(e) On November 29, 2016, the board of directors of Sound
Community Bank (the Bank) the wholly owned subsidiary of Sound
Financial Bancorp, Inc., adopted a nonqualified deferred
compensation plan (the Plan), which was effective on January 1,
2017. The Plan complies with the deferred compensation rules set
forth in Section 409A of the Internal Revenue Code. The purpose
of the Plan is to provide a select group of management or
highly-compensated employees of the Bank with an opportunity to
defer the receipt of up to eighty percent (80%) of their annual
compensation and to assist the Bank in attracting, retaining and
motivating employees of high caliber and experience. In addition
to elective deferrals, the Bank may make discretionary
contributions to be credited to the account of any or all
participants, subject to the vesting requirements set forth in
the Plan. Distributions of vested account balances are made upon
death or after certain payment events including disability,
separation from service or separation from service upon a change
in control. Distributions shall be made in a single cash payment
or at the election of the participant in the case of separation
from service in annual installments for a period of up to ten
(10) years.

The obligations of the Bank under the Plan will be general
unsecured obligations of the Bank to pay deferred compensation in
the future to eligible participants in accordance with the terms
of the Plan from the general assets of the Bank, although the
Bank may establish a trust to hold amounts which the Bank may use
to satisfy Plan distributions from time to time. Distributions
from the Plan are governed by the Internal Revenue Code and the
Plan. The Bank may, at any time, in its sole discretion,
terminate the Plan or amend or modify the Plan, in whole or in
part, except that no such termination, amendment or modification
shall have any retroactive effect to reduce any amounts deemed to
be accrued and vested prior to such amendment.

The description above is a summary and is qualified in its
entirety by the terms of (i) the adoption agreement for the Plan,
a copy of which is attached hereto as Exhibit 10.1 to this report
and is incorporated herein by this reference, and (ii) the Plan,
a copy of which is attached hereto as Exhibit 10.2 to this report
and is incorporated herein by this reference.

Item 9.01 Financial Statements and Exhibits

(d)

Exhibits

10.1

Adoption Agreement for the Sound Community Bank Nonqualified Deferred Compensation Plan

10.2

The Sound Community Bank Nonqualified Deferred Compensation Plan