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 Laurence J. Hueth ("Mr. Hueth" and/or the
"Employee") and First Northwest Bancorp (the “FNWB”) and its wholly owned
subsidiary, First Federal Savings & Loan Association of Port Angeles (the
“Bank”), including, past and present, and affiliated corporations (collectively
FNWB and the Bank are referred to as the "Company" and/or the "Employer").

2.          Purpose.  Mr. Hueth has been employed by FNWB and the Bank as the
Chief Executive Officer and President for each entity.   The purpose of this
Agreement is to set forth the terms of Mr. Hueth’s separation from service from
the Company.  By agreement of the Company and Mr. Hueth, the effective date of
his separation will be January 2, 2020 (the "Separation Date").

3.          Considerations.

3.1         Mr. Hueth’s separation from the Bank was made effective August 1,
2019. Notwithstanding such separation, this Agreement is intended by both
parties to incorporate terms and conditions of Mr. Hueth’s separation from both
the Bank and FNWB.  

3.2     If the Employee signs and returns this Agreement and does not revoke
this Agreement as provided in Section 9 below, then the Company will pay to the
Employee within seven (7) days of the Separation Date a lump sum in the amount
of $17,139.00, which is equivalent to the cost of continuation coverage under
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) for Executive and eligible dependents for a period of twelve
(12) months at the same level of benefits that Executive had elected as of the
Separation Date, provided Executive and/or eligible dependents timely elect
continuation coverage under COBRA within the time period prescribed pursuant to
COBRA, and otherwise qualify for continued coverage. This amount will be treated
as non-taxable provided that Employee provides Company with written
documentation confirming that COBRA continuation coverage was timely elected,
and that the amount was actually used for such premiums.

In the event that Employee becomes eligible for health coverage elsewhere within
the twelve (12) month period by virtue of new employment and will not be paying
for a full twelve (12) months of COBRA premiums, Employee agrees to refund
Company the unused amount in full, without demand.

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3.3          The Employee shall receive a lump sum payment for his accrued but
unused vacation leave as of his Separation Date, with such lump sum to be paid
in the Bank's first payroll of 2020.
3.4    The Employee shall receive a lump sum payment for one half of his accrued
but unused sick leave (up to 240 hours) as of his Separation Date, with such
lump sum to be paid in the Bank’s first payroll of 2020.
3.5          The Employee shall be entitled to receive his vested benefits under
the Bank's Equity Incentive Plan, 401(k) Plan and Deferred Compensation Plan in
accordance with the terms of such plans.

3.6          The Employee acknowledges and agrees that his Employment Agreement
dated February 22, 2019 with the Corporation and the Bank shall be terminated as
of the Separation Date and shall have no further force or effect after the
Separation Date. The Employee acknowledges that no other sums of money are owed
by the Employer and that the sums paid to him under this Agreement are adequate
consideration for the release of claims in Section 4 and the restrictive
covenants in Section 6 that he is agreeing to upon his execution of this
Agreement.

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

4.          General Release.

4.1          In consideration for the above, and all of the terms of this
Agreement, the Employee, with the intention of binding himself and his heirs,
executors, administrators, agents, representatives and assigns (hereinafter the
"Releasors"), does hereby release, remise and forever discharge FNWB and the
Bank, and each of their parents, subsidiaries, affiliates, related entities,
predecessors, successors, assigns, and each of the current and former employees,
officers, directors, executives, members, trustees, representatives, agents,
shareholders, attorneys, investors and insurers of any of the foregoing entities
and each of their heirs, successors, executors and administrators and all
persons acting by, through, under and/or in concert with any of them
(hereinafter the "Releasees") of and from any and all claims, demands, causes of
action, actions, rights, damages, judgments, costs, compensation, suits, debts,
dues, accounts, bonds, covenants, agreements, expenses, attorneys' fees,
damages, penalties, punitive damages and liability of any nature whatsoever, in
law or in equity or otherwise, which any of the Releasors have had, now have,
shall or may have, whether known or unknown, foreseen or unforeseen, suspected
or unsuspected, by reason of any cause, matter or thing whatsoever, from the
beginning of the Employee's employment with the Company to the date the Employee
signs this Agreement, including those relating to or arising out of the
Employee's employment or affiliation with the Company, the terms and conditions
of such employment or affiliation, and the termination of that employment or
affiliation.

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4.2          By the general release set forth in this Section 4, the Employee
acknowledges that he is giving up all claims relating to or arising out of his
employment or affiliation with the Company, the terms and conditions of such
employment or affiliation, and the termination of that employment or
affiliation, including but not limited to claims for breach of contract or
implied contract, wrongful, retaliatory or constructive discharge, negligence,
misrepresentation, fraud, detrimental reliance, promissory estoppel, defamation,
invasion of privacy, impairment of economic opportunity, tortious interference
with contract or business relationships, intentional or negligent inflection of
emotional distress, any and all other torts, and claims for attorneys' fees, as
well as the following statutory claims described below.
4.3          The Employee further acknowledges that various local, state and
federal laws prohibit discrimination based on age, gender, sexual orientation,
race, color, national origin, religion, disability, and handicap or veterans
status and are included within the scope of this release.  These include, but
are not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights
Acts of 1866 and 1871, and the Civil Rights Act of 1991 (relating to gender,
national origin, religion, race and certain other kinds of job discrimination);
the Pregnancy Discrimination Act; the Age Discrimination in Employment Act and
the Older Workers Benefit Protection Act (relating to age discrimination in
employment); the Rehabilitation Act of 1973 and the Americans with Disabilities
Act (relating to disability discrimination in employment); and the Washington
State Law Against Discrimination (RCW 49.60).  The Employee also understands and
acknowledges that there are various federal and state laws governing benefit
issues, wage and hour issues, and other employment issues, including, but not
limited to, the Employee Retirement Income Security Act (excluding claims for
vested benefits), the Sarbanes-Oxley Act of 2002, the National Labor Relations
Act, the Fair Labor Standards Act, the Equal Pay Act, the Worker Adjustment and
Retraining Notification Act, the Family and Medical Leave Act, wage and hour
laws, whistleblower laws and other laws.
4.4            The Employee acknowledges that he is giving up any claims he may
have under any of the statutes or laws referenced in this Section 4 and under
any other federal, state or municipal statute, ordinance, executive order or
regulation relating to discrimination in employment, wage and hour issues, or in
any way pertaining to employment relationships.  The Employee also understands
and acknowledges that he is giving up any and all claims for benefits  not
covered by Section 3 of this Agreement including, but not limited to, life
insurance, accidental death and disability insurance, sick leave or other
employer provided plans or programs; claims for bonuses or other distributions
of income or profit; claims for reimbursement; claims for wages; claims for
vacation or other leave time; claims relating to retirement, pension and/or
profit-sharing plans (excluding claims for vested benefits under the Bank's
Equity Incentive Plan, 401(k) Plan, Deferred Compensation Plan, as well as
vested rights (if any) to stock options); claims for group health insurance
coverage (excluding claims for continued medical insurance coverage and COBRA
continuation coverage as detailed in Section 3.2 above); or any other claims.
The Employee understands and acknowledges that this general release applies to
all such employment-related claims that he now has or may have had to the date
he signs this Agreement (except as specifically provided otherwise herein) under
any and all applicable federal, state, municipal, county or local laws,
ordinances and regulations and any common law claims now or hereinafter
recognized.

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4.5          The Employee further agrees that neither the Employee nor anyone on
his behalf shall or may seek or be entitled to recover reasonable attorneys'
fees and costs pursuant to any of the aforementioned federal, state, county,
municipal or local statutes, or any other such laws or regulations.  The
Employee understands and acknowledges that the general release set forth in this
Section 4 applies to all claims and causes of action, including but not limited
to employment-related claims which the Employee now has or may have had to the
date he signs this Agreement except as specifically provided otherwise herein.
4.6          The Employee further agrees that this release includes any other
claims, whether or not related to his employment with the Company, arising from
any alleged violation of any federal, state or local statute, regulation,
ordinance or common law or tort, including but not limited to claims for
tortuous interference with contractual relations/advantage, misrepresentation,
emotional distress, libel, slander, breach of express or implied contract  or
covenant of good faith and fair dealing (whether written or oral), retaliation,
quantum merit, wrongful discharge, promissory estoppel, fraud, negligence,
detrimental reliance, assault, battery, mental anguish, personal injury or loss
of consortium, past physical injury associated with employment or future
manifestations of physical injury incurred during or as a result of employment,
and any and all claims that may be asserted on his behalf by others (including
without limitation by the Equal Employment Opportunity Commission, the
Washington State Human Rights Agency or any similar agency).
4.7          This release does not apply to claims that cannot be released by
this Agreement, including claims for worker's compensation, unemployment
benefits claims, or vested retirement benefits, nor does it waive or release any
rights or claims that the Employee may have under the Age Discrimination in
Employment Act which arise after the date he signs this Agreement.  This release
does not prevent the Employee from filing a charge with or participating in any
investigation or proceeding conducted by the Equal Employment Opportunity
Commission, the Washington State Human Rights Agency, the Securities and
Exchange Commission, the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System, or any other federal, state or local 
government agency or commission ("Government Agency"), although this release
does waive the Employee's right to any monetary or other relief of any nature
whatsoever in connection with any such charge, investigation or proceeding to
the extent permitted by law.  Notwithstanding any other provision in this
Section 4, the Employee waives any right he may have to bring, or participate
in, any collective action or class action against the Company or the other
Releasees in his capacity as an employee or former employee of the Company.  The
Employee further understands that this Agreement does not limit his ability to
communicate with any Government Agencies or otherwise participate in any
investigation or proceeding that may be conducted by any Government Agency,
including providing documents or other information, without notice to the
Company.  This Agreement does not limit the Employee's right to receive an award
for information provided to any Government Agencies.
4.8          The Employee represents that he:  (i) has not filed any civil
actions, lawsuits, complaints, charges or claims for relief or benefits against
or involving the Company or any of the other Releasees with any local, state or
federal court, regulatory body or administrative agency that are currently
outstanding, other than a claim for unemployment compensation benefits;

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(ii) has not transferred or assigned any claim described by the general release
in this Section 4; (iii) has received all leave (paid or unpaid), compensation,
wages, overtime if applicable, vacation pay, expense reimbursements, and/or
benefits to which he may be entitled and that no other amounts and/or benefits
are due (other than as set forth in Section 3 above); and (iv) has not
complained of and is not aware of any fraudulent activity or any act(s) which
would form the basis of a claim of fraudulent or illegal activity by or against
the Company.
5.          Confidentiality.
5.1    Nondisclosure. The Employee may not use or disclose any confidential
information (as defined in paragraph 5.3 below) either during or following the
term of this Agreement, except as required by the Employee's duties under this
Agreement or as otherwise allowed under subsection 5.2 below. Notwithstanding
anything to the contrary in this Agreement or otherwise, nothing limits the
Employee's rights under applicable law to provide truthful information to any
governmental entity or to file a charge with or participate in an investigation
conducted by any governmental entity. The Employee is hereby notified that the
immunity provisions in 18 USC § 1833 provide that an individual cannot be held
criminally or civilly liable under any federal or state trade secret law for any
disclosure of a trade-secret that is made (i) in confidence to federal, state,
or local government officials, either directly or indirectly, or to an attorney,
and is solely for the purpose of reporting or investigating a suspected
violation of the law, (ii) under seal in a complaint or other document filed in
a lawsuit or other proceeding, or (iii) to the individual's attorney in
connection with a lawsuit for retaliation for reporting a suspected violation of
law (and the trade secret may be used in the court proceedings for the lawsuit)
as long as any document containing the trade secret is filed under seal and the
trade secret is not disclosed except in response to court order.
5.2    Exceptions. The Employee's nondisclosure obligation under paragraph 5.1
above does not apply to any use or disclosure that is:
(a)Made with the prior written consent of the Board of Directors;

(b)Required by a court order or a subpoena from a government agency (as long as
the Employee first provides the Company and First Federal with reasonable notice
of the court order or subpoena in order to allow the Company and First Federal
the opportunity to contest the requested disclosure); or

(c)Of confidential information that has been previously disclosed to the public
by the Company or First Federal or is in the public domain (other than because
of the Employee's breach of this Agreement).
5.3    Confidential Information. "Confidential Information" includes any of the
Company's (or subsidiaries' or affiliates') trade secrets, customer or prospect
lists, information regarding product development, marketing plans, sales plans,
strategic plans, projected acquisitions or dispositions, management agreements,
management organization information, operating policies or manuals, business
plans, purchasing agreements, financial records, or other similar financial,
commercial, business, or technical information of any kind that the Company or
any subsidiaries

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or affiliates has received from service providers, other vendors, or customers
that these third parties have designated as confidential or proprietary.
6.          Restrictive Covenants.  
6.1    Non-Competition. The Employee agrees that for a period of one year after
the Separation Date (the "Noncompetition Period"), the Employee will not
directly or indirectly 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 the Company, an
affiliates or subsidiaries, including any successor, within any county in which
the Company operates a full-service branch office or lending center. But the
Employee will not be deemed a "principal shareholder" unless (i) the Employee's
investment in such an institution exceeds one percent of the institution's
outstanding voting securities or (ii) the Employee is active in the
organization, management, or affairs of the institution. The provisions
restricting competition by the Employee may be waived by action of the Board of
Directors.
Notwithstanding the foregoing the Company has agreed it will waive and not seek
enforcement of the non-compete obligations reflected in this Section 6.1 for any
portion of the Noncompetition Period that the Company is in default of any
payment obligations to Employee under the terms of the Deferred Compensation
Plan.
6.2    Noninterference. During the Noncompetition Period, the Employee shall not
directly or indirectly (i) solicit or attempt to solicit any other employee of
the Company to leave the employ of the Company, or in any way interfere with the
relationship between the Company and any other employee of the Company, (ii)
solicit or attempt to solicit any customers or potential customer whom the
Company actively solicited at any time during the 12-month period before the
Separation Date (the "Customers"), including but not limited to all successors,
owners, directors, partners, and management personnel of the Customers, to cease
doing business with the Company or to otherwise divert the Customers' business
from the Company, or (iii) solicit or attempt to solicit any supplier, licensee,
or other business associates of the Company to cease doing business with the
Company.
6.3    Interpretation. The parties agree that the terms of subsections 6.1 and
6.2 of this Section 6 (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 Company's business
and goodwill; (ii) that the Restrictive Covenants are not any greater than are
reasonably necessary to secure the Company's business and goodwill; and (iii)
that the degree of injury to the public from the loss of the service and skill
of the Employee or the restrictions placed on the Employee's opportunity to make
a living with the Employee's skills upon enforcement of the Restrictive
Covenants, does not and will not warrant nonenforcement of them. If a court or
any other administrative body with jurisdiction over a dispute related to this
Agreement determines that the restrictive covenants set forth in this Section 6
are unreasonably broad, the parties hereby authorize and direct the court or
administrative body to narrow them so as to make them reasonable, given all
relevant circumstances, and to enforce them.

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7.          Return of Company Property:  The Employee represents and warrants
that he has, or will have by the Separation Date, returned to the Company all
property in his possession, custody or control owned by the Company, including,
but not limited to, keys, access cards, credit cards, documents and
electronically stored information in his possession (regardless of whether or
not such information is Confidential Information).
8.          Acknowledgements.
8.1          The Employee acknowledges that:
(a)   He is releasing all of his claims, including those under the Age
Discrimination in Employment Act, knowingly and voluntarily and without duress,
coercion or undue influence of any kind, in exchange for consideration of value
to which the Employee is not otherwise entitled;
(b)  He has been advised by this Agreement to consult with an attorney prior to
signing this Agreement to explain the terms of this Agreement including, without
limitation, the terms relating to his release of claims arising under the Age
Discrimination in Employment Act;
(c) He received this Agreement on or before October 4, 2019 and he has at least
twenty-one (21) days to consider the terms of this Agreement and to consult with
an attorney;
(d) In the event the Employee executes this Agreement within less than
twenty-one (21) days after its delivery to him, then the Employee hereby
acknowledges that his decision to execute this Agreement prior to the expiration
of such twenty-one (21) day period was done by him knowingly and was entirely
voluntary on his part; and
(e) Other than the items set forth in Section 3, Employee will not receive, and
is not entitled to receive, any additional payments, salary, bonuses, overtime,
incentive payments, commissions, discretionary payments or other amounts for any
period subsequent to his Separation Date.
8.2          If Employee does not return an executed copy of this Agreement to
Stephen Oliver, Chairman of the Boards of FNWB and the Bank, so that it received
by him by no later than the close of business on October 31, 2019, this
Agreement and the obligations set forth herein shall become null and void.
            9.           Revocation of Agreement. The Employee has the right to
revoke this Agreement at any time during the seven (7) day period immediately
following his acceptance of this Agreement. If the Employee decides to revoke
this Agreement, he must do so by mailing a notice of revocation, postmarked
within the seven (7) day revocation period, to Christopher J. Riffle, General
Counsel, First Federal Savings & Loan Association of Port Angeles, 105 W. Eighth
Street, Port Angeles, WA 98362, which notice must be sent by certified mail,
return receipt requested. The revocation period starts the day after the
Employee signs this Agreement.  The revocation period expires at 5:00 p.m. on
the last day of the revocation period, but if the last day is not a business
day, the revocation period continues to run until 5:00 p.m. on the next business
day.  This Agreement shall not become effective or enforceable until the
revocation period has expired. If the Employee

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revokes this Agreement, then he will not be entitled to any of the items set
forth in Section 3 of this Agreement.
            10.          Additional Terms.
10.1          This Agreement is not, and shall not be construed to be, an
admission of liability, culpability or any other legal conclusion.
10.2          This Agreement shall be interpreted, enforced and governed under
the laws of the State of Washington. In the event of any lawsuit arising from or
relating to this Agreement, venue shall be in Clallam County, Washington.
10.3          This Agreement constitutes the entire understanding between the
parties regarding the Employee's separation from employment with the Company and
supersedes any prior written or oral agreements regarding such employment.  The
Employee acknowledges that there are no representations by the Company or any of
its agents, attorneys or officers, oral or written, which are not set forth in
this Agreement upon which the Employee relied in signing this Agreement. 
However, this Agreement shall not alter or revise any fiduciary duties of the
Employee arising out of or in connection with his employment as CEO and
President of FNWB and the Bank, which fiduciary duties shall survive and
continue to be in effect. This Agreement cannot be modified or amended except by
written agreement signed by both the Employee and the Company.
10.4          The failure of the Employee or the Company to insist upon strict
compliance with any provision of this Agreement will not be deemed a waiver of
such provision or of any other provision in this Agreement. 
10.5          This Agreement may be assigned by the Company and shall inure to
the benefit of, and may be enforced by, the Company, its successors and
assigns.  This Agreement is personal to the Employee and may not be assigned by
him.
The Employee's signature below indicates his acceptance of this Agreement and
shall cause this Agreement to be binding upon the Employee and his heirs,
executors, administrators, agents, representatives and assigns.  The Employee's
signature shall also signify that he has read and understands this Agreement,
and that he has either reviewed it with an attorney or has voluntarily elected
not to do so.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
set forth opposite their respective signatures.

FIRST NORTHWEST BANCORP

/s/ Stephen Oliver
 
Date:
October 4, 2019
Stephen Oliver, Chairman of the Board
 
 
 

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FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF PORT ANGELES

/s/ Stephen Oliver
 
Date:
October 4, 2019
Stephen Oliver, Chairman of the Board
 
 
 

EMPLOYEE

/s/ Laurence J. Hueth
 
Date:
October 4, 2019
Laurence J. Hueth
 
 
 

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