Document:

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                                                                   EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT
                               MICHAEL J. CLEMENTZ

        This EMPLOYMENT AGREEMENT ("Agreement") signed March 15, 2000, between
FRONTIER FINANCIAL CORPORATION ("Frontier"), FRONTIER BANK and MICHAEL J.
CLEMENTZ ("Executive") takes effect on the Effective Date of the Merger of
Liberty Bay Financial Corporation ("Liberty") into Frontier and North Sound Bank
into Frontier Bank ("Effective Date").

                                    RECITALS

        A. Frontier and Frontier Bank have entered into a Plan and Agreement of
Mergers ("Plan") with Liberty and North Sound Bank, pursuant to which Liberty
will merge into Frontier and North Sound Bank will merge into Frontier Bank
("Mergers").

        B. Executive is presently the President and Chief Executive Officer
("CEO") of Liberty and the Chairman and CEO of North Sound Bank. Frontier and
Frontier Bank wish to retain Executive's services following the Mergers, and
Executive wishes to accept employment with Frontier and Frontier Bank following
the Mergers.

        C. The purpose of this Agreement is to set forth the terms agreed to by
the parties to achieve the goals set forth in paragraph B, above.

                                    AGREEMENT

        The parties agree as follows:

        1. EMPLOYMENT. Frontier and Frontier Bank agree to employ Executive, and
Executive agrees to accept employment, with Frontier. During the Term of his
employment under this Agreement, Executive will have the title of Executive Vice
President of Frontier Financial Corporation and Frontier Bank (hereafter
referred to jointly as "Frontier" unless Frontier Bank is specifically
mentioned). In addition, during the Term of this Agreement, Executive will be a
member of the Frontier Executive Management Team.

        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 Mergers. If the Plan terminates before
        Closing, this Agreement will not become effective and will be void.

        3. DUTIES. Executive will faithfully and diligently perform the duties
assigned to Executive from time to time by the Board of Directors of Frontier
and Frontier Bank (hereinafter

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referred to jointly as the "Board") and by the President and CEO of Frontier.
These duties will include, without limitation, the following:

                (a) Executive will oversee the integration of the branches of
        North Sound Bank into Frontier Bank and will be responsible for the
        development and preservation of banking relationships and other business
        development efforts (including appropriate civic and community duties)
        in the Peninsula Region.

                (b) Executive will assist Frontier with the development and
        implementation of acquisition strategies and in the analysis of the
        viability of new product offerings and opportunities to engage in new
        activities "closely related to banking."

                (c) Executive will serve as a member of the Board of Directors
        of Frontier Financial Corporation, Frontier Bank and FFP, Inc.,
        receiving all the benefits and compensation received by other directors.

        4. SALARY. Initially, Executive will receive a base salary from Frontier
Bank of $150,000 per year, to be paid in accordance with Frontier Bank's regular
payroll schedule ("Base Salary").

        5. INCENTIVE COMPENSATION. The Board will determine the amount of bonus
to be paid by Frontier to Executive for each year during the Term. In making
this determination, the Board will consider factors such as Executive's
performance of his duties and the safety, soundness and profitability of
Frontier.

        6. STAY BONUS. In addition to any incentive compensation granted
Executive under paragraph 5 hereof, on each anniversary of the Effective Date of
this Agreement during the Term, Executive shall receive a "Stay Bonus" of
$40,000 (three payments--$120,000 in total).

        7. INCOME DEFERRAL AND BENEFITS. Subject to eligibility requirements and
in accordance with and subject to any policies adopted by the Board with respect
to any benefit plans or programs, Executive will be entitled to receive benefits
(including stock options) similar to those offered to other executive officers
of Frontier and its Subsidiaries with positions and duties comparable to those
of Executive.

        8. BUSINESS EXPENSES. Frontier will reimburse Executive for ordinary and
necessary expenses (including, without limitation, travel, entertainment, club
dues and similar expenses) incurred in performing and promoting Frontier's
business. The level of reimbursement will be comparable to the reimbursement
Executive currently receives at North Sound Bank. Executive will present from
time to time itemized accounts of these expenses, subject to any rules and
regulations of the Internal Revenue Service.

        9. TERMINATION.

                (a) Termination By Frontier for Cause. If, before the end of the
        Term, Frontier terminates Executive's employment for Cause or Executive
        terminates his employment without Good Reason (defined below), Frontier
        will pay Executive the

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        salary earned and expenses reimbursable under this Agreement incurred
        through the date of Executive's termination. Executive will have no
        right to receive compensation or other benefits, including Stay Bonus,
        for any period after termination under this Section 9(a).

                (b) Other Termination By Frontier. If, before the end of the
        Term, Frontier terminates Executive's employment without Cause or
        Executive terminates his employment for Good Reason (defined below),
        Frontier will pay Executive for the remainder of the Term the Base
        Salary and Stay Bonus Executive would have been entitled to under this
        Agreement if his employment had not terminated.

                (c) Death or Disability. This Agreement terminates (1) if
        Executive dies or (2) if Executive is unable to perform his duties and
        obligations under this Agreement for a period of 90 days as a result of
        a physical or mental disability arising at any time during the Term of
        this Agreement, unless with reasonable accommodation Executive could
        continue to perform his duties under this Agreement and making these
        accommodations would not pose undue hardship to Frontier. If termination
        occurs under this Section 9(c), Executive or his estate will be entitled
        to receive only the compensation and benefits earned and expenses
        reimbursable through the date this Agreement terminated, together with
        the balance of any Stay Bonus otherwise payable under this Agreement.

                (d) Health Benefits. Upon termination of Executive's employment
        with Frontier (whether prior to or after expiration of the Term of this
        Agreement), Frontier will make a single cash payment (the "Insurance
        Payment") to Executive in an amount sufficient to cover the
        present-value costs (after income tax calculated at the then highest
        individual rate) of (1) Executive's coverage under Frontier's COBRA
        Plan, and (2) such other individual or group health insurance plan(s)
        providing in the aggregate the same level of health benefits to
        Executive as those enjoyed by comparably situated Frontier employees.
        The Insurance Payment, which is based on projected rates in effect at
        the expiration of Executive's employment, is intended to cover Executive
        until the time of his 65th birthday. This section 9(d) will survive
        termination of this Agreement.

                (e) Return of Bank Property. If and when Executive ceases, for
        any reason, to be employed by Frontier, Executive must return to
        Frontier all keys, pass cards, identification cards and any other
        property of Frontier. At the same time, Executive also must return to
        Frontier 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 Frontier. 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.

        10. DEFINITION OF "CAUSE". "Cause" means any one or more of the
following:

                (a) Willful misfeasance or gross negligence in the performance
        of Executive's duties.

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

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                (c) Conduct demonstrably and significantly harmful to Frontier,
        as reasonably determined by the Board on the advice of legal counsel.

        11. DEFINITION OF "GOOD REASON". "Good Reason" means only any one or
more of the following:

                (a) 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 Frontier employees formerly
        benefited.

                (b) The assignment to Executive without his consent of any
        authority or duties materially inconsistent with Executive's position as
        of the Effective Date of this Agreement.

                (c) A relocation or transfer of Executive's principal place of
        employment that would require Executive to commute on a regular basis
        more than thirty (30) miles each way from his current business office at
        North Sound Bank on the Effective Date of this Agreement, unless
        Executive consents to the relocation or transfer.

                (d) The written consent of Frontier to such resignation.

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

        13. NONCOMPETITION.

                (a) Participation in a Competing Business. During the period
        Executive is employed by Frontier and for twenty-four (24) months after
        Executive's employment with Frontier terminates, Executive 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 Executive may acquire and passively own an
        interest not exceeding 2% of the total equity interest in any Competing
        Business.

                (b) No Solicitation. During the period Executive is employed
        with Frontier and for twenty-four (24) months after Executive's
        employment with Frontier terminates, Executive will not directly or
        indirectly solicit or attempt to solicit (1) any employees of Frontier,
        or any of Frontier's Subsidiaries, to leave their employment or (2) any
        customers of Frontier, or any of Frontier's Subsidiaries, to remove
        their business from Frontier or to participate in any manner in a
        Competing Business. Solicitation prohibited under this Section includes
        solicitation by any means, including, without limitation,

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        meetings, letters or other mailings, electronic communications of any
        kind, and internet communications.

                (c) Employment Outside the Restricted Area. Nothing in this
        Agreement prevents Executive from accepting employment after the end of
        the Term outside the Restricted Area (defined below) from a Competing
        Business, as long as Executive will not (a) act as an employee or other
        representative or agent of the Competing Business within the Restricted
        Area or (b) have any responsibilities for the Competing Business'
        operations within the Restricted Area.

                (d) Competing Business. "Competing Business" means any financial
        institution ("financial institution" means a state or national bank, a
        state or federal savings and loan association, a mutual savings bank, or
        a state or federal credit union), trust company or mortgage company
        (including without limitation, any start-up or other financial
        institution, trust company or mortgage company) that competes with, or
        will compete with, Frontier in Kitsap, Jefferson or Clallam Counties in
        the State of Washington (the "Restricted Area").

        14. ENFORCEMENT.

                (a) Frontier and Executive stipulate that, in light of all of
        the facts and circumstances of the relationship between Executive and
        Frontier, the agreements referred to in Sections 12 and 13 (including
        without limitation their scope, duration and geographic extent) are fair
        and reasonably necessary for the protection of Frontier's confidential
        information, goodwill and other protectable interests. If a court of
        competent jurisdiction should decline to enforce any of those covenants
        and agreements, Executive and Frontier request the court to reform these
        provisions to restrict Executive's use of confidential information and
        Executive's ability to compete with Frontier to the maximum extent, in
        time, scope of activities and geography, the court finds enforceable.

                (b) Executive acknowledges that Frontier will suffer immediate
        and irreparable harm that will not be compensable by damages alone, if
        Executive repudiates or breaches any of the provisions of Sections 12 or
        13 or threatens or attempts to do so. For this reason, under these
        circumstances, Frontier, 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 Frontier
        will not be required to post a bond as a condition for the granting of
        this relief.

        15. ADEQUATE CONSIDERATION. Executive specifically acknowledges the
receipt of adequate consideration for the covenants contained in Sections 12 and
13 and that Frontier is entitled to require him to comply with these Sections.
These Sections will survive termination of this Agreement. Executive represents
that if his employment is terminated, whether voluntarily or involuntarily,
Executive has experience and capabilities sufficient to enable 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.

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        16. 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
        Executive violates Section 12 or 13, Frontier will have the right to
        initiate the court proceedings described in Section 14(b), in lieu of an
        arbitration proceeding under this Section 16. Frontier may initiate
        these proceedings wherever appropriate within Washington State; but
        Executive will consent to venue and jurisdiction in King County,
        Washington.

        17. 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) Automobile. Executive shall retain the automobile he is
        presently using, which is owned by North Sound Bank, for the Term of
        this Agreement. Upon termination of Executive's employment, Executive
        shall be permitted to purchase the vehicle (or comparable replacement
        vehicle) at Frontier's depreciated cost.

                (c) Entire Agreement. This Agreement constitutes the entire
        understanding between the parties concerning its subject matter and
        supersedes all prior agreements. Accordingly, Executive specifically
        waives the terms of and all of his rights under all employment,
        change-in-control and salary continuation agreements, whether written or
        oral, he has previously entered into with Liberty or North Sound Bank.

                (d) Binding Effect. This Agreement will bind and inure to the
        benefit of Frontier's and Executive's heirs, legal representatives,
        successors and assigns.

                (e) 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-

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        pocket expenses and costs including, without limitation, reasonable
        attorneys' fees and costs incurred in connection with the enforcement or
        collection.

                (f) 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.

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

                (h) Amendment. This Agreement may be modified only through a
        written instrument signed by both parties and consented to by Frontier.

                (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. 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.

                (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.

                                      FRONTIER FINANCIAL CORPORATION

                                      By:        /s/
                                          -------------------------------------
                                          Robert J. Dickson, President and CEO

                                  FRONTIER BANK

                                      By:        /s/
                                          -------------------------------------
                                          Robert J. Dickson, President and CEO

                                      By:        /s/
                                          -------------------------------------
                                          MICHAEL J. CLEMENTZ

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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

                               ROBERT W. ROBINSON

        This EMPLOYMENT AGREEMENT ("Agreement") signed May 11, 2000, between
FRONTIER BANK (the "Bank") and ROBERT W. ROBINSON ("Executive") takes effect on
the Effective Date of the Merger of Liberty Bay Financial Corporation
("Liberty") into Frontier Financial Corporation and North Sound Bank into
Frontier Bank ("Effective Date").

                                    RECITALS

        A. Frontier Financial Corporation and the Bank have entered into a Plan
and Agreement of Mergers ("Plan") with Liberty and North Sound Bank, pursuant to
which Liberty will merge into Frontier Financial Corporation and North Sound
Bank will merge into the Bank ("Mergers").

        B. Executive is presently the President and Chief Credit Officer of
North Sound Bank. The Bank wishes to retain Executive's services following the
Mergers, and Executive wishes to accept employment with the Bank following the
Mergers.

        C. The purpose of this Agreement is to set forth the terms agreed to by
the parties to achieve the goals set forth in paragraph B, above.

                                    AGREEMENT

        The parties agree as follows:

        1. EMPLOYMENT. The Bank agrees to employ Executive, and Executive agrees
to accept employment with the Bank. During the Term of his employment under this
Agreement, Executive will have the title of "Senior Vice President of Frontier
Bank."

        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, unless earlier terminated pursuant to
        paragraph 9.

                (c) Abandonment of the Mergers. If the Plan terminates before
        the closing of the Mergers, this Agreement will not become effective and
        will be void.

        3. DUTIES. Executive will faithfully and diligently perform the duties
assigned to Executive from time to time by the Bank's Chairman, Chief Executive
Officer and/or the Bank's Executive Vice Presidents. Executive will use his best
efforts to perform his duties and will devote full time and attention to these
duties during working hours. These duties will include, without limitation, the
following:

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                (a) Bank Performance. Executive will be responsible for all
        aspects of the performance of the former North Sound Bank offices
        ("Peninsula Region"), including, without limitation, directing that
        daily operational and managerial matters are performed in a manner
        consistent with the Bank's policies. These duties will also include
        performing all other tasks in connection with the Bank's management and
        affairs that are normal and customary to Executive's position.

                (b) Commercial Banking. Executive will be responsible for the
        lending functions of the Peninsula Region. These duties will include,
        without limitation, assuring that Loan Department operations and
        management functions are performed in a manner consistent with the
        Bank's policies.

                (c) Development and Preservation of Business. Executive will be
        responsible for the development and preservation of banking
        relationships and other business development efforts (including
        appropriate civic and community activities) in the Peninsula Region.

                (d) Report to Executive Vice President and Branch Administrator.
        Executive will report directly to the Bank's Executive Vice President
        and Branch Administrator. The Bank's board of directors may, from time
        to time, modify Executive's title or add to, delete from, or modify
        Executive's performance responsibilities to accommodate management
        succession, as well as any other management objectives of the Bank.
        Executive will assume any additional positions, duties, and
        responsibilities as may reasonably be requested of him with or without
        additional compensation, as appropriate and consistent with Sections
        3(a), 3(b) and 3(c) of this Agreement.

        4. SALARY. Initially, Executive will receive a base salary from the Bank
of $101,500 per year, to be paid in accordance with the Bank's regular payroll
schedule ("Base Salary").

        5. INCENTIVE COMPENSATION. The Bank 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 will consider factors such as Executive's
performance of his duties and the safety, soundness and profitability of the
Bank.

        6. STAY BONUS. In addition to any incentive compensation granted
Executive under paragraph 5 hereof, on each anniversary of the Effective Date of
this Agreement during the Term, Executive shall receive a "Stay Bonus" of
$20,300 (three payments--$60,900 in total).

        7. INCOME DEFERRAL AND BENEFITS. Subject to eligibility requirements and
in accordance with and subject to any policies adopted by the Bank with respect
to any benefit plans or programs, Executive will be entitled to receive benefits
(including stock options) similar to those offered to other executive officers
of the Bank with positions and duties comparable to those of Executive.

        8. BUSINESS EXPENSES. The Bank will reimburse Executive for ordinary and
necessary expenses (including, without limitation, travel, entertainment, and
similar expenses)

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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.

        9. TERMINATION.

                (a) Termination By Frontier for Cause. If, before the end of the
        Term, the Bank terminates Executive's employment for Cause or Executive
        terminates his employment without Good Reason (defined below), the Bank
        will pay Executive the salary earned and expenses reimbursable under
        this Agreement incurred through the date of Executive's termination.
        Executive will have no right to receive compensation or other benefits,
        including Stay Bonus, for any period after termination under this
        Section 9(a).

                (b) Other Termination By the Bank. If, before the end of the
        Term, the Bank terminates Executive's employment without Cause or
        Executive terminates his employment for Good Reason (defined below), the
        Bank will pay Executive for the remainder of the Term the Base Salary
        and Stay Bonus Executive would have been entitled to under this
        Agreement if his employment had not terminated, except if Sections 9(d)
        and 9(e), below, apply.

                (c) Death or Disability. This Agreement terminates (1) if
        Executive dies or (2) if Executive is unable to perform his duties and
        obligations under this Agreement for a period of 90 days as a result of
        a physical or mental disability arising at any time during the Term of
        this Agreement, unless with reasonable accommodation Executive could
        continue to perform his duties under this Agreement and making these
        accommodations would not pose undue hardship to the Bank. If termination
        occurs under this Section 9(c), Executive or his estate will be entitled
        to receive only the compensation and benefits earned and expenses
        reimbursable through the date this Agreement terminated, together with
        the balance of any Stay Bonus otherwise payable under this Agreement.

                (d) Executive Termination Window. During the 25th month of the
        Term, Executive may terminate this Agreement by delivering written
        notice to the Bank. If Executive does so, regardless of whether
        Executive had Good Reason to terminate the 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, including Stay Bonus ("Total Annual Compensation").
        In addition, Executive will continue to be covered by all of the Bank's
        medical, health (including disability) and dental plans for twelve (12)
        months following such date of termination.

                (e) Termination Related to a Change in Control.

                        (1) Termination by the Bank. If, during the Term of this
                Agreement, 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 Executive's death,

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                disability, or Cause): (1) terminates Executive's employment
                within one year following a Change in Control (as defined
                below); or (2) terminates Executive's employment before a Change
                in Control and a Change in Control occurs within nine months
                after the termination, the Bank (or its successor) will pay
                Executive a single cash payment equal to the greater of the
                balance remaining due for the Term of the Agreement or two times
                Executive's Total Annual Compensation. In addition, Executive
                will continue to be covered by all of the Bank's medical, health
                (including disability) and dental plans for twelve (12) months
                following such termination.

                        (2) Termination by Executive. If, during the Term of
                this Agreement, Executive terminates Executive's employment,
                with or without Good Reason, within one year following a Change
                in Control, the Bank (or its successor) will pay Executive an
                amount equal to the greater of the balance remaining due for the
                Term of the Agreement or two times Executive's Total Annual
                Compensation. In addition, Executive will continue to be covered
                by all of the Bank's medical, health (including disability) and
                dental plans for twelve (12) months following such termination.

                        (3) Limitations on Payments Related to Change in
                Control. The following apply notwithstanding any other provision
                of this Agreement:

                                (a) the Total Annual Compensation described in
                        Section 00 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

                                (b) Executive's right to receive his Total
                        Annual Compensation payment described in Section 00
                        terminates: (i) immediately, if before the Change in
                        Control transaction closes, Executive terminates his
                        employment without Good Reason or the Bank terminates
                        Executive's employment for Cause; or (ii) one year after
                        a Change in Control occurs.

                        (4) 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
                Frontier Financial Corporation, within the meaning of Section
                280G of the Internal Revenue Code. The Mergers do not constitute
                a Change in Control.

                        (5) Adoption of Change in Control Plan by the Bank. In
                the event Frontier Financial Corporation or the Bank adopts a
                Change in Control Plan in which employees at Executive's level
                would be entitled to participate, Executive shall, for the
                duration of the Term of this Agreement, have the option of
                electing to retain this Change in Control provision or electing
                to participate in the Bank's Change in Control Plan. If the Bank
                adopts a Change in Control Plan in which

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                Executive is entitled to participate, Executive, if still
                employed by the Bank, shall immediately be included in such plan
                upon the expiration of the Term of this Agreement, and the
                Change in Control provision in this Agreement shall terminate.

                (f) 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, pass cards, 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.

        10. DEFINITION OF "CAUSE." "Cause" means any one or more of the
        following:

                (a) Willful misfeasance or gross negligence in the performance
        of Executive's duties.

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

                (c) Conduct demonstrably and significantly harmful to Frontier,
        as reasonably determined by the Board on the advice of legal counsel.

        11. DEFINITION OF "GOOD REASON." "Good Reason" means only any one or
        more of the following:

                (a) 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 Frontier employees formerly
        benefited.

                (b) The assignment to Executive without his consent of any
        authority or duties materially inconsistent with Executive's position as
        of the Effective Date of this Agreement.

                (c) A relocation or transfer of Executive's principal place of
        employment that would require Executive to commute on a regular basis
        more than thirty (30) miles each way from his current business office at
        North Sound Bank on the Effective Date of this Agreement, unless
        Executive consents to the relocation or transfer.

                (d) The written consent of the Bank to such resignation.

        12. CONFIDENTIALITY. Executive will not, after signing this Agreement,
        including during and after its Term, use for his own purposes or
        disclose to any other person or entity any confidential information
        concerning the Bank or its business operations or customers, unless (1)

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<PAGE>   6
the Bank consents to the use or disclosure of their respective confidential
information, (2) the use or disclosure is consistent with Executive's duties
under this Agreement, or (3) disclosure is required by law or court order.

        13. NONCOMPETITION.

                (a) Participation in a Competing Business. During the period
        Executive is employed by the Bank and for twenty-four (24) months after
        Executive's employment with the Bank terminates, Executive 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 Executive may acquire and passively own an
        interest not exceeding 2% of the total equity interest in any Competing
        Business.

                (b) No Solicitation. During the period Executive is employed
        with the Bank and for twenty-four (24) months after Executive's
        employment with the Bank terminates, Executive will not directly or
        indirectly solicit or attempt to solicit (1) any employees of the Bank,
        or any of the Bank's Subsidiaries, to leave their employment or (2) any
        customers of the Bank, or any of the Bank's Subsidiaries, to remove
        their business from the Bank 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 Restricted Area. Nothing in this
        Agreement prevents Executive from accepting employment after the end of
        the Term outside the Restricted Area (defined below) from a Competing
        Business, as long as Executive will not (a) act as an employee or other
        representative or agent of the Competing Business within the Restricted
        Area or (b) have any responsibilities for the Competing Business'
        operations within the Restricted Area.

                (d) Competing Business. "Competing Business" means any financial
        institution ("financial institution" means a state or national bank, a
        state or federal savings and loan association, a mutual savings bank, or
        a state or federal credit union), trust company or mortgage company
        (including without limitation, any start-up or other financial
        institution, trust company or mortgage company) that competes with, or
        will compete with, the Bank in Kitsap, Jefferson or Clallam Counties in
        the State of Washington (the "Restricted Area").

        14. ENFORCEMENT.

                (a) The Bank and Executive stipulate that, in light of all of
        the facts and circumstances of the relationship between Executive and
        the Bank, the agreements referred to in Sections 12 and 13 (including
        without limitation their scope, duration and geographic extent) are fair
        and reasonably necessary for the protection of the Bank's

                                      -6-
<PAGE>   7
        confidential information, goodwill and other protectable interests. If a
        court of competent jurisdiction should decline to enforce any of those
        covenants and agreements, Executive and the Bank request the court to
        reform these provisions to restrict Executive's use of confidential
        information and Executive's ability to compete with the Bank to the
        maximum extent, in time, scope of activities and geography, the court
        finds enforceable.

                (b) Executive acknowledges that the Bank will suffer immediate
        and irreparable harm that will not be compensable by damages alone, if
        Executive repudiates or breaches any of the provisions of Sections 12 or
        13 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.

        15. ADEQUATE CONSIDERATION. Executive specifically acknowledges the
receipt of adequate consideration for the covenants contained in Sections 12 and
13 and that the Bank is entitled to require him to comply with these Sections.
These Sections will survive termination of this Agreement. Executive represents
that if his employment is terminated, whether voluntarily or involuntarily,
Executive has experience and capabilities sufficient to enable 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.

        16. 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
        Executive violates Section 12 or 13, the Bank will have the right to
        initiate the court proceedings

                                      -7-
<PAGE>   8
        described in Section 14(b), in lieu of an arbitration proceeding under
        this Section 16. The Bank may initiate these proceedings wherever
        appropriate within Washington State; but Executive will consent to venue
        and jurisdiction in King County, Washington.

        17. 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) Automobile. Executive shall retain the automobile he is
        presently using, which is owned by North Sound Bank, for the Term of
        this Agreement. Upon termination of Executive's employment, assuming the
        Bank is continuing to provide Executive a vehicle at such time,
        Executive shall be permitted to purchase the vehicle (or comparable
        replacement vehicle) at the Bank's depreciated cost.

                (c) Entire Agreement. This Agreement constitutes the entire
        understanding between the parties concerning its subject matter and
        supersedes all prior agreements. Accordingly, Executive specifically
        waives the terms of and all of his rights under all employment,
        change-in-control and salary continuation agreements, whether written or
        oral, he has previously entered into with Liberty Bay Financial
        Corporation or North Sound Bank.

                (d) Binding Effect. This Agreement will bind and inure to the
        benefit of the Bank's and Executive's heirs, legal representatives,
        successors and assigns.

                (e) 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.

                (f) 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.

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

                (h) Amendment. This Agreement may be modified only through a
        written instrument signed by both parties and consented to by the Bank.

                (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.

                                      -8-
<PAGE>   9
                (j) Governing Law. This Agreement will be governed by and
        construed in accordance with Washington law, except to the extent that
        certain matters may be governed by federal law.

                (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.

                                  FRONTIER BANK

                                      By:        /s/
                                          -------------------------------------
                                          Robert J. Dickson, President and CEO

                                                 /s/
                                      -----------------------------------------
                                      ROBERT W. ROBINSON

                                      -9-

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