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Exhibit 10.17
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement")
is made and entered into effective the 1st day of January, 2007
(the "Effective Date"), by and between NORTHRIM BANCORP, INC. and
its wholly owned subsidiary, NORTHRIM BANK, a state-chartered
commercial bank, with its principal office in Anchorage, Alaska
(collectively, the "Employer"), and Joseph M. Schierhorn
(the "Executive").
In consideration of the mutual
promises made in this Agreement, the parties agree as follows:
1. Employment.
Employer employs Executive and
Executive accepts employment with Employer as its Executive Vice
President, Chief Financial Officer .
2. Term.
The term of this Agreement (the
"Term") shall commence on the Effective Date and shall continue
through December 31, 2007; provided, however , that on
January 1, 2008 and each succeeding January 1, the Term
shall automatically be extended for one additional year unless, not
later than ninety (90) days prior to any such January 1,
either party shall have given written notice to the other that it
does not wish to extend the Term. In the event the Term is not
extended, Executive shall have no rights to any of the severance
payments or benefits continuation described in Section 5 except as
specifically provided for in Section 5 (a).
3. Duties.
The Executive will serve as
Executive Vice President, Chief Financial Officer of the
Employer. Executive shall render such executive, management and
administrative services and perform such tasks in connection with
the affairs and overall operation of the Employer as is customary
for his position, subject to the direction of Employer’s
President and Board of Directors. Executive shall devote necessary
time, attention and effort to Employer’s business in order to
properly discharge his responsibilities under this Agreement.
4. Compensation,
Benefits, Reimbursement and Bonus.
a. Base Salary. In consideration for all services
rendered by Executive during the term of this Agreement, Employer
shall pay Executive an annual base salary (before all customary and
proper payroll deductions) of $185,072 , as adjusted from
time to time ("Base Salary"). The Board of Directors of the
Employer shall review Executive’s salary each year, in a
manner consistent with that used for all management employees of
the Employer, and in its sole discretion may adjust such salary
commensurate with the Executive’s performance under this
Agreement.
b. Incentive Compensation . Under the
Employer’s Executive Incentive Compensation Plan, Executive
shall be eligible to receive an annual bonus based on performance
as
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defined by the Board of Directors. Executive’s annual
target bonus will equal 30% of Base Salary. This is the
amount payable for ambitious, but expected, results as determined
by the Board of Directors. Executive’s bonus may be more or
less than this amount at the Board of Directors discretion but may
not exceed 40% of Base Salary.
c. Stock Options. Executive shall be eligible for
stock option grants under the Employer’s Stock Incentive
Plan. The timing and size of awards will be at the discretion of
the Board of Directors.
d. SERP and Deferred Compensation. Executive shall
also be entitled to receive an annual contribution equal to
5% of annual Base Salary in accordance with the
Employer’s Supplemental Executive Retirement Plan, as may be
adjusted at the discretion of the Board of Directors from time to
time. The Executive may also participate in the Employer’s
Deferred Compensation Plan.
e. Supplemental Retirement Deferred Compensation .
Executive shall also participate in the Company’s
Supplemental Retirement Deferred Compensation Plan, in accordance
with such plan.
f. Other Benefits. Throughout the term of this
Agreement, Employer shall provide Executive with reasonable health
insurance, disability and other employee benefits. Executive shall
participate in all employee benefit plans and programs of Employer
on a basis at least as favorable as that accorded to any other
officer of Employer.
g Expenses. Employer shall reimburse Executive for
his reasonable expenses (including, without limitation, travel,
entertainment, and similar expenses) incurred in performing and
promoting the business of Employer. Executive shall present from
time to time itemized accounts of any such expenses as required by
Employer, subject to any limits of company policy and the rules and
regulations of the Internal Revenue Service.
h. Automobile Allowance. Executive shall receive a
FOUR HUNDRED Dollar ($400.00) monthly automobile allowance
for his automobile, fuel and maintenance expenses for Bank
business. No other expense reimbursement will be provided for use
of his vehicle.
5. Termination of
Agreement.
a. Termination Due to a Change in Control . If
(A) Employer (either Northrim BanCorp, Inc. or Northrim Bank)
is subjected to a Change of Control (as defined in
Section 5(f)(i)), and (B) either Employer or its assigns
terminates Executive’s employment without Cause (either
during the annual term of this Agreement or by refusing to extend
this Agreement when the annual termination occurs every
December 31) or Executive terminates his employment for Good
Reason within 730 days of such Change of Control, then
Employer shall pay Executive in a lump sum: (i) all Base
Salary earned and all reimbursable expenses incurred under this
Agreement through such termination date; (ii) a pro rata
portion of any annual target bonus for the year of termination; and
(iii) an amount equal to two (2) times Executive’s
highest Base Salary over the prior three (3) years, plus an
amount equal to two (2) times the target bonus or two
(2) times the average bonus paid over the prior three
(3) years, whichever is greater; and (iv) benefits
described in Sections 5(b)(I) and (II) below. The amounts
described in Section 5(a)(i) and (ii) herein shall be
paid no later than 45 days after the day on which employment is
terminated. The amount described
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in Section 5(a)(iii) herein shall be paid on the first day
of the month following a period of six (6) months after the
termination of employment, provided that the payment may be made
sooner if either (i) the amount does not exceed two times the
lesser of (a) the Executive’s annual compensation for
the year prior to the year in which employment is terminated; or
(b) the maximum amount that may be taken into account under a
qualified plan pursuant to Internal Revenue Code
Section 401(a)(17) for such year (the "IRC Safe Harbor") or
(ii) at the Executive’s election, the amount described
in Section 5(a)(iii) is reduced to fit within the IRC Safe
Harbor. No payment will be made pursuant to Section 5(a)(iii)
until the Executive has signed an agreement, in a form acceptable
to Employer, that releases and holds Employer harmless from all
known and unknown claims and liabilities arising out of
Executive’s employment with Employer or the performance of
this Agreement ("Release Agreement").
b. Termination by Employer Without Cause or by Executive
for Good Reason . If Employer terminates
Executive’s employment without Cause, or if Executive
terminates his employment for Good Reason, Employer shall pay
Executive in a lump sum: (i) all Base Salary earned and all
reimbursable expenses incurred under this Agreement through such
termination date, plus a pro rata portion of any annual target
bonus for the year of termination; and (ii) an amount equal to
two (2) times Executive’s highest Base Salary over the prior
three (3) years, plus an amount equal to two (2) times
the target bonus or two (2) times the average bonus paid over
the prior three (3) years, whichever is greater. The amount
described in 5(b)(i) herein shall be paid no later than
45 days after the day on which employment is terminated. The
amount described in 5(b)(ii) herein shall be paid on the first day
of the month following a period of six (6) months after the
termination of employment, provided that the payment may be made
sooner if either (i) the amount does not exceed the IRC Safe
Harbor or (ii) at the Executive’s election, the amount
described in Section 5(a)(ii) is reduced to fit within the IRC
Safe Harbor. No payment will be made pursuant to
Section 5(a)(ii) until the Executive has signed a Release
Agreement.
(I) Benefits Continuation. In addition,
Executive shall be entitled to health and dental insurance benefits
for a period of eighteen (18) months following the termination
of this Agreement. These benefits will be provided at
Employer’s expense, but such period shall count towards the
Employer’s continuation of coverage obligation under
Section 4980B of the Internal Revenue Code (commonly referred
to as "COBRA").
(II) Age and Service Credit. Executive shall
also be entitled to receive age credit and credit for period of
service towards all SERP plans for the remaining period of time
covered by this Agreement. If Executive is hired by Employer, its
assigns, any company in control of Employer, or any company
controlled by Employer during the period covered by this Agreement,
then Executive will be entitled to be treated for all purposes
relating to future compensation, and benefits, as if this Agreement
had never been terminated and as if Executive had performed his
responsibilities as an Executive throughout the period originally
covered by this Agreement.
c. Termination by Employer for Cause or by Executive
Without Good Reason . If Employer terminates
Executive’s employment for Cause or if Executive terminates
his employment without Good Reason, Employer shall pay Executive
upon the effective date of such termination only such Base Salary
earned and expenses reimbursable under this Agreement incurred
through such termination date. In such case, Executive shall have
no right to receive compensation or other benefits for any period
after termination under this Agreement.
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d. Termination Due to Disability . If Employer
terminates Executive’s employment on account of any mental or
physical Disability that prevents Executive from discharging his
duties under this Agreement, even with reasonable accommodation,
Executive shall be entitled to: (i) all Base Salary earned and
reimbursement for expenses inc
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