NORTHRIM BANK DEFERRED COMPENSATION PLAN

EXHIBIT 10.26

NORTHRIM BANK

DEFERRED COMPENSATION PLAN

Originally Effective as of January 1, 1995

Amended Effective as of October 3, 1996
and
January 1, 2005

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TABLE OF CONTENTS

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NORTHRIM BANK

DEFERRED COMPENSATION PLAN

ARTICLE I

INTRODUCTION

This Deferred Compensation Plan (the “Plan”) provides competitive fringe benefit planning to key employees of Northrim Bank (the “Employer” or “Company”) by permitting such employees to defer the receipt of compensation. The election to defer must be irrevocable and must be made in accordance with the terms of the Plan. This Plan and the elections made hereunder shall bind the Employer, its successors and assigns. The effective date of the Plan is January 1, 1995.

ARTICLE II

ELIGIBILITY

As of the Effective Date, all officers of the Employer are eligible to participate in this Plan (“Eligible Employee(s)” or “Participant”). Other key employees may become eligible to participate if so notified by the Compensation Committee, hereinafter “Committee.”

ARTICLE III

PAYMENT OF DEFERRED AMOUNTS AND INTEREST

3.1 Accounts. Salary and bonus deferrals made under this Article 3 shall be credited to a Participant’s Accounts. Amounts deferred and vested prior to 2005 shall be credited to a Pre-2005 Grandfathered Account. Post-2004 deferrals shall be credited to a Post-2004 Account and administered in accordance with Internal Revenue Code Section 409A.

All deferrals made hereunder shall be credited to special accounts on the books of the Employer in the name of the Participants, and/or, with consent of the Employer’s Board and the Committee, deposited in a grantor trust on behalf of such Participants. The Committee shall credit such accounts with interest, in accordance with Section 3.4 hereof. Participant’s accounts will be increased by his or her proportionate share of all interest credited to the accounts by the Employer. A Participant is entitled to a statement of his or her accounts, at least annually, within ninety (90) days after the close of the calendar year.

3.2 Salary Deferral. On or prior to December 31 of each year that this Plan is in effect, any Eligible Employee may elect to defer receipt of at least five percent (5%) to a maximum of one hundred percent (100%) of their salary to be paid in the calendar year following the year of election. The election shall be in writing, on a form provided by the Committee, and shall be irrevocable as to any Salary payable in the next year. Any such election will also be effective with respect to future years’ salary unless revoked by the Participant prior to December 31 of the year preceding the year in which the deferral is to take effect. New elections may be made in accordance with the terms of this Section 3.2 if made by December 31 of the year preceding the year for which the change is to take effect.

Notwithstanding the other provisions of this Section 3.2, an Eligible Employee may elect to defer receipt of all or a portion of their remain salary to be paid in the current calendar year if such election is made in writing within thirty (30) days after the Participant is first notified of their eligibility to participate in the Plan by the Committee.

3.3 Bonus Deferral. On or prior to December 31 of each year that this Plan is in effect, any Eligible Employee may elect to defer receipt of at least five percent (5%) to a maximum of one hundred percent (100%) of their bonus for services to be performed in a succeeding Plan Year. The election shall be in writing, on a form provided by the Committee, and shall be irrevocable as to any bonus payable with respect to services to be performed.

Any such election will also be effective with respect to future years’ bonuses unless revoked by the Participant prior to December 31 of the year preceding the year in which services are to be performed. Any new election with respect to future years’ bonuses must be filed with the Committee prior to December 31 of the year preceding the year during which the services to which the bonus relates are to be performed.

Notwithstanding the other provisions of this Section 3.3, an Eligible Employee may elect to defer receipt of all or any portion of their bonus if such election is made in writing within thirty (30) days after the Participant is first notified of their eligibility to participate in the Plan by the Committee.

3.4 Interest Credited to Accounts. The Committee shall credit all amounts deferred and credited to a Participant’s Accounts as outlined in Sections 3.1 and 3.5 herein, with interest compounded annually. The interest for any given year, or portion thereof, shall be Northrim Bank’s average yield on the Bank’s total assets calculated on January 1, based on the prior year’s performance, less one percentage (l%) point.

All taxes (including interest and penalties) levied or assessed with respect to the funds or the income thereon, shall be paid by the Employer, unless under other applicable tax law, such taxes are deemed an obligation of the Participant, in which case the Participant will pay.

3.5 Form and Timing of Payment for Pre-2005 Grandfathered Accounts. Subject to the limitations contained herein, a Participant’s Pre-2005 Grandfathered Account shall be paid in installments or as a lump sum in accordance with the Participant’s deferral election.

Notwithstanding the above, if installment payments were elected, the Committee may elect, in its sole discretion, to accelerate payments provided an irrevocable request is made in writing at least thirty (30) days prior to the commencement date of the first payment. If an accelerated payment is made, the Participant will also pay to the company a penalty equal to two percent (2%) of the accelerated amount. No such acceleration shall be made to the detriment of a current creditor of the Company. If installment payments are elected, a calculation shall be made to compute a level series of monthly payments based on the Participant’s account balance, the time period selected and the applicable interest rate in effect as of the benefit commencement date. For purposes of this paragraph, the applicable interest rate will be fifty (50) basis points over the applicable U.S. Treasury Note Rate. The applicable U.S. Treasure Note Rate will be the preceding twelve (12) months average, preceding the commencement of payments, and will be the nearest quoted rate for a maturity representing two-thirds of the installment pay-out period. For example, if the installment period is fifteen (15) years, the applicable U.S. Treasury Note Rate will be the rate for a note whose term is two-thirds of the fifteen (15) year installment period, i.e., a 10-Year U.S. Treasury Note. The applicable interest rate will, therefore, be fifty (50) basis points over the prior average annual rate for a 10-Year U.S. Treasury Note.

Any deferral must be for a minimum period of two years. A distribution of a Participant’s account shall begin on the first day of the month following sixty (60) days (or as soon thereafter as administratively possible) after the occurrence of the earliest of: (i) termination of employment (voluntary or involuntary); (ii) disability; or (iii) passage of the period of time stated on the Participant’s deferral election.

3.6 Form and Timing of Payment for Post-2004 Accounts. A Participant’s Post-2004 Account shall be 100% vested and nonforfeitable at all times and shall become payable to the Participant at the time specified in his election form. A Participant’s election form for his or her Post-2004 Account may provide that the Participant’s deferral period will end on a specified date or the date he terminates employment.

Any deferral election for his or her Post-2004 Account to a specified future distribution date must be for at least two Plan Years, so that the earliest specified future distribution date that a Participant may elect will be January 1 following two Plan Years of deferral (counting the Participant’s initial Plan Year of eligibility if he or she first becomes a Participant on the date after January 1 of a Plan Year).

Notwithstanding the foregoing, a Participant or former Participant may later elect at least 12 months prior to the date on which the Participant’s deferral period for his or her Post-2004 Account would otherwise have ended to change the specified future distribution date on which payments will commence, provided that election changes the specified future distribution date to a date that is at least five (5) years later than the Participant’s deferral period for his or her Post-2004 Account would otherwise have ended.

All Participants must elect no later than D