Document:

Prepared by MERRILL CORPORATION

Exhibit 10.19

 

PROPOSED

AMENDED PACIFIC

NORTHWEST BANCORP

 

1996 OUTSIDE

DIRECTORS STOCK OPTIONS-FOR-FEES PLAN

 

(Effective January 1,

2002)

 

1.             Purpose

of Plan.  The purpose of

the Amended Pacific Northwest Bancorp 1996 Outside Directors Stock

Options-for-Fees Plan is to provide non-employee directors of the Corporation

with an increased incentive to make significant and extraordinary contributions

to the long-term performance and growth of the Corporation and its Affiliates,

to join the interests of non-employee directors with the interests of the

stockholders of the Corporation, and to facilitate attracting and retaining

non-employee directors of exceptional ability.

 

2.             Definitions.  As used herein, the following definitions

shall apply:

 

"Affiliate"

shall mean any corporation in which the Corporation owns, directly or

indirectly, stock possessing more than fifty percent of the combined voting

power of all classes of stock.

 

"Board of

Directors" shall mean the board of directors of the Corporation.

 

"Committee" shall mean a committee of the Board of Directors

designated by the Board to administer the Plan.

 

"Common Stock" shall mean the common stock, no par value per

share, of the Corporation.

 

"Corporation" shall mean Pacific Northwest Bancorp, a

Washington corporation, or any successor thereof.

 

"Director Notice" shall mean a written notice setting forth

the Participant's election under Section 4(b) of the Plan and delivered by a

Participant to the Corporation prior to the first day of the calendar year, to

be effective for such year or years as are specified in such notice. A Director

Notice shall be irrevocable for the current calendar year but may be modified

by a Participant with respect to a future year(s).

 

“Fair Market

Value" shall mean, as of any date, the closing price of the Corporation's

Common Stock on the Nasdaq National Market System. If the Common Stock is not

traded on a national securities exchange or quoted on the Nasdaq Stock Market,

and there are not at least two brokerage companies reporting a bid price per

share on the Option Grant Date, then the Fair Market Value shall be that value

determined in good faith by the Committee in such manner as it deems

appropriate.

 

"Nonqualified

Option" shall mean an option to purchase Common Stock which meets the

requirements set forth in the Plan but does not meet the definition of an

incentive stock option set forth in Section 422 of the Internal Revenue Code of

1986, as amended (the "Code").

 

"Option Grant Date" shall mean the first

business day of each calendar year following the effective date of the

Plan.

 

"Option Price" shall mean the price at which a Nonqualified

Option may be exercised which shall be the Fair Market Value on the Option

Grant Date of such Nonqualified Option.

 

"Participant" shall mean a member of the Board of Directors

who is not an employee of the Corporation or an Affiliate.

 

"Plan" shall mean this Amended Pacific Northwest Bancorp 1996

Outside Directors Stock Options-for-Fees Plan.

 

"Total Director Fees" shall mean, with respect to any

calendar year, $10,000, as the retainer fee payable to an outside Director for

service on the Board of Directors of the Corporation.

 

3.             Administration.  The Plan shall be administered by the

Committee. Subject to the provisions of the Plan, the Committee is authorized

to interpret the Plan, to promulgate, amend and rescind rules and regulations

relating to the Plan and to make all other determinations necessary or

advisable for its administration. Interpretation and construction of any

provision of the Plan by the Committee shall be final and conclusive. Acts

approved by a majority of the members present at any meeting at which a quorum

is present, or acts unanimously approved in writing by the Committee, shall be

the acts of the Committee.

 

4.             Annual

Grants.

 

(a)            Each Participant shall deliver a

Director Notice to the Corporation on or before the date specified in the Plan.

During the term of this Plan, on the first business day of each calendar year

following the effective date of the Plan, each Participant shall receive a

Nonqualified Option to the extent of the Participant's election in his or her

Director Notice in effect for such year. The option exercise price for each

such Nonqualified Option shall be the Option Price. If, with respect to any calendar

year, a Director Notice is not received from a Participant, the Participant's

Total Director Fees shall be payable in cash.

 

(b)           Each Participant may specify one of

the following elections in a Director Notice:

 

(i)            Option 1.  Receive Total Director Fees in cash, payable quarterly;

 

(ii)           Option 2.  Convert the right to receive fifty percent

(50%) of the retainer (currently $5,000) for an option to purchase three times

the dollar amount of the converted retainer (currently $15,000) worth of Common

Stock at the fair market value on the date of grant, or

 

(iii)          Option 3.  Convert the right to receive the entire

annual retainer (currently $10,000) for an option to purchase three times the

dollar amount of the converted retainer (currently $30,000) worth of Common

Stock at the fair market value on the date of grant.

 

5.             Vesting.  Each Nonqualified Option issued pursuant to

this Plan shall be conditioned on the Participant continuing to serve as a

member of the Board for a period of one (1) year following the Option Grant

Date. The Nonqualified Option may not be exercised during said one (1) year

period. If a Participant ceases to be a member of the Board prior to the

expiration of the one (1) year period, all unexercisable Nonqualified Options

held by the Participant shall be cancelled as of the Participant's last day of

service.

 

6.             Indemnification of Committee Members.  In addition to such other rights of

indemnification as they may have, the members of the Committee shall be

indemnified by the Corporation against the reasonable expenses, including

attorneys' fees, actually and necessarily incurred in connection with the

defense of any action, suit or proceeding, or in connection with any appeal

therein, to which they or any of them may be a party by reason of any action

taken or failure to act under or in connection with the Plan or any option

granted hereunder, and against all amounts paid by them in settlement thereof

(provided such settlement is approved by independent legal counsel selected by

the Corporation) or paid by them in satisfaction of a judgment in any such

action, suit or proceeding, except in relation to matters as to which it shall

be adjudged in such action, suit or proceeding that such Committee member has

acted in bad faith; provided, however, that within sixty (60) days after

receipt of notice of institution of any such action, suit or proceeding a

Committee member shall offer the Corporation in writing the opportunity, at its

own cost, to handle and defend the same.

 

7.             Maximum

Number of Shares Subject to Plan.  The maximum number of shares with respect to which stock options

may be granted under the Plan shall be 25,000 shares in the aggregate of Common

Stock of the Corporation, which may consist in whole or in part of the

authorized and unissued or reacquired Common Stock of the Corporation. If a

stock option expires or terminates for any reason without having been fully

exercised, the number of shares with respect to which the stock option was not

exercised at the time of its expiration or termination shall again become

available for the grant of stock options under the Plan, unless the Plan shall

have been terminated.

 

The number of shares subject to each outstanding stock option, the

option price with respect to outstanding stock options, and the aggregate

number of shares remaining available under the Plan shall be subject to such

adjustment as the Committee, in its discretion, deems appropriate to reflect

such events as stock dividends, stock splits, recapitalization, mergers, consolidations

or reorganizations of or by the Corporation; provided, however, that no

fractional shares shall be issued pursuant to the Plan, no rights may be

granted under the Plan with respect to fractional shares, and any fractional

shares resulting from such adjustments shall be eliminated from any outstanding

stock option.

 

8.             Written

Agreement.  Each stock

option shall be evidenced by a written agreement and shall contain such

provisions as may be approved by the Committee. Such agreements shall constitute

binding contracts between the Corporation and the Participant, and every

Participant, upon acceptance of such agreement, shall be bound by the terms and

restrictions of the Plan and of such agreement. The terms of each such

agreement shall be in accordance with the Plan, but the agreements may include

such additional provisions and restrictions determined by the Committee,

provided that such additional provisions and restrictions are not inconsistent

with the terms of the Plan.

 

9.             Payment

of Stock Option Price. 

To exercise in whole or in part any stock option granted hereunder,

payment of the option price in full in cash shall be made by the Participant

for all shares so purchased. No Participant shall have any of the rights of a

stockholder of the Corporation under any stock option until the actual issuance

of shares to said Participant, and prior to such issuance no adjustment shall

be made for dividends, distributions or other rights in respect of such shares,

except as provided in Paragraph 7.

 

10.           Exercise of Stock Options.  A Participant may exercise a stock option,

in whole or in part, by delivery to the Corporation of written notice of the

exercise, in such form as the Committee may prescribe, accompanied by (i) full

payment for the shares with respect to which the stock option is exercised, in

cash, or (ii) in the sole discretion of the Committee, irrevocable instructions

to a stock broker to promptly deliver to the Corporation full payment for the

shares with respect to which the stock option is exercised from the proceeds of

the stock broker's sale of or loan against the shares. Successive stock options

may be granted to the same Participant, whether or not the stock option(s)

previously granted to such Participant remain unexercised. A Participant may

exercise a stock option, if then exercisable, notwithstanding that stock

options previously granted to such Participant remain unexercised.

 

11.           Nontransferability of Stock Options.  Except to the extent authorized by the

Committee, no stock option granted under the Plan to a Participant shall be

transferable by such Participant otherwise than by will, or by the laws of

descent and distribution, and stock options shall be exercisable, during the

lifetime of the Participant, only by the Participant.

 

12.           Term of Stock Options.  If not sooner terminated, each stock option

granted hereunder shall expire upon the earlier to occur of the date five (5)

years from Option Grant Date or the date ninety (90) days (three (3) years in

the event a director attains the Board's mandatory retirement age or, with

Committee approval, upon termination of service for any other reason, other

than voluntary resignation or termination for cause) following the date upon

which the Participant ceases to be a member of the Board of Directors.

Notwithstanding the foregoing, all outstanding options held by a Participant

shall expire immediately upon the Participant's termination for cause. For

purposes of this plan, "termination for cause" shall mean termination

because of a Participant's personal dishonesty, incompetence, willful

misconduct, breach of fiduciary duty involving personal profit, intentional

failure to perform stated duties, or willful violation of any law, rule, or

regulation (other than traffic violations or similar offenses).

 

13.           Investment Purpose.  If the Committee in its discretion

determines that as a matter of law such procedure is or may be desirable, it

may require a Participant, upon any acquisition of stock hereunder and as a

condition to the Corporation's obligation to deliver certificates representing

such shares, to execute and deliver to the Corporation a written statement, in

form satisfactory to the Committee, representing and warranting that the

Participant's acquisition of shares of stock shall be for such person's own

account, for investment and not with a view to the resale or distribution

thereof and that any subsequent offer for sale or sale of any such shares shall

be made either pursuant to (a) a Registration Statement on an appropriate form

under the Securities Act of 1933, as amended (the "Securities Act"),

which Registration Statement has become effective and is current with respect

to the shares being offered and sold, or (b) a specific exemption from the

registration requirements of the Securities Act, but in claiming such exemption

the Participant shall, prior to any offer for sale or sale of such shares,

obtain either the Corporation's approval or a favorable written opinion from

counsel for or approved by the Corporation as to the availability of such

exemption. The Corporation may endorse an appropriate legend referring to the

foregoing restriction upon the certificate or certificates representing any

shares issued or transferred to the Participant under this Plan.

 

14.           No Right to Continued Service as a

Director.  Nothing

contained in the Plan or in any stock option granted pursuant to the Plan, nor

any action taken by the Committee hereunder, shall confer upon any Participant

any right with respect to continuation of service as a director of the

Corporation or an Affiliate nor interfere in any way with the right of the

Corporation, any Affiliate, or their stockholders to terminate such

Participant's service as a director at any time.

 

15.           Withholding Payments.  If upon the exercise of an option there

shall be payable by the Corporation any amount for income tax withholding, then

in the Committee's sole discretion, either the Corporation shall appropriately

reduce the amount of stock to be paid to the Participant or the Participant

shall pay such amount to the Corporation to reimburse it for such income tax

withholding. The Committee may, in its sole discretion permit Participants to

satisfy such withholding obligations, in whole or in part, by electing to have

the amount of Common Stock delivered or deliverable upon exercise of a stock

option appropriately reduced, or by electing to tender Common Stock back to the

Corporation subsequent to exercise of a stock option, to reimburse the

Corporation for such income tax withholding, subject to such rules and

regulations as the Committee may adopt. The Committee may make such other

arrangements with respect to income tax withholding as it shall determine.

 

16.           Termination, Duration, and Amendment

of Plan.

 

(a)            The Plan may be

terminated at any time by the Board of Directors of the Corporation. Unless

sooner terminated, the Plan shall terminate on December 31, 2005, and no

stock options may be granted thereafter. 

The termination of the Plan shall not affect the validity of any stock

option outstanding on the date of termination.

 

(b)           The Board of

Directors may amend, alter, suspend, discontinue, or terminate the Plan or any

portion thereof at any time; provided that no such amendment, alteration,

suspension, discontinuation or termination shall be made without shareholder

approval if such approval is necessary to comply with any tax or regulatory

requirement.

 

17.           Section 16 Compliance.  With respect to persons subject to Section

16 of the Exchange Act, transactions under this Plan are intended to comply

with all applicable terms and conditions of Rule 16b-3 and any successor

provisions. To the extent that any provision of the Plan or action by the

Committee or the Board of Directors fails to so comply, it shall be deemed null

and void, to the extent permitted by law and deemed advisable by the Committee.

 

18.           Governing Law.  The validity, construction, and effect of

the Plan and any rules and regulations relating to the Plan shall be determined

in accordance with the laws of the State of Washington, without giving effect

to the choice of law principles thereof.Prepared by MERRILL CORPORATION

Exhibit 10.20

 

EMPLOYMENT AGREEMENT

KIM S. BRACE

 

This Employment Agreement is made on the 15th day of June,

2001, between PACIFIC NORTHWEST BANCORP and PACIFIC NORTHWEST BANK (hereinafter

jointly referred to as the “Bank”) and KIM S. BRACE (hereinafter referred to as

the “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.

 

B.             On June 15, 2000,

the Bank and Executive amended the Agreement to make it advantageous for

Executive to continue her employment through June 15, 2001.

 

C.             The Bank and

Executive now wish to terminate the original Employment Agreement (January 15,

1998), as amended by the First Amendment thereto (June 15, 2000) and replace it

with this Employment Agreement (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

and Chief Administrative Officer under the terms and conditions set forth in

this Employment Agreement.

 

2.    Effective Date and Term.  This Employment Agreement is effective on

June 16, 2001, replacing the prior Employment Agreement, as amended, which will

remain in effect until the effective date of this Agreement.  The term of this Agreement is two years

beginning on June 16, 2001, and terminating on June 15, 2003 (“Term”).

 

3.    Duties.  Executive will faithfully and diligently

perform the duties assigned to Executive 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 her best efforts to perform her 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 her with or without additional compensation, as appropriate and

consistent with this paragraph 3.

 

4.    Salary.  Executive shall receive a salary set by the

Compensation Committee for employees with comparable duties and experience, but

not less than $160,000 per year, to be paid in accordance with the Bank’s

regular payroll schedule.  Executive’s

salary shall be reviewed annually.

 

5.    Incentive Compensation.  The Bank’s Board of Directors will determine

the amount of bonus, if any, to be paid by the Bank to Executive for each year

during the Term.  In making this

determination, the Bank’s Board of Directors will consider factors such as

Executive’s performance of her 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, 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 Bank for Cause.  If, before the

end 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  Death or Disability.  This Agreement terminates: (i) if Executive

dies, or (ii) if Executive is unable to perform her 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 Executive could continue to perform her duties

under this Agreement and making these accommodations would not require the Bank

to expend any funds.  If termination

occurs under this Section 8.2, Executive or her estate

will be entitled to receive only the compensation and benefits earned and

expenses reimbursable through the date this Agreement terminated, 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 her death or disability.

 

8.3  Other Termination by Bank.  If, before the end of the Term, the Bank

terminates Executive’s employment without Cause, or Executive terminates her

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 her employment had not terminated, or (b) the

amount Executive would be entitled to receive under Section 8.4 hereof.

 

8.4  Voluntary Termination by

Executive.  If before the end of the

Term, Executive elects to terminate this Agreement by delivering written notice

to the Bank, regardless of whether Executive had Good Reason to terminate this

Agreement, the Bank will pay Executive 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 (“Total Annual Compensation”).

 

8.5  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 her 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.

 

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 her 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 her 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 her 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 her to comply with such section.  Section 11 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 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 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 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, 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 her rights under all

employment, change in control and salary continuation agreements, whether written

or oral, she 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 she 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 her 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.

 

15.10  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.

 

Dated as of the date first above written.

 

	

   

  	

  PACIFIC

  NORTHWEST BANK

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  Patrick M. Fahey

  
	

   

  	

   

  	

  Patrick M.

  Fahey, President and CEO

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/  Kim S. Brace

  
	

   

  	

   

  	

  KIM S. BRACE

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