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Exhibit 10.11
EMPLOYMENT AGREEMENT
THIS
AGREEMENT (the "Agreement") is made and entered into this 1ST day
of
January, 2004 (the "Effective Date"), by
and between NORTHRIM BANK, a
state-chartered commercial bank and wholly
owned subsidiary of NORTHRIM BANCORP,
INC., with its principal office in
Anchorage, Alaska (the "Employer"), and
ROBERT L. SHAKE (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 Senior Vice President and Executive
Loan Manager.
2.
TERM.
The term
of this Agreement (the "Term") shall commence on the Effective
Date and shall continue through December
31, 2004; provided, however, that (i)
on January 1, 2005 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 and (ii) such one year extensions
of the Term shall not occur on and after
the January 1 of the year in which the
Executive will attain age sixty-five (65)
but instead the Term shall be extended
only until the date of the Executive's
sixty-fifth (65th) birthday. In the event
the Term is not extended, Executive shall
have no rights to any of the severance
payments or benefits continuation described
in Paragraph 5.
3.
DUTIES.
Executive
will serve as Senior Vice President and Executive Loan Manager.
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 Chairman, 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. 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 $150,000, as adjusted from time to time ("Base
Salary"). The Board of Directors of the Employer shall review
Executive's salary at the end of 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.
Employer shall pay Executive a car allowance of $400 per
month.
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c. Under
the Employer's Incentive Compensation Plan, Executive
shall be eligible to receive an annual
bonus based on performance as defined by
the Board of Directors. Executive's annual
target bonus will equal 25% of Base
Salary ("Target Bonus"). 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
35% of Base Salary.
d.
Executive
shall be eligible for stock option grants under the
Employer's Stock Option Plan. The timing
and size of awards will be at the
discretion of the Board of Directors.
e.
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.
Executive will also participate in the
Employer's Deferred Compensation Plan, with
annual premiums of $45,000 paid by
Employer.
f.
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. 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, subject to any limits of company
policy and the rules and regulations
of the Internal Revenue Service.
5.
TERMINATION OF AGREEMENT.
a.
TERMINATION DUE TO A CHANGE OF CONTROL. If Employer or its
holding company, Northrim BanCorp, Inc., is
subjected to a Change of Control (as
defined in Section 5(f)(i)), and either
Employer or its assigns terminates
Executive's employment without Cause or
Executive terminates his employment for
Good Reason within 730 days of such Change
of Control, then Employer shall pay
Executive upon the effective date of such
termination 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. In addition, Employer shall
pay Executive 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. In addition,
Employer shall provide the benefits
described in Sections 5(b)(i) and (ii)
below. Provided, also, that the payment and
benefits described in this Section
5(a) will only be paid conditioned upon
Executive signing 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 upon the effective date of such
termination 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
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the year of termination. In addition,
Employer shall pay Executive 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.
Provided, however, that the payment and
benefits described in this Section 5(b)
will only be made conditioned upon
Executive signing a Release Agreement.
(i) BENEFITS
CONTINUATION. In addition, the 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 ("COBRA").
(ii) AGE AND SERVICE
CREDIT. Executive shall also be entitled
to receive age credit and credit for period
of service towards all pension/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, benefits, and retirement, 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.
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, Executive
shall be entitled to: (A) all Base Salary
earned and reimbursement for expenses
incurred under this Agreement through the
termination date, plus a pro rata
portion of any annual Target Bonus for the
year of termination. In addition,
Employer shall pay Executive full Base
Salary for the year following the
termination date (less the amount of any
payments received by Executive during
such one (1) year period under any
Employer-sponsored disability plan), and (B)
health and dental insurance benefits for a
period of one (1) year following the
termination date, which 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 Code
(commonly referred to as "COBRA").
Provided, however, that the payment and
benefits described in this Section 5(d)
will only be made conditioned upon
Executive signing a Release Agreement.
e.
TERMINATION UPON DEATH OF EXECUTIVE. Executive's term of
employment under this Agreement shall be
terminated upon the death of Executive.
In such case, the Employer shall be
obligated to pay to the surviving spouse of
Executive, of if there is no
