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Section 1: 8-K (FORM 8-K)

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 10, 2020

 
First Financial Northwest, Inc.
 
  (Exact name of registrant as specified in its charter)  

Washington
 
001-33652
 
26-0610707
State or other jurisdiction of
incorporation
 
Commission
File Number
 
(I.R.S. Employer
Identification No.)
         
201 Wells Avenue South, Renton, Washington
 
98057
(Address of principal executive offices)
 
(Zip Code)


Registrant’s telephone number (including area code) (425) 255-4400

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

[  ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))

[  ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $0.01 par value per share
 
FFNW
 
The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]


Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Supplemental Executive Retirement Plan Agreements
On January 10, 2020, First Financial Northwest Bank (the “Bank”), the wholly owned subsidiary of First Financial Northwest, Inc. (the “Company”), entered into supplemental executive retirement plan agreements (“SERPs”) with the following named executive officers: Joseph W. Kiley III, President and Chief Executive Officer of the Company, and Richard P. Jacobson, Executive Vice President, Chief Financial Officer and Chief Operating Officer of the Bank (each, an “Executive” and, collectively, the “Executives”).
Each SERP provides that if the Executive separates from service after attaining normal retirement age (age 69 for Mr. Kiley and age 65 for Mr. Jacobson) for any reason other than death, he will receive a lifetime monthly benefit equal to what is provided under a specifically identified annuity contract that will be purchased to informally fund the Executive’s SERP (the “Normal Retirement Benefit”).   The Normal Retirement Benefit will commence on the first day of the second month following the Executive’s separation from service.
If the Executive separates from service prior to attaining normal retirement age for any reason other than death or a change in control, as defined in the SERP, he will receive an early termination benefit equal to the Normal Retirement Benefit determined as if he remained employed until normal retirement age, multiplied by a vesting percentage.  For Mr. Kiley, the vesting percentage is determined by dividing Mr. Kiley’s account balance (the amount accrued to pay his SERP benefit) as of his separation from service date by his projected account balance on his normal retirement age.  For Mr. Jacobson, the vesting percentage, determined on a monthly basis, is as follows: 17% for each of the first full five plan years in which he is employed by the Bank (i.e., 85% after five years of service), 91% after six full years of service, 96% after seven full years of service and 100% after eight full years of service.  The early termination benefit will commence on the first day of the second month following when the Executive attains his normal retirement age.
If the Executive is actively employed at the time of a “change in control” (as defined in the SERP) and experiences an involuntary termination within 24 months following the change in control, then the Executive will receive a fully vested Normal Retirement Benefit, payable at the same time and the same manner as the Normal Retirement Benefit described above (the “Change in Control Benefit”).  The amount necessary to fund and pay for the Executive’s Change in Control Benefit will be contributed to a rabbi trust.  Whether the Executive has experienced an involuntary termination for Change in Control Benefit purposes generally will be determined by the definition of involuntary termination in his employment agreement with the Bank (which includes voluntary termination for good reason).  If the acquirer in the change in control transaction does not assume the Executive’s SERP, then the Change in Control Benefit will be paid regardless of whether the Executive is involuntarily terminated.
No SERP benefit will be paid if the Executive’s termination of employment is for “cause” as defined in the SERP.  SERP benefits may be delayed to comply with Internal Revenue Code (“Code”) Section 409A.
If the Executive dies while actively employed, or after his separation from service but prior to attaining his normal retirement age, his designated beneficiary will receive a lump sum death benefit equal to the amount that should have been accrued to provide the Executive’s SERP benefit as of the date of his death. If the Executive dies after SERP payments have commenced, but before 180 monthly payments have been received, then his designated beneficiary will receive the present value of the
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remaining payments (that is, 180 payments less the number of payments actually received).  If the Executive dies after SERP payments have commenced, and after 180 monthly payments have been received, then no death benefit will be paid under the SERP.  All death benefits will be paid no later than 60 days after the Executive’s death.  The death benefit is in lieu of any other payments under the SERP.
The SERP also provides that, in the event that the payments to be received by the Executive, when taken together with payments and benefits payable to or on behalf of the Executive under any other plans, contracts or arrangements (“parachute payments”), will be subject to excise tax under Code Section 4999, then parachute payments under the plans, contracts or arrangements (including the Executive’s SERP) may be reduced to the extent necessary to avoid the Code Section 4999 excise tax.  SERP benefits may also be reduced as necessary to comply with regulatory requirements.
The foregoing summary of the SERP agreements is not complete and is qualified in its entirety by reference to the full text of Mr. Kiley’s and Mr. Jacobson’s SERP agreements, which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
Amendment to Existing Supplemental Retirement Plan for Joseph W. Kiley III

On January 10, 2020, the Bank entered into an amendment to the existing Executive Supplemental Retirement Plan Participation Agreement (“Agreement”) with Mr. Kiley.  The Agreement, which was last amended on July 10, 2017,  is a nonqualified deferred compensation plan intended to provide Mr. Kiley with supplemental retirement benefits if certain conditions are met.  The material terms of the amendment are summarized below and a copy of the full Agreement, as amended, is furnished as Exhibit 10.3 hereto and is incorporated herein by reference.

The amendment to the Agreement provides that if Mr. Kiley remains employed with the Bank until age 69, then the period of time during which monthly benefits under the Agreement would be paid will be extended from 180 months until the end of his life, assuming he lives beyond the end of the 180 month period. This amendment does not modify the amount, time or form of the payments due during the 180 month period.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is furnished as Exhibit 10.3 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(d)          Exhibits

The following exhibits are being filed herewith and this list shall constitute the exhibit index:

10.1 Supplemental Executive Retirement Plan Agreement for Joseph W. Kiley III

10.2 Supplemental Executive Retirement Plan Agreement for Richard P. Jacobson

10.3 Supplemental Executive Retirement Plan Agreement for Joseph W. Kiley III (Last Amended July 10, 2017)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 
FIRST FINANCIAL NORTHWEST, INC.
 
 
 
 

DATE: January 15, 2020
By:  /s/ Richard P. Jacobson                    
 
        Richard P. Jacobson
        Executive Vice President and
        Chief Financial Officer









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Section 2: EX-10.1 (EXHIBIT 10.1)

Exhibit 10.1

FIRST FINANCIAL NORTHWEST BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This First Financial Northwest Bank Supplemental Executive Retirement Plan (“Plan”) is adopted as of this 10th day January, 2020 (the “Effective Date”) by First Financial Northwest Bank, a Washington state chartered commercial bank (the “Employer” or the “Bank”) for the benefit of Joseph W. Kiley III (the “Executive”).  The purpose of the Plan is to provide certain supplemental nonqualified pension benefits to certain executives who have contributed substantially to the success of the Employer and the Employer desires to incentivize the executives to continue in its employ.
This Plan is intended to be and shall be administered as an income tax nonqualified, unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Sections 201(2), 301(a)(3), and 401(a)(1).  This Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, the intent of the parties hereto is that the Plan shall be operated and interpreted consistent with the requirements thereof.
ARTICLE 1
DEFINITIONS
    Whenever used in this Plan, the following terms have the meanings specified:

    1.1.  “Account Balance” means, as of any date, the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) on behalf of the Executive.
    1.2. Annuity Contract” means the following annuity contract(s) purchased and solely owned by the Bank:  a Flexible Premium Indexed Deferred Annuity Contract issued by Protective Life Insurance Company, contract #FG0000046 or such other annuity contracts (a) as the Bank may purchase from time to time in accordance with Plan Section 2.3 or otherwise, the income value of which the Bank intends to serve as the measure of the Plan benefit for Executive and (b) are identified by Policy number in writing by the Bank as an “Annuity Contract” under this Plan.
    1.3.  Beneficiary” means the person or entity designated, or otherwise determined in accordance with Article 4, in writing by the Executive to receive death benefits pursuant to this Plan in the event of the Executive’s death.
    1.4.  Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.
    1.5.  Board” means the Board of Directors of the Employer.
    1.6.  Change in Control” means the occurrence, through sale, exchange, merger, redemption or otherwise of a (i) change in ownership as defined in Treasury Regulation §l.409A-3(i)(5)(v), (ii) change in effective control as defined in Treasury Regulation §l.409A-3(i)(5)(vi), or (iii) change in the ownership of a substantial portion of the assets of the Company as defined in Treasury Regulation §1.409A-3(i)(5)(vii) as currently in effect and as may hereafter from time to time be amended.
        (a)  the merger, acquisition or consolidation of the Company or the Bank with any corporation pursuant to which the other corporation immediately after such merger, acquisition or


consolidation owns more than 50% of the voting securities (defined as any securities which vote generally in the election of its directors) of the Company or the Bank, as appropriate, outstanding immediately prior thereto or more than 50% of the Company’s or Bank’s total fair market value, as appropriate, immediately prior thereto;
       (b)  the date that any person, or persons acting as a group, as described in Treas. Reg. §1.409A-3(i)(5) (a “Person”), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or the Bank or in a fiduciary capacity, or a corporation controlling the Company the Bank or owned directly or indirectly by the shareholders of the Company or the Bank in substantially the same proportions as their ownership of stock of the Company or the Bank, becomes the beneficial owner (as defined in Rule 13d-3 under the Securities and Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company or the Bank representing more than 80% of the total voting power represented by the Company's or the Bank’s then outstanding voting securities (as defined above);

        (c)  the date that a majority of the members of the board of directors of the Company or the Bank is replaced during any 12-month period by directors whose appointment or election is not endorsed by a two-third majority of the members of the board of directors of the Company before the date of the appointment or election; or

        (d)  the date that any Person acquires (or has acquired within the 12-month period ending on such date) substantially all of the assets of the Company or the Bank; provided, however, that any of the following acquisitions will be excluded from such calculation:


(i)        an acquisition by a shareholder of the Company (immediately before the acquisition) in exchange for or with respect to its stock;

(ii)       an acquisition by an entity 50% or more of the total value or voting power of which is owned directly or indirectly by the Company;

(iii)      an acquisition by a Person that owns directly or indirectly 50% or more of the total value or voting power of the outstanding stock of the Company; or

(iv)      an acquisition by an entity 50% or more of the total value or voting power of which is owned directly or indirectly by a Person described in paragraph (iii) above.
    1.7.  Company” means First Financial Northwest, Inc.
    1.8.  ERISA” means the Employee Retirement Income Security Act of 1974.
    1.9.  “Involuntary Termination” shall have the same meaning as in the Executive’s employment agreement.  If there is no employment agreement in effect with respect to the Executive, then Involuntary Termination shall have the same meaning as in Treas. Reg. §1.409A-1(n).  The term “Involuntary Termination” shall not include a Termination for Cause as defined in Section 5.3.
    1.10.  Normal Retirement Age” means age sixty-nine (69).
    1.11.  Rider” means the income rider attached to the Annuity Contract as an endorsement or other product feature that operates as an income rider, with such feature providing for a withdrawal or payment feature for the life of the annuitant.
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    1.12.  Section 409A” means Section 409A of the Code and the Treasury Regulations and other guidance of general applicability issued thereunder.
    1.13.  Separation from Service” means complete separation from service as that term is defined and interpreted in Section 409A.  For the avoidance of doubt, the Executive shall not be considered to have experienced a Separation from Service for purposes of the Plan if he continues to perform any service as an Employee for the Employer or an affiliated entity, even if such reduced service would constitute a separation from service under the Section 409A regulations.
ARTICLE 2
ASSET FINANCING, OWNERSHIP AND RIGHTS
    2.1.   Annuity Contract and Other Investments.  For purposes of satisfying its obligations to provide benefits under this Plan, the Bank has initially invested in the Annuity Contract and may invest in other investments.  However, nothing in this Section shall require the Bank to invest in any particular form of investment.
    2.2.  Ownership of the Annuity Contract.  The Bank is the sole owner of the Annuity Contract, and other such investments, and shall have the right to exercise all incidents of ownership.  The Bank shall be the beneficiary of the death proceeds of the Annuity Contract.  The Bank shall at all times be entitled to the Annuity Contract’s cash surrender value, as that term is defined in the Annuity Contract.
    2.3.   Right to Annuity Contract.  Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender any Annuity Contract without terminating this Plan, provided the Bank replaces the Annuity Contract with a comparable annuity policy, or asset of comparable value, with a comparable lifetime withdrawal feature and comparable benefit value.  Without limitation, the Annuity Contract at all times shall be the exclusive property of the Bank and shall be subject to the claims of the Bank’s creditors.
    2.4.   Rabbi Trust.  Employer may establish a “rabbi trust” to which contributions may be made to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan.  The trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan for purposes of ERISA. Neither the Executive nor the Beneficiary shall have any beneficial ownership interest in any assets held in the trust.
ARTICLE 3
RETIREMENT AND OTHER BENEFITS
    3.1.   Normal Retirement Benefit. Upon the Executive’s Separation from Service after reaching Normal Retirement Age for any reason other than death, the Executive will be entitled to the monthly benefit payment described in this Section 3.1.  The amount of the benefit will equal the amount that is paid from the Annuity Contract through the Rider designated under this Plan to benefit the Executive, commencing on the first (1st) day of the second month following the date of the Executive’s Separation from Service, payable monthly and continuing for the Executive’s lifetime.  Subject to section 3.4, this shall be the Executive’s benefit in lieu of any other benefit under this Plan.
    3.2.   Early Termination Benefit.  In the event the Executive should incur a Separation from Service prior to Normal Retirement Age for any reason other than death or Change in Control, the Executive will be entitled to the monthly benefit payment described in this Section 3.2.  The amount of the benefit will be a percentage of the amount that is paid from the Annuity Contract through the Rider designated under this Plan to benefit the Executive.  The percentage is the ratio of the Account Balance on the date of
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Separation from Service to the projected Account Balance at Normal Retirement Age.  This percentage will be applied to the amount that is paid from the Annuity Contract through the Rider at Normal Retirement Age.  In the event the Executive dies prior to reaching Normal Retirement Age, benefits will be payable in accordance with Article 3.4 instead of this Article 3.2.  If the Executive survives to Normal Retirement Age, benefit payments will commence on the first day of the second month following the Executive’s Normal Retirement Age and will continue for the Executive's lifetime.  Subject to Article 3.4, this shall be the Executive’s benefit in lieu of any other benefit under this Plan.
    3.3.   Change in Control Benefit.  If the Executive is actively employed at the time of a Change in Control and experiences an Involuntary Termination within twenty-four (24) months following the Change in Control, the Executive will fully vest in the Normal Retirement Benefit as provided for in Article 3.1, with such benefit payable in the amount as provided for in Article 3.1.  Notwithstanding the foregoing, if in connection with the Change in Control the acquiring or surviving entity does not formally assume this Plan and its obligations at the time of the Change in Control, then the Executive shall be entitled to the benefit provided for in this Article 3.3 without regard to whether he experiences an Involuntary Termination. The Employer will establish a “rabbi trust”, if one has not already been established, for the purposes of this Plan, to which assets will be contributed to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan.  The amount of the contribution to the “rabbi trust” will be the amount sufficient to satisfy the benefit under Article 3.1.  In the event the Executive dies prior to reaching Normal Retirement Age, benefits will be payable in accordance with Article 3.4 instead of this Article 3.3.  If the Executive survives to Normal Retirement Age, benefits payable under this Article 3.3 will commence on the first day of the second month following the later of the Executive’s Normal Retirement Age or Separation from Service and will continue for the Executive's lifetime.  Subject to Article 3.4, this shall be the Executive’s benefit in lieu of any other benefit under this Plan.
    3.4.   Death Benefits.
                 (a)  Death During Active Service. Upon the death of the Executive while in active service with the Employer, the Employer shall pay to the Executive’s Beneficiary the Account Balance, payable in a lump sum no later than sixty (60) days from the date of such death.  This shall be the Executive’s benefit in lieu of any other benefit under this Plan.

         (b)  Death Following a Separation from Service but Prior to Commencement of Benefits.  Upon the death of the Executive following a Separation from Service, having qualified for benefits, but prior to Commencement of Benefits, the Employer shall pay to the Executive’s Beneficiary the Account Balance, payable in a lump sum no later than sixty (60) days from the date of such death.  This shall be the Executive’s benefit in lieu of any other benefit under this Plan.

         (c)  Death During Benefit Period.  Upon death of the Executive after benefit payments have commenced but before receiving a total of one hundred eighty (180) monthly payments, the Employer shall pay to the Executive’s Beneficiary in a single lump sum the present value of the remaining payments (that is, one hundred eighty (180) payments less the number of payments already made), based on the accrued liability rate used in the Plan, no later than sixty (60) days from the date of death.  If the Executive dies after receiving at least one hundred eighty (180) payments, this Agreement will terminate and no additional payments will be made to the Executive’s Beneficiary under the Plan.

    3.5.   Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Plan regarding timing of payments, the following special rules shall apply if the stock of the Employer is publicly traded at the time of the Executive’s Separation from Service in order for this Plan to comply with Section 409A: (i) to the extent the Executive is a “specified employee” (as defined under Section 409A) at
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the time of a distribution and to the extent such applicable provisions of Section 409A and the regulations thereunder require a delay of such distributions by a six-month period after the date of such Executive’s Separation from Service with the Employer, no such distribution shall be made prior to the date that is six months after the date of the Executive’s Separation from Service, and (ii) any such delayed payments shall be paid to the Executive in a single lump sum within five (5) business days after the end of the six (6) month delay, without interest.
ARTICLE 4
BENEFICIARIES
    4.1.   Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Plan upon the death of the Executive. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.
    4.2.   Beneficiary Designation; Changes. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the Executive and his spouse subsequently are divorced or legally separated. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.
    4.3.   Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received in writing by the Plan Administrator or its designated agent.
    4.4.   No Beneficiary Designation. If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary, unless the Executive and his spouse are legally separated. If the Executive has no surviving spouse, or the Executive and his spouse are legally separated, the benefits shall be distributed to the personal representative of the Executive’s estate.
    4.5.   Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Employer may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Employer from all liability for the benefit.
ARTICLE 5
GENERAL LIMITATIONS
    5.1.   Limits on Payments.  Notwithstanding anything contained in this Plan to the contrary, it is understood and agreed that the Bank shall not be required to make any payment or take any action under this Plan if: (a) such payment or action is prohibited by any governmental agency having jurisdiction over the Bank (hereinafter referred to as “Regulatory Authority”) in light of the fact that the Bank has been declared by Regulatory Authority to be troubled, or operating in an unsafe or unsound matter; or (b) such
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payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to the Bank, as now in effect or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory Authority.
    5.2.   Excess Parachute or Golden Parachute Payment. Notwithstanding any provision of this Agreement to the contrary, any benefit provided under this Agreement when added to all other amounts or benefits provided to or on behalf of Executive in connection with his termination of employment, would result in the imposition of an excise tax under Section 4999 of the Code, such payments shall be retroactively (if necessary) reduced to the extent necessary to avoid such excise tax imposition, or shall be forfeited to the extent the benefit would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency had not given written consent to pay pursuant to 12 C.F.R. §359.4. Upon written notice to Executive, together with calculations of Bank's independent auditors, Executive shall remit to Bank the amount of the reduction plus such interest as may be necessary to avoid the imposition of such excise tax. Notwithstanding the foregoing or any other provision of this contract to the contrary, if any portion of the amount herein payable to the Executive is determined to be non-deductible pursuant to the regulations promulgated under Section 280G of the Code, the Bank shall be required only to pay to Executive the amount determined to be deductible under Section 280G of the Code.
    5.3.   Termination for Cause. Notwithstanding anything to the contrary contained herein, in the event of the Executive's termination for Cause, this Plan shall terminate and no benefits shall be payable under the Plan.  For this purpose, “Cause” shall have the same meaning as in the Executive’s employment agreement with the Employer.  If no such employment agreement is in effect, or such employment agreement does not include a definition of “Cause” or a similar definition, then “Cause” shall be defined as (i) willful misconduct or gross neglect of duties which, in either case, has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided that within 30 days after receiving notice of such misconduct or neglect, on which the Board is relying to terminate the Executive for cause, the Executive is are provided the opportunity to defend himself before the Board; or (ii) a repeated failure by the Executive to follow the written directives of the Board or any written Bank policy or guidelines expressly approved by the Board which has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided, however, that if the Executive initially refuses to obey the written directives of the Board, (a) the Executive is furnished a written statement by the Board that it believes in good faith that the acts or non-acts in respect of the direction that is given the Executive were in the best interests of the Bank, and (b) the Executive is provided the opportunity to discuss with the Board reasons for not complying with the Board's directives; provided further that the Executive’s refusal to follow any written directive of the Board that would cause the Executive to commit any illegal act or engage in any illegal course of conduct shall not be grounds for terminating the Executive’s employment for Cause.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
     6.1.   Claims Procedure. A person or Beneficiary (a “claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows:
         (a)  Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after the notice was received by the claimant. All other claims must be made within one hundred eighty (180) days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant.
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        (b)  Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days, by notifying the claimant in writing, prior to the end of the initial ninety (90)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.  The time period shall begin at the time a claim is filed, whether or not all information necessary for a determination accompanies the filing.

         (c)  Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:



   (i)     The specific reasons for the denial,


   (ii)     A reference to the specific provisions of the Plan on which the denial is based,


   (iii)    A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, and


   (iv)     An explanation of the Plan’s review procedures and the time limits applicable to such procedures.
    6.2.   Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows:
          (a)  Initiation - Written Request. To initiate the review, the claimant, within sixty (60) days (180 days for a Disability claim) after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.
          (b)  Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
          (c)  Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
          (d)  Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.
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           (e)  Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:


   (i)     The specific reasons for the denial,


   (ii)    A reference to the specific provisions of the Plan on which the denial is based,


   (iii)    A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and


   (iv)     A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).
           (f)  Statute of Limitations.  If the Plan Administrator provides the claimant with a final notice of denial of appeal, in order to preserve the Executive’s claim, the claimant must file an action with respect to the denied claim no later than the second anniversary of the date of the Plan Administrator's final notice of denial of appeal.
ARTICLE 7
MISCELLANEOUS
    7.1.   Amendments and Termination.  Subject to Article 7.12 of this Plan, this Agreement may be amended or terminated solely by a written agreement signed by the Bank and by the Executive.
    7.2.   No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Executive the right to remain an employee of the Employer, nor does it interfere with the Employer’s right to discharge the Executive. It also does not require any Executive to remain an employee nor interfere with any Executive’s right to terminate employment at any time.
    7.3.   Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.
    7.4.   Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.
    7.5.   Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction and performance of this Plan shall be governed by and construed in accordance with the laws of the State of Washington, without giving effect to the principles of conflict of laws of such state.
    7.6.   Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Plan. The benefits represent the mere promise by the Employer to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance, annuity contract or other asset purchased by Employer to fund its obligations under this Plan shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.
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    7.7.   Benefit Provision.  Notwithstanding the provisions of this Plan in the payment of the benefits under Article 3, if the Plan benefits are informally funded by Annuity Contract(s) identified in the Plan, then any benefits payable under this Plan are contingent solely upon the amount that is provided by said Annuity Contract(s) or other provision as provided for in Article 2.
    7.8.   Severability. If any provision of this Plan is held invalid, such invalidity shall not affect any other provision of this Plan, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Plan is held invalid in part, such invalidity shall not affect the remainder of the provision, and the remainder of such provision together with all other provisions of this Plan shall continue in full force and effect to the full extent consistent with law.
    7.9.   Headings. The headings of articles herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.
    7.10.     Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board, at 201 Wells Avenue South, Renton, Washington, 98057.
    7.11.    Termination or Modification of Plan Because of Changes in Law, Rules or Regulations. The Employer is entering into this Plan on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form. If that assumption materially changes and the change has a material detrimental effect on this Plan, then the Employer reserves the right to terminate or modify this Plan accordingly, provided that the Executive is provided a benefit that is economically equivalent to the benefit provided under the Plan prior to the change in assumption, and such equivalent benefit does result in a violation of Section 409A.
ARTICLE 8
ADMINISTRATION OF AGREEMENT
    8.1.   Plan Administrator Duties. This Plan shall be administered by a Plan Administrator consisting of the Board or such committee or person(s) as the Board shall appoint. The Plan Administrator shall have the sole and absolute discretion and authority to interpret and enforce all appropriate rules and regulations for the administration of this Plan and the rights of the Executive under this Plan, to decide or resolve any and all questions or disputes arising under this Plan, including benefits payable under this Plan and all other interpretations of this Plan, as may arise in connection with the Plan. No benefit shall be payable hereunder to any person unless the Plan Administrator, in its sole discretion, determines such benefit is due.
    8.2.   Agents. In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Employer.
    8.3.   Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.  Without limiting the foregoing, it is acknowledged that the value of the benefits payable hereunder may be difficult to determine in the event the Employer does not actually purchase and maintain the Annuity Contract as contemplated hereunder; therefore, in such event, the
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Employer shall have the right to make any reasonable assumptions in determining the benefits payable hereunder and any such determination made in good faith shall be binding on the Executive.
    8.4.   Indemnity of Plan Administrator. The Plan Administrator shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless such action or omission is attributable to the gross negligence or willful misconduct of the Plan Administrator or any of its members. The Employer shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Plan, except in the case of gross negligence or willful misconduct by the Plan Administrator or any of its members.
    8.5.   Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.
This Supplemental Executive Retirement Plan Agreement is hereby adopted as of the date written above.
THE EXECUTIVE:
 
FIRST FINANCIAL NORTHWEST BANK
 
 
/s/Joseph W. Kiley III
 
By:
/s/Richard P. Jacobson
   

Title:
 EVP, CFO & COO






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BENEFICIARY DESIGNATION
FIRST FINANCIAL NORTHWEST BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

I, Joseph W. Kiley III, designate the following as Beneficiary of any death benefits under the First Financial Northwest Bank Supplemental Executive Retirement Plan for the benefit of Joseph W. Kiley III:
 
Primary:
 
 
 
 
     
 
Contingent: 
 
 
 
 
Note: To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these Beneficiary designations by filing a new written designation with the Employer. I further understand that the designations will be automatically revoked if the Beneficiary predeceases me, or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.
 
Signature:
/s/Joseph W. Kiley III
 
 
 
 
Date:
January 10, 2020
Accepted by the Employer this 10th day of January, 2020.

 
By:
/s/Richard P. Jacobson
 
 
 
  Print Name:
Richard P. Jacobson
     
  Title:
EVP, CFO & COO 





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Section 3: EX-10.2 (EXHIBIT 10.2)

Exhibit 10.2

FIRST FINANCIAL NORTHWEST BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This First Financial Northwest Bank Supplemental Executive Retirement Plan (“Plan”) is adopted as of this 10th day January, 2020 (the “Effective Date”) by First Financial Northwest Bank, a Washington state chartered commercial bank (the “Employer” or the “Bank”) for the benefit of Richard P. Jacobson (the “Executive”).  The purpose of the Plan is to provide certain supplemental nonqualified pension benefits to certain executives who have contributed substantially to the success of the Employer and the Employer desires to incentivize the executives to continue in its employ.
This Plan is intended to be and shall be administered as an income tax nonqualified, unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Sections 201(2), 301(a)(3), and 401(a)(1).  This Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, the intent of the parties hereto is that the Plan shall be operated and interpreted consistent with the requirements thereof.
ARTICLE 1
DEFINITIONS
Whenever used in this Plan, the following terms have the meanings specified:
    1.1.  “Account Balance” means, as of any date, the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) on behalf of the Executive.
    1.2.  Annuity Contract” means the following annuity contract(s) purchased and solely owned by the Bank:  a Flexible Premium Indexed Deferred Annuity Contract issued by National Western Life Insurance Company, contract #0101393287 or such other annuity contracts (a) as the Bank may purchase from time to time in accordance with Plan Section 2.3 or otherwise, the income value of which the Bank intends to serve as the measure of the Plan benefit for Executive and (b) are identified by Policy number in writing by the Bank as an “Annuity Contract” under this Plan.
    1.3.  Beneficiary” means the person or entity designated, or otherwise determined in accordance with Article 4, in writing by the Executive to receive death benefits pursuant to this Plan in the event of the Executive’s death.
    1.4.  Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.
    1.5.  Board” means the Board of Directors of the Employer.
    1.6.  Change in Control” means the occurrence, through sale, exchange, merger, redemption or otherwise of a (i) change in ownership as defined in Treasury Regulation §l.409A-3(i)(5)(v), (ii) change in effective control as defined in Treasury Regulation §l.409A-3(i)(5)(vi), or (iii) change in the ownership of a substantial portion of the assets of the Company as defined in Treasury Regulation §1.409A-3(i)(5)(vii) as currently in effect and as may hereafter from time to time be amended.
        (a)  the merger, acquisition or consolidation of the Company or the Bank with any corporation pursuant to which the other corporation immediately after such merger, acquisition or


consolidation owns more than 50% of the voting securities (defined as any securities which vote generally in the election of its directors) of the Company or the Bank, as appropriate, outstanding immediately prior thereto or more than 50% of the Company’s or Bank’s total fair market value, as appropriate, immediately prior thereto;
        (b)  the date that any person, or persons acting as a group, as described in Treas. Reg. §1.409A-3(i)(5) (a “Person”), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or the Bank or in a fiduciary capacity, or a corporation controlling the Company the Bank or owned directly or indirectly by the shareholders of the Company or the Bank in substantially the same proportions as their ownership of stock of the Company or the Bank, becomes the beneficial owner (as defined in Rule 13d-3 under the Securities and Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company or the Bank representing more than 80% of the total voting power represented by the Company's or the Bank’s then outstanding voting securities (as defined above);
        (c)  the date that a majority of the members of the board of directors of the Company or the Bank is replaced during any 12-month period by directors whose appointment or election is not endorsed by a two-third majority of the members of the board of directors of the Company before the date of the appointment or election; or
        (d)  the date that any Person acquires (or has acquired within the 12-month period ending on such date) substantially all of the assets of the Company or the Bank; provided, however, that any of the following acquisitions will be excluded from such calculation:

(i)     an acquisition by a shareholder of the Company (immediately before the acquisition) in exchange for or with respect to its stock;

(ii)     an acquisition by an entity 50% or more of the total value or voting power of which is owned directly or indirectly by the Company;

(iii)     an acquisition by a Person that owns directly or indirectly 50% or more of the total value or voting power of the outstanding stock of the Company; or

(iv)     an acquisition by an entity 50% or more of the total value or voting power of which is owned directly or indirectly by a Person described in paragraph (iii) above.
    1.7.  Company” means First Financial Northwest, Inc.
    1.8.  ERISA” means the Employee Retirement Income Security Act of 1974.
    1.9.  “Involuntary Termination” shall have the same meaning as in the Executive’s employment agreement.  If there is no employment agreement in effect with respect to the Executive, then Involuntary Termination shall have the same meaning as in Treas. Reg. §1.409A-1(n).  The term “Involuntary Termination” shall not include a Termination for Cause as defined in Section 5.3.
    1.10.  Normal Retirement Age” means age sixty-five (65).
    1.11.  Rider” means the income rider attached to the Annuity Contract as an endorsement or other product feature that operates as an income rider, with such feature providing for a withdrawal or payment feature for the life of the annuitant.
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    1.12.  Section 409A” means Section 409A of the Code and the Treasury Regulations and other guidance of general applicability issued thereunder.
    1.13.  Separation from Service” means complete separation from service as that term is defined and interpreted in Section 409A.  For the avoidance of doubt, the Executive shall not be considered to have experienced a Separation from Service for purposes of the Plan if he continues to perform any service as an Employee for the Employer or an affiliated entity, even if such reduced service would constitute a separation from service under the Section 409A regulations.
ARTICLE 2
ASSET FINANCING, OWNERSHIP AND RIGHTS
    2.1.   Annuity Contract and Other Investments.  For purposes of satisfying its obligations to provide benefits under this Plan, the Bank has initially invested in the Annuity Contract and may invest in other investments.  However, nothing in this Section shall require the Bank to invest in any particular form of investment.
    2.2.   Ownership of the Annuity Contract.  The Bank is the sole owner of the Annuity Contract, and other such investments, and shall have the right to exercise all incidents of ownership.  The Bank shall be the beneficiary of the death proceeds of the Annuity Contract.  The Bank shall at all times be entitled to the Annuity Contract’s cash surrender value, as that term is defined in the Annuity Contract.
    2.3.   Right to Annuity Contract.  Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender any Annuity Contract without terminating this Plan, provided the Bank replaces the Annuity Contract with a comparable annuity policy, or asset of comparable value, with a comparable lifetime withdrawal feature and comparable benefit value.  Without limitation, the Annuity Contract at all times shall be the exclusive property of the Bank and shall be subject to the claims of the Bank’s creditors.
    2.4.   Rabbi Trust.  Employer may establish a “rabbi trust” to which contributions may be made to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan.  The trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan for purposes of ERISA. Neither the Executive nor the Beneficiary shall have any beneficial ownership interest in any assets held in the trust.
ARTICLE 3
RETIREMENT AND OTHER BENEFITS
    3.1.   Normal Retirement Benefit. Upon the Executive’s Separation from Service after reaching Normal Retirement Age for any reason other than death, the Executive will be entitled to the monthly benefit payment described in this Section 3.1.  The amount of the benefit will equal the amount that is paid from the Annuity Contract through the Rider designated under this Plan to benefit the Executive, commencing on the first (1st) day of the second month following the date of the Executive’s Separation from Service, payable monthly and continuing for the Executive’s lifetime.  Subject to section 3.4, this shall be the Executive’s benefit in lieu of any other benefit under this Plan.
    3.2.   Early Termination Benefit.  In the event the Executive should incur a Separation from Service prior to Normal Retirement Age for any reason other than death or Change in Control, the Executive will be entitled to a percentage of the Normal Retirement Benefit in accordance with the vesting table below. Vesting shall determined monthly, on a complete months basis. For purposes of determining the benefit in this Article 3.2, the Normal Retirement Benefit will be equal to the amount payable based on the
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Executive remaining in service to Normal Retirement Age. In the event the Executive dies prior to reaching Normal Retirement Age, benefits will be payable in accordance with Article 3.4 instead of this Article 3.2.  If the Executive survives to Normal Retirement Age, benefit payments will commence on the first day of the second month following the Executive’s Normal Retirement Age and will continue for the Executive's lifetime.  Subject to Article 3.4, this shall be the Executive’s benefit in lieu of any other benefit under this Plan.
 
Plan Year
Vested in Normal
Retirement
Benefit (Per
Year)
Monthly Vesting
Rate
1
17%
1.4167%/month.
2
34%
1.4167%/month.
3
51%
1.4167%/month.
4
68%
1.4167%/month.
5
85%
1.4167%/month.
6
91%
.5%/month
7
96%
.4166%/month
8
100%
.3333%/month

    3.3.   Change in Control Benefit.  If the Executive is actively employed at the time of a Change in Control and experiences an Involuntary Termination within twenty-four (24) months following the Change in Control, the Executive will fully vest in the Normal Retirement Benefit as provided for in Article 3.1, with such benefit payable in the amount as provided for in Article 3.1.  Notwithstanding the foregoing, if in connection with the Change in Control the acquiring or surviving entity does not formally assume this Plan and its obligations at the time of the Change in Control, then the Executive shall be entitled to the benefit provided for in this Article 3.3 without regard to whether he experiences an Involuntary Termination. The Employer will establish a “rabbi trust”, if one has not already been established, for the purposes of this Plan, to which assets will be contributed to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan.  The amount of the contribution to the “rabbi trust” will be the amount sufficient to satisfy the benefit under Article 3.1.  In the event the Executive dies prior to reaching Normal Retirement Age, benefits will be payable in accordance with Article 3.4 instead of this Article 3.3.  If the Executive survives to Normal Retirement Age, benefits payable under this Article 3.3 will commence on the first day of the second month following the later of the Executive’s Normal Retirement Age or Separation from Service and will continue for the Executive's lifetime.  Subject to Article 3.4, this shall be the Executive’s benefit in lieu of any other benefit under this Plan.
    3.4.   Death Benefits.
          (a)  Death During Active Service. Upon the death of the Executive while in active service with the Employer, the Employer shall pay to the Executive’s Beneficiary the Account Balance, payable in a lump sum no later than sixty (60) days from the date of such death.  This shall be the Executive’s benefit in lieu of any other benefit under this Plan.
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         (b)  Death Following a Separation from Service but Prior to Commencement of Benefits.  Upon the death of the Executive following a Separation from Service, having qualified for benefits, but prior to Commencement of Benefits, the Employer shall pay to the Executive’s Beneficiary the Account Balance, payable in a lump sum no later than sixty (60) days from the date of such death.  This shall be the Executive’s benefit in lieu of any other benefit under this Plan.
         (c)  Death During Benefit Period.  Upon death of the Executive after benefit payments have commenced but before receiving a total of one hundred eighty (180) monthly payments, the Employer shall pay to the Executive’s Beneficiary in a single lump sum the present value of the remaining payments (that is, one hundred eighty (180) payments less the number of payments already made), based on the accrued liability rate used in the Plan, no later than sixty (60) days from the date of death.  If the Executive dies after receiving at least one hundred eighty (180) payments, this Agreement will terminate and no additional payments will be made to the Executive’s Beneficiary under the Plan.
    3.5.   Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Plan regarding timing of payments, the following special rules shall apply if the stock of the Employer is publicly traded at the time of the Executive’s Separation from Service in order for this Plan to comply with Section 409A: (i) to the extent the Executive is a “specified employee” (as defined under Section 409A) at the time of a distribution and to the extent such applicable provisions of Section 409A and the regulations thereunder require a delay of such distributions by a six-month period after the date of such Executive’s Separation from Service with the Employer, no such distribution shall be made prior to the date that is six months after the date of the Executive’s Separation from Service, and (ii) any such delayed payments shall be paid to the Executive in a single lump sum within five (5) business days after the end of the six (6) month delay, without interest.
ARTICLE 4
BENEFICIARIES
    4.1.   Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Plan upon the death of the Executive. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.
    4.2.   Beneficiary Designation; Changes. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the Executive and his spouse subsequently are divorced or legally separated. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.
    4.3.   Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received in writing by the Plan Administrator or its designated agent.
    4.4.   No Beneficiary Designation. If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary, unless the Executive and his spouse are legally separated. If the Executive has no
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surviving spouse or the Executive and his spouse are legally separated, the benefits shall be distributed to the personal representative of the Executive’s estate.
    4.5.   Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Employer may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Employer from all liability for the benefit.
ARTICLE 5
GENERAL LIMITATIONS
    5.1.   Limits on Payments.  Notwithstanding anything contained in this Plan to the contrary, it is understood and agreed that the Bank shall not be required to make any payment or take any action under this Plan if: (a) such payment or action is prohibited by any governmental agency having jurisdiction over the Bank (hereinafter referred to as “Regulatory Authority”) in light of the fact that the Bank has been declared by Regulatory Authority to be troubled, or operating in an unsafe or unsound matter; or (b) such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to the Bank, as now in effect or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory Authority.
    5.2.   Excess Parachute or Golden Parachute Payment. Notwithstanding any provision of this Agreement to the contrary, any benefit provided under this Agreement when added to all other amounts or benefits provided to or on behalf of Executive in connection with his termination of employment, would result in the imposition of an excise tax under Section 4999 of the Code, such payments shall be retroactively (if necessary) reduced to the extent necessary to avoid such excise tax imposition, or shall be forfeited to the extent the benefit would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency had not given written consent to pay pursuant to 12 C.F.R. §359.4. Upon written notice to Executive, together with calculations of Bank's independent auditors, Executive shall remit to Bank the amount of the reduction plus such interest as may be necessary to avoid the imposition of such excise tax. Notwithstanding the foregoing or any other provision of this contract to the contrary, if any portion of the amount herein payable to the Executive is determined to be non-deductible pursuant to the regulations promulgated under Section 280G of the Code, the Bank shall be required only to pay to Executive the amount determined to be deductible under Section 280G of the Code.
    5.3.   Termination for Cause. Notwithstanding anything to the contrary contained herein, in the event of the Executive's termination for Cause, this Plan shall terminate and no benefits shall be payable under the Plan.  For this purpose, “Cause” shall have the same meaning as in the Executive’s employment agreement with the Employer.  If no such employment agreement is in effect, or such employment agreement does not include a definition of “Cause” or a similar definition, then “Cause” shall be defined as (i) willful misconduct or gross neglect of duties which, in either case, has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided that within 30 days after receiving notice of such misconduct or neglect, on which the Board is relying to terminate the Executive for cause, the Executive is provided the opportunity to defend himself before the Board; or (ii) a repeated failure by the Executive to follow the written directives of the Board or any written Bank policy or guidelines expressly approved by the Board which has resulted, or in all probability is likely to result, in material economic damage to the Bank; provided, however, that if the Executive initially refuses to obey the written directives of the Board, (a) the Executive is furnished a written statement by the Board that it believes in
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good faith that the acts or non-acts in respect of the direction that is given the Executive were in the best interests of the Bank, and (b) the Executive is provided the opportunity to discuss with the Board reasons for not complying with the Board's directives; provided further that the Executive’s refusal to follow any written directive of the Board that would cause the Executive to commit any illegal act or engage in any illegal course of conduct shall not be grounds for terminating the Executive’s employment for Cause.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
    6.1.   Claims Procedure. A person or Beneficiary (a “claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows:
         (a)  Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after the notice was received by the claimant. All other claims must be made within one hundred eighty (180) days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant.
          (b)  Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days, by notifying the claimant in writing, prior to the end of the initial ninety (90)-day period that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.  The time period shall begin at the time a claim is filed, whether or not all information necessary for a determination accompanies the filing.
          (c)  Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i)     The specific reasons for the denial,

(ii)     A reference to the specific provisions of the Plan on which the denial is based,

(iii)    A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed, and

(iv)     An explanation of the Plan’s review procedures and the time limits applicable to such procedures.
    6.2.   Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows:
          (a)  Initiation - Written Request. To initiate the review, the claimant, within sixty (60) days (180 days for a Disability claim) after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.
            (b)  Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.
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The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
          (c)  Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
          (d)  Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60)-day period that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.
          (e)  Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i)     The specific reasons for the denial,

(ii)    A reference to the specific provisions of the Plan on which the denial is based,

(iii)    A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and

(iv)    A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).
           (f)  Statute of Limitations.  If the Plan Administrator provides the claimant with a final notice of denial of appeal, in order to preserve the Executive’s claim, the claimant must file an action with respect to the denied claim no later than the second anniversary of the date of the Plan Administrator's final notice of denial of appeal.
ARTICLE 7
MISCELLANEOUS
    7.1.  Amendments and Termination.  Subject to Article 7.12 of this Plan, this Agreement may be amended or terminated solely by a written agreement signed by the Bank and by the Executive.
    7.2.  No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Executive the right to remain an employee of the Employer, nor does it interfere with the Employer’s right to discharge the Executive. It also does not require any Executive to remain an employee nor interfere with any Executive’s right to terminate employment at any time.
    7.3.  Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.
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    7.4.  Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.
    7.5.  Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction and performance of this Plan shall be governed by and construed in accordance with the laws of the State of Washington, without giving effect to the principles of conflict of laws of such state.
    7.6.  Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Plan. The benefits represent the mere promise by the Employer to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance, annuity contract or other asset purchased by Employer to fund its obligations under this Plan shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.
    7.7.  Benefit Provision.  Notwithstanding the provisions of this Plan in the payment of the benefits under Article 3, if the Plan benefits are informally funded by Annuity Contract(s) identified in the Plan, then any benefits payable under this Plan are contingent solely upon the amount that is provided by said Annuity Contract(s) or other provision as provided for in Article 2.
    7.8.  Severability. If any provision of this Plan is held invalid, such invalidity shall not affect any other provision of this Plan, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Plan is held invalid in part, such invalidity shall not affect the remainder of the provision, and the remainder of such provision together with all other provisions of this Plan shall continue in full force and effect to the full extent consistent with law.
    7.9.  Headings. The headings of articles herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.
    7.10.  Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board, at 201 Wells Avenue South, Renton, Washington 98057.
    7.11.  Termination or Modification of Plan Because of Changes in Law, Rules or Regulations. The Employer is entering into this Plan on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form. If that assumption materially changes and the change has a material detrimental effect on this Plan, then the Employer reserves the right to terminate or modify this Plan accordingly, provided that the Executive is provided a benefit that is economically equivalent to the benefit provided under the Plan prior to the change in assumption, and such equivalent benefit does result in a violation of Section 409A.
ARTICLE 8
ADMINISTRATION OF AGREEMENT
    8.1.  Plan Administrator Duties. This Plan shall be administered by a Plan Administrator consisting of the Board or such committee or person(s) as the Board shall appoint. The Plan Administrator shall have the sole and absolute discretion and authority to interpret and enforce all appropriate rules and
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regulations for the administration of this Plan and the rights of the Executive under this Plan, to decide or resolve any and all questions or disputes arising under this Plan, including benefits payable under this Plan and all other interpretations of this Plan, as may arise in connection with the Plan. No benefit shall be payable hereunder to any person unless the Plan Administrator, in its sole discretion, determines such benefit is due.
    8.2.  Agents. In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Employer.
    8.3.  Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.  Without limiting the foregoing, it is acknowledged that the value of the benefits payable hereunder may be difficult to determine in the event the Employer does not actually purchase and maintain the Annuity Contract as contemplated hereunder; therefore, in such event, the Employer shall have the right to make any reasonable assumptions in determining the benefits payable hereunder and any such determination made in good faith shall be binding on the Executive.
    8.4.  Indemnity of Plan Administrator. The Plan Administrator shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless such action or omission is attributable to the gross negligence or willful misconduct of the Plan Administrator or any of its members. The Employer shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Plan, except in the case of gross negligence or willful misconduct by the Plan Administrator or any of its members.
    8.5.  Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.
This Supplemental Executive Retirement Plan Agreement is hereby adopted as of the date written above.

THE EXECUTIVE:
 
FIRST FINANCIAL NORTHWEST BANK
 
 
/s/Richard P. Jacobson
 
By:
/s/Joseph W. Kiley III
   

Title:
President & CEO



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BENEFICIARY DESIGNATION
FIRST FINANCIAL NORTHWEST BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

I, Richard P. Jacobson, designate the following as Beneficiary of any death benefits under the First Financial Northwest Bank Supplemental Executive Retirement Plan for the benefit of Richard P. Jacobson:
 
Primary:
 
 
 
 
     
 
Contingent: 
 
 
 
 
Note: To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these Beneficiary designations by filing a new written designation with the Employer. I further understand that the designations will be automatically revoked if the Beneficiary predeceases me, or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

 
Signature:
/s/Richard P. Jacobson
 
 
 
 
Date:
January 10, 2020

 
Accepted by the Employer this 10th day of January, 2020.

 
By:
/s/Joseph W. Kiley III
 
 
 
  Print Name:
Joseph W. Kiley III
     
  Title:
President & CEO 





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Section 4: EX-10.3 (EXHIBIT 10.3)

Exhibit 10.3


EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
PARTICIPATION AGREEMENT
(AS AMENDED JANUARY 10, 2020)


This amended Agreement is made and entered into as of the 10th day of January, 2020 by and between FIRST FINANCIAL NORTHWEST BANK (hereinafter referred to as the “Bank”) and Joseph W. Kiley III (hereinafter referred to as “the Participant”), pursuant to the Executive Supplemental Retirement Income Plan.  This agreement modifies all other Executive Supplemental Retirement Plan Participant Agreements between the Bank and the Participant if any, including, in particular, the Participant Agreement effective July 10, 2017).

In consideration of past and future services of the Participant to the Bank, and of the mutual covenants contained herein, the Bank and the Participant agree as follows:


1.
Benefits.

A. Normal Retirement:Effective January 10, 2020, the Participant shall be entitled to the normal retirement benefit provided for in this Section 1, Paragraph A if: (i) he is actively employed by, or on an authorized leave of absence with, the Bank on September 12, 2017, and (ii) either (A) he does not voluntarily terminate employment with the Bank (except in connection with an Involuntary Termination) prior to his attaining age 65, or (B) prior to his attaining age 65, he experiences an “Involuntary Termination” whether or not such Involuntary Termination occurs in connection with a Change in Control. For purposes of the preceding sentence, “Involuntary Termination” and “Change in Control” shall have the same meaning as in the Participant’s employment agreement dated December 2, 2013.  If the above requirements are satisfied, then upon the first day of a month during the 90-day period beginning with the date of the Participant’s “separation from service” (as that phrase is defined in Section 409A of the Internal Revenue Code and the regulations and guidance of general applicability issued thereunder (“Section 409A”)), taking into account the rules and presumptions provided for in the Section 409A regulations, from the Bank and all other related entities (as determined under Section 409A), the Bank shall pay to the Participant an annual pension of Twenty Eight Thousand ($28,000) Dollars for 15 years, payable in monthly installments (180 months in total). If the 90-day period referred to in the preceding sentence spans two calendar years, then payments must commence during the second calendar year. Upon commencement of benefit payments, regardless of age, said benefit shall remain level except pursuant to Section 5, Paragraphs B and E. herein.  Said payments shall be reduced by any state or federal taxes required to be withheld by the Bank. Notwithstanding the foregoing, if at the time of the Participant’s separation from service he is a “specified employee” (within the meaning of Section 409A), then payments under this Paragraph shall not


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commence until the 185th day following the date of Participant’s separation from service (the “Six Month Rule”).  All payments which are delayed on account of the foregoing sentence shall be paid (without interest) with the first payment that is not subject thereto.  In the event that said Participant shall die following the commencement of benefits hereunder, but prior to receiving 180 monthly payments, the Bank will pay to the Participant’s beneficiary, designated on the attached Exhibit “A”, Beneficiary Designation Form, the balance of said payments until a total of 180 payments have been made by the Bank.  The beneficiary designated by the Participant on the attached Beneficiary Designation Form shall be the Participant’s legal spouse, if married, unless such spouse shall consent in writing, to the designation of another beneficiary.  If, at the time of the Participant’s death, there is no surviving spouse, or if the designation of beneficiary shall be ineffective for any reason, the beneficiary shall conclusively be deemed to be the Participant’s lineal descendants, per stirpes or, if none, those persons who would be entitled to share in the Participant’s estate if the Participant died intestate.  Any beneficiary designation in favor of the Participant’s spouse shall be void upon the Participant’s divorce or legal separation from that spouse.  Subject to the foregoing, the Participant may, at any time, change the beneficiary hereunder by filing a new Beneficiary Designation Form with the Secretary of the Bank.  No payments shall be made under this Paragraph 1.A unless the Participant first executes a release substantially in the form attached as Exhibit B hereto within 60 days following the date of the Participant’s separation from service as defined herein.

       1.A(i)   Extended Retirement:  In addition to the benefit provided in “A. Normal Retirement” of the Agreement, the Participant also shall be entitled to a continuation of his Normal Retirement benefit payments (i.e., an additional benefit) if his date of “separation from service” (as defined in Section 1.A.) occurs on or after the date he attains age sixty-nine (69).  Such continuation of Normal Retirement benefit payments shall commence on the first day of the month following the end of the original fifteen (15) year benefit period described in Section 1.A. and shall continue for the life of the Participant, with the last payment made on the first day of the month in which the Participant dies.  For the avoidance of doubt, the benefit provided in this Section 1.A(i) shall not modify the amount, time or form of the payments described in Section 1.A.

       B. Pre-Retirement Death:     In the event the Participant dies while employed by the Bank, but prior to the commencement of benefits under Section 1, Paragraph A (except on account of the Six Month Rule as defined therein), the Participant’s beneficiary as designated on the Beneficiary Designation Form (pursuant to the rules on beneficiary designations set forth in Paragraph 1.A.), shall receive a lump sum death benefit of $200,000.  Such amount shall be payable no later than 60 days following the date of the Participant’s death. Upon payment of this amount, no further sums shall be due the Participant or his beneficiary.

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2.
Forfeiture of Benefits.    Notwithstanding any other provision of this plan to the contrary, supplemental retirement benefits shall be forfeited or suspended if the Participant is discharged for cause by reason of fraud, dishonesty, embezzlement or any other breach of trust.


3.
Ownership of Insurance.    All rights and incidents of ownership in any life insurance policy that the Bank may purchase insuring the life of the Participant shall belong exclusively to the Bank, and neither the Participant or any beneficiary or other person claiming under or through him or her shall have any rights, title or interest in or to any such insurance policy.  Neither the Participant nor any beneficiary under this Agreement shall have any power to transfer, assign, hypothecate or otherwise encumber, in advance any of the benefits payable hereunder, nor shall any benefits be subject to seizure for the benefit of any debts or judgments, or be transferable by operation of law in the event of bankruptcy, insolvency or otherwise.


4.
Administration.   The Bank shall have full power and authority to interpret, construe and administer this Plan, to adopt appropriate procedures and to make all decisions necessary or proper to carry out the terms of the Plan.  The Bank's interpretation and construction hereof, and actions hereunder, including any determination of benefit amount or designation of the person to receive supplemental payments, shall be binding and conclusive on all persons for all purposes.  Neither the Bank, nor its officers, employees, or directors, nor any member thereof shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan.


5.
Other Provisions.

      A. Retirement Plan:  Nothing in this Agreement shall diminish or impair the Participant's eligibility, participation or benefit entitlement under the qualified retirement plan for the employees of the Bank, or any other benefit, insurance or compensation plan or agreement of the Bank now or hereinafter in effect.

      B. Reductions of Benefits:   Notwithstanding any other provision of this Agreement, if payments received or to be received under this Agreement, together with any other amounts and the value of benefits received or to be received by the Participant under another agreement, would cause any amount to be nondeductible for federal income tax purposes pursuant to or by reason of Code Section 280G, then payments under this Agreement shall be reduced (not less than zero) to the extent necessary so as to maximize amounts and the value of benefits to be received by the Participant without causing any amount to become nondeductible pursuant to or by reason of Code Section 280G.   To the extent permitted by Code Section 280G and Section 409A, the

3


Participant may determine the allocation of such reduction among payments he is entitled to receive under this Agreement and payments or the value of benefits he is entitled to receive under other agreements.

      C. No Effect on Employment:  This Plan shall not be deemed to give the Participant any right to be retained in the employment of the Bank, or to interfere with the right of the Bank to terminate the Participant at any time and to treat him without regard to the effect which such treatment might have upon him as a Participant in this Plan.

      D. Legally Binding:  The rights, privileges, benefits and obligations under this Plan are intended to be legal obligations of the Bank and binding upon the Bank, its successors and assigns.

      E. Modification:  The Bank by action of the Board of Directors, reserves the exclusive right to amend, modify or terminate this Plan.  Any such termination, modification or amendment shall not terminate or diminish any present or future rights or benefits.  The Bank shall give thirty (30) days’ notice, in writing, to the Participant prior to the effective date of any such amendment, modification or termination of this Plan.  The Plan may be amended or terminated only if the amendment or termination occurs in accordance with the requirements of Section 409A.

In witness whereof, the Bank has caused this Agreement to be executed by its Secretary duly authorized and the Participant as of the date first written set forth above.

 
PARTICIPANT
 
FIRST FINANCIAL NORTHWEST BANK
 
 
 
 
 
 
 
 
 
/s/Joseph W. Kiley III
 
 By:
/s/Richard P. Jacobson
 
Joseph W. Kiley III
 
           Richard P. Jacobson, Executive Vice President
        



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Exhibit A
BENEFICIARY DESIGNATION
FIRST FINANCIAL NORTHWEST BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

I, Joseph W. Kiley III, designate the following as Beneficiary of any death benefits under the First Financial Northwest Bank Supplemental Executive Retirement Plan for the benefit of Joseph W. Kiley III:
 
Primary:
 
 
 
 
     
 
Contingent: 
 
 
 
 
Note: To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these Beneficiary designations by filing a new written designation with the Employer. I further understand that the designations will be automatically revoked if the Beneficiary predeceases me, or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.
 
Signature:
/s/Joseph W. Kiley III
 
 
 
 
Date:
January 10, 2020
Accepted by the Employer this 10th day of January, 2020.

 
By:
/s/Richard P. Jacobson
 
 
 
  Print Name:
Richard P. Jacobson
     
  Title:
EVP, CFO & COO 


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EXHIBIT B
Form of General Release

This General Release (“Agreement”) is between ______________ (“Employee”) and FIRST FINANCIAL NORTHWEST BANK (the “Company”), collectively, the “Parties”.  The Employee acknowledges that this Agreement is being executed in accordance with Section 1.A of the amended Executive Supplemental Retirement Plan between the Parties dated _________, 20__ (the “Source Agreement”).

Both Employee and the Company desire to resolve all matters, known or unknown, arising out of Employee’s employment with and separation from the Company according to the terms, conditions and consideration included in this Agreement.

This Agreement is dated ______________ for reference purposes, which is the date that the Company delivered this Agreement to the Employee for consideration.

Based on the above recitals, the Parties agree that the following terms will apply only if all conditions of this Agreement are met:

1.1
Release.

(a) Employee hereby releases and forever discharges any and all of the “Released Parties” (defined below) from any and all claims of any kind, known or unknown, which Employee ever had, now has, or hereafter may have, that arose on or before the date that he signed this Agreement, including without limitation, claims for:

wrongful termination or constructive discharge, including claims based on violation of public policy; breach of agreements, representations, policies or practices related to Employee’s relationship with any Released Party; or based on any legal obligation owed by any Released Party;

violation of federal, state, or local laws, ordinances, or executive orders prohibiting discrimination, harassment or retaliation, or requiring accommodation, on the basis of race, ancestry, creed, color, religion, national origin, pregnancy, childbirth or related medical conditions, families with children, sex, genetic information, marital status, sexual orientation, gender expression or gender identity, political ideology, age, honorably discharged veteran or military status, sensory, physical, or mental impairment or other legally protected characteristic or activity;

wages (including overtime pay) or compensation of any kind (including attorney’s fees or costs) to the fullest extent permitted by law;

tortious interference with contract or expectancy; fraud or negligent misrepresentation; breach of privacy, defamation or libel; intentional or negligent infliction of emotional distress; unfair labor practices; breach of fiduciary duty; or any other tort;

violation of the Washington Law Against Discrimination; the Washington Prohibited Employment Practices Law; the Washington Minimum Wage Act; Washington’s Little Norris-LaGuardia Act; the Washington Family Leave Act; the Washington Family Care Act; the Washington Military Family Leave Act; the Washington law permitting leave for victims of domestic violence, sexual assault or stalking; the Washington Fair Credit


6



Reporting Act; the retaliation provisions of the Washington Workers’ Compensation Act; the Washington Industrial Safety and Health Act (WISHA), including any and all amendments to the above, to the fullest extent permitted by law;

violation of the Consolidated Omnibus Budget and Reconciliation Act of 1985 (COBRA); the Fair Labor Standards Act (FLSA); the Labor Management Relations Act (LMRA); the Employee Polygraph Protection Act; the Racketeer Influenced and Corrupt Organizations Act (RICO); the Electronic Communications Privacy Act; the Uniform Services Employment and Re-Employment Rights Act (USERRA); the Sarbanes-Oxley Act; the Civil Rights Act of 1964; Title VII; Sections 1981 through 1988 of Title 42 of the United States Code; the Civil Rights Act of 1991; the Equal Pay Act of 1963; the Lilly Ledbetter Fair Pay Act; the Genetic Information Nondiscrimination Act of 2008 (GINA); the Americans with Disabilities Act of 1990 (ADA); the federal Family and Medical Leave Act of 1993 (FMLA); the Worker Adjustment and Retraining Notification Act (WARN); the Occupational Safety and Health Act (OSHA); the Sarbanes-Oxley Act of 2002; the Employee Retirement Income Security Act of 1974 (ERISA); the National Labor Relations Act (NLRA); the Immigration Reform and Control Act (IRCA); including any and all amendments to the above, to the fullest extent permitted by law;

the Age Discrimination in Employment Act of 1967 (ADEA); the Older Workers Benefit Protection Act (OWBPA); and

violations of all similar federal, state and local laws, to the fullest extent permitted by law.
(b) “Released Party” or “Released Parties” includes First Financial Northwest, Inc., First Financial Northwest Bank (as the successor to First Savings Bank Northwest), First Financial Diversified Corporation, and all current and former parents, subsidiaries, related companies and affiliates (including any partnerships or joint ventures), and the benefit plans of each such entity; and with respect to each such entity, all past, present and future employees, supervisors, managers, fiduciaries, directors, officers, owners, shareholders, representatives, agents, attorneys, assigns, insurers, whether acting in their individual or official capacities, and any other persons acting by, through, under, or in concert with any of the persons or entities listed in this paragraph; and with respect to each such entity and individual, all predecessors, successors and assigns.
(c) Employee agrees that, except as may be required by subpoena, court order, or other force of law, Employee will not in any way assist any individual or entity in commencing or prosecuting any action or proceeding against any Released Party connected to any and all matters arising from any event that has occurred up to the date of the Employee’s separation from service with the Company (the “Separation Date”).
(d) Employee understands that he is releasing potentially unknown claims, and that Employee has limited knowledge with respect to some of the claims being released.  Employee acknowledges that there is a risk that, after signing this Agreement, he may learn information that might have affected Employee’s decision to enter into this Agreement.  Employee assumes this risk and all other risks of any mistake in entering into this Agreement.  Employee acknowledges that this Agreement and the release and discharge contained herein is fairly and knowingly made.  Employee is giving up all rights and claims of any kind, known or unknown, except for the rights specifically given in this Agreement.
(e) This Agreement does not in any way affect: (1) the Employee’s rights of indemnification to which the Employee was entitled immediately prior to the Separation Date (as an employee or director of any of the Released Parties); (2) any rights the Employee may have as a shareholder of a Released Party; (3) the Employee’s vested rights under any tax-qualified retirement plan or stock compensation plan maintained by a Released Party; (4) any right the Employee may have to obtain


7

contribution in the event of an entry of judgment against the Employee as a result of any act or failure to act for which the Employee and any of the Released Parties are jointly responsible; and (5) the right of the Employee to take whatever steps may be necessary to enforce the terms of the Source Agreement.
    1.2.  Indemnification.  Employee agrees to indemnify and hold Released Parties harmless from and against all losses, costs, damages or expenses, including, without limitation, reasonable attorney’s fees incurred, arising out of a breach of this Agreement.  As a material part of this Agreement, Employee represents and warrants that there are presently no claims or potential claims that are capable of being asserted against the Released Parties which he has not asserted or which could be asserted on his behalf or on behalf of his marital community.
    1.3  Affirmations.

        (a)  Employee affirms that he has disclosed any workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under federal, state, or local laws, including family or medical leave, paid sick or safe leave, or any other leave mandated by law.
        (b)  Employee affirms that he has not and will not initiate any suit, action, or arbitration before any federal, state or local judicial, administrative or other forum with respect to any matter arising out of or connected with his employment with the Company and/or the termination of that employment; and that, without subpoena, he will not, except at the Company’s request, testify in any judicial or administrative proceedings to which any Released Party is a party regarding any matter involving the affairs of any Released Party of which Employee has knowledge.  Nothing in this Agreement precludes Employee from filing a charge or complaint with an appropriate administrative agency.  However, Employee agrees that he is not entitled to and will not accept any monetary recovery directly from the Company as a result of filing such charge or complaint.  Employee affirms that he has not transferred or assigned any claims or rights to claims to any other person or entity.
        (c)  Nothing in this Agreement prohibits Employee from reporting possible violations of federal, state or local laws or regulations to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the United States Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations. Employee does not need prior authorization of any kind to make any such reports or disclosures and Employee is not required to notify the Company that Employee has made such reports or disclosures.
    1.4  Older Workers’ Benefit Protection Act Provisions.  In accordance with the requirements of the Older Workers’ Benefit Protection Act, Employee expressly acknowledges the following:

        (a)  Independent Legal Counsel.  Employee is advised and encouraged to consult with an attorney before signing this Agreement.  Employee acknowledges that, if he desired to consult an attorney, he had an adequate opportunity to do so.
        (b)  Consideration Period.  Employee has twenty-one (21) calendar days from the date this Agreement was given to him (______________) to consider this Agreement before signing it.  Employee agrees that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original twenty-one (21) calendar day consideration period.  The twenty-one (21) day period expires on ______________.  Employee may use as much or as little of this twenty-one (21) day period as he wishes before signing.  If Employee does not sign and return this Agreement within this twenty-one (21) day period, it will not become effective or enforceable, and Employee will not receive the benefits described in the Source Agreement.
        (c)  Revocation Period and Effective Date.  Employee has seven (7) calendar days after signing this Agreement to revoke it.  To revoke this Agreement after signing it, Employee must deliver a

8

written notice of revocation to the Company’s Chief Executive Officer before the seven (7) day period expires.  This Agreement shall not become effective until the eighth (8th) calendar day after Employee signs it (“Effective Date”).  If Employee revokes this Agreement, it will not become effective or enforceable, and he will not receive the benefits described in the Source Agreement.
        (d)  Acceptance.  Employee agrees and accepts this Agreement.  Employee acknowledges that he has not signed this Agreement relying on anything not set out herein.  Employee acknowledges that if he is signing this before ____________, he has decided not to wait for the full twenty-one (21) day period, even though he has the right to do so.
    1.5  Non-Admission.  This Agreement shall not be construed as an admission by Employee or any Released Party of any liability, breach of any agreement, or violation of any statute, law or regulation, nor shall it be construed as an admission of any deficient performance or breach of any professional obligation.
    1.6  Governing Law.  This Agreement is governed by the laws of the State of Washington that apply to contracts executed and to be performed entirely within the State of Washington without giving effect to the rules governing the conflicts of laws, and without the aid of any canon, custom, or rule of law requiring construction against the drafter, and regardless of whether a party changes domicile or residence.
    1.7  Successors and Assigns.  Employee’s obligations will bind his heirs, successors, and assigns, to the benefit of the Company.  The Company shall have the right to assign this Agreement to any of the Company’s successors, assigns, or affiliates or to any entity that, directly or indirectly, is in control of, is controlled by, or is under common control with the Company.  This Agreement shall be binding upon the successors and permitted assigns of the Company.
    1.8  Headings; Definitions.  The headings in the Agreement are for convenience only and shall not affect the meaning of the terms as set out in the text.  Any capitalized terms not defined in this Agreement will have the meaning assigned to those terms in the Employment Agreement.
    1.9  Attorney’s Fees.  In any dispute involving this Agreement, each Party shall be responsible for their own attorney’s fees and costs.
    1.10  Severability.  It is further understood and agreed that if any of the provisions of this Agreement are held to be invalid or unenforceable, the remaining provisions shall nevertheless continue to be valid and enforceable.
    1.11  Complete Agreement.  This Agreement represents and contains the entire understanding between the Parties in connection with the subject matter of this Agreement.  It is expressly acknowledged and recognized by all Parties that there are no oral or written collateral agreements, understandings or representations between the Parties other than as contained in this document.  Any modifications to this Agreement must be in writing and signed by both Parties to be effective.
    1.12  Counterparts.  This Agreement may be executed in duplicate originals, each of which is equally admissible in evidence, and each original shall fully bind each party who executed it.  An e-mailed or facsimile copy of the signature may be submitted as proof of execution; however, Employee shall send the original executed agreement by U.S. Mail to the Company’s Chief Executive Officer no later than three (3) days after signature.



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This Agreement consists of ______ pages, not including any exhibits.


 
 
 
 
 
Date

 
Agreed by FIRST FINANCIAL NORTHWEST BANK

  
 
 
 
By:
 
 
Date
Its:
     









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