SOUND FINANCIAL, INC.
2008 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

RS No.
_______________                                                                                                Grant
Date: _______________

This Restricted Stock Award of Shares (“Restricted Stock”) is granted by Sound
Financial, Inc. (“Company”) to [Name] (“Grantee”) in accordance with the terms
of this Restricted Stock Award Agreement (“Agreement”) and subject to the
provisions of the Sound Financial, Inc. 2008 Equity Incentive Plan, as amended
from time to time (“Plan”).  The Plan is incorporated herein by reference.

1.  
Restricted Stock Award.  The Company makes this Restricted Stock Award of
[Number] Shares to Grantee.  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.

 
2.  
Vesting Dates:  The Shares shall vest as follows:

 

 
Vesting Date
Number of Shares Vesting
[Over at least 5 years beginning
one year from the Grant Date.]
[20% or less in each annual
installment]

3.  
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.

 
4.  
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.

 
5.  
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.

 
6.  
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.

 
 

 
 
 
7.  
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:

 
The common stock evidenced hereby is subject to the terms of an Award Agreement
between Sound Financial, Inc. and [name] dated [grant date] made pursuant to the
terms of the Sound Financial, Inc. 2008 Equity Incentive Plan, copies of which
are on file at the executive offices of Sound Financial, Inc., and may not be
sold, encumbered, hypothecated or otherwise transferred except in accordance
with the terms of such Plan and Award Agreement.
 
8.  
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.

 
9.  
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.

 
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, in its sole discretion, may 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.

 
11.  
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.

 
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.

 
 
RS-2

 
 
 
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.

 

 
RS-3
 
 

 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 
 
 

   
SOUND FINANCIAL, INC.
                     
By ________________________________
   
Its  ________________________________
                     
ACCEPTED BY GRANTEE
   
___________________________________
   
(Signature)
         
___________________________________
   
(Print Name)
         
___________________________________
   
(Street Address)
   
___________________________________
   
(City, State & Zip Code)

 
Beneficiary Designation:
 
The Grantee designates the following Beneficiary to receive the Shares upon
Grantee’s death:
 

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RS-4