exv10w29






EXHIBIT 10.29




NORTHRIM BANK

EXECUTIVE INCENTIVE PLAN




Originally Effective as of

November 3, 1994




Amended Effective as of

May 14, 2009




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NORTHRIM BANK ANNUAL

EXECUTIVE INCENTIVE PLAN




TYPE OF PLAN



Criteria Incentive Plan




PLAN YEAR



January 1 — December 31




PLAN ADMINISTRATION



The plan will be administered by the Compensation Committee (“Committee”) of the Board of Directors
of Northrim Bank (“Bank”).




PLAN PARTICIPATION



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 Executive Incentive Plan (“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:





	 	•	 	Head of a department or equivalent responsibilities.
	 
	 	•	 	Significant impact on the bottom line of the Bank.
	 
	 	•	 	Management responsibility.
	 
	 	•	 	Record of superior performance and initiative to surpass expectation.
	 
	 	•	 	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.





CONDITIONS PRECEDENT



The following conditions must be met prior to the payment of any criteria based award:





	 	•	 	In the sole opinion of the Committee, the Company’s operations support the payment of
bonus compensation to its senior officers.
	 
	 	•	 	Consolidated net income should exceed a minimum 1.0% Return on Average Assets (ROA) in
order for any Performance Criteria Award to be paid to an Executive Officer.




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INCENTIVE AWARD AMOUNTS



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:




TIER 1




     Participants: President and Chairman.



	 	 	 	 	 
	Minimum	 	Target	 	Maximum
	20% Award

	 	40% Award
	 	50% Award






TIER 2




     Participants: Executive Officers



	 	 	 	 	 
	Minimum	 	Target	 	Maximum
	15% Award

	 	30% Award
	 	40% Award






TIER 3




     Participants: Senior Vice Presidents and Other Participants



	 	 	 	 	 
	Minimum	 	Target	 	Maximum
	10% Award

	 	25% Award
	 	35% Award





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 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.





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PERFORMANCE CRITERIA AND STANDARDS



Before any incentive award amounts are awarded, the Bank must meet certain criteria and
standards of performance.



Plan criteria and standards will undergo an annual review by the Compensation Committee upon
adoption of the annual business plan, to ensure their effectiveness in supporting the strategic
plan of the Bank and maximizing shareholder returns.



The performance standards for each criterion may be weighed to reflect their specific value at
the various award levels. Standards are assumed to be equally weighted unless the Committee
establishes otherwise.



Awards are earned when the performance standards set for each criterion are met or exceeded at
the various award levels.



For example, let us assume that Participant X earns $60,000 a year and is in Tier 3 for award
amount percentages. Additionally, let us also assume that for Performance Year 20XX the Bank
had an ROE of 11%, an ROA of 1.2%, net income achieved 80% of budget, had balance sheet growth
of 20% over the preceding year, asset quality was equal to peer and reserves were 21% of
deposits.




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Participant X’s incentive award for Performance Year 20XX would be calculated as follows:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	20XX	 	 	Award	 	 	 	 	 	 	Award	 	 	 	 	 	 	20XX	 
	Criteria	 	Results	 	 	Level	 	 	Award %	 	 	Weight	 	 	Salary	 	 	Award	 
	 
	ROE
	 	 	11.0	%	 	Minimum	 	 	5	%	 	 	x 20	%	 	 	x 60,000	 	 	 	= $600.00	 
	ROA
	 	 	1.2	%	 	Target	 	 	15	%	 	 	x 20	%	 	 	x 60,000	 	 	 	= 1, 800.00	 
	Net Income
	 	 	80.0	%	 	 	—	 	 	 	—	 	 	 	x 20	%	 	 	x 60,000	 	 	 	=    —	 
	Growth
	 	 	10.0	%	 	Maximum	 	 	25	%	 	 	x 20	%	 	 	x 60,000	 	 	 	= 3,000.00	 
	Safety &
Soundness
	 	 	100.00	%	 	Minimum	 	 	5	%	 	 	x 20	%	 	 	x 60,000	 	 	 	= 600.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100	%	 	 	 	 	 	$	6,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






PAYMENT OF AWARDS



Any earned award amounts will be paid in cash upon completion of the CPA audit for the plan year
and Committee approval.



Awards can only be paid if the Bank meets or exceeds the “adequately capitalized” risk based
capital standards at year-end. If the Bank is not in compliance, cash awards will be deferred until
such time as capital has been restored to those standards.




INCENTIVE AWARD LIMITATIONS



The total payment made to Plan participants for any plan year shall be the lesser of (i) the total
awards that would have been paid to participants based on the achievement of the target standards
for all criteria listed in the Plan and the accompanying percentage of salary awards, or (ii) 10%
of net income after tax, including the Bank’s mandatory 401(k) match but excluding any awards paid
as part of this plan, or discretionary 401(k) matches.



If the funding in any plan year is limited to the 10% of net income figure, then individual
participant awards will be based on the following ratio:





	 	•	 	The individual’s award if no restriction existed
	 
	 	•	 	/ (divide) the total awards if no restrictions existed
	 
	 	•	 	* (multiply) 10% of net income after tax calculated in (ii) above





Example:



Participant X would have received a target bonus for plan year 20XX of $20,000. However, due to the
fact that 10% of net income after tax ($78, 684) was less than the targeted amount that would have
been paid to all participants ($187,000), Participant X’s award would be limited to:




$20,000 / $187, 000 * $78, 684 = $8, 415




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Deferred Payment



Each participant shall have an opportunity to defer receipt of an award pursuant to the terms and
conditions of the Northrim Bank Deferred Compensation Plan.




DISCRETIONARY AWARDS



The Chairman or President of the Bank may recommend to the Committee any other member of the
organization for a discretionary award to recognize superior accomplishments. This could include
payments to newly promoted or hired senior managers who would normally be included in the Plan, but
who have been with the Bank less than one year.




APPLICABLE LAW



This Executive Incentive Plan is adopted by the Bank in the State of Alaska, and is to be construed
and interpreted in accordance with the laws of the State of Alaska.




	 	 	 	 	 
	 	NORTHRIM BANK

 	 
	 	By:  	R. Marc Langland
 	 
	 	 	Its:   President        	 



Adopted by the Board of Directors of Northrim Bank on November 3, 1994.

Adopted by the Board of Directors of Northrim Bank as Amended on May 14, 2009.





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