Document:

Prepared by MerrillDirect

Exhibit
10.1

FORM
OF TERMINATION PROTECTION AGREEMENT

             THIS TERMINATION PROTECTION AGREEMENT is entered
into between Juno Online Services, Inc. (the “Company”) and ___________ (the
“Executive”).

             Executive is a skilled and
dedicated employee who has important management responsibilities and talents
which benefit the Company.  The Company
believes that its best interests will be served if Executive is encouraged to
remain with the Company.  The Company
has determined that Executive’s ability to perform Executive’s responsibilities
and utilize Executive’s talents for the benefit of the Company, and the
Company’s ability to retain Executive as an employee, will be significantly
enhanced if Executive is provided with fair and reasonable protection from the
risks of a change in ownership or control of the Company.  Accordingly, the Company and Executive agree
as follows:

             1.          Defined
Terms.

             Unless otherwise indicated,
capitalized terms used in this Agreement which are defined in Schedule A
shall have the meanings set forth in Schedule A.

             2.          Effective
Date; Term.

             This Agreement shall be effective
as of _______, 2001 (the “Effective Date”) and shall remain in effect until
_______, 2004 (the “Term”); provided, however, that commencing
with _______, 2002 and on each anniversary thereof (each an “Extension Date”),
the Term shall be automatically extended for an additional one-year period,
unless the Company or Executive provides the other party hereto written notice
before the applicable Extension Date that the Term shall not be so
extended.  Notwithstanding the
foregoing, this Agreement shall, if in effect on the date of a Change of
Control, remain in effect until the later of eighteen months following the
Change of Control and the date that all of the Company’s obligations under this
Agreement have been satisfied in full.

             3.          Termination
Protection Benefits.

             If Executive’s employment with the
Company is terminated upon or at any time within eighteen months following a
Change of Control, by the Company without Cause or by Executive for Good
Reason, Executive shall be entitled to the payments and benefits provided
hereafter in this Section 3 and as set forth in this Agreement.  If Executive’s employment with the Company
is terminated prior to a Change of Control, by the Company by virtue of an act
or omission by the Company or by Executive for Good Reason, either (i) at the
request of a party (other than the Company or an affiliate of the Company) to a
bona fide transaction which, if consummated, would result in a Change of
Control, whether or not such Change of Control actually occurs, or (ii) in
connection with or in anticipation of a Change of Control that subsequently
occurs, Executive shall be entitled to the benefits provided hereafter in this
Section 3 and as set forth in this Agreement, and Executive’s Termination Date
shall be Executive’s last day of employment for purposes of clause (i) and
shall be deemed to have occurred immediately following the Change of Control
for purposes of clause (ii).  If
Executive’s employment with the Company is terminated for any reason other than
by the Company with Cause or due to Executive’s death or Permanent Disability
within the three month period immediately prior to a Change of Control that
subsequently occurs, Executive shall be entitled to the benefits provided
hereafter in this Section 3 and as set forth in this Agreement, and Executive’s
Termination Date shall be deemed to have occurred immediately following the
Change of Control.  For purposes of this
Agreement, the effective date of any such termination is referred to as the
“Termination Date.”  Notice of
termination without Cause or for Good Reason shall be given in accordance with
Section 14, and shall indicate the specific termination provision
hereunder relied upon, the relevant facts and circumstances, and the
Termination Date.

a.          Severance
Payments.  Within ten business days
after the Termination Date, the Company shall pay Executive a cash lump sum
amount equal to:

(1)         ___
times Executive’s Base Salary in effect on the Termination Date or the date of
a Change of Control (if any), whichever is higher; provided that if any
reduction of the Base Salary, or any failure to increase the Base Salary
pursuant to an agreement between Executive and the Company, has occurred, then
the Base Salary on either date shall be as in effect immediately prior to such
reduction or after giving effect to such increase, as the case may be; and

(2)         ___
times Executive’s Bonus in effect on the Termination Date or the date of a
Change of Control (if any), whichever is higher; provided that if any
reduction of the Bonus, or any failure to increase the Bonus pursuant to an
agreement between Executive and the Company, has occurred, then the Bonus on
either date shall be as in effect immediately prior to such reduction or after
giving effect to such increase, as the case may be; and

(3)         Executive’s
Bonus (as determined in (2), above) multiplied by a fraction, the numerator of
which shall equal the number of days Executive was employed by the Company between
the last day of the last period for which Executive received a year-end bonus
and the Termination Date and the denominator of which shall equal 365 (or such
other lower number of days in the applicable measuring period).

b.          Treatment
of Stock Options.  Any stock options
outstanding on the Termination Date (and any options into which such options
are converted or options granted in substitution for such options) shall (1)
become fully vested and exercisable (if not already vested and exercisable), and
(2) remain exercisable for a period of one year following the Termination
Date.  Notwithstanding the foregoing, no
option shall be exercisable after the specified maximum term of the option, as
set forth in the document granting the option.

c.          COBRA.  If, following the Termination Date,
Executive elects to continue group health benefits in accordance with the
Consolidated Omnibus Reconciliation Act of 1985 (COBRA) (or other similar state
coverage continuation law) and in accordance with the terms of the applicable
plans, policies and arrangements of the Company, the Company shall pay the
entire amount of all required premiums for a period of up to eighteen months or
until Executive obtains comparable coverage under another health plan,
whichever is earlier.  Executive agrees
to provide notice to the Company promptly if Executive becomes so covered under
another health plan.

d.          Payment
of Earned But Unpaid Amounts. 
Within ten business days after the Termination Date (or such earlier
date required by law), the Company shall pay Executive any as-yet unpaid
portion of the Base Salary owed through the Termination Date, any Bonus earned
but unpaid as of the Termination Date for any previously completed fiscal year
(or other measuring period) of the Company, all compensation previously
deferred by Executive but not yet paid, and reimbursement for any unreimbursed
expenses properly incurred by Executive in accordance with Company policies
prior to the Termination Date.  Executive
shall also receive such employee benefits, if any, to which Executive may be
entitled from time to time under the employee benefit or fringe benefit plans,
policies or programs of the Company, other than any Company severance policy
(payments and benefits in this subsection (d), the “Accrued Benefits”).

e.          Non-Compete
Payment.  Within ten business days
after the Termination Date, the Company shall pay Executive a cash lump sum
amount equal to ___ times the sum of Executive’s Base Salary and Bonus (as
determined in Section 3(a)(1) and Section 3(a)(2) above).  The payment of such amount is compensation
for, and is subject to, Executive’s compliance with the covenants and
restrictions set forth on the attached Schedule B.

             4.          Mitigation.

             Executive shall not be required to
mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise, and (except as provided in Section
3(c) in the case where Executive obtains other group health benefits),
compensation earned from such employment or otherwise shall not reduce the
amounts otherwise payable under this Agreement.

             5.          Impact
of “Golden Parachute” Tax Provisions.

a.          In
the event the Company determines, based upon the advice of the independent
public accountants for the Company, that part or all of the consideration,
compensation or benefits to be paid or provided to or for the benefit of
Executive under this Agreement constitute “parachute payments” under Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), then,
if the aggregate present value of such parachute payments, whether evaluated
alone or together with the aggregate present value of any consideration,
compensation or benefits to be paid to Executive under any other plan,
arrangement or agreement which constitute “parachute payments” (collectively
the “Parachute Amount”) exceed 2.99 times the Executive’s “base amount”, as
defined in Section 280G(b)(3) of the Code (the “Executive Base Amount”), the
amounts constituting “parachute payments” which would otherwise be payable or
provided to or for the benefit of Executive shall be reduced to the extent
necessary so that the Parachute Amount is equal to 2.99 times the Executive
Base Amount (the “Reduced Amount”); provided that such amounts shall not
be so reduced if Executive determines, based upon the advice of an independent
nationally recognized public accounting firm (which may, but need not be, the
independent public accountants of the Company), that without such reduction
Executive would be entitled to receive and retain, on a net after-tax basis
(including, without limitation, any excise taxes payable under Section 4999 of
the Code), an amount which is greater than the amount, on a net-after tax
basis, that Executive would be entitled to retain upon Executive’s receipt of
the Reduced Amount.  All costs incurred
by the Company or Executive in order to make the determinations described in
this Section 5(a) shall be paid by the Company.

b.          If
the determination made pursuant to Section 5(a) results in a reduction of the
amounts that would otherwise be paid or provided to or for the benefit of
Executive, Executive may then elect, in Executive’s sole discretion, which and
how much of any particular entitlement shall be eliminated or reduced and shall
advise the Company in writing of Executive’s election within ten days of the
determination of the reduction in payments. 
If no such election is made by Executive within such ten-day period, the
Company may elect which and how much of any entitlement shall be eliminated or
reduced and shall notify Executive promptly of such election.  Within ten days following such determination
and the elections hereunder, the Company shall pay or provide to or for the
benefit of Executive such amounts as are then due to Executive under this Agreement
and shall promptly pay or provide to or for the benefit of Executive in the
future such amounts as become due to Executive under this Agreement.

c.          As
a result of the uncertainty in the application of Section 280G of the Code at
the time of a determination hereunder, it is possible that payments will be
made by the Company which should not have been made under Section 5(a)
(“Overpayment”) or that additional payments which are not made by the Company
pursuant to Section 5(a) should have been made (“Underpayment”).  In the event that there is a final
determination by the Internal Revenue Service which the parties do not contest,
or a final determination by a court of competent jurisdiction, that an
Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to Executive which Executive shall return to the Company
together with interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code.  In the event that
there is (1) a final determination by the Internal Revenue Service which the
parties do not contest, (2) a final determination by a court of competent
jurisdiction, or (3) a change in the provisions of the Code, any regulations
promulgated thereunder, or other administrative or judicial announcements,
decisions, or interpretations pursuant to which an Underpayment reasonably
arises under this Agreement, any such Underpayment shall be promptly paid or
provided by the Company to or for the benefit of Executive, together with
interest at the applicable Federal rate provided for in Section 7872(f)(2) of
the Code.

             6.          Termination
for Cause.

             Nothing in this Agreement shall be
construed to prevent the Company from terminating Executive’s employment for
Cause.  If Executive is terminated for
Cause, the Company shall have no obligation to make any payments under this
Agreement, except for the Accrued Benefits.

             7.          Indemnification; Director’s and
Officer’s Liability Insurance.

             Executive shall, after the
Termination Date, retain all rights to indemnification under applicable law or
under the Company’s Certificate of Incorporation or By-Laws, as they may be
amended or restated from time to time, but which in any event shall not be
reduced in scope from such rights possessed by Executive on the date of a Change
of Control, if any, or the Termination Date, if earlier (except as required by
law).  In addition, the Company shall
maintain Director’s and Officer’s liability insurance on behalf of Executive,
at no less than the level in effect immediately prior to the Termination Date,
for the six-year period following the Termination Date, and throughout the
period of any applicable statute of limitations with respect to any services
rendered by Executive for or on behalf of the Company.

             8.          Release.

             Executive’s receipt of any payments
under this Agreement is contingent upon (i) Executive’s execution of a release
substantially in the form attached hereto as Exhibit 1, and (ii) the
expiration of the Age Discrimination in Employment Act revocation period set
forth in such release, without such release being revoked by Executive.

             9.          Not
an Employment Agreement; Effect on Other Rights.

             This Agreement is not, and nothing
herein shall be deemed to create, a contract of employment between the Company
and Executive.  Except as expressly
provided herein, this Agreement shall not interfere in any way with the right
of the Company at any time to reduce Executive’s compensation or other benefits
or terminate Executive’s employment, with or without Cause.  Any rights that Executive shall have in that
regard shall be as set forth in any applicable employment agreement between
Executive and the Company.  With respect
to Executive’s employment agreement, if any, as in effect immediately prior to
the Termination Date, nothing herein shall have any effect on Executive’s
rights thereunder; provided, however, that in the event of
Executive’s termination of employment in accordance with Section 3 hereof, this
Agreement shall govern solely for the purpose of providing the terms of all payments
and additional benefits to which Executive is entitled upon such termination
and any payments or benefit provided thereunder shall reduce the corresponding
type of payments or benefits hereunder.

             10.        Costs of Proceedings.

             Each party shall pay its own costs
and expenses in connection with any legal proceeding (including arbitration),
relating to the interpretation or enforcement of any provision of this
Agreement, except that the Company shall pay such costs and expenses, including
attorneys’ fees and disbursements, of Executive if Executive prevails in such
proceeding.

             11.        Assignment.

             Except as otherwise provided
herein, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the Company and Executive and their respective heirs, legal
representatives, successors and assigns. 
If the Company shall be merged into or consolidated with another entity,
the provisions of this Agreement shall be binding upon and inure to the benefit
of the entity surviving such merger or resulting from such consolidation.  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company, by
agreement, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. 
The provisions of this Section 11 shall continue to apply to each
subsequent employer of Executive hereunder in the event of any subsequent
merger, consolidation or transfer of assets of such subsequent employer.

             12.        Withholding.

             Notwithstanding any other provision
of this Agreement, the Company may, to the extent required by law, withhold applicable
federal, state and local income and other taxes from any payments due to
Executive hereunder.

             13.        Applicable
Law.

             This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.

             14.        Notice.

             For the purpose of this Agreement,
any notice and all other communication provided for in this Agreement shall be
in writing and shall be deemed to have been duly given when delivered by hand
or overnight courier or three days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.

             If to the Company:

Juno Online Services, Inc.

1540 Broadway, 27th Floor

New York, New York  10036

Attention:  General Counsel

             If
to Executive:

To the most recent address of Executive set
forth in the personnel records of the Company.

             15.        Succeeding Provisions of Law.

             References in this Agreement to any
provision of law shall also be read to include any other provision that
replaces, succeeds, or otherwise modifies such provision of law.

             16.        Entire Agreement; Modification.

             This Agreement constitutes the
entire agreement between the parties on the subject of termination of
employment and subsequent non-competition, and, except as expressly provided
herein, supersedes all other prior agreements expressly concerning the terms of
all payments and additional benefits to which Executive is entitled upon
termination of employment, whether or not such termination is in connection
with the occurrence of a Change of Control, including that certain employment
agreement between the Company and Executive dated _____________, and the
supplemental letter between the Company and Executive dated ________ which
forms a part of such employment agreement. 
This Agreement may be changed only by a written agreement executed by
the Company and Executive.

             17.        Counterparts.

             This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

             IN WITNESS WHEREOF, the parties have
executed this Agreement on the ____ day of ______, 2001.

	 	 	COMPANY
	 	 	Juno Online
  Services, Inc.
	 	 	 
	 	By:	

	 	Name:	

	 	Title:	

 

 

	 	EXECUTIVE
	 	[Name]
	 	 
	 	 
	 	

 

Schedule
A

CERTAIN
DEFINITIONS

             As used in this Agreement, and
unless the context requires a different meaning, the following terms, when
capitalized, have the meaning indicated:

             1.          “Act”
means the Securities Exchange Act of 1934, as amended.

             2.          “Base
Salary” means Executive’s annual rate of base salary in effect on the date
in question.

             3.          “Bonus”
means the amount payable (including any guaranteed minimum amounts) to
Executive under the applicable bonus arrangement (including an existing
employment agreement) with respect to the relevant fiscal year (or other
shorter measuring period) of the Company. 
If no amount payable or minimum amount is specified as of the relevant
date, then solely for the purpose of calculating the portion of the severance
payment described in Sections 3(a)(2) and 3(a)(3), the “Bonus” shall mean the
sum of all bonus payments made with respect to the most recent fiscal year (or
other most recent shorter measuring periods which in the aggregate cover a
twelve (12) month period), or the minimum guaranteed bonus for 2001, whichever
is greater.

             4.          “Cause”
means any of the following: (i) conviction of a felony under the laws of the
United States or any state thereof, or (ii) Executive’s willful malfeasance or
willful misconduct in connection with Executive’s duties hereunder, or (iii)
Executive’s repeated willful refusal to perform Executive’s duties (not
including any duties in excess of Executive’s duties immediately prior to a
Change of Control, if any) which, in each case, results in demonstrable
material harm to the financial condition or business reputation of the Company
or any of its subsidiaries or affiliates, which Executive fails to cure within
fifteen days after being provided with written notification of such willful
action or inaction as determined by resolution of the Board of Directors.

             5.          “Change
of Control” means the first to occur of any of the following during the
Term:

a.          any
“person” or “group” (as described in the Act) becomes the beneficial owner of
50% or more of the combined voting power of the then outstanding voting
securities with respect to the election of the Company’s Board of Directors,
and also holds more than any group or person who is the beneficial owner of
Company common shares.  “Person” does not
include any Company employee benefit plan, any company the shares of which are
held by the Company’s shareholders in substantially the same proportion as they
held the Company’s stock, or any testamentary trust or estate;

b.          any
merger, consolidation, amalgamation, plan or arrangement, reorganization or
similar transaction involving the Company, other than, in the case of any of
the foregoing, a transaction in which Company shareholders immediately prior to
the transaction hold immediately thereafter, in the same proportion as
immediately prior to the transaction, not less than 50.1% of the combined
voting power of the then outstanding voting securities with respect to the
election of the board of directors of the resulting entity;

c.          any
change in a majority of the Company’s Board of Directors within a 24-month
period unless the change was approved by a majority of the Incumbent Directors;

d.          any
liquidation, sale, exchange, lease or other transfer of all or substantially
all of the assets of the Company; or

e.          any
other transaction so denominated by the Company’s Board of Directors.

             6.          “Code”
means the Internal Revenue Code of 1986, as amended.

             7.          “Company”
means Juno Online Services, Inc. and any successor or successors thereto.

             8.          “Good
Reason” means any of the following actions taken without Executive’s
express prior written approval, other than due to Executive’s Permanent
Disability or death:

a.          any
decrease of more than five percent over a twelve consecutive month period in,
or any failure to increase in accordance with an agreement between Executive
and the Company, Base Salary, Bonus, or minimum guaranteed bonus;

b.          any
material decrease in Executive’s pension benefit opportunities or any material
diminution in the aggregate employee benefits (in each case, if applicable, as
afforded to Executive immediately prior to a Change of Control, if any); for
this purpose employee benefits shall include, but not be limited to life
insurance, medical and disability benefits, flexible perquisites and matching
gifts;

c.          any
diminution in Executive’s title or reporting relationship, or substantial
diminution in duties or responsibilities; or

d.          any
relocation of Executive’s principal place of business of 20 miles or more,
including travel inconsistent (as to frequency and/or distance) with Executive’s
normal practice as of the date of the Agreement.

Executive shall
have six months from the time Executive first becomes aware of the existence of
Good Reason (but not more than eighteen months following the Change of Control)
to resign for Good Reason.

             9.          “Incumbent Director” means a
member of the Company’s Board of Directors at the beginning of the period in
question, including any director who was not a member of the Company’s Board of
Directors at the beginning of such period but was elected or nominated to the
Board of Directors by, or on the recommendation of or with the approval of, at
least two-thirds of the directors who then qualified as Incumbent Directors (so
long as such director was not nominated by a person who has expressed an intent
to effect a Change of Control or engage in a proxy or other control contest).

             10.        “Permanent
Disability” means inability, by reason of any physical or mental
impairment, to substantially perform the significant aspects of Executive’s
regular duties, which inability has lasted for six months and is reasonably
expected to be permanent.  Permanent
Disability shall be determined by a qualified physician who is acceptable to
both the Company and Executive.

Schedule
B

NON-COMPETITION

Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its affiliates and accordingly agrees as follows.  Unless otherwise indicated, capitalized
terms shall have the meaning set forth in the Agreement to which this Schedule
B is a part, including the terms of Schedule A.

             1.          For
a period of _______ months following the Termination Date (the “Restricted
Period”), Executive will not, whether on Executive’s own behalf or on behalf of
or in conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly solicit or assist in soliciting
in competition with the Company, the business of any client of the Company:

a.          with
whom Executive had personal contact or dealings on behalf of the Company during
the six-month period immediately preceding the Termination Date; or

b.          for
whom Executive had direct or indirect responsibility during the six-month
period immediately preceding the Termination Date.

             2.          During
the Restricted Period, Executive will not directly or indirectly:

a.          provide
services comparable to those Executive performed for the Company for any
company, the primary business of which is the provision of dial-up or broadband
Internet access or for the Internet access provider unit or subsidiary of any
company whose primary business is other than the provision of Internet access
(a “Competitive Business”); or

b.          acquire
a financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant.

             3.          Notwithstanding
anything to the contrary in the Agreement, Executive may, directly or
indirectly, own, solely as an investment, securities of any person engaged in
the business of the Company or its affiliates, including a Competitive
Business, if Executive (i) is not a controlling person of, or a member of
a group which controls, such person and (ii) does not, directly or
indirectly, own 5% or more of any class of equity securities of such person.

             4.          During
the Restricted Period, Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any person, company, business entity or
other organization whatsoever, directly or indirectly, solicit or encourage any
employee of the Company or its affiliates to provide services to a Competitive
Business.

It is expressly
understood and agreed that although Executive and the Company consider the
restrictions contained in this Schedule B and the Agreement to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Schedule B and the Agreement is an unenforceable restriction
against Executive, the provisions of this Schedule B and the Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Schedule B or the Agreement is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

EXHIBIT
1

FORM
OF RELEASE

             THIS RELEASE (“Release”) is made by
___________ (“you”) as of the date set forth below.

             WHEREAS, Juno Online Services,
Inc. and you have entered into a Termination Protection Agreement dated as of
__________________, 2001 (the “Agreement”); and

             IN CONSIDERATION OF the protection and
benefits provided for under the Agreement, and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, you hereby
agree as follows:

             a.          You
hereby agree on behalf of yourself, your agents, assignees, attorneys,
successors, assigns, heirs and executors, to, and you do hereby, fully and
completely forever release the Company and its affiliates, predecessors and successors
and all of their respective past and/or present officers, directors, partners,
members, managing members, managers, employees, agents, representatives,
administrators, attorneys, insurers and fiduciaries in their individual and/or
representative capacities (hereinafter collectively referred to as the “Company
Releasees”), from any and all causes of action, suits, agreements, promises,
damages, disputes, controversies, contentions, differences, judgments, claims,
debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities,
covenants, contracts, variances, trespasses, extents, executions and demands of
any kind whatsoever, which you or your heirs, executors, administrators,
successors and assigns ever had, now have or may have against the Company
Releasees or any of them, in law, admiralty or equity, whether known or unknown
to you, for, upon, or by reason of, any matter, action, omission, course or
thing in connection with or in relationship to your employment or other service
relationship with the Company or its affiliates, the termination of any such
employment or service relationship and any applicable employment, compensatory
or equity arrangement with the Company or its affiliates occurring up to the
date this Release is signed by you; provided that such released claims
shall not include any claims to enforce your rights under, or with respect to,
the Agreement, any claims relating to indemnification as described further in
Section 7 of the Agreement, or any claims which arise out of the relationship
with the Company or its affiliates other than that as an employee or other
service provider (e.g., a shareholder) (such released claims are collectively
referred to herein as the "Released Claims").

             b.          Notwithstanding
the generality of clause (a) above, the Released Claims include, without
limitation, (i) any and all claims under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act
of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, and any and all
other federal, state or local laws, statutes, rules and regulations pertaining
to employment or otherwise, and (ii) any claims for wrongful discharge, breach
of contract, fraud, misrepresentation or any compensation claims, or any other
claims under any statute, rule or regulation or under the common law, including
compensatory damages, punitive damages, attorney’s fees, costs, expenses and
all claims for any other type of damage or relief.

             c.          To
ensure that the foregoing release is fully enforceable in accordance with its
terms, you agree to waive any and all rights of Section 1542 of the California
Civil Code (to the extent applicable) as it exists from time to time or a
successor provision thereto, which provides:

A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have materially affected
his settlement with the debtor.

In addition, to
ensure that the foregoing release is fully enforceable in accordance with its
terms, you agree to waive any protection that may exist under any comparable or
similar statute and under any principle of common law of the United States or
any and all States.

             d.          You
represent that you have read carefully and fully understand the terms of this
Release, and that you have been advised to consult with an attorney and have
had the opportunity to consult with an attorney prior to signing this
Release.  You acknowledge that you are
executing this Release voluntarily and knowingly and that you have not relied
on any representations, promises or agreements of any kind made to you in
connection with your decision to accept the terms of this Release, other than
those set forth in this Release.  You
acknowledge that you have been given at least twenty-one (21)(1) days to
consider whether you want to sign this Release and that the Age Discrimination
in Employment Act gives you the right to revoke this Release within seven (7)
days after it is signed, and you understand that you will not receive any
payments due you under the Agreement before such seven (7) day revocation
period (the “Revocation Period”) has passed and then, only if you have not
revoked this Release.  To the extent you
have executed this Release within less than twenty-one (21) days after its delivery
to you, you hereby acknowledge that your decision to execute this Release prior
to the expiration of such twenty-one (21) day period was entirely voluntary.

             THIS the ___ day of
___________________, 200_.

	 	[Name]
	 	 
	 	 
	 	 
	 	

ACCEPTED AND
AGREED:

Juno Online
Services, Inc.

(1) Note: 
A 45-day period instead may apply in certain cases where a release is
requested in connection with an exit incentive or other termination program
offered to a group or class of employees. 
In that case, additional disclosure must be provided to Executive.

 

	By:	

	Name	

	Title:Prepared by MerrillDirect

Exhibit 10.17

 

PACIFIC NORTHWEST BANK

EMPLOYMENT AGREEMENT

             THIS
EMPLOYMENT AGREEMENT ("Agreement"), signed January 15, 1998, between
PACIFIC NORTHWEST BANK ("Bank") and GEORGE P. BRACE
("Employee") takes effect on the effective date of the Reorganization
("Effective Date").

RECITALS

	A.	InterWest Bancorp, Inc.
  ("InterWest") has entered into a Plan and Agreement of
  Reorganization ("Plan") with the Bank, under which the Bank will
  become a wholly owned subsidiary of InterWest ("Reorganization").
	 	 
	B.	Employee is presently the Bank's Senior Vice
  President and the Manager of the Bellevue Financial Center. The Bank wishes
  to continue Employee's employment in that capacity under the terms and
  conditions of this Agreement.
	 	 
	C.	Employee wishes to continue his employment at
  the Bank under the terms and conditions of this Agreement.

AGREEMENT

	 	The parties agree as follows.
	 	 
	1.	Employment. The Bank will continue Employee's
  employment during the Term of this Agreement, and Employee accepts employment
  by the Bank on the terms and conditions set forth in this Agreement.
  Employee's title will be "Senior Vice President/Manager, Bellevue
  Financial Center."
	 	 	 
	2.	Effective Date and
  Term.	 
	 	 	 
	 	(a)	Effective Date. This Agreement is effective as of the
  Effective Date.
	 	 	 
	 	(b)	Term. The term of this Agreement ("Term")
  is three years, beginning on the Effective Date.
	 	 	 
	 	(c)	Abandonment of the Reorganization. If the Plan terminates before Closing,
  this Agreement will not become effective and will be void.
	 	 	 
	3.	Duties. Employee will faithfully and
  diligently perform the duties assigned to Employee from time to time by the
  Bank's Chairman or President, consistent with the duties that have been
  normal and customary to Employee's position. Employee will use his best efforts
  to perform his duties and will devote full time and attention to these duties
  during working hours. Employee will report directly to the Bank's President.
  The Bank's board of directors may, from time to time, modify Employee's title
  or performance responsibilities to accommodate management succession, as well
  as any other management objectives of the Bank or of InterWest. Employee 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 Section 3.
				

 

	4.	Salary. Initially, Employee will receive a
  salary of $125,000 per year, to be paid in accordance with the Bank's regular
  payroll schedule.
	 	 	 
	5.	Incentive
  Compensation.
  The Bank's board of directors, subject to ratification by InterWest's board
  of directors, will determine the amount of bonus, if any, to be paid by the
  Bank to Employee for each year during the Term. In making this determination,
  the Bank's board of directors will consider factors such as Employee's
  performance of his duties and the safety, soundness, and profitability of the
  Bank. Employee's bonus, if any, will reflect Employee'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 or InterWest's board of directors with respect
  to any benefit plans or programs, Employee will be entitled to receive
  benefits (including stock options) similar to those offered to other
  employees of the Bank or InterWest with position and duties comparable to
  those of Employee. The foregoing notwithstanding, it is the specific and
  agreed intent that the total compensation of Employee shall be, in the
  aggregate, comparable to the total compensation Employee is presently
  receiving at the Bank (including but not limited to benefits under any
  retirement plans or long-term disability plans).
	 	 	 
	7.	Business Expenses. The Bank will reimburse Employee for
  ordinary and necessary expenses (including, without limitation, Bank
  automobile, travel, entertainment, and similar expenses) incurred in
  performing and promoting the Bank's business. Employee 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.	 
	 	 	 
	 	(a)	Termination By Bank for Cause. If, before the end of the Term, the
  Bank terminates Employee's employment for Cause or Employee terminates his
  employment without Good Reason, the Bank will pay Employee the salary earned
  and expenses reimbursable under this Agreement incurred through the date of
  Employee's termination. Employee will have no right to receive compensation
  or other benefits for any period after termination under this Section 8(a).
	 	 	 
	 	(b)	Other Termination By Bank. If, before the end of the Term, the
  Bank terminates Employee's employment without Cause or Employee terminates
  his employment for Good Reason (defined below), the Bank will pay Employee
  for the remainder of the Term the salary Employee would have been entitled to
  under this Agreement if his employment had not terminated.
	 	 	 
	 	(c)	Death or Disability. This Agreement terminates (1) if Employee
  dies or (2) if Employee 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 accomodation Employee could continue to perform his duties under
  this Agreement and making these accomodations would not require the Bank to
  expend any funds. If termination occurs under this Section 8(c), Employee or
  his estate will be entitled to receive only the compensation and benefits
  earned and expenses reimbursable through the date this Agreement terminated.
				

 

	 	(d)	Employee Termination Window. During the period commencing with the
  25th
  month of the Term through the 30th month of the Tem, Employee may terminate
  this Agreement by delivering written notice to the Bank and to InterWest. If
  Employee does so, regardless of whether Employee had Good Reason to terminate
  the Agreement, the Bank will pay Employee a single cash payment in an amount
  equal to Employee's W-2 income before salary deferrals over the twelve (12)
  months preceding the date of termination ("Total Annual
  Compensation").
	 	 	 
	 	(e)	Termination Related to a Change in Control.
	 	 	 
	 	(1)	Termination by Bank. If the Bank, or its successor in
  interest by merger, or its transferee in the event of a purchase and
  assumption transaction, (for reasons other than Employee's death, disability,
  or Cause) (1) terminates Employee's employment within one year following a
  Change in Control (as defined below) or (2) terminates Employee's employment
  before a Change in Control and a Change in Control occurs within nine months
  after the termination, the Bank will pay Employee the payment described in
  Section 8(e)(3).
	 	 	 
	 	(2)	Termination by Employee. If Employee terminates Employee's
  employment, with or without Good Reason, within one year following a Change
  in Control, the Bank will pay Employee the payment described in Section
  8(e)(3).
	 	 	 
	 	(3)	Payments. If Section 8(e)(1) or (2) is triggered as
  described in those Sections, the Bank will pay Employee his Total Annual
  Compensation (as defined in Section 8(d) above).
	 	 	 
	 	(f)	Limitations on Payments Related to Change in
  Control.
  The following apply notwithstanding any other provision of this Agreement:
	 	 	 
	 	(1)	the payment described in Section 8(e)(3) will
  be less than the amount that would cause it to be a "parachute
  payment" within the meaning of Section 280G(b)(2)(A) of the Internal
  Revenue Code; and
	 	 	 
	 	(2)	Employee's right to receive the payment
  described in Section 8(e)(3) terminates (i) immediately, if before the Change
  in Control transaction closes, Employee terminates his employment without
  Good Reason or the Bank terminates Employee's employment for Cause, or (ii)
  one year after a Change in Control occurs.
	 	 	 
	 	(g)	Definition of "Change in Control". "Change in Control" means a
  change "in the ownership or effective control" or "in the
  ownership of a substantial portion of the assets" of InterWest, within
  the meaning of section 280G of the Internal Revenue Code.
	 	 	 
	 	(h)	Return of Bank Property. If and when Employee ceases, for any
  reason, to be employed by the Bank, Employee must return to the Bank all
  keys, pass cards, identification cards and any other property of the Bank or
  InterWest. At the same time, Employee 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 or InterWest. The obligations in this paragraph include
  the return of documents and other materials which may be in Employee's desk
  at work, in Employee's car or place of residence, or in any other location
  under Employee's control.
					

 

	9.	Definition of
  "Cause".
  "Cause" means any one or more of the following:
	 	 	 
	 	(a)	Willful misfeasance or gross negligence in the
  performance of Employee's duties;
	 	 	 
	 	(b)	Conviction of a crime in connection with his
  duties;
	 	 	 
	 	(c)	Conduct demonstrably and significantly harmful
  to the Bank, as reasonably determined by the Bank's board of directors on the
  advice of legal counsel; or
	 	 	 
	 	(d)	Permanent disability, meaning a physical or
  mental impairment which renders Employee incapable of substantially
  performing the duties required under this Agreement, and which is expected to
  continue rendering Employee so incapable for the reasonably foreseeable
  future.
	 	 	 
	10.	Definition of
  "Good Reason". "Good Reason" means only any one or
  more of the following:
	 	 	 
	 	(a)	Reduction, without Employee's consent, of
  Employee's salary or elimination of any compensation or benefit plan
  benefiting Employee, 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) formerly
  benefited;
	 	 	 
	 	(b)	The assignment to Employee without his consent
  of any authority or duties materially inconsistent with Employee's position
  as of the date of this Agreement; or
	 	 	 
	 	(c)	A relocation or transfer of Employee's
  principal place of employment that would require Employee 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 Employee consents to the
  relocation or transfer.
	 	 	 
	11.	Confidentiality. Employee 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 InterWest or their business operations or customers,
  unless (1) the Bank or InterWest consents to the use or disclosure of their
  respective confidential information, (2) the use or disclosure is consistent
  with Employee's duties under this Agreement, or (3) disclosure is required by
  law or court order.
	 	 	 
	12.	Noncompetition.
	 	 	 
	 	(a)	Participation in a Competing Business. During the Term and for eighteen (18)
  months after Employee's employment with the Bank, InterWest, or any Subsidiary
  of InterWest ends (regardless of whether Employee's employment ends at the
  end of the Term or at some other point after the end of the Term), Employee
  will not become involved with a Competing Business or serve, directly or
  indirectly, a Competing Business in any manner, including, without
  limitation, as a shareholder, member, partner, director, officer, manager,
  investor, organizer, "founder", employee, consultant, or agent; provided,
  however, that Employee may acquire and passively own an interest not to
  exceed 2% of the total equity interest in any entity (whether or not such
  entity is a Competing Business).

 

	 	(b)	No Solicitation. During the Term and for eighteen (18)
  months after Employee's employment with the Bank, InterWest, or any affiliate
  of InterWest ends (regardless of whether Employee's employment ends at the
  end of the Term or at some other point after the end of the Term), Employee
  will not directly or indirectly solicit or attempt to solicit (1) any
  employees of the Bank, InterWest, or any of InterWest's Subsidiaries, to
  leave their employment or (2) any customers of the Bank, InterWest, or any of
  InterWest's Subsidiaries to remove their business from the Bank, InterWest,
  or any of InterWest's Subsidiaries, 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.
	 	 	 
	 	(c)	Employment Outside the Washington State. Nothing in this Agreement prevents
  Employee from accepting employment after the end of the Term outside
  Washington State from a Competing Business, as long as Employee will not (a)
  act as an employee or other representative or agent of the Competing Business
  within Washington State or (b) have any responsibilities for the Competing
  Business' operations within Washington State.
	 	 	 
	 	(d)	Competing Business. "Competing Business" means
  any financial institution or trust company that competes with, or will
  compete in Washington State with, InterWest, the Bank, or any of InterWest's
  Subsidiaries. The term "Competing Business" includes, without
  limitation, any start-up or other financial institution or trust company in
  formation.
	 	 	 
	13.	Enforcement.
	 	 	 
	 	(a)	The Bank and Employee stipulate that, in light
  of all of the facts and circumstances of the relationship between Employee
  and the Bank, the agreements referred to in Sections 11 and 12 (including
  without limitation their scope, duration and geographic extent) are fair and
  reasonably necessary for the protection of the Bank's and InterWest's
  confidential information, goodwill and other protectable interests. If a
  court of competent jurisdiction should decline to enforce any of those
  covenants and agreements, Employee and the Bank request the court to reform
  these provisions to restrict Employee's use of confidential information and
  Employee's ability to compete with the Bank and InterWest to the maximum
  extent, in time, scope of activities, and geography, the court finds
  enforceable.
	 	 	 
	 	(b)	Employee acknowledges that the Bank and
  InterWest will suffer immediate and irreparable harm that will not be
  compensable by damages alone, if Employee repudiates or breaches any of the
  provisions of Sections 11 or 12 or threatens or attempts to do so. For this
  reason, under these circumstances, the Bank and InterWest, 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 retrain the breach, and neither
  the Bank nor InterWest will be required to post a bond as a condition for the
  granting of this relief.

 

	14.	Adequate Consideration. Employee specifically acknowledges the
  receipt of adequate consideration for the covenants contained in Sections 11
  and 12 and that the Bank is entitled to require him to comply with these
  Sections. These Sections will survive termination of this Agreement. Employee
  represents that if his employment is terminated, whether voluntarily or
  involuntarily, Employee has experience and capabilities sufficient to enable
  Employee 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 Employee from earning a livelihood.
	 	 	 
	15.	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 Employee
  violates Section 11 or 12, the Bank will have the right to initiate the court
  proceedings described in Section 13(b), in lieu of an arbitration proceeding
  under this Section 15. The Bank may initiate these proceedings wherever appropriate
  within Washington State; but Employee will consent to venue and jurisdiction
  in King County, Washington.
	 	 	 
	16.	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)	Entire Agreement. This Agreement constitutes the entire
  understanding between the parties concerning its subject matter and
  supersedes all prior agreements. Accordingly, Employee specifically waives
  the terms of and all of his rights under all employment, change-in-control
  and salary continuation agreements, whether written or oral, he has
  previously entered into with the Bank or any of its Subsidiaries or
  affiliates.
	 	 	 
	 	(c)	Binding Effect. This Agreement will bind and inure to the
  benefit of the Bank's, InterWest's, and Employee's heirs, legal
  representatives, successors and assigns.
	 	 	 
	 	(d)	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.

 

	 	(e)	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.
	 	 	 
	 	(f)	Counsel Review. Employee acknowledges that he has had the
  opportunity to consult with independent counsel with respect to the
  negotiation, preparation, and execution of this Agreement.
	 	 	 
	 	(g)	Assignment. The services to be rendered by Employee under
  this Agreement are unique and personal. Accordingly, Employee may not assign
  any of his rights or duties under this Agreement.
	 	 	 
	 	(h)	Amendment. This Agreement may be modified only through a
  written instrument signed by both parties and consented to by InterWest in
  writing.
	 	 	 
	 	(i)	Severability. The provisions of this Agreement are
  severable. The invalidity of any provision will not affect the validity of
  other provisions of this Agreement.
	 	 	 
	 	(j)	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 15(c), 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.
	 	 	 
	 	(k)	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.

 

Signed January 15, 1998:

	 	PACIFIC NORTHWEST BANK
	 	 
	 	/s/ PATRICK M. FAHEY
	 	

	 	By:
	 	Its: President
	 	 
	 	GEORGE P. BRACE, individually
	 	 
	 	/s/ GEORGE P. BRACE
	 	

	 	George P. Brace

FIRST AMENDMENT TO

PACIFIC NORTHWEST BANK EMPLOYMENT AGREEMENT

 

(GEORGE P. BRACE)

 

             This
First Amendment to Employment Agreement (“Amendment”) is made on the 23rd
day of March, 2000, between INTERWEST BANCORP, INC. and PACIFIC NORTHWEST BANK
(hereinafter jointly referred to as “Bank”) and GEORGE P. BRACE (“Employee”),
who agree as follows:

 

RECITALS

 

             This
Amendment is made with reference to the following facts and objectives:

 

             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 Employee (“Agreement”).

 

             B.          Bank and Employee now wish to amend
the Agreement to make it advantageous for Employee to continue his employment
after June 16, 2000, the first date upon which Employee has the right to
terminate employment with Bank and receive a one-time cash payment as provided
under the “Employment Termination Window” provision of the Agreement.

 

             C.          To achieve the goals set forth in B,
above, the parties agree to amend the Agreement as set forth hereafter.

 

AMENDMENT

 

             1.          Subparagraph (b), Term, of paragraph 2 of the Agreement, Effective Date and Term, is deleted in
its entirety and the following shall be inserted in its place:

 

             (b)        Term.  The term of this Agreement (“Term”) shall
commence on the Effective Date and terminate on June 15, 2002, unless extended
by written agreement.

 

             2.          Paragraph 4, Salary, is deleted in its entirety and
the following shall be inserted in its place:

 

             4.          Salary.  Employee shall receive a salary set by the
Compensation Committee for employees with comparable duties and experience, but
not less than $130,000 per year, to be paid in accordance with the Bank’s
regular payroll schedule.  Employee’s
salary shall be reviewed annually.

 

             3.          Subparagraph 8 (c), Termination, is amended to add the
following at the end of the paragraph:

 

“.
 . . , together with a single cash payment in an amount equal to Employee’s W-2
income before salary deferrals over the 12 months preceding the death or
disability, provided, however, if
the death or disability occurs after June 16, 2000, the amount paid shall in no
event be less than the amount Employee would receive if Employee terminated
employment on June 16, 2000.”

 

             4.          Subparagraph 8(d), Employee
Termination Window, is deleted in its entirety and replaced with the
following:

 

             (d)        Employee
Termination Window.  During the
period commencing with June 16, 2000 through June 15, 2002, Employee may
terminate this Agreement by delivering written notice to Bank.  If Employee does so, regardless of whether
Employee had Good Reason to terminate the Agreement, Bank will pay Employee a
single cash payment, payable within 30 days of termination, in an amount equal
to Employee’s W-2 income before salary deferrals over the twelve (12) months
preceding the date of termination (“Total Annual Compensation”); provided, however, that the amount paid
under this section shall in no event be less than the amount Employee would
receive if Employee terminated employment on June 16, 2000.

 

             5.          Subparagraph 12(a), Participation in a Competing Business,
is deleted in its entirety and replaced with the following:

 

             (a)         Participation
in a Competing Business.  During his
employment with Bank and for twelve (12) months after Employee’s employment
with Bank, or any Subsidiary of InterWest ends (regardless of whether
Employee’s employment ends at the end of the Term or at some other point after
the end of the Term), Employee will not become involved with a Competing
Business or serve, directly or indirectly, a Competing Business in any manner,
including, without limitation, as a shareholder, member, partner, director,
officer, manager, investor, organizer, “founder,” employee, consultant, or
agent; provided, however, that
Employee may acquire and passively own an interest not to exceed 2% of the
total equity interest in any entity (whether or not such entity is a Competing
Business).

 

             6.          Except as set forth in this Amendment,
all the provisions of the Agreement shall remain unchanged and in full force
and effect.

 

	 	InterWest Bancorp, Inc.
	 	 
	 	 
	 	By: 
  /s/ STEVEN M. WALDEN
	 	

	 	       
  Stephen M. Walden, President and CEO
	 	 
	 	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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