

a)             Defined Terms.  Capitalized terms used as defined terms, but
not defined in this Agreement, will have the meanings assigned to those terms
in the Plan.

b)            Abandonment of the Merger.  If the Plan terminates before the Effective
Date, this Agreement will not become effective and will be void.

c)             Entire Agreement.  This Agreement constitutes the entire
understanding between the parties concerning its subject matter and supersedes
all prior agreements.

d)            Reviewed with Independent
Counsel/Construction of Agreement. 
Each party had the opportunity to review this Agreement with legal
counsel of their choosing, and this Agreement is the outcome of that review
process. This Agreement has been entered into after negotiation and review of
its terms and conditions by parties under no compulsion to execute and deliver
a disadvantageous agreement.  This
Agreement incorporates provisions, comments and suggestions proposed by both
parties.  No ambiguity or omission in
this Agreement shall be construed or resolved against any party on the ground
that this Agreement or any of its provisions was drafted or proposed by that
party.

e)             Binding Effect.  This Agreement will bind and inure to the
benefit of Pacific’s and Consultant’s heirs, legal representatives, successors
and assigns.

f)             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, this 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.

 

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g)            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.

h)            Assignment.  The services to be rendered by Consultant
under this Agreement are unique and personal. 
Accordingly, Consultant may not assign any of his  rights or duties under this
Agreement.

i)              Amendment.  This Agreement may be modified only through
a written instrument signed by all parties.

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

k)             Governing Law.  This Agreement will be governed by and
construed in accordance with Washington law, except to the extent that certain
matters may be governed by federal law.

 

	
   

  	
  PACIFIC NORTHWEST BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick M. Fahey

  
	
   

  	
   

  	
  Patrick M. Fahey,
  President and CEO

  
	
   

  	
   

  
	
   

  	
  PACIFIC NORTHWEST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Patrick M. Fahey

  
	
   

  	
   

  	
  Patrick M. Fahey,
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Mark A. Coffey

  
	
   

  	
  MARK A. COFFEY

  

 

5Exhibit 10.5

 

EMPLOYMENT AGREEMENT

GEORGE P. BRACE

 

This Employment Agreement (this “Agreement”) is made
on the 24th day of April, 2002 between PACIFIC NORTHWEST BANCORP and PACIFIC
NORTHWEST BANK (hereinafter jointly referred to as the “Bank”) and GEORGE P.
BRACE (hereinafter referred to as “Executive”), who agree as follows:

 

RECITALS

 

A.            Pacific
Northwest Bank, in conjunction with a Plan and Merger Agreement of
Reorganization whereby Pacific Northwest Bank was acquired by InterWest
Bancorp, Inc., entered into an Employment Agreement with Executive dated
January 15, 1998.  That Employment
Agreement was later amended and the term extended through June 15, 2002.

 

B.            The
Bank and Executive now wish to replace the original Employment Agreement, as
amended, with this Agreement.

 

AGREEMENT

 

The parties agree as follows:

 

1.     Employment.  The
Bank agrees to employ Executive and Executive agrees to accept employment as
the Bank’s Executive Vice President under the terms and conditions set forth in
this Employment Agreement.

 

2.     Effective Date and Term. 
This Agreement shall be effective upon execution by the parties (the
“Effective Date”), replacing the prior Employment Agreement, as amended. This
Agreement shall be in full force and effect from the Effective Date through
June 15, 2004 (the “Term”).

 

3.     Duties.  Executive
will faithfully and diligently perform the duties assigned to him from time to
time by the Bank’s President, consistent with the duties that have been normal
and customary to Executive’s position. 
Executive will use his best efforts to perform his duties and will
devote full time and attention to these duties during working hours.  Executive will report directly to the Bank’s
President.  The Bank’s Board of
Directors may, from time to time, modify Executive’s title or performance
responsibilities to accommodate management succession, as well as any other
management objectives of the Bank. 
Executive will assume any additional positions, duties and responsibilities
as may reasonably be requested of him with or without additional compensation,
as appropriate and consistent with this paragraph 3.

 

4.     Salary.  Executive
shall receive a salary set by the Bank’s Board of Directors, or a committee
thereof, for employees with comparable duties and experience, but not less than
$180,000 per year, to be paid in accordance with the Bank’s regular payroll
schedule (“Salary”). Executive’s Salary shall be reviewed at the end of each
calendar year.

 

5.     Incentive Compensation. 
The Bank’s Board of Directors, or a committee thereof, will determine
the amount of bonus, if any, to be paid by the Bank to Executive at the end of
each calendar year during the Term.  In
making this determination, the Bank’s Board of Directors will consider factors
such as Executive’s performance of his duties and the safety, soundness and
profitability of the Bank. Executive’s bonus, if any, will reflect Executive’s
contribution to the performance of the Bank during the year.

 

6.     Income Deferral and Benefits.  Subject to eligibility requirements and in accordance with and
subject to any policies adopted by the Bank’s Board of Directors with respect
to any benefit plans or programs, Executive will 

 

 

be entitled to
receive benefits (including stock options) similar to those offered to other employees
of the Bank with positions and duties comparable to those of Executive.

 

7.     Business Expenses. 
The Bank will reimburse Executive for ordinary and necessary expenses
including, without limitation, a Bank automobile, travel, entertainment and
similar expenses incurred in performing and promoting the Bank’s business.  Executive will present from time to time
itemized accounts of these expenses, subject to any limits of Bank policy or
the rules and regulations of the Internal Revenue Service.

 

8.     Termination.

 

8.1   Termination by the Bank for Cause.  If, prior to expiration of the Term, the
Bank terminates Executive’s employment for Cause, the Bank will pay Executive
the salary earned and expenses reimbursable under this Agreement incurred
through the date of Executive’s termination. 
If Executive is terminated for Cause, Executive will have no right to
receive compensation or other benefits for any period after termination under
this Section 8.1.

 

8.2   Voluntary Termination, Death or Disability.  If, prior to expiration of the Term: (i)
Executive voluntarily elects to terminate this Agreement by delivering written
notice of termination to the Bank, regardless of whether Executive had Good
Reason to terminate this Agreement; or (ii) Executive dies, or (iii) Executive
is unable to perform his duties and obligations under this Agreement for a
period of 90 days as a result of a physical or mental disability arising at any
time during the Term, unless with reasonable accommodation Executive could
continue to perform his duties under this Agreement and making these
accommodations would not require the Bank to expend any funds, this Agreement
shall immediately terminate.  If
termination occurs under this Section 8.2, Executive or his estate will be
entitled to receive only the compensation and benefits earned and expenses
reimbursable through the date of termination, together with a single cash
payment in an amount equal to Executive’s W-2 income before salary deferrals
over the twelve (12) months preceding his death or disability.

 

8.3   Other Termination by the Bank.  If, prior to expiration of the Term, the
Bank terminates Executive’s employment without Cause, or Executive terminates
his employment for Good Reason, the Bank will pay Executive the greater of: (a)
the Salary Executive would have been entitled to receive under this Agreement
for the remainder of the Term if his employment had not terminated, or (b) a
single cash payment in an amount equal to Executive’s W-2 income before salary
deferrals over the twelve (12) months preceding the date of termination.

 

8.4   Return of Bank Property.  If and when Executive ceases, for any
reason, to be employed by the Bank, Executive must return to the Bank all keys,
passcards, identification cards, and any other property of the Bank.  At the same time, Executive also must return
to the Bank 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 the Bank.  The obligations
in this paragraph include the return of documents 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.

 

9.     Definition of “Cause”. 
“Cause” means any one or more of the following:

 

9.1   Willful misfeasance or gross negligence in
the performance of Executive’s duties;

 

9.2   Conviction of a crime in connection with
Executive’s duties; or

 

9.3   Conduct demonstrably and significantly
harmful to the Bank, as reasonably determined by the Bank’s Board of Directors
on the advice of legal counsel.

 

2

 

10.   Definition of “Good Reason”.  “Good Reason” means only any one or more of
the following:

 

10.1         Reduction, without Executive’s consent,
of Executive’s salary or elimination of any compensation or benefit plan
benefiting Executive, unless the reduction or elimination is generally
applicable to substantially all similarly situated Bank employees (or employees
of a successor or controlling entity of the Bank);

 

10.2         Assignment to Executive without his
consent of any authority or duties materially inconsistent with Executive’s
position as of the date of this Agreement; or

 

10.3         Relocation or transfer of Executive’s
principal place of employment that would require Executive to commute on a
regular basis more than 60 miles each way from his current business office at
the Bank on the date of this Agreement, unless Executive consents to the
relocation or transfer.

 

11.   Confidentiality.  Executive will not, after signing this
Agreement, including during and after its Term, use for his own purposes or
disclose to any other person or entity any confidential information concerning
the Bank or its business operations or customers, unless: (i) the Bank consents
to the use or disclosure of its respective confidential information, (ii) the
use or disclosure is consistent with Executive’s duties under this Agreement,
or (iii) disclosure is required by law or court order.

 

12.   Enforcement.

 

12.1         The Bank and Executive stipulate that,
in light of all the facts and circumstances of the relationship between
Executive and the Bank, the requirement of confidentiality referred to in
Section 11 is fair and reasonably necessary for the protection of the Bank’s
confidential information, goodwill and other protectable interest.  If a court of competent jurisdiction should
decline to enforce that provision, Executive and the Bank shall request the
court to reform the provision to restrict Executive’s use of confidential
information to the maximum extent the court finds enforceable.

 

12.2         Executive acknowledges that the Bank
will suffer immediate and irreparable harm that will not be compensable by
damages alone, if Executive repudiates or breaches Section 11 or threatens or
attempts to do so.  For this reason,
under these circumstances, the Bank, 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 the Bank will not be required to post a
bond as a condition for the granting of this relief.

 

13.   Adequate Consideration.  Executive specifically acknowledges the
receipt of adequate consideration for the covenants contained in Section 11 and
that the Bank is entitled to require him to comply with such section.  Section 11 will survive termination of this
Agreement. Executive represents that if his employment is terminated, whether
voluntarily or involuntarily, Executive has experience and capabilities
sufficient to enable him to obtain employment in areas which do not violate
this Agreement and that the Bank’s enforcement of a remedy by way of injunction
will not prevent Executive from earning a livelihood.

 

14.   Arbitration.

 

14.1         Arbitration.  At either party’s request the parties must
submit any dispute, controversy or claim arising out of, 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 usually 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,

 

3

 

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.

 

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

 

14.3         Exception to Arbitration.  Notwithstanding the above, if Executive
violates Section 11 hereof, the Bank will have the right to initiate the court
proceedings described in Section 12.2, in lieu of an arbitration proceeding
under this Section 14.  The Bank may
initiate these proceedings wherever appropriate within the state of Washington,
but Executive will consent to venue and jurisdiction in King County,
Washington.

 

15.   Miscellaneous Provisions.

 

15.1         Entire Agreement.  This Agreement constitutes the entire
understanding between the parties concerning its subject matter and supersedes
all prior agreements. Accordingly, Executive specifically waives the terms of,
and all of his rights under, all employment, change in control and salary
continuation agreements, whether written or oral, that he has previously
entered into with the Bank or any of its subsidiaries or affiliates.

 

15.2         Binding Effect.  This Agreement will bind and inure to the
benefit of the Bank’s and Executive’s heirs, legal representatives, successors
and assigns.

 

15.3         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, this party will be entitled to reimbursement from the other party
for any and all its out-of-pocket expenses and costs including, without
limitation, reasonable attorneys’ fees and costs incurred in connection with
the enforcement or collection.

 

15.4         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.

 

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

 

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

 

15.7         Amendment.  This Agreement may be modified only through
a written instrument signed by both parties and consented to by the Bank in
writing.

 

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

 

15.9         Governing Law and Venue.  This Agreement will be governed by and
construed in accordance with Washington law, except to the extent that certain
matters may be governed by federal law. 
Except as otherwise provided in Section 14.3, the parties must bring any
legal proceeding arising out of this Agreement in King County, Washington, and
the parties will submit to jurisdiction in that county.

 

4

 

Dated as of the date first above written.

 

	
   

  	
  PACIFIC NORTHWEST
  BANCORP

  
	
   

  	
   

  
	
   

  	
  PACIFIC NORTHWEST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Patrick M. Fahey

  
	
   

  	
   

  	
  Patrick M. Fahey, President
  and CEO

  
	
   

  	
   

  
	
   

  	
  /s/ George P. Brace

  
	
   

  	
  GEORGE P. BRACE

  

 

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