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NORTHRIM BANK ANNUAL
EXECUTIVE INCENTIVE PLAN
The plan will
be administered by the Compensation Committee
(“Committee”) of the Board of Directors of Northrim
Bank (“Bank”).
Participation
in the plan is limited to members of management whose performance
has a significant impact on the success of the Bank.
Participants in
the incentive plan must be recommended by the Chairman of the Board
or President and approved by the Committee prior to each plan
year.
The minimum
factors to be used in evaluating and recommending individuals for
plan participation are as follows:
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Head of a department or equivalent
responsibilities.
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Significant impact on the bottom
line of the Bank.
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Management
responsibility.
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Record of superior performance and
initiative to surpass expectation.
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This is an earned benefit and will
not necessarily be made to newly hired or promoted managers who
might otherwise be qualified for plan inclusion.
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1
Each plan
participant will be assigned an incentive award amount established
as a percent of their base salary. Base salary is the annual salary
in effect at the close of the plan year, prior to any deductions,
such as for 401(K), salary deferral, etc. Award amounts will be
based on the participants’ officer title and their
corresponding level of responsibilities.
There will be
three tiers of incentive award amounts as follows:
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Participants:
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President and Chairman.
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Minimum
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Target
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Maximum
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30%
Award
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40%
Award
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Participants:
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Senior Vice Presidents and certain
Vice Presidents depending on the scope and impact of their
positions.
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Minimum
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Target
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Maximum
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25%
Award
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35%
Award
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Participants:
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Vice Presidents and certain
Assistant Vice Presidents depending on the scope and impact of
their positions.
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Minimum
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Target
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Maximum
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15%
Award
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25%
Award
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The listed
award amounts are earned by the plan participants at the completion
of the plan year, if the performance standards achieved for the
criteria listed in the following section are met by the Bank. If
the Bank fails to meet the minimum criteria standards listed, then
no award amounts would be made for those criteria for the plan
year. Individual performance measures may be instituted in certain
cases and would be in addition to the bank-wide
criteria.
2
PERFORMANCE
CRITERIA AND STANDARDS
Before any
incentive award amounts are awarded, the Bank must meet certain
criteria and standards of performance. The following criteria have
been selected because they impact the financial success of the
Bank, and contribute to the overall safety and soundness of the
Bank’s operation.
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Return on equity
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Return on assets
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Net
income
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Balance sheet growth
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