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First Financial Northwest, Inc.
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(Exact name of
registrant as specified in its
charter)
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Washington
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001-3365
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26-0610707
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State or other jurisdiction of
incorporation
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Commission
File
Number
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(I.R.S.
Employer
Identification
No.)
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201 Wells Avenue South, Renton,
Washington
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98057
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(Address
of principal executive
offices)
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(Zip
Code)
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
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(17
CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act
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(17
CFR 240.13e-4 (c))
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| FIRST FINANCIAL NORTHWEST, INC. | |
| Date: July 1, 2008 | By: /s/Victor Karpiak |
| Victor Karpiak | |
| Chairman, President and Chief Executive Officer |
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1.
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ISO
Award. The Company grants to Option Holder ISOs to
purchase [Number] Shares at an
Exercise Price of $[Number] per
Share. These ISOs are subject to forfeiture and to limits on
transferability until they vest, as provided in Sections 5 and 6 of this
Agreement and in Article V of the
Plan.
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2.
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Vesting
Dates: The ISOs shall vest as follows, subject to
earlier vesting in the event of a termination of Service as provided in
Section 6:
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Vesting
Date
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ISOs
for
Number
of Shares Vesting
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[Over
at least 5 years beginning
one
year from the Grant Date.]
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[20%
or less in each annual
installment]
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3.
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Exercise: The
Option Holder (or in the case of the death of the Option Holder, the
designated legal representative or heir of the Option Holder) may exercise
the ISOs during the Exercise Period by giving written notice to the
Secretary of the Company in the form required by the Committee (“Exercise
Notice”). The Exercise Notice must specify the number of Shares
to be purchased, which shall be at least 100 unless fewer shares remain
unexercised. The exercise date is the date the Exercise Notice
is received by the Company. The Exercise Period commences on
the Vesting Date and expires at 5:00 p.m., Renton, Washington, time, on
the date 10 years [five years
for over 10% owners of Company on the Grant Date] after the Grant
Date, subject to earlier expiration in the event of a termination of
Service as provided in Section 6. Any ISOs not exercised as of
the close of business on the last day of the Exercise Period shall be
cancelled without consideration at that
time.
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4.
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Related
Awards: These ISOs [are
not related to
any other Award under the Plan.] or [are
related to stock appreciation rights granted on the Grant Date and
designated SAR Nos. ___. Any related
stock appreciation rights do not receive the special tax treatment
afforded the ISOs. To the extent any of the related stock
appreciation rights are exercised, the ISOs shall terminate with respect
to the same number of
Shares.]
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5.
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Transferability. The
Option Holder may not sell, assign, transfer, pledge or otherwise encumber
any ISOs, except in the event of the Option Holder’s death, by will or by
the laws of descent and distribution or pursuant to a Qualified Domestic
Relations Order.
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6.
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Termination of
Service. If the Option Holder terminates Service for any
reason other than in connection with a Change in Control or the death or
Disability of the Option Holder, any ISOs that have not vested as of the
date of that termination shall be forfeited to the Company, and the
Exercise Period shall expire three months after that termination of
Service, except in the case of a Termination for Cause, when it shall
expire immediately. If the Option Holder’s Service terminates
on account of the Option Holder’s death or Disability, the Vesting Date
for all ISOs that have not vested or been forfeited shall be accelerated
to the date of that termination of Service, and the Exercise Period shall
expire one year after that termination of
Service.
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7.
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Effect
of Change in Control. Upon a Change in Control, the
Vesting Date for all ISOs that have not vested or been forfeited shall be
accelerated to the date of the earliest event constituting a Change in
Control. [May
be modified at Committee’s election for 280G planning purposes for
executive officers.]
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8.
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Option
Holder’s Rights. The ISOs awarded hereby do not entitle
the Option Holder to any rights of a shareholder of the
Company.
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9.
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Delivery
of Shares to Option Holder. Promptly after receipt of an
Exercise Notice and full payment of the Exercise Price for the Shares
being acquired, the Company shall issue and deliver to the Option Holder
(or other person validly exercising the ISO) a certificate or certificates
representing the Shares of Common Stock being purchased, registered in the
name of the Option Holder (or such other person), or, upon request, in the
name of the Option Holder (or such other person) and in the name of
another person in such form of joint ownership as requested by the Option
Holder (or such other person) pursuant to applicable state
law. The Company’s obligation to deliver a stock certificate
for Shares purchased in the exercise of an ISO can be conditioned upon the
receipt of a representation of investment intent from the Option Holder
(or the Option Holder’s Beneficiary) in such form as the Committee
requires. The Company shall not be required to deliver stock
certificates for Shares purchased prior to: (a) the listing of those
Shares on the Nasdaq; or (b) the completion of any registration or
qualification of those Shares required under applicable
law.
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10.
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Notice
of Sale of Shares. The Option Holder (or other person
who received Shares from the exercise of the ISOs) shall give written
notice to the Company promptly in the event of the sale or other
disposition of Shares received from the exercise of the ISOs within
either: (a) two years from the Grant Date; or (b) one year from the
exercise date for the ISOs
exercised.
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11.
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Adjustments
in Shares. In the event of any recapitalization, stock
split, reorganization, merger, consolidation, spin-off, combination,
exchange of securities, stock dividend, special or recurring dividend or
distribution, liquidation, dissolution or other similar corporate
transaction or event, the Committee shall proportionately adjust the
number of Shares or class of securities of the Company covered by the ISOs
or the Exercise Price of the ISOs. The Option Holder agrees to
execute any documents required by the Committee in connection with an
adjustment under this Section 11.
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12.
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Tax
Withholding. The Company shall have the right to require
the Option Holder to pay to the Company the amount of any tax that the
Company is required to withhold with respect to such Shares, or in lieu
thereof, to retain or sell without notice, a sufficient number of Shares
to cover the minimum amount required to be withheld. The
Company shall have the right to deduct from all dividends paid with
respect to the Shares the amount of any taxes that the Company is required
to withhold with respect to such dividend
payments.
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13.
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Plan
and Committee Decisions are Controlling. This Agreement,
the award of ISOs to the Option Holder and the issuance of Shares upon the
exercise of the ISOs are subject in all respects to the provisions of the
Plan, which are controlling. Capitalized terms herein not
defined in this Agreement shall have the meaning ascribed to them in the
Plan. All decisions, determinations and interpretations by
Committee respecting the Plan, this Agreement, the award of ISOs or the
issuance of Shares upon the exercise of the ISOs shall be binding and
conclusive upon the Option Holder, any Beneficiary of the Option Holder or
the legal representative thereof.
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14.
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Option
Holder’s Employment. Nothing in this Agreement shall
limit the right of the Company or any of its Affiliates to terminate the
Option Holder’s service or employment as a director, officer or employee,
or otherwise impose upon the Company or any of its Affiliates any
obligation to employ or accept the services or employment of the Option
Holder.
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15.
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Amendment. The
Committee may waive any conditions of or rights of the Company or modify
or amend the terms of this Agreement; provided, however, that the
Committee may not amend, alter, suspend, discontinue or terminate any
provision of this Agreement if such action may adversely affect the Option
Holder without the Option Holder’s written consent. To the
extent permitted by applicable laws and regulations, the Committee shall
have the authority, in its sole discretion, to accelerate the vesting of
the Shares or remove any other restrictions imposed on the Option Holder
with respect to the Shares, whenever the Committee may determine that such
action is appropriate by reason of any unusual or nonrecurring events
affecting the Company, any Affiliate or their
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| financial statements or any changes in applicable laws, regulations or accounting principles. | |
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16.
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Loss
of ISO Status. If any of the ISOs fail, for any reason,
to qualify for the special tax treatment afforded the ISOs, they shall be
treated as Non-Qualified Stock Options under the Plan. The ISOs
will lose ISO status: (a) if the Option Holder is not an employee of the
Company or its Affiliates from the Grant date through the date three
months before the exercise date; or (b) if the Shares acquired upon the
exercise of the ISO are sold or disposed of within one of the time periods
described in Section 10.
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17.
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Option
Holder Acceptance. The Option Holder shall signify
acceptance of the terms and conditions of this Agreement and acknowledge
receipt of a copy of the Plan by signing in the space provided below and
returning the signed copy to the
Company.
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| FIRST FINANCIAL NORTHWEST, INC. | |
| By ________________________________ | |
| Its ________________________________ | |
| ACCEPTED BY OPTION HOLDER | |
| ___________________________________ | |
| (Signature) | |
| ___________________________________ | |
| (Print Name) | |
| ___________________________________ | |
| (Street Address) | |
| ___________________________________ | |
| (City, State & Zip Code) |
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1.
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NQSO
Award. The Company grants to Option Holder NQSOs to
purchase [Number] Shares at an
Exercise Price of $[Number] per
Share. These NQSOs are subject to forfeiture and to limits on
transferability until they vest, as provided in Sections 5 and 6 of this
Agreement and in Article V of the
Plan.
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2.
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Vesting
Dates: The NQSOs shall vest as follows, subject to
earlier vesting in the event of a termination of Service as provided in
Section 6:
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Vesting Date
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NQSOs
for
Number
of Shares Vesting
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|
[Over
at least 5 years beginning
one
year from the Grant Date.]
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[20%
or less in each annual
installment]
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3.
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Exercise: The
Option Holder (or in the case of the death of the Option Holder, the
designated legal representative or heir of the Option Holder) may exercise
the NQSOs during the Exercise Period by giving written notice to the
Secretary of the Company in the form required by the Committee (“Exercise
Notice”). The Exercise Notice must specify the number of Shares
to be purchased, which shall be at least 100 unless fewer shares remain
unexercised. The exercise date is the date the Exercise Notice
is received by the Company. The Exercise Period commences on
the Vesting Date and expires at 5:00 p.m., Renton, Washington time, on the
date 10 years after the Grant Date, subject to earlier expiration in the
event of a termination of Service as provided in Section 6. Any
NQSOs not exercised as of the close of business on the last day of the
Exercise Period shall be cancelled without consideration at that
time.
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4.
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Related
Awards: These NQSOs [are
not related to
any other Award under the Plan.] or [are
related to stock appreciation rights granted on the Grant Date and
designated SAR Nos. ___. To the extent any of the related stock
appreciation rights is exercised, the NQSOs shall terminate with respect
to the same number of
Shares.]
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5.
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Transferability. The
Option Holder may not sell, assign, transfer, pledge or otherwise encumber
any NQSOs, except in the event of the Option Holder’s death, by will or by
the laws of descent and distribution or pursuant to a Qualified Domestic
Relations Order. The Committee, in its sole and absolute
discretion, may allow the Option Holder to transfer one or more NQSOs to
the Option Holder’s Family Members, as provided in the
Plan.
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6.
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Termination of
Service. If the Option Holder terminates Service for any
reason other than in connection with a Change in Control or the death or
Disability of the Option Holder, any NQSOs that have not vested as of the
date of that termination shall be forfeited to the Company, and the
Exercise Period shall expire three months after that termination of
Service, except in the case of a Termination for Cause, when it shall
expire immediately. If the Option Holder’s Service terminates
on account of the Option Holder’s death or Disability, the Vesting Date
for all NQSOs that have not vested or been forfeited shall be accelerated
to the date of that termination of Service, and the Exercise Period shall
expire one year after that termination of
Service.
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7.
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Effect
of Change in Control. Upon a Change in Control, the
Vesting Date for all NQSOs that have not vested or been forfeited shall be
accelerated to the date of the earliest event constituting a Change in
Control. [May
be modified at Committee’s election for 280G planning purposes for
executive officers or directors holding 1% or more of the Company’s
outstanding stock.]
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8.
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Option
Holder’s Rights. The NQSOs awarded hereby do not entitle
the Option Holder to any rights of a shareholder of the
Company.
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9.
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Delivery
of Shares to Option Holder. Promptly after receipt of an
Exercise Notice and full payment of the Exercise Price for the Shares
being acquired, the Company shall issue and deliver to the Option Holder
(or other person validly exercising the NQSO) a certificate or
certificates representing the Shares of Common Stock being purchased,
registered in the name of the Option Holder (or such other person), or,
upon request, in the name of the Option Holder (or such other person) and
in the name of another person in such form of joint ownership as requested
by the Option Holder (or such other person) pursuant to applicable state
law. The Company’s obligation to deliver a stock certificate
for Shares purchased in the exercise of an NQSO can be conditioned upon
the receipt of a representation of investment intent from the Option
Holder (or the Option Holder’s Beneficiary) in such form as the Committee
requires. The Company shall not be required to deliver stock
certificates for Shares purchased prior to: (a) the listing of those
Shares
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10.
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Adjustments
in Shares. In the event of any recapitalization, stock
split, reorganization, merger, consolidation, spin-off, combination,
exchange of securities, stock dividend, special or recurring dividend or
distribution, liquidation, dissolution or other similar corporate
transaction or event, the Committee shall proportionately adjust the
number of Shares or class of securities of the Company covered by the
NQSOs or the Exercise Price of the NQSOs. The Option Holder
agrees to execute any documents required by the Committee in connection
with an adjustment under this Section
10.
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11.
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Tax
Withholding. The Company shall have the right to require
the Option Holder to pay to the Company the amount of any tax that the
Company is required to withhold with respect to such Shares, or in lieu
thereof, to retain or sell without notice, a sufficient number of Shares
to cover the minimum amount required to be withheld. The
Company shall have the right to deduct from all dividends paid with
respect to the Shares the amount of any taxes that the Company is required
to withhold with respect to such dividend
payments.
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12.
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Plan
and Committee Decisions are Controlling. This Agreement,
the award of NQSOs to the Option Holder and the issuance of Shares upon
the exercise of the NQSOs are subject in all respects to the provisions of
the Plan, which are controlling. Capitalized terms herein not
defined in this Agreement shall have the meaning ascribed to them in the
Plan. All decisions, determinations and interpretations by
Committee respecting the Plan, this Agreement, the award of NQSOs or the
issuance of Shares upon the exercise of the NQSOs shall be binding and
conclusive upon the Option Holder, any Beneficiary of the Option Holder or
the legal representative thereof.
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13.
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Option
Holder’s Employment. Nothing in this Agreement shall
limit the right of the Company or any of its Affiliates to terminate the
Option Holder’s service or employment as a director, officer or employee,
or otherwise impose upon the Company or any of its Affiliates any
obligation to employ or accept the services or employment of the Option
Holder.
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14.
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Amendment. The
Committee may waive any conditions of or rights of the Company or modify
or amend the terms of this Agreement; provided, however, that the
Committee may not amend, alter, suspend, discontinue or terminate any
provision of this Agreement if such action may adversely affect the Option
Holder without the Option Holder’s written consent. To the
extent permitted by applicable laws and regulations, the Committee shall
have the authority, in its sole discretion, to accelerate the vesting of
the Shares or remove any other restrictions imposed on the Option Holder
with respect to the Shares, whenever the Committee may determine that such
action is appropriate by reason of any unusual or nonrecurring events
affecting the Company, any Affiliate or their financial statements or any
changes in applicable laws, regulations or accounting
principles.
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15.
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Option
Holder Acceptance. The Option Holder shall signify
acceptance of the terms and conditions of this Agreement and acknowledge
receipt of a copy of the Plan by signing in the space provided below and
returning the signed copy to the
Company.
|
| FIRST FINANCIAL NORTHWEST, INC. | |
| By ________________________________ | |
| Its ________________________________ | |
| ACCEPTED BY OPTION HOLDER | |
| ___________________________________ | |
| (Signature) | |
| ___________________________________ | |
| (Print Name) | |
| ___________________________________ | |
| (Street Address) | |
| ___________________________________ | |
| (City, State & Zip Code) |
|
1.
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Restricted
Stock Award. The Company makes this Restricted Stock
Award of [Number] Shares to Grantee
[in
exchange for a payment of $________]. These Shares are
subject to forfeiture and to limits on transferability until they vest, as
provided in Sections 2, 3 and 4 of this Agreement and in Article VII of
the Plan.
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2.
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Vesting
Dates: The Shares shall vest as
follows:
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Vesting
Date
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Number
of Shares Vesting
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|
[Over
at least 5 years beginning
one
year from the Grant Date.]
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[20%
or less in each annual
installment]
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3.
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Transferability. The
Grantee may not sell, assign, transfer, pledge or otherwise encumber any
Shares that have not vested, except in the event of the Grantee’s death,
by will or by the laws of descent and
distribution.
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|
4.
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Termination of
Service. If the Grantee terminates Service for any
reason other than in connection with a Change in Control or the death or
Disability of the Grantee, any Shares that have not vested as of the date
of that termination shall be forfeited to the Company. If the
Grantee’s Service terminates on account of the Grantee’s death or
Disability, the Vesting Date for all Shares that have not vested or been
forfeited shall be accelerated to the date of that termination of
Service.
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5.
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Effect
of Change in Control. Upon a Change in Control, the
Vesting Date for all Shares that have not vested or been forfeited shall
be accelerated to the date of the earliest event constituting a Change in
Control. [May
be modified at Committee’s election for 280G planning purposes for
executive officers or directors that hold 1% or more of the Company’s
outstanding stock.]
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6.
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Stock
Power. The Grantee agrees to execute a stock power with
respect to each stock certificate reflecting the Shares in favor of the
Company. The Shares shall not be issued by the Company until
the required stock powers are delivered to the
Company.
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7.
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Certificates
for Shares. The Company shall issue stock certificates
in the name of the Grantee reflecting the Shares vesting on each Vesting
Date in Section 2. The Company shall retain these certificates
until the Shares represented thereby become vested. These
certificates shall bear the following
legend:
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8.
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Grantee’s
Rights. As the owner of all Shares that have not vested,
the Grantee shall be paid dividends by the Company with respect to those
Shares at the same time as they are paid to other holders of the Company’s
common stock. The Grantee may exercise all voting rights
appurtenant to the Shares. [May be modified at
Committee’s election, if
desired.]
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9.
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Delivery
of Shares to Grantee. Upon the vesting of any Shares,
the restrictions in Sections 3 and 4 shall terminate, and the Company
shall deliver only to the Grantee (or, if applicable, the Grantee’s
Beneficiary or estate) a certificate (without the legend referenced in
Section 7) and the related stock power in respect of the vesting
Shares. The Company’s obligation to deliver a stock certificate
for vested Shares can be conditioned upon the receipt of a representation
of investment intent from the Grantee (or the Grantee’s Beneficiary) in
such form as the Committee requires. The Company shall not be
required to deliver stock certificates for vested Shares prior to: (a) the
listing of those Shares on the Nasdaq; or (b) the completion of any
registration or qualification of those Shares required under applicable
law.
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|
10.
|
Adjustments
in Shares. In the event of any recapitalization, stock
split, reorganization, merger, consolidation, spin-off, combination,
exchange of securities, stock dividend, special or recurring dividend or
distribution, liquidation, dissolution or other similar corporate
transaction or event, the Committee shall proportionately adjust the
number of Shares or class of securities of the Company covered by this
Agreement. Any additional Shares or other securities received
by the Grantee as a result of any such adjustment shall be subject to all
restrictions and requirements applicable to Shares that have not
vested. The Grantee agrees to execute any documents required by
the Committee in connection with an adjustment under this Section
10.
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|
11.
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Tax
Election. The Grantee understands that an election may
be made under Section 83(b) of Code to accelerate the Grantee’s tax
obligation with respect to receipt of the Shares from the Vesting Dates to
the Grant Date by submitting an election to the Internal Revenue Service
substantially in the form attached
hereto.
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|
12.
|
Tax
Withholding. The Company shall have the right to require
the Grantee to pay to the Company the amount of any tax that the Company
is required to withhold with respect to such Shares, or in lieu thereof,
to retain or sell without notice, a sufficient number of Shares to cover
the minimum amount required to be withheld. The Company shall
have the right to deduct from all dividends paid with respect to the
Shares the amount of any taxes that the Company is required to withhold
with respect to such dividend
payments.
|
|
13.
|
Plan
and Committee Decisions are Controlling. This Agreement
and the award of Shares to the Grantee are subject in all respects to the
provisions of the Plan, which are controlling. Capitalized
terms herein not defined in this Agreement shall have the meaning ascribed
to them in the Plan. All decisions, determinations and
interpretations by the Committee respecting the Plan, this Agreement or
the award of Shares shall be binding and conclusive upon the Grantee, any
Beneficiary of the Grantee or the legal representative
thereof.
|
|
14.
|
Grantee’s
Employment. Nothing in this Agreement shall limit the
right of the Company or any of its Affiliates to terminate the Grantee’s
service or employment as a director, officer or employee, or otherwise
impose upon the Company or any of its Affiliates any obligation to employ
or accept the services or employment of the
Grantee.
|
|
15.
|
Amendment. The
Committee may waive any conditions of or rights of the Company or modify
or amend the terms of this Agreement; provided, however, that the
Committee may not amend, alter, suspend, discontinue or terminate any
provision of this Agreement if such action may adversely affect the
Grantee without the Grantee’s written consent. To the extent
permitted by applicable laws and regulations, the Committee shall have the
authority, in its sole discretion, to accelerate the vesting of the Shares
or remove any other restrictions imposed on the Grantee with respect to
the Shares, whenever the Committee may determine that such action is
appropriate by reason of any unusual or nonrecurring events affecting the
Company, any Affiliate or their financial statements or any changes in
applicable laws, regulations or accounting
principles.
|
|
16.
|
Grantee
Acceptance. The Grantee shall signify acceptance of the
terms and conditions of this Agreement and acknowledge receipt of a copy
of the Plan by signing in the space provided below and returning the
signed copy to the Company.
|
| FIRST FINANCIAL NORTHWEST, INC. | |
| By ________________________________ | |
| Its ________________________________ | |
| ACCEPTED BY OPTION HOLDER | |
| ___________________________________ | |
| (Signature) | |
| ___________________________________ | |
| (Print Name) | |
| ___________________________________ | |
| (Street Address) | |
| ___________________________________ | |
| (City, State & Zip Code) |
| ________________________________ |
| Name: | __________________________________________________________________ |
| Address: | __________________________________________________________________ |
| __________________________________________________________________ | |
| __________________________________________________________________ |
| __________ | _____________________________________ |
| Date | Signature |
|
RS-6
|