8-K

UNITED STATES

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) December 30, 2011                                                                                                                                 

SOUND FINANCIAL, INC.

(Exact name of Registrant as specified in its Charter)

United States	000-52889	26-0776123
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification Number)

2005 5th Avenue, Second Floor, Seattle, Washington	98121
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (206) 448-0884

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))

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

On December 30, 2011, Sound Community Bank (the “Bank”), the wholly owned operating subsidiary of Sound Financial, Inc. (the “Company”), amended the supplemental executive retirement plan (SERP) agreement with Laura Lee Stewart, a “named executive officer” of the Company.  The Company and Ms. Stewart also agreed to an additional SERP agreement for Ms. Stewart as well as a Confidentiality, Non-Competition and Non-Solicitation Agreement as of this date.  Ms. Stewart is the President and Chief Executive Officer of the Company and the Bank.

The SERP Agreement Addendum amends the agreements previously entered into with Ms. Stewart dated August 27, 2007.  The foregoing descriptions of the Employment Agreement Addendums are qualified in their entirety by reference to the Employment Agreement Addendums that are attached hereto as Exhibit 10.1 of this Current Report, and is incorporated by reference into this Item 5.02.

Item 9.01  Financial Statements and Exhibits

(c)            The following exhibit is filed as part of this report.

Exhibit 10.1 Amendment to Freeze Benefit Accruals under Executive Long Term Compensation Agreement for Laura Lee Stewart

Exhibit 10.2 Supplemental Executive Retirement Agreement for Laura Lee Stewart

Exhibit 10.3 Confidentiality, Non-Competition, and No-Solicitation Agreement for Laura Lee Stewart

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 thereunto duly authorized.

	SOUND FINANCIAL, INC.
Date:   January 4, 2011	By:	/s/ Matthew P. Deines
		Matthew P. Deines Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
Exhibit 10.1	Amendment to Freeze Benefit Accruals under Executive Long Term Compensation Agreement for Laura Lee Stewart
Exhibit 10.2	Supplemental Executive Retirement Agreement for Laura Lee Stewart
Exhibit 10.3	Confidentiality, Non-Competition, and No-Solicitation Agreement for Laura Lee Stewart

EX-10.1

Section 3:  EX-10.1

AMENDMENT TO FREEZE BENEFIT ACCRUALS UNDER

EXECUTIVE LONG TERM COMPENSATION AGREEMENT

This Amendment is adopted as of this 30th day of December, 2011, by and between Sound Community Bank and Sound Financial, Inc. (collectively, the “Employer”) and Laura Lee Stewart, an individual resident of the State of Washington (the “Executive”).

WHEREAS, the Employer and the Executive have previously entered into an Executive Long Term Compensation Agreement effective August 14, 2007 (the “Agreement”), an unfunded arrangement maintained to encourage the Executive to remain an employee of the Employer;

WHEREAS, the Agreement is designed to provide retirement benefits (the “Benefits”) to the Executive upon his retirement, death, or disability, payable out of the Employer’s general assets; and

WHEREAS, the Employer and the Executive have agreed to freeze the accrual of Benefits under the Agreement as of December 30, 2011;

NOW, THEREFORE, for good and valuable consideration, the adequacy of which is acknowledged by the parties hereto, the Agreement is hereby amended by adding new Section 2.2 as follows:

2.2.     Freeze in Accrued Benefit.  Effective December 30, 2010, notwithstanding anything herein to the contrary, (i) no additional service or compensation will be credited under the Agreement and  (ii) accrued benefits hereunder will be frozen such that no additional benefits (including disability and death benefits under Article 3) will be accrued under this Agreement.  Such frozen accrued benefits will be paid in accordance with the terms of the Agreement in a manner consistent with section 409A of the Code.

IN WITNESS WHEREOF, the Executive and a duly authorized officer of the Employer have signed this Agreement as of the date first written above.

THE EXECUTIVE:		Sound Community Bank
/s/Laura Lee Stewart	By:	/s/Tyler Myers
	Its:	Chairman of the Board
		Sound Financial, Inc.
	By:	/s/Tyler Myers
	Its:	Chairman of the Board

EX-10.2

Section 4: EX-10.2

SOUND COMMUNITY BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

This Supplemental Executive Retirement Plan Agreement (“Agreement”) is entered into as of this 30th day December, 2011 (the “Effective Date”) by and between Sound Community Bank (the “Employer”), and Laura Lee Stewart (the “Executive”), and establishes the Sound Community Bank Supplemental Executive Retirement Plan f/b/o Laura Lee Stewart (the “Plan”).

WHEREAS, the Executive has contributed substantially to the success of the Employer and the Employer desires that the Executive continue in its employ;

WHEREAS, Employer desires to provide certain supplemental nonqualified pension benefits to Executive;

WHEREAS, Employer and Executive desire to enter into this Agreement to provide a retirement benefit under this Plan and to be paid to Executive upon Separation from Service as provided herein;

WHEREAS, the parties hereto intend that this Agreement shall be an unfunded arrangement maintained primarily to provide supplemental retirement benefits for the Executive, and shall be considered a plan described in Section 301(a)(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); and

WHEREAS, 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;

NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

DEFINITIONS

Whenever used in this Agreement, the following terms have the meanings specified:

“Annuity” means the annuity product provided under the Annuity Contract.

“Annuity Contract” means a Flexible Premium Indexed Deferred Annuity Contract issued by Aviva Life and Annuity Company, contract #(TBD), with the following endorsements:  Income Rider.

“Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined according to Article 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.

“Board” means the Board of Directors of the Employer.

“Change in Control” shall be deemed to have taken place if:

any person or entity, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, other than the Employer, a wholly-owned subsidiary thereof, or any employee benefit plan of the Employer or any of its subsidiaries becomes the beneficial owner of Employer securities having fifty percent (50%) or more of the combined voting power of the then outstanding securities of the Employer that may be cast for the election of directors of the Employer (other than as a result of the issuance of securities initiated by the Employer in the ordinary course of business); or

as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the holders of all Employer’s securities entitled to vote generally in the election of directors of the Employer immediately prior to such transaction constitute, following such transaction, less than a majority of the combined voting power of the then-outstanding securities of the Employer or any successor corporation or entity entitled to vote generally in the election of the directors of Employer or such other corporation or entity after such transactions; or

such other change of ownership or control event as defined in Treasury Regulation §1.409A-3(i)(5) or any subsequent, applicable Treasury Regulation.

“Disability” shall mean the Executive (i) is unable to engage in an substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expect to result in death or can be expected to last for a continuous period of net less than twelve (12) months or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer.

Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Employer, provided that the definition of Disability applied under such Disability insurance program complies with the requirements of Section 409A. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of Social Security Administration’s or the provider’s determination. The said monthly payments shall begin the first day of the third month following the month that the Executive becomes Disabled.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Rider” means the Income Rider attached to the Annuity Contract as an endorsement.

“Normal Retirement Age” means age sixty-five (65).

“Plan Administrator” means the plan administrator described in Article 8.

“Separation from Service” means the complete and intended termination of the employment relationship with the Employer and all corporations or entities or organizations with whom the Employer would be considered a single employer pursuant to subsections (b) and (c) of section 414 of the Code determined in conformance with section 409A of the Code and section 1.409A-1(h) of the Final Treasury Regulations or the corresponding provisions in future guidance issued by the Department of the Treasury and the Internal Revenue Service.

DEFERRED COMPENSATION AND VALUATION OF ACCOUNT

Annuity Contract.  The Annuity Contract shall be a mere accounting device and the Employer shall have no obligation to actually purchase Annuity.  Further, to the extent the Employer does purchase the Annuity, all right, title, and interest in and to the Annuity (or any other assets which may be purchased by Employer) shall at all times be the sole property of the Employer and shall in no event be deemed to constitute a fund or collateral security for the payments under the Agreement.  The Annuity and any other asset purchased by the Employer shall for all purposes be a part of the general funds of the Employer.  To the extent that the Executive or the Executive’s Beneficiary acquires rights to receive payments under the Plan, such rights shall be no greater than the rights of any unsecured general creditor of the Employer.  The Annuity Contract shall merely be the mechanism for tracking the benefits owed to the Executive under the Agreement.

No Requirement to Purchase Annuity Contract.  While the Employer is not required to acquire and maintain any the Annuity Contract, it may do so, and if the Employer does acquire the Annuity Contract, then the Executive consents thereto and agrees to assist the Employer in making application for the Annuity Contract by submitting to any required physical examination and providing any information necessary for the completion of such application.

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. The Executive and his Beneficiaries shall have no beneficial ownership interest in any assets held in the trust.

RETIREMENT AND OTHER BENEFITS

Retirement Benefit. Upon the Executive’s Separation from Service on or after Normal Retirement Age for any reason other than death, the Executive will be entitled to the monthly benefit payment described in this Section.  The benefit will commence on the first (1st) day of the month following the Executive’s 70th Birthday (the “Commencement Date”).  The amount of the monthly benefit will equal the amount which would be paid from the Annuity Contract assuming (i) the Employer actually made a contribution of $755,000 to the Annuity and (ii) election of Lifetime Income Withdrawals, as described in the Rider attached to the Annuity Contract, commencing on such date, based on a mortality age of 83.  This shall be the Executive’s benefit in lieu of any other benefit under this Agreement.

Early Retirement.  Upon the Executive’s Separation from Service prior to Normal Retirement Age for any reason other than death, the Executive will be entitled to the amount accrued for the Retirement Benefit by the Employer as of the Early Retirement date, payable on the first (1st) day of the second month following the date of the Early Retirement in 180 equal monthly installments.  The discount rate used by the Plan Administrator for determining the Early Retirement benefit will be based on the yield on a 20-year corporate bond rated Aa by Moody’s, rounded to the nearest ¼%, or as otherwise determined by the governing Regulatory body. The initial discount rate is 5.00%.  In its sole discretion, the Plan Administrator may adjust the discount rate to maintain the rate within reasonable standards according to GAAP and consistent with the Interagency Advisory on Accounting for Deferred Compensation Agreements which states that the “cost of those benefits shall be accrued over that period of the employee’s service in a systematic and rational manner.”

Disability.  In the event the Executive should become Disabled while actively employed by the Employer any time after the effective date of this Agreement but prior to Normal Retirement or Early Retirement, the Executive will be entitled to the amount accrued for the Retirement Benefit by the Employer as of the date of Disability, payable on the first (1st) day of the second month following the date of the Disability in 180 equal monthly installments.  The discount rate used by the Plan Administrator for determining the Disability benefit will be based on the yield on a 20-year corporate bond rated Aa by Moody’s, rounded to the nearest ¼%, or as otherwise determined by the governing Regulatory body. The initial discount rate is 5.00%.  In its sole discretion, the Plan Administrator may adjust the discount rate to maintain the rate within reasonable standards according to GAAP and consistent with the Interagency Advisory on Accounting for Deferred Compensation Agreements which states that the “cost of those benefits shall be accrued over that period of the employee’s service in a systematic and rational manner.”

Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Agreement 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 termination of employment in order for this Agreement to comply with section 409A of the Code: (i) to the extent the Executive is a “specified employee” (as defined under section 409A of the Code) at the time of a distribution and to the extent such applicable provisions of section 409A of the Code 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 with the Employer, 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.

Death Benefits.  Upon death of the Executive, the Beneficiary will be entitled to a single sum payment, payable within ninety (90) days of the date of death (with the beneficiary having no right to designate the taxable year of the payment) equal to the amount accrued for the Retirement Benefit by the Employer as of the date of Death.

Change in Control Benefit.  Upon a Change in Control, the Executive will be 100% vested in the Retirement Benefit as provided for in paragraph 3.1. and payable in accordance with paragraph 3.1. at Normal Retirement Age.

BENEFICIARIES

Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.

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 marriage is subsequently dissolved. 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.

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.

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. If the Executive has no surviving spouse, the benefits shall be distributed to the personal representative of the Executive’s estate.

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.

GENERAL LIMITATIONS

Limits on Payments.  It is the intention of the parties that none of the payments to which the Executive is entitled under this Agreement will constitute a “golden parachute payment” within the meaning of 12 USC Section 1828(k)(3) or implementing regulations of the FDIC, the payment of which is prohibited.  Notwithstanding any other provision of this Agreement to the contrary, any payments due to be made by Employer for the benefit of the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned on compliance with 12 USC Section 1828(k) and any regulations promulgated thereunder including the receipt of all required approvals thereof by Employer’s primary federal banking regulator and/or the FDIC.

In addition, Employer and its successors retain the legal right to demand the return of any payment made hereunder which constitutes a “golden parachute payment” within the meaning of 12 USC Section 1828(k)(3) or implementing regulations of the FDIC should Employer or its successors later obtain information indicating that the Executive committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a)(4).

CLAIMS AND REVIEW PROCEDURES

Claims Procedure. A person or Beneficiary (a “claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

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.

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.

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:

The specific reasons for the denial,

A reference to the specific provisions of the Agreement on which the denial is based,

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

An explanation of the Agreement’s review procedures and the time limits applicable to such procedures, and

A statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review.

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

Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

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.

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.

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.

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:

The specific reasons for the denial,

A reference to the specific provisions of the Agreement on which the denial is based,

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

A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

MISCELLANEOUS

Amendments and Termination. Subject to Section 7.13 of this Agreement, (a) this Agreement may be amended solely by a written agreement signed by the Employer and by the Executive, and (b) except as otherwise provided herein, this Agreement may be terminated solely by a written agreement signed by the Employer and by the Executive.

Binding Effect. This Agreement shall bind the Executive and the Employer and their beneficiaries, survivors, executors, successors, administrators, legal representatives, and transferees.

No Guarantee of Employment. This Agreement is not an employment policy or contract. It does not give the 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 the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time.

Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.

Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.

Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction, and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee, without giving effect to the principles of conflict of laws of such state.

Unfunded Arrangement. The Executive and the Executive’s Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Agreement. 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 Agreement shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.

Severability. If any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Agreement 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 Agreement shall continue in full force and effect to the full extent consistent with law.

Headings. The headings of sections herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement.

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 of Directors, at 51 Germantown Court, Suite 100, Cordova, Tennessee 38018.

Entire Agreement. This Agreement constitutes the entire agreement between the Employer and the Executive concerning the subject matter hereof. No rights are granted to the Executive under this Agreement other than those specifically set forth herein.

Payment of Legal Fees. In the event litigation ensues between the parties concerning the enforcement of the obligations of the parties under this Agreement, the Employer shall pay all costs and expenses in connection with such litigation until such time as a final determination (excluding any appeals) is made with respect to the litigation. If the Employer prevails on the substantive merits of the each material claim in dispute in such litigation, the Employer shall be entitled to receive from the Executive all reasonable costs and expenses, including without limitation attorneys’ fees, incurred by the Employer on behalf of the Executive in connection with such litigation, and the Executive shall pay such costs and expenses to the Employer promptly upon demand by the Employer.

Termination or Modification of Agreement Because of Changes in Law, Rules or Regulations. The Employer is entering into this Agreement 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 Agreement, then the Employer reserves the right to terminate or modify this Agreement accordingly, subject to the written consent of the Executive, which shall not be unreasonably withheld.

ADMINISTRATION OF AGREEMENT

Plan Administrator Duties. This Agreement shall be administered by a Plan Administrator consisting of the Board of Directors of the Employer or such committee or person(s) as the Board of Directors of the Employer 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 Agreement and the rights of the Executive under this Agreement, to decide or resolve any and all questions or disputes arising under this Agreement, including benefits payable under this Agreement and all other interpretations of this Agreement, as may arise in connection with the Agreement.

Agents. In the administration of this Agreement, 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.

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 Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement.  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.

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 Agreement, unless such action or omission is attributable to the 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 Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

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, Disability, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.

IN WITNESS WHEREOF, the Executive and a duly authorized Officer of the Employer have signed this Agreement as of the date first written above.

THE EXECUTIVE:	SOUND COMMUNITY BANK
/s/ Laura Lee Stewart	By:	/s/Tyler Myers
	Its:	Chairman of the Board

BENEFICIARY DESIGNATION

SOUND COMMUNITY BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

I, Laura Lee Stewart, designate the following as Beneficiary of any death benefits under this Supplemental Executive Retirement Plan Agreement

Primary: The Estate of Laura Lee Stewart

Contingent:  None                                                                                     

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/Laura Lee Stewart
Date:	December 30, 2011

Accepted by the Employer this 30th day of December, 2011.

By:	/s/Tyler Myers
Print Name:	Tyler Myers
Title:	Chairman of the Board

EX-10.3

Section 5: EX-10.3

CONFIDENTIALITY, NON-COMPETITION, AND

NON-SOLICITATION AGREEMENT

This Confidentiality, Non-Competition, and Non-Solicitation Agreement (“Agreement”) is made and entered into between Sound Community Bank, a Washington corporation (the “Company”), and Laura Lee Stewart (the “Employee”).

WHEREAS Employee is a key member of the management of the Company and has provided guidance, leadership, and direction in the growth, management, and development of the Company and has learned trade secrets, confidential procedures and information, and sensitive business plans of the Company;

WHEREAS the Company desires to continue to employ the Employee, and Employee desires to continue employment with the Company;

WHEREAS the Company desires to restrict, after the Employee’s separation from service with the Company, the Employee’s availability to other companies or entities that

compete with the Company;

WHEREAS the Employee agrees to undertake such post-employment restrictions in exchange for the severance payments described herein;

NOW THEREFORE, in consideration of these premises, the mutual promises and

undertakings set forth in this Agreement, and other good and valuable consideration, the receipt

and sufficiency of which are hereby acknowledged, the Employee and the Company hereby agree as follows.

1.           DEFINITIONS.  As used in this Agreement, certain terms shall have the following meanings:

a. Affiliate shall mean the Company and any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

b. Cause shall mean and be limited to:  (i) willful and gross neglect of duties by the Employee, (ii) an act or acts committed by the Employee constituting a felony and substantially detrimental to the Company or its reputation, (iii) any action or inaction detrimental to the Company or its reputation that results in regulatory enforcement action, whether or not such enforcement action is subject to direct enforcement under 12 U.S.C § 1818(i)(l), by any regulatory authorities having authority over the Company, (iv) any regulatory or other finding, action, or directive requiring Employee’s termination of employment pursuant to any applicable statue, rule, or regulation; and/or (v) any violation of Employee’s obligations under this Agreement, including, without limitation, the obligations set forth in paragraphs 3, 4, and 6.

c. Change in Control shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, as such change is defined under the default definition in Treasury Regulation §1.409A-3(i)(5) or any subsequently applicable Treasury Regulation.

d. Code shall mean the Internal Revenue Code of 1986, as amended, or any successor statute, rule or regulation of similar effect.

e. Customer shall mean any individual, joint venture, entity of any sort, or other business partner of the Company or its Affiliates with, for, or to whom the Company or its Affiliates have provided financial products or services during the final two years of the Employee’s employment with the Company, or any individual, joint venturer, entity of any sort, or business partner whom the Company or the Bank has identified as a prospective customer of financial products or services within the final year of the Employee’s employment with the Company or the Bank.

f. Disability or Disabled means the Employee:  (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, is receiving income replacement benefits for a period of not less than three (3) months under a disability plan covering employees of the Company.

g. Financial products or services shall mean any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Company or an Affiliate on the date of the Employee’s separation from service, including but not limited to banking activities and activities that are closely related and a proper incident to banking, or other products or services of the type in which the Employee was involved during the Employee’s employment with the Company.

h. Good Reason shall mean and be limited to:  (i) without the Employee’s express written consent, a material diminution in authority, duties or responsibilities, except as required by any regulatory or other finding, action, or directive pursuant to any applicable statute, rule, or regulation; (ii) any material reduction by the Company in the Employee’s Base Salary; (iii) any failure of the Company to obtain the assumption of, or the agreement to perform, this Agreement by any successor as contemplated in paragraph 13 hereof; (iv) the Company’s material breach of this Agreement; or (v) the Company requiring the Employee to be permanently assigned to a location more than 35 miles from Employee’s current work location, except for required travel on Company business, or, in the event the Employee consents to any relocation, and such relocation is more than 35 miles from the Employee’s previous location, the failure by the Company to pay (or reimburse the Employee) for all reasonable moving expenses incurred by the Employee relating to a change of the Employee’s principal residence in connection with such relocation and to indemnify the Employee against any loss realized on the sale of the Employee’s principal residence in connection with any such change of residence. Good Reason shall be deemed to occur only when Employee provides written notice to the Company of Employee’s judgment that a Good Reason event has occurred within 90 days of such occurrence, and the Company will have at least 30 days during which it may remedy the condition.1

i. Specified Employee means an employee who at the time of termination of employment is a key employee of the Company, if any stock of the Company is publicly traded on an established securities market or otherwise. For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the 12-month period ending on December 31 (the “identification period”). If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of January following the close of the identification period.

j. Voluntary Termination shall mean the termination by Employee of Employee’s employment, which is not the result of Good Reason.

2.           TERM.  The term of this Agreement shall commence upon the date the employee terminates employment, now anticipated as March 1, 2016, and will continue for a term of 36 months.2

3.           NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.  Except as permitted in writing by the Company, the Employee shall not at any time divulge, furnish or make accessible to anyone, or use in any way other than in the ordinary course of the business of the Company or its Affiliates, any confidential, proprietary, or secret knowledge or information of the Company or its Affiliates that the Employee has acquired or will acquire about the Company or its Affiliates, whether developed by himself or herself or by others, concerning (i) any trade secrets; (ii) any confidential, proprietary, or secret designs, programs, processes, formulae, plans, devices, or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company or of its Affiliates; (iii) any customer or supplier lists; (iv) any confidential, proprietary, or secret development or research work; (v) any strategic or other business, marketing, or sales plans; (vi) any financial data or plans; or (viii) any other confidential, proprietary, or secret information about any aspect of the business of the Company or of its Affiliates (collectively “Confidential Information”). The Employee acknowledges that the knowledge and information described above constitutes a unique and valuable asset of the Company and represents a substantial investment of time and expense by the

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1. The definition of Good Reason must be substantial enough to satisfy the requirements set forth in the § 409A regulations.  This is an example of a common provision.

2.    The term of the Agreement will mirror the length of the employee’s non-competition and non-solicitation obligations.  Except in the event of an involuntary termination following a change in control (see paragraph 5(c)), employees will receive severance for the same period.

Company and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company or its Affiliates would be wrongful and would cause irreparable harm to the Company. The Employee shall not intentionally commit any act that would materially reduce the value of such knowledge or information to the Company or its Affiliates. The Employee's obligations under this Agreement to maintain the confidentiality of the Company's confidential, proprietary, and secret information are in addition to any obligations of the Employee under applicable statutory or common law . The obligations of the Employee under this paragraph 3 shall survive the termination of this Agreement and the termination of the Employee’s employment with the Company.

a. Exceptions.  The foregoing obligations of confidentiality shall not apply to any knowledge or information that:  (i) is now or subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of this Agreement; (ii) is independently made available to the Employee in good faith by a third party who has not violated a confidential relationship with the Company or its Affiliates or any other entity; or (iii) is required to be disclosed by law or legal process.

     4.             NON-COMPETITION AND NON-SOLICITATION.

a. Non-Competition Obligations.  For and in consideration of the monthly payments described in paragraph 5, the Employee shall not, for the 36-month period immediately following the Employee’s separation from service with the Company,3 either separately, jointly, or in association with others, directly or indirectly, as an agent, employee, owner, partner, stockholder, or otherwise, compete with the Company or any of its Affiliates, or establish, engage in, or become interested in any business, trade, or occupation that competes with the Company or any of its Affiliates, in the financial products or services industry. The Company and the Employee acknowledge that, during the term of the Employee’s employment, the Employee has acquired special and confidential knowledge regarding the operations of the Company and its Affiliates. Furthermore, although not a term or condition of this Agreement, the Company and the Employee acknowledge that the Employee’s services have been used and are being used by the Company in executive, managerial, and supervisory capacities throughout the areas in which the Company and its Affiliates conduct business. Employee acknowledges that the non-compete restrictions contained herein are reasonable and fair in scope and necessary to protect the legitimate business interests of the Company.

b. Non-Solicitation Obligations. For and in consideration of the monthly payments described in paragraph 5, the Employee shall not, for the 36-month period immediately following the Employee’s separation from service with the Company: (a) directly or indirectly solicit or attempt to solicit any customer of the Company or any of its Affiliates to accept or purchase financial products or services of the same nature, kind or variety currently being provided to the customer by the Company or any of its Affiliates, or being provided to the customer by the Company or any of its Affiliates when the Employee’s separation from service occurs; (b) directly or indirectly influence or attempt to influence any customer, joint venturer, or other business partner of the Company or any of its Affiliates to alter that person or entity’s business relationship with the Company or any of its Affiliates in any way; and/or (c) accept the financial products or services business of any customer or provide financial products or services to any customer on behalf of anyone other than the Company or its Affiliates. In addition, the Employee shall not solicit or attempt to solicit and shall not encourage or induce in any way any employee, joint venturer, or business partner of the Company or any of its Affiliates to terminate an employment or contractual relationship with the Company or any of its Affiliates, and shall not hire any person employed by Company or any of its Affiliates during the two (2)-year period immediately before the Employee’s employment termination or any person employed by the Company or any of its Affiliates during the term of this covenant.

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3.       Again, each employee’s non-competition and non-solicitation obligations will last for as long as they are receiving severance pursuant to paragraph 5 of the Agreement.

c. Duration; no impact on existing obligations under law or contract.  The covenants in this paragraph 4 shall apply throughout the 36-month period immediately following the Employee’s separation from service.  The 36-month durational period referenced herein shall be tolled and shall not run during any period of time the Employee is in breach of this Agreement and/or in violation of any of the covenants contained herein, and once tolled hereunder shall not begin to run again until such time as all such breach and/or violations have ceased. The Employees acknowledges and agrees that nothing in this Agreement is intended to or shall have any impact on the Employee’s obligations as an officer or employee of the Company to refrain from competing against the Company or any of its Affiliates, soliciting customers, officers, or employees of the Company or any of its Affiliates, or disclosing confidential information of the Company or any of its Affiliates while the Employee is serving as an officer or employee of the Company or thereafter, whether the Employee’s obligations arise under applicable statutory or common law, under an employment agreement, or otherwise.

d. Forfeiture of payments under this Agreement.  If the Employee breaches any of the covenants in this paragraph 4, the Employee’s right to any of the payments specified in paragraph 5 after the date of the breach shall be forever forfeited and the right of the Employee’s designated beneficiary or estate to any payments under this Agreement shall likewise be forever forfeited. This forfeiture is in addition to and not instead of any injunctive or other relief that may be available to the Company. The Employee further acknowledges and agrees that any breach of any of the covenants in paragraphs 3, 4, and 7 shall be deemed a material breach by the Employee of this Agreement.

5.            NON-COMPETITION AND NON-SOLICITATION PAYMENTS.

a. Payments.  In consideration of the Employee’s non-competition and non-solicitation obligations, as described in paragraph 4, the Company shall pay to the Employee:

(i) Upon the termination of Employee’s employment by the Company for Cause or upon a Voluntary Termination of Employment by the Employee, except for a Termination for Good Reason, a bi-monthly payment, in an amount equal to $3,541.67, which amount shall be paid in 72 equal bi-monthly payments beginning on the fifth day of the month following the Employee’s separation from service; or

(ii) Except as set forth in paragraph 5(c) below, upon the Employee’s separation from service for any reason other than those set forth in subparagraph (a)(i) above, an amount equal to the aggregate of 1.5 times the annual rate of base salary then being paid to the employee, plus the average of the past three years short term bonus pay,which amount shall be paid in 12 equal monthly payments beginning on the first day of the month following the Employee’s separation from service.

(iii) Notwithstanding (i) and (ii) above, in the event Employee has an involuntary separation from service including Good Reason that occurs within 24 months immediately following a Change in Control, the Employee shall receive an amount equal to the amount determined in (ii) above to be paid in a lump sum.4

b. Potential six-month delay under section 409A.  If, when separation from service occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the non-competition payments under this paragraph 5 would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s non-competition payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.

c. Death and Disability.  Notwithstanding anything herein to the contrary, no amounts are payable under this Agreement in the event of the Employee’s separation from service as a result of death or Disability. Further, all payments under this Agreement shall cease upon Employee’s death.

d. Employee’s Ineligibility to Work in Financial Products or Services Industry.  Notwithstanding anything herein to the contrary, no amounts are payable under this Agreement in the event of a regulatory or other finding, action, or directive resulting in Employee’s ineligibility to work in the financial products or services industry (as defined in paragraph 1(g) above) pursuant to any applicable statute, rule, or regulation.

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4.        With respect to executives who have existing Management/Employment Agreements providing payments upon involuntary termination following a Change in Control, the rules under the 409A regulations require that the time and form of payment be preserved with respect to payment events (CIC in this case) from existing agreements under the anti-substitution rules.  As a result, lump sum payments, if any, for termination following a CIC in the current Management/Employment Agreements must be retained in the new non-compete agreements.

6.            RETURN OF RECORDS AND PROPERTY.  Upon the Employee's separation from service for any reason, or at any time upon the Company's request, the Employee shall promptly deliver to the Company all Company and Affiliate records and all Company and Affiliate property in the Employee’s possession or the Employee’s control, including without limitation manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, computer tapes, source codes, data, tables or calculations, and all copies thereof; documents that in whole or in part contain any Confidential Information of the Company or its Affiliates and all copies thereof; and keys, access cards, access codes, passwords, credit cards, personal or laptop computers, telephones, PDAs, smart phones, and other electronic equipment belonging to the Company or an Affiliate.

7.            REMEDIES.  Employee agrees that if Employee fails to fulfill Employee’s obligations under this Agreement, including, without limitation, the Non-Competition and Non-Solicitation obligations set forth in paragraph 4, the damages to the Company or any of its Affiliates would be very difficult or impossible to determine.  Therefore, in addition to any other rights or remedies available to the Company at law, in equity or by statute, Employee hereby consents to the specific enforcement by the Company of this Agreement through an injunction or restraining order issued by an appropriate court, without the necessity of proving actual damages, and Employee hereby waives as a defense to any equitable action the allegation that the Company has an adequate remedy at law.  The provisions of this paragraph shall not diminish the right of the Company to claim and recover damages or to obtain any equitable remedy in addition to injunctive relief to which the Company may otherwise be entitled.  The Employee understands and agrees that the Employee will also be responsible for all costs and attorney’s fees incurred by the Company in enforcing any of the provisions of this Agreement including, but not limited to, expert witness fees and deposition costs.

8.            SEVERABILITY.  If, for any reason, any paragraph or portion of this Agreement shall be held by a court to be invalid or unenforceable, it is agreed that such holding shall not affect any other section or portion of this Agreement.  If the final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

9.            ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement between Company and the Employee concerning the subject matter of confidentiality, non-competition and non-solicitation and supersedes all prior agreements between the parties, including, without limitation, the Management/Employment Agreement, executed February 27, 2007 and amended August 27, 2007. No rights are granted to the Employee under this Agreement other than those specifically set forth herein.

10.        NO EMPLOYMENT AGREEMENT.  This Agreement is not an employment policy or contract. It does not give the Employee the right to remain an employee of the Company, nor does it interfere with the Company’s right to discharge the Employee. It also does not require the Employee to remain an employee or interfere with the Employee’s right to separate from service at any time.

11.        AMENDMENTS.  The parties agree that no modification of the Agreement may be made except by means of a written agreement signed by the parties.  However, if the Company determines to its reasonable satisfaction that an alteration or amendment of this Agreement is necessary or advisable so that the Agreement complies with the Code or any other applicable tax law, then, upon written notice to Employee, the Company may unilaterally amend this Agreement in such manner and to such extent as the Company reasonably considers necessary or advisable to ensure compliance with the Code or other applicable tax law. Nothing in this paragraph shall be deemed to limit the Company’s right to terminate this Agreement at any time and without stated cause.

12.ASSIGNMENT OF RIGHTS; SPENDTHRIFT CLAUSE.  None of the Employee, the Employee’s estate, or the Employee’s beneficiary shall have any right to sell, assign, transfer, pledge, attach, encumber, or otherwise convey the right to receive any payment hereunder. To the extent permitted by law, benefits payable under this Agreement shall not be subject to the claim of any creditor of the Employee, the Employee’s estate, or the Employee’s designated beneficiary or subject to any legal process by any creditor of the Employee, the Employee’s estate, or the Employee’s designated beneficiary.

13.BINDING EFFECT.  This Agreement shall bind the Employee, the Company, and their beneficiaries, survivors, executors, successors and assigns, administrators, and transferees.

14.SUCCESSORS; BINDING AGREEMENT.  By an assumption agreement in form and substance satisfactory to the Employee, the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform this Agreement had no succession occurred.

15.        TAX WITHHOLDING.  If taxes are required by the Code or other applicable tax law to be withheld by the Company from payments under this Agreement, the Company shall withhold any taxes that are required to be withheld.

16.GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the laws of the State of North Dakota.

17.NOTICES.  All notices, requests and demands given to or made pursuant hereto shall be in writing and shall be delivered or mailed to any such party at its address which:

a. In the case of the Company shall be:

Sound Community Bank

2005 5th Avenue, Second Floor

Seattle, WA 98121

Attention:  Human Resources

b. In the case of the Employee shall be:

Laura Lee Stewart

2000 Alaskan Way #245

Seattle, WA 98121

Either party may, by notice hereunder, designate achanged address. Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed to have been given on the registered date or that date stamped on the certified mail receipt.

18.SEVERABILITY.  In the event that any portion of this Agreement is held to be invalid or unenforceable for any reason, it is hereby agreed that such invalidity or unenforceability shall not affect the other portions of this Agreement and that the remaining covenants, terms and conditions or portions hereof shall remain in full force and effect, and any court of competent jurisdiction may so modify the objectionable provision as to make it valid, reasonable and enforceable.

19.RELEASE OF CLAIMS.  Notwithstanding the foregoing provisions of this Agreement, the Company will not be obligated to make any payments to the Employee under this Agreement unless the Employee has signed a release of claims in favor of the Company and its Affiliates in a form to be prescribed by the Company, and all applicable consideration and rescission periods provided by law have expired.

20.           COMPLIANCE WITH CODE SECTION 409A.  The Company and the Employee intend that their exercise of authority or discretion under this Agreement shall comply with section 409A of the Code. Notwithstanding anything herein to the contrary in this Agreement, to the extent that any benefit under this Agreement that is nonqualified deferred compensation (within the meaning of section 409A of the Code) payable upon Employee’s termination of employment, such payment(s) shall be made only upon Employee’s “Separation from Service” pursuant to the default definition in Treasury Regulation section 1.409A-1(h).

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Date:	December 30, 2011	/s/ Laura Lee Stewart
		Laura Lee Stewart
		Accepted for Sound Community Bank:
Date:	December 30, 2011	By:	/s/ Tyler Myers
			Tyler Myers
		Its:	Chairman of the Board