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) May 11, 2016

SOUND FINANCIAL BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-35633	45-5188530
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

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.

Sound Financial Bancorp, Inc. (the “Company”), the holding company of Sound Community Bank (the “Bank”), is reporting the departure of Kelli Nielson, the Bank’s Senior Vice President/Retail Banking.  Ms. Nielson’s duties will be assumed by Laurie Stewart President and CEO of the Company and the Bank.  In connection with Ms. Nielson’s departure, the Bank will enter into a Separation Agreement and Release of All Claims (the “Separation Agreement”) with Ms. Nielson.

Under the terms of the Separation Agreement, Ms. Nielson employment with the Bank will terminate as of May 13, 2016 and she will be paid through the remainder of the month, until May 31, 2016.  Thereafter, she will receive severance in the form of salary continuation at her current base salary until August 15, 2016 and by no later than August 15, 2016 will be paid a lump sum payment for any unused vacation that accrued on or before May 15, 2016.  Ms. Nielson will continue to be covered under the Bank’s medical plan until August 31, 2016 and will be eligible for continuation of health benefits pursuant to “COBRA”   if she so elects.  The Bank will provide the Ms. Nielson with the additional sum of $2,500 for the purpose of outplacement services.  The Separation Agreement also contains a mutual non-disparagement covenant and a general release of claims by Ms. Nielson.

The foregoing description is a summary of the material terms of the Separation Agreement and is qualified in its entirety by reference to the full text of the Separation Agreement, which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.

In addition, pursuant to the terms of Ms. Nielson’s individual stock option and restricted stock award agreements, Ms. Nielson will be entitled for a period of three months following her departure from the Bank to exercise her vested stock option awards.  All unvested stock options and restricted stock awards automatically are forfeited upon her departure.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit 10.1 Form of Separation Agreement and Release of All Claims

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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 thereunto duly authorized.

		SOUND FINANCIAL BANCORP, INC.
Date:	May 13, 2016	By:	/s/ Laura Lee Stewart
			Laura Lee Stewart, President and CEO

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EXHIBIT INDEX

Exhibit No.	Description
Exhibit 10.1	Form of Separation Agreement and Release of All Claims

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EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT AND

RELEASE OF ALL CLAIMS

1.         The Parties.  This Separation Agreement and Release of All Claims (“Agreement”) is entered into between KELLI NIELSEN (hereinafter referred to as “Ms. Nielsen” and/or the “Employee”) and SOUND COMMUNITY BANK, including, past and present, its subsidiary and affiliated corporations, directors, owners, shareholders, officers, managers, agents, and employees (collectively referred to herein as “the Bank” and/or the “Employer”).

2.         Purpose.  The purpose of this Agreement is to set forth the terms concluding the employment relationship between Ms. Nielsen and the Bank.  Ms. Nielsen will resign from her employment at the Bank and relinquish her role as Senior Vice President/Retail Banking effective May 13, 2016.

3.         Considerations.

3.1.         Employee’s last day at the office will be May 13, 2016.  She will be paid through the remainder of the month, until May 31, 2016.  Employee will receive severance in the form of salary continuation at her current base salary from June 1, 2016, to August 15, 2016.  The severance payments will be subject to ordinary deductions and withholdings.  By no later than August 15, 2016, employee will receive a lump sum payment for any unused vacation that accrued on or before May 15, 2016.

3.2.         Employee will continue to be covered under Employer’s medical plan until August 31, 2016.  Employee will be eligible for COBRA if she so elects.

3.3          The Bank will provide the Employee with the additional sum of $2,500 for the purpose of outplacement services, payable within ten days of the execution of this Agreement.

3.4.         Employee acknowledges that no other sums of money are owed by Employer and that the sums paid to her under this Agreement are adequate consideration for the release of claims that she has executed.

3.5.         The Bank will not contest Employee’s application for unemployment benefits.

3.6          Ms. Nielsen will not disparage the Bank, its officers, employees, and Board members.  Similarly, the Bank, the members of the Board and the members of the Executive Leadership Team will not disparage Ms. Nielsen.

3.7.         In the event of future inquiries from prospective employers, the Bank will provide only the employee’s dates of employment, title held and salary.

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3.8.         Employee acknowledges that she will continue to be bound by the terms of the Confidentiality provisions set forth in the Sound Community Employee Handbook dated January 2016.

3.9.         Employee agrees to the release of claims as set forth hereinafter.

4.         Release.

4.1.         Employee fully and forever releases and discharges the Employer, including, past and present, its subsidiary and affiliated corporations, directors, owners, shareholders, officers, agents, managers, and employees, from any and all claims, agreements, causes of action or obligations or liabilities of whatever kind or nature, which have existed or may have existed as of the date of this Agreement, including, but without in any way limiting the generality of the foregoing:  (1) any and all claims arising out of any act, transaction or occurrence which may have occurred with respect to Employee’s employment and the termination thereof and/or voluntary resignation from the Bank, and (2) any claims arising from the Washington State Law Against Discrimination (RCW 49.60), Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act (“ERISA”), as amended, the Fair Labor Standards Act of 1938, as amended, the federal Age Discrimination in Employment Act 29 U.S.C. 621 et. seq., or any other federal or state law, regulation or ordinance, or public policy, contract or tort law having any bearing whatsoever on the terms and conditions of, or cessation of Employee’s relationship with the Bank.

4.2.         This Agreement will not preclude the Employee from filing a complaint with the EEOC, Washington State Human Rights Agency or like agency.  However, Employee acknowledges that she forever waives any right to claim or receive financial compensation in connection with any enforcement proceeding by said agency or agencies.

4.3.         Ms. Nielsen acknowledges and agrees that she received this Agreement on or before May 13, 2016.  Employee also acknowledges and agrees she has had at least twenty-one (21) calendar days from the date he received this Agreement to decide whether to sign it, and understands that she may sign the Agreement at any time on or before the expiration of this twenty-one day (21) period.  Employee understands that for seven (7) calendar days after she signs this Agreement she has the right to revoke it, and this Agreement shall not become effective and enforceable until after the expiration of this seven-day period.  The Agreement may not be revoked after the seven day period.

4.4          This Release does not prevent either party from suing to enforce the terms of the Agreement.

5.         Effect of Agreement.

5.1.         This Agreement is to operate as a release and discharge as to the parties hereto, their heirs and assigns, their spouses and marital communities and their agents and employees.

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5.2.         This Agreement shall be binding on and inure to the benefit of the parties, their heirs and assigns, their spouses and marital communities, and their respective legal representatives, successors and assigns.

6.         Confidentiality.  The terms of this Agreement shall be kept confidential by all parties.

7.         Governing Law.  This Agreement shall be governed by the laws of the State of Washington.  In the event of any lawsuit arising from or relating to this Agreement, venue shall be in King County, Washington.

8.         Entire Agreement.  This writing contains the entire Agreement between Ms. Nielsen and the Bank and can only be modified in a writing signed by both parties.  The parties hereby acknowledge that this Agreement hereby supersedes all prior agreements entered into by the Bank and Ms. Nielsen, with the exception of the confidentiality provisions of the Sound Community Bank Employee Handbook dated January 2016 which will survive.

9.         Representations.

9.1.         Employee acknowledges that she has carefully read and understands the Agreement and that she is freely signing and executing the same.

9.2.         Employee acknowledges that she has been encouraged to retain legal counsel to review this Agreement with her.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth opposite their respective signatures.

	EMPLOYEE:
Date:	KELLI NIELSEN
	EMPLOYER:  SOUND COMMUNITY BANK
	By:
Date:		Laura Lee Stewart, President/CEO

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