PACIFIC NORTHWEST BANCORP
EX-10.25
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<DESCRIPTION>EX-10.25
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit

10.25</font></b></p>



<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">FIRST AMENDMENT TO</font></b></p>



<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SEVERANCE/CHANGE

OF CONTROL AGREEMENT</font></b></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Patrick M. Fahey</font></i></b></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This First

Amendment to Severance/Change of Control Agreement (this &#147;Amendment&#148;) dated

this 22nd day of July, 2002, is made by and between PACIFIC NORTHWEST BANCORP

and PACIFIC NORTHWEST BANK (hereinafter referred to jointly as the &#147;Company&#148;)

and PATRICK M. FAHEY<b><i><font style="font-style:italic;font-weight:bold;">  </font></i></b>(the

&#147;Executive&#148;), who agree as follows:</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Recitals</font></u></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Amendment is made with reference to the following facts and

objectives:</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The parties entered into a

Severance/Change of Control Agreement dated November 21, 2000 (the &#147;Agreement&#148;)

in which the Company agreed to provide benefits to the Executive in the event

of severance or change of control.</font></p>



<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">B.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The parties desire to amend the

Agreement to change its name to &#147;Severance/Change of Control/Health Insurance

Agreement&#148; and to provide for health insurance benefits upon termination of

employment.</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amendment</font></u></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Paragraph 5, &#147;Termination of the

Agreement,&#148; shall be deleted in its entirety and there shall be inserted in its

place the following:</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Termination of

the Agreement</u>.&#160; Except for Paragraph

6, &#147;Health Care Insurance,&#148; which shall survive the termination of this

Agreement, this Agreement shall terminate if the Executive shall voluntarily

resign, retire, become permanently and totally disabled, or die; <i><font style="font-style:italic;">provided,

however</font></i>, if the Executive becomes permanently and totally disabled

or dies after the Board of Directors has authorized proceeding with

negotiations which result in a Change of Control or within twelve (12) months

after a Change of Control, if the Executive is then employed by the Company,

the Executive or his personal or legal representatives, executors,

administrators, successors, heirs, distributees, devisees and legatees, as the

case may be, shall be entitled to receive the Change of Control payment under

Paragraph 1(c) hereof.</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The following new paragraph shall

be added as Paragraph 6 of the Agreement:</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Health Care

Insurance</u>. Upon termination of the Executive&#146;s employment by Company (other

than discharge for cause as defined above) whether such termination is under

Paragraph 1, &#147;Severance Benefits,&#148; or voluntary resignation, retirement,

disability or death, the Executive and/or his spouse shall receive the

following health benefit coverage following such termination of employment.</font></p>



<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="left" style="line-height:normal;margin:0in 0in .0001pt 5.75pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The

Company will pay all premiums for benefits to the Executive and his covered

spouse and dependent children under and subject to the term of the Consolidated

Omnibus Budget Reconciliation Act (&#147;COBRA&#148;).</font></p>



<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Upon expiration of

any applicable COBRA coverage period, if the Executive and/or his spouse are

not then entitled to enroll for Medicare, the Company shall provide, at its

expense, an individual health insurance policy for the Executive and/or his

spouse which will provide them with health care benefits as nearly equivalent

as possible to those provided the Executive and his spouse by the Company prior

to the Executive&#146;s termination of employment.</font></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>





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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>



<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Upon reaching an age

when the Executive and his spouse are entitled to receive Medicare, the

Executive and his spouse shall enroll to receive Medicare and the Company shall

pay the premiums due on a Medicare supplement insurance policy so that the

coverage provided through Medicare and the Medicare supplement insurance policy

shall be as nearly equivalent as possible to the coverage provided the

Executive and his spouse prior to the Executive&#146;s termination of employment.</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The purpose of this paragraph is to provide, to the extent possible,

that upon termination of the Executive&#146;s employment with the Company (other

than discharge for cause as defined above), the Executive and his spouse shall

have, following termination of the Executive&#146;s employment, seamless health care

coverage provided at the Company&#146;s expense that is comparable to the coverage

provided the Executive and his spouse prior to the Executive&#146;s termination of

employment.&#160; The foregoing

notwithstanding, after termination of the Executive&#146;s employment with the

Company, if the Executive should be employed by another company which provides

group health benefits for the Executive, the coverage provided herein shall be

secondary and supplemental to any such coverage.</font></p>



<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Paragraphs 6 through 11 of the

Agreement shall be re-numbered Paragraphs 7 through 12.</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS

WHEREOF, the Executive and the Company have executed this Amendment, as of the

day and year first above written.</font></p>



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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PACIFIC

  NORTHWEST BANCORP</font></p>

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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

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  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

  </td>

  <td width="9%" valign="top" style="padding:0in 0in 0in 0in;width:9.86%;">

  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

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  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>

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  <td width="47%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:47.0%;">

  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;/s/ Michael T. Crawford</font></p>

  </td>

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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

  </td>

  <td width="45%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:45.2%;">

  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;/s/ Patrick M. Fahey</font></p>

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  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.26%;">

  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

  </td>

  <td width="47%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:47.0%;">

  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael T.

  Crawford</font></p>

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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>

  </td>

  <td width="45%" colspan="2" valign="top" style="border:none;padding:0in 0in 0in 0in;width:45.2%;">

  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PATRICK M.

  FAHEY</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>





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