1.

ROLE, DUTIES, AUTHORITY, AND PLACE OF WORK

a.

The Company and the Bank shall each employ Executive as its President and Chief Executive Officer, and Executive shall accept such employment. If elected, Executive shall also serve as a member of the Board of Directors of the Company and a member of the Board of Directors of the Bank for no additional compensation. Executive agrees to perform the duties that are customarily performed by the President and Chief Executive Officer of a bank holding company and a state-chartered banking institution and accepts all other duties described herein or as prescribed by the Employer’s Boards of Directors (the “Board”) and agrees to discharge the same faithfully and to the best of his ability and the highest standards of the banking industry, in accordance the Employer’s Articles of Incorporation, Bylaws, and published policies and procedures applying to Executive. Executive shall devote his full business time and attention to the business and affairs of Employer. Except as permitted by the prior written consent of the Board, Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any other person, firm or corporation, whether for compensation or otherwise, which are in conflict with Employer’s interests.

b.

During the Term, Executive agrees to reside in Washington State and maintain a primary office in Port Angeles, Washington. Executive further agrees to spend at least sixty percent (60%) of Executive’s working time on the Olympic Peninsula. Executive understands that Executive’s duties will require periodic travel.

2.

TERM

3.

COMPENSATION

a.

Base Salary. Employer will pay Executive a base salary at an annual rate of five hundred fifty thousand dollars ($550,000.00). Any changes to Executive’s base salary shall be in the sole and absolute discretion of the Board or the Compensation Committee of the Board (the “Compensation Committee”). Executive’s salary shall be paid in accordance with Employer’s standard payroll practices.

b.

Signing Bonus. Subject to Executive’s employment, Employer will pay Executive a lump sum cash amount equal to one hundred thousand dollars ($100,000) (the “Signing Bonus”) within sixty (60) days following the Effective Date. If Executive’s employment terminates as a result of a termination by Employer for Cause (as defined below) or resignation by Executive without Good Reason (as defined below), in either case, prior to the first anniversary of the Effective Date, Executive agrees to repay to Employer a portion of the Signing Bonus prorated on an annualized basis within ten (10) days following such termination.

c.

New Hire Grant. Subject to Executive's employment, on September 30, 2025, the Company will grant Executive an award of fifty thousand (50,000) shares of restricted stock, which award will vest annually on the first three (3) anniversaries of the grant date and be subject to the terms of the First Northwest Bancorp 2020 Equity Incentive Plan effective May 5, 2020, and corresponding award agreement. During his employment with the Company, Executive will be required to continue to hold at least fifty percent (50%) of the shares that have vested in accordance with the award agreement.

d.

Short-Term Incentive. Starting in 2026, Executive will be eligible for short-term incentive compensation with an annual target of fifty percent (50%) of Executive’s base salary. Short-term incentive awards will be as authorized and declared by the Board or the Compensation Committee.

e.

Long-Term Incentive. Starting in 2026, Executive will be eligible for long-term incentive awards with an annual target of thirty-five percent (35%) of Executive’s base salary. Long-term incentive awards will be as authorized and declared by the Board or the Compensation Committee.

f.

Vacation and Sick Leave. Executive will be eligible for (i) paid vacation in accordance with the Employer’s policy, as in effect from time to time (currently, unlimited annual paid vacation); (ii) seven (7) days of annual paid sick leave, which may be used for the purposes specified under the Washington Paid Sick Leave law; and (iii) such other leave as may be provided from time to time in accordance with the Employer’s polices.

g.

Employee Benefits. Executive shall be entitled to participate in any and all other employee benefits and plans that may be provided by Employer and in which Executive is eligible to participate under the terms of such plans, subject to the Employer’s right to amend or terminate such plans.

h.

Fringe Benefits and Perquisites. Employer will reimburse Executive for all ordinary and customary expenses for business-related entertainment, meals, travel, and incidental business expenses in accordance with Employer’s policies. Employer will provide Executive with a one thousand dollar ($1,000) monthly car and gas allowance.

4.

LIFE INSURANCE

5.

TERMINATION

a.

Termination by Employer. Employer may terminate this Agreement with or without Cause (as defined below) by serving written notice upon Executive. For purposes of this Agreement, “Cause” shall mean any of the following: (i) embezzlement, willful misconduct, gross negligence, dishonesty which causes material harm to the Employer, or other fraudulent acts involving Employer or Employer’s business operations or in the performance of Executive’s duties under this Agreement, including but not limited to Executive’s refusal to comply with legal directives of the Board; (ii) a material breach of Executive’s fiduciary duties to Employer if such breach has not been remedied, or is not being remedied, to Employer’s reasonable satisfaction within thirty (30) days after written notice, including a detailed description of such breach, has been delivered to Executive; (iii) Executive’s material breach of this Agreement or any confidentiality policy of Employer; (iv) an act or omission that materially injures Employer’s reputation, business affairs, or financial condition, if such injury could have been reasonably avoided by Executive; or (v) Executive’s conviction of or a plea of no contest or nolo contendere to a felony or crime involving dishonesty or moral turpitude.

b.

Executive’s Death or Disability. This Agreement will terminate immediately upon Executive’s death. Employer may terminate this Agreement in the event of a Disability by serving written notice upon Executive or his conservator, as the case may be. For purposes of this Agreement, “Disability” means a physical or mental disability rendering Executive incapable of performing the essential functions of his position, with or without reasonable accommodation.

c.

Termination by Executive. Executive may terminate this Agreement with or without Good Reason.  For purposes of this Agreement “Good Reason” shall mean the occurrence of any of the following, in each case, during the Term without the Executive’s written consent: (i) a material reduction in the Executive’s base salary; (ii) a relocation of the Executive’s principal place of employment by more than thirty-five (35) miles; or (iii) a material adverse change in the Executive’s authority, duties, or responsibilities (other than temporarily while the Executive is physically or mentally incapacitated or as required by applicable law); provided however, that Good Reason shall only be deemed to have occurred if (x) within ninety (90) days after the initial existence of the circumstances constituting Good Reason, Executive provides the Employer with a written notice describing such circumstances; (y) the Employer fails to cure the circumstance within 30 days after the Employer receives Executive’s notice; and (z) Executive terminates his employment with the Employer and all affiliates of the Employer within ninety (90) days of the date of Executive’s initial notice. Executive must provide ninety (90) days’ prior written notice to the Board to terminate without Good Reason.

d.

Effect of Termination. In the event this Agreement is terminated for any reason, Executive shall be deemed to have resigned from positions that the Executive holds as an officer or member of the Board (or a committee thereof) of the Employer immediately. Executive agrees to take all reasonable steps and provide any documentation necessary or appropriate to effect the foregoing.

6.

SEVERANCE BENEFITS

a.

In the event this Agreement is terminated by Employer for Cause, by Executive without Good Reason, by reason of Executive’s death or Disability or if the Term expires without an extension as described in Section 2, Executive shall not be entitled to any severance pay or benefits.

b.

In the event this Agreement is terminated by Employer without Cause, or is terminated by Executive for Good Reason, subject to the requirements set forth in this Agreement, Employer shall pay Executive a severance payment (the “Severance”) equal to the sum of (i) two (2) times Executive’s annual base salary as of the date of the Executive’s termination of employment (disregarding any reduction that gave rise to Good Reason, if applicable), and (ii) Executive’s COBRA premiums for continuation of group health insurance coverage for twelve (12) months, based on such premiums in effect on the date of Executive’s termination; provided, however, if such termination without Cause or for Good Reason occurs as of or within twelve (12) months following a Change in Control (as defined below), the Severance shall equal the sum of (i) two and ninety-nine hundredths (2.99) times Executive’s annual base salary as of the date of the Executive’s termination of employment (disregarding any reduction that gave rise to Good Reason, if applicable), and (ii) Executive’s COBRA premiums for continuation of group health insurance coverage for eighteen (18) months, based on such premiums in effect on the date of Executive’s termination.

c.

Severance shall be subject to Executive’s timely execution and delivery to Employer of a customary release of all claims Executive may have against the Employer, and its officers, directors, agents, employees, predecessors, successors, and related parties, which shall include agreement to a mutual non-disparagement provision, and Executive not revoking such release agreement. Severance shall be paid in a single lump sum within sixty (60) days after termination and Executive shall not be obligated to use any portion of the payment for COBRA premiums.

d.

“Change in Control” means a change in the ownership or effective control or in the ownership of a substantial portion of the assets of the Bank or Company, within the meaning of Section 409A of the Code; provided, however that (i) an internal reorganization of Employer or (ii) the placement of the Bank into receivership or conservatorship by the Federal Deposit Insurance Corporation (“FDIC”) shall not constitute a “Change in Control.” 

e.

Executive acknowledges and agrees that the entitlement to Severance hereunder is in lieu of all damages, payments, and liabilities on account of the early termination of this Agreement and is the sole and exclusive remedy for Executive.

7.

EXCESS PARACHUTE PAYMENTS

8.

RESTRICTIVE COVENANTS

a.

Employee Nonsolicitation. Executive agrees that, during Executive’s employment with Employer (other than in connection with his duties for Employer) and for a period of one (1) year thereafter, Executive shall not directly or indirectly solicit or attempt to solicit any employee of Employer to leave the employ of Employer, or in any way interfere with the relationship between Employer or any other employee of Employer. The obligations in this Section 8(a) shall apply regardless of whether Section 8(c) is in effect.

b.

No Solicitation of Current Customers. Executive agrees that, during Executive’s employment with Employer and for a period of one (1) year thereafter, Executive shall not directly or indirectly solicit or attempt to solicit any customers of Employer (the “Current Customers”), including but not limited to all successors, owners, directors, partners, and management personnel of such Current Customers, to cease doing business with Employer, or to otherwise divert the Current Customers’ business from Employer, or solicit or attempt to solicit any supplier, licensee, or other business associate of Employer to cease doing business with Employer. The obligations in this Section 8(b) shall apply regardless of whether Section 8(c) is in effect.

c.

Noncompetition and Nonsolicitation. Executive agrees that, during Executive’s employment with Employer and for a period of one (1) year thereafter, Executive will not, without the prior approval of Employer, directly or indirectly (i) become interested in, as a founder, organizer, principal shareholder, director, officer, or employee of or consultant to any bank, savings bank, savings and loan association, credit union, or similar financial institution or holding company of such an entity, now existing or organized hereafter, that competes or may compete with Employer, including any successor, within any county in which Employer operates a full-service branch office or lending center, or (ii) without limitation of Executive’s obligations under Section 8(b) with respect to Current Customers, solicit or attempt to solicit any (A) customers that sought or received services from Employer within the 12 month period before Executive’s date of termination, or (B) potential customers whom Executive or any other member of executive management of Employer directly and actively solicited at any time during the 12 month period before Executive’s date of termination ((A) and (B) collectively, the “Restricted Customers”), including but not limited to all successors, owners, directors, partners, and management personnel of such Restricted Customers, to cease doing business with Employer, not commence doing business with Employer, or to otherwise divert the Restricted Customers’ business from Employer. Executive will not be deemed a “principal shareholder” unless (1) Executive’s investment in such institution exceeds three percent (3%) of the institution’s outstanding voting securities or (2) Executive is active in the organization, management, or affairs of the institution. The provisions restricting competition and solicitation by Executive in this Section 8(c) may be waived by written action of the Board.

d.

Interpretation. The parties agree that the terms of Section 8(a) through Section 8(c) (collectively, the “Restrictive Covenants”) are reasonable as to both time and scope. The parties additionally agree (i) that the Restrictive Covenants are necessary for the protection of the Employer’s business and goodwill; (ii) that the Restrictive Covenants are not any greater than are reasonably necessary to secure Employer’s business and goodwill; and (iii) that the degree of injury to the public from the loss of the service and skill of Executive or the restrictions placed on Executive’s opportunity to make a living with Executive’s skills upon enforcement of the Restrictive Covenants does not and will not warrant non-enforcement of them. If an arbitrator, court, or any other administrative body with jurisdiction over a dispute related to this Agreement determines that the Restrictive Covenants are unreasonably broad, the parties hereby authorize and direct the arbitrator, court, or administrative body to narrow them so as to make them reasonable, given all relevant circumstances, and to enforce them. This Section 8 will survive the termination or expiration of this Agreement or Executive’s employment for any reason.

e.

Acknowledgement. The parties acknowledge that the compensation and benefits under this Agreement are good and valuable consideration provided in exchange for the Executive’s obligations hereunder.

9.

CONFIDENTIAL INFORMATION AND NONDISCLOSURE

a.

Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its Customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of his employment and information developed or learned by Executive during the course of his employment. Confidential Information is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or the businesses of Employer’s Customers. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Customer’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data; pricing and product information; computer data information; inventory levels and products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

b.

Protection of Confidential Information. Executive agrees that at all times during and after his employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Customers, except for the benefit of Employer or its Customers and in the course of his employment. For purposes of this Agreement, the disclosure of any Confidential Information, at any time except as required by law or as expressly provided in this Agreement, shall be considered to be “unfair competition.” Executive acknowledges that he is aware that the unauthorized disclosure of Confidential Information of Employer or its Customers may be highly prejudicial to their interests, an invasion of privacy, and an improper disclosure of trade secrets and financial information in violation of state and federal law.

c.

Return of Property. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all Employer property, documents, and other data relating to his employment which is in his possession and control and to deliver promptly all such property, documents, and data to Employer.

d.

Sanctions for Unauthorized Taking of Trade Secrets. Executive understands that taking of Employer’s trade secrets is a crime and could also result in civil liability under the Washington Trade Secrets Act and that willful misappropriation may result in an award against Executive of double the amount of the Employer’s damages and Employer’s attorney fees for collecting such damages.

e.

Notice of Immunity. Notwithstanding any other provision of this Agreement:

i.

Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed under seal in a lawsuit or other proceeding.

ii.

If Executive files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Executive may disclose Employer’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive: (A) files any document containing trade secrets under seal; and (B) does not disclose trade secrets except pursuant to court order.

f.

Exceptions. Nothing in this Agreement shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. If permitted to do so, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order. Nothing in this Agreement prohibits or restricts Executive from reporting, without any prior authorization from, or notification to Employer, possible violations of federal or state law or regulation to any governmental agency or entity, or self-regulatory agency, including but not limited to the Securities and Exchange Commission or the Financial Industry Regulatory Authority, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation.  

g.

Injunctive Relief and Survival. Executive acknowledges that breach of this Section 9 may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief consistent with Section 15 below, without the necessity of posting a bond, to enforce this section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief in accordance with Section 15 below. This Section 9 will survive the termination or expiration of this Agreement or Executive’s employment for any reason.

10.

DISCOVERIES AND INVENTIONS; WORK MADE FOR HIRE

11.

INDEMNIFICATION

12.

CLAWBACK PROVISIONS

13.

NOTICES

14.

BENEFIT OF AGREEMENT; ASSIGNMENT

15.

GOVERNING LAW; ARBITRATION

16.

CAPTIONS AND PARAGRAPH HEADINGS

17.

INVALID PROVISIONS

18.

WAIVER

19.

ENTIRE AGREEMENT

20.

IRC SECTION 409A COMPLIANCE; PAYMENT LIMITATIONS

a.

The severance payments and other benefits under this Agreement are intended to be exempt from the requirements of Section 409A of the Code by reason of all payments under this Agreement as “short-term deferrals” within the meaning of Treasury Regulation Section 1.409A-1(b)(4) and/or as separation pay due to involuntary separation from service under Treasury Regulation Section 1.409A-1(b)(9)(iii) to the maximum extent possible. All provisions of this Agreement shall be interpreted in a manner consistent with preserving either or both such exemptions. If Executive is a “specified employee” as defined in Section 409A of the Code, and Treasury regulations promulgated thereunder (“Section 409A Rules”), then any amounts subject to the Section 409A rules that are otherwise required to be paid to him upon his separation from service (as defined in the Section 409A Rules) shall not be paid until the date that is six months after the date of his separation from service or, if earlier, the date of his death. To the extent that this Agreement provides for the reimbursement of specified expenses incurred, such reimbursement will be made in accordance with the provisions of the Agreement (or other applicable plan or policy), but in no event later than the last day of the taxable year following the taxable year in which the expense was incurred. The amount of expenses eligible for reimbursement or in-kind benefits provided by Employer in any taxable year will not affect the amount of expenses or in-kind benefits to be reimbursed or provided in any other year. The term “termination,” when used in reference to termination of employment, shall mean “separation from service,” as defined in the Section 409A Rules.

b.

Notwithstanding any other provision of this Agreement or any other arrangement or agreement of Employer, Employer’s obligation to make payments and provide benefits to Executive is subject to applicable law, including, without limitation, Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. § 1828(k), and part 359 of the regulations of the Federal Deposit Insurance Corporation, 12 C.F.R. Pt. 359 and payments related to a change in control shall be paid within any limits and subject to any approvals that may be imposed by the FDIC for “golden parachute payments” and “prohibited indemnification payments” under applicable provisions of 12 C.F.R. 359.

21.

ATTORNEY FEES AND COSTS