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  NORTHRIM BANK    
    
    EMPLOYEE STOCK OPTION AND RESTRICTED STOCK AWARD PLAN    
    
    

 
  I.
  GENERAL PROVISIONS    
  

    1.  Purpose of the Plan.  The purpose of this Plan is to provide additional incentives to selected
eligible key officers of Northrim Bank (the "Bank") and future subsidiaries of the Bank, thereby helping to attract and retain the best available personnel for positions of responsibility with such
corporations and otherwise promoting the success of the business activities of such corporations. The incentives will be in the form of options to purchase shares of the Bank's common stock and/or
restricted stock awards of the Bank's common stock. 

    2.  Definitions.  As used in this Plan, the following definitions shall apply: 

    (a) "Award"
or "Restricted Stock Award" shall mean Common Stock of the Bank granted to an Employee pursuant to and subject to the limitations described in the
Restricted Stock Award provisions of this Plan (Part III). 

    (b) "Bank"
shall mean Northrim Bank, a state-chartered commercial bank located in Anchorage, Alaska. 

    (c) "Board
shall mean the Board of Directors of the Bank. 

    (d) "Common
Stock" shall mean the Bank's common stock. 

    (e) "Committee"
shall mean the Committee appointed by the Board in accordance with Section 4(a) of this Part I. 

    (f)  "Continuous
Status as an Employee" shall mean the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not
be considered interrupted in the case of sick leave, military leave, or any other leave of absence approved by the Committee. 

    (g) "Employee"
shall mean any person employed by the Bank or any Parent or Subsidiary of the Bank that now exists or is hereafter organized or acquired by the Bank. 

    (h) "Employer"
shall mean the Bank or any Parent or Subsidiary of the Bank that now exists or hereafter organized or acquired by the Bank. 

    (i)  "Grantee"
shall mean any Employee who receives an Award. 

    (j)  "Incentive
Stock Options" shall mean incentive stock options within the meaning of Section 422A of the Internal Revenue Code, as now in effect or as
hereafter amended. 

    (k) "Nonqualified
Stock Options" shall mean any options granted pursuant to this Plan that are not Incentive Stock Options. 

    (l)  "Option"
shall mean a right to purchase Common Stock of the Bank pursuant to the Stock Option provisions of this Plan (Part II). Options shall include both
Incentive Stock Options and Nonqualified Stock Options. 

    (m) "Optioned
Stock" shall mean the Common Stock subject to an option. 

    (n) "Optionee"
shall mean an Employee who receives an Option. 

    (o) "Plan"
shall mean this Plan, including without limitation both the Stock Option and Restricted Stock Award provisions of this Plan. 

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    (p) "Parent" shall mean any corporation having a relationship with the Bank as described in Section 425(e) of the Internal Revenue Code. 

    (q) "Shareholder-Employee"
shall mean an Employee who owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of
the Employer or of any Parent or Subsidiary. For this purpose, the attribution of stock ownership rules provided in Section 425(d) of the Internal Revenue Code shall apply. 

    (r) "Subsidiary"
shall mean any corporation having a relationship with the Bank as described in Section 425(f) of the Internal Revenue Code. 

    3.  Shares Subject to the Plan.  

    (a) Total Shares Available. The number of shares that may be issued and sold pursuant to Options granted under the Stock
Option provisions of this Plan (Part II) and that may be issued pursuant to the Restricted Stock Award provisions of this Plan (Part III) shall not, in the aggregate, exceed 373,489
shares of the Common Stock of the Bank. 

    Common
Stock issued under this Plan may be either authorized and unissued shares or shares issued and thereafter acquired by the Bank. If any Options granted under this Plan shall,
for any reason, expire without having been exercised in full, or if any Awards shall, for any reason, be forfeited or canceled, the Common Stock not purchased under such options, or so forfeited,
shall be available again for the purposes of this Plan. 

    (b) Adjustments to Shares Available. The number of shares of Common Stock covered by each outstanding Option and Award,
the number of shares of Common Stock available for grant of additional Options and Awards, and the price per share of Common Stock specified in each outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from any stock split or other subdivision or consolidation of shares, the payment of any stock dividend
(but only on the Common Stock), or any other increase or decrease in the number of such shares of Common Stock effected without receipt of consideration by the Bank;  provided, however, that conversion of any convertible securities of the Bank shall not be deemed to have
been "effected without receipt of consideration." Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. 

    No
Option shall be adjusted by the Committee pursuant to this Section 3 in a manner that causes the Option, if an Incentive Stock Option, to fail to continue to qualify as an
Incentive Stock Option. 

    4.  Administration of the Plan.  

    (a) The Committee. This Plan shall be administered by the Compensation Committee of the Board or such other Committee as
shall be appointed by the Board. The Committee shall consist of not less than three members of the Board. Once appointed, the Committee shall continue to serve until otherwise directed by the Board.
From time to time, the Board may increase the size of the Committee and appoint additional members, remove members (with or without cause), appoint new members in substitution for existing members,
and fill vacancies (however caused). In appointing members to such Committee, the Board shall consider whether to appoint individuals qualifying as (a) "outside directors," as such term is used
in Section 162(m) of the Internal Revenue Code, and (b) "non-employee directors" as such term is used in Rule 16b-3 as issued by the Securities and
Exchange Commission. The Committee shall select one of its members as 

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chairman, and shall hold meetings at such times and places as the chairman or a majority of the Committee may determine. 

    At
all times, a majority of the members of the Committee shall consist of members of the Board who are not eligible to receive Options or Awards under the Plan. Members of the
Committee who are either eligible for Options or Awards or who have been granted Options or Awards shall be counted for all purposes in determining the existence of a quorum at any meeting of the
Committee and shall be eligible to vote on all matters before the Committee respecting the granting of Options or Awards or administration of this Plan, except only that such members shall not vote or
otherwise act upon the grant or the modification of the terms of any Option or Award granted or to be granted to himself or herself. 

    At
least annually, the Committee shall present a written report to the Board indicating the Employees to whom Options and Awards have been granted since the date of the last such
report, and, in each case, the date or dates of Options and Awards granted, the number of shares optioned and awarded, and the Option price and Award value per share. 

    The
Board further shall have the power at any time to remove all members of the Committee and thereafter to directly administer this Plan as a Committee of the whole. In such event,
all references in the Plan to the "Committee" shall refer to the Board. 

    (b) Powers of the Committee. Subject to the provisions and limitations of this Plan, the Committee shall have the
authority and discretion: 

    (1) to
determine the Employees to whom Options and Awards are to be granted, the times of grant, and the number of shares to be represented by each Option and Award; 

    (2) to
determine the Option price for the shares of Common Stock to be issued pursuant to each Option, subject to the provisions of Subparagraph 3(b) of Part II
of this Plan in the case of Incentive Stock Options; 

    (3) to
determine all other terms and conditions of each Option and Award granted under this Plan, which need not be identical; 

    (4) to
modify or amend the terms of any Option or Award previously granted, or to grant substitute Options or Awards; 

    (5) to
interpret this Plan; 

    (6) to
authorize any person or persons to execute and deliver Option and Award agreements or to take any other actions deemed by the Committee to be necessary or
appropriate to effectuate the grant of Options and Awards by the Committee; 

    (7) to
make all other determinations and take all other actions that the Committee deems necessary or appropriate to administer the Plan in accordance with its terms
and conditions and applicable law. 

    All
actions of the Committee shall be either by (i) a majority vote of the members of the full Committee at a meeting of the Committee, or (ii) by unanimous written
consent of all members of the full Committee without a meeting of the Committee. 

    All
decisions, determinations, and interpretations of the Committee shall be final and binding upon all persons, including all Optionees, Grantees and any other holders or persons
interested in any Option or Award, unless otherwise expressly determined by a vote of the majority of the entire 

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Board. No member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to this Plan, an Option or an Award. 

 
 

II.
  STOCK OPTIONS    
  

    1.  Nonqualified Stock Options and Incentive Stock Options.  Options in the form of Nonqualified Stock
Options and Options that qualify as Incentive Stock Options may be granted under the Plan. 

    2.  Eligibility.  Options may be granted only to Employees whom the Committee, in its discretion,
determines to be key Employees of the Bank, a Parent or Subsidiary. Granting of Options pursuant to
this Plan shall be entirely discretionary with the Committee, and the adoption of this Plan shall not confer upon any Employee any right to receive any Option or Options pursuant to this Plan unless
and until such Options are granted by the Committee, in its sole discretion. Neither the adoption of this Plan nor the granting of any Options pursuant to this Plan shall confer upon any Employee or
Optionee any right with respect to continuation of employment, nor shall the same interfere in any way with his or her right (or with the right of the Bank or a Subsidiary or a Parent) to terminate
his or her employment at any time. 

    3.  Terms and Conditions of Options.  All Options granted pursuant to this Plan must be authorized by the
Committee, and must be documented in written agreements in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to all of the following terms
and conditions: 

    (a) Number of Shares; Annual Limitation. Each Option agreement shall state the number of shares subject to Option. Any
number of Options may be granted to a single eligible Employee at any time and from time to time; except in the case of Incentive Stock Options, the aggregate fair market value (determined as of the
time each Option is granted) of all shares of Common Stock with respect to which Options are exercisable for the first time by such Employee in any one calendar year (under all Incentive Stock Option
plans of the Bank, its Parent and all of its Subsidiaries taken together) shall not exceed $100,000. 

    (b) Option Price and Consideration. The Option price for the shares of Common Stock to be issued pursuant to the Option
shall be such price as is determined by the Committee, but, in the case of Incentive Stock Options, shall in no event be less than the fair market value of the Common Stock on the date of grant of the
Incentive Stock Option. 

    In
the case of an Incentive Stock Option granted to an Employee, who, immediately before the grant of such Incentive Stock Option, is a Shareholder-Employee, the Incentive Stock
Option price shall be at least 110% of the fair market value of the Common Stock on the date of grant of the Incentive Stock Option. The fair market value shall be determined by the Committee in its
discretion; provided, however, that in the event that there is a public market for the Common Stock, the
fair market value shall be the mean of the bid and asked prices of the Common Stock as of the date of grant as reported on the National Association of Securities Dealers Automatic Quotation System
(NASDAQ), or, in the
event the Common Stock is listed on a stock exchange, the closing price on the exchange as of the date of grant of the Option. 

    The
Option price shall be payable either (i) in United States dollars upon exercise of the Option, or (ii) if so determined by the Committee and specified in the Option
agreement, in other property, including, without limitation, Common Stock of the Bank at its fair market value on the date of exercise. 

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    (c) Term of Option. No Stock Option granted pursuant to this Plan shall in any event be exercisable after the expiration
of ten (10) years from the date such Option is granted, except that the term of an Incentive Stock Option granted to an Employee who, immediately before such Incentive Stock Option is granted,
is a Shareholder-Employee, shall be for not more than five (5) years from the date of grant of the Incentive Stock Option. Subject to the foregoing and other applicable provisions of this Plan,
the term of each Option shall be determined by the Committee in its discretion. 

    (d) Manner of Exercise: Cashless Exercise. An Option shall be deemed to be exercised when written notice of exercise has
been given to the Bank in accordance with the terms of the Option by the person entitled to exercise the Option, together with full payment for the shares of Common Stock subject to such notice. The
Committee may, in its discretion, allow for the cashless exercise of an Option whereby an Optionee, subject to (i) the requirements of Rule 16b-3 as promulgated by the
Securities and Exchange Commission, Regulations of the Federal Reserve Board, federal income tax laws, and any other applicable laws, (ii) the terms of any written agreements executed in
connection with the grant of any such Option; and (iii) any procedures and policies established from time to time by the Committee, can exercise an Option or a portion thereof without making a
direct payment of the Option price to the Employer. 

    (e) Death of Optionee. In the event of the death of an Optionee who at the time of his or her death was an Employee and
who had been in Continuous Status as an Employee since the date of grant of the Option, the Option shall, whether or not otherwise exercisable on the date of death, become
immediately exercisable and shall thereafter terminate on the earlier of (i) five years after the date of death of the Optionee, or (ii) the expiration date otherwise provided in the
Option agreement, except that in no event will any Nonqualified Stock Option expire before the end of the 90-day period immediately following the Optionee's death. The Option rights shall
be exercisable at any time prior to such termination by the Optionee's estate, or by such person or persons who have acquired the right to exercise the Option by bequest or by inheritance or by reason
of the death of the Optionee. 

    (f)  Disability of Optionee. If an Optionee's status as an Employee is terminated at any time during the Option period
by reason of a disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code), and if such Optionee had been in Continuous Status as an Employee since the date of grant of the
Option, the Option shall, whether or not otherwise exercisable on that date of such termination, become immediately exercisable and shall thereafter terminate on the earlier of (i) five years
after the date of termination of the Optionee's status as an Employee or (ii) the expiration date otherwise provided in the Option agreement; except that in no event will an Incentive Stock
Option be exercisable more than 12 months from the date of termination of the Optionee's status as an Employee. The Option shall be exercisable by the Optionee at any time prior to such
termination date. 

    (g) Termination of Status as an Employee.

    (1) Except
as described in (g)(2) and (g)(3) below, if an Optionee's status as an Employee is terminated at any time after the grant of his or her Option for any reason
other than death, disability, as provided in (e) or (f) above, his or her Option shall terminate on the earlier of (i) the same day of the third month after the date of
termination of his or her status as an Employee, or (ii) the expiration date otherwise provided in his or her Option agreement. The Option shall be exercisable by the Optionee at any time prior
to such 

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termination date, but only to the extent that it was exercisable by the Optionee on the date of the termination of employment. 

    (2) In
the case of Nonqualified Stock Options, if an Optionee's status as an Employee is terminated at any time after the grant of his or her Nonqualified Option by
reason of retirement, in accordance with the retirement policy of the Employer, his or her Nonqualified Stock Option shall terminate on the earlier of (i) five years after the date of his or
her retirement, or (ii) the expiration date otherwise provided in his or her Option agreement. 

    (3) If
an Optionee's status as an Employee is terminated at any time after the grant of his or her Option by reason of fraud or willful misconduct, then his or her
Option shall terminate on the date of termination of his or her status as an Employee. 

    (h) Non-Transferability of Options. An Option granted pursuant to this Plan may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution, and may be exercised, during the lifetime of the Optionee, only by the
Optionee. 

    (i)  Date of Grant of Option. The date of grant of an Option shall, for all purposes, be the date on which the Committee
makes the determination granting such Option. Such date of grant shall be specified in the Option agreement. 

    (j)  Conditions Upon Issuance of Shares. Shares of Common Stock shall not be issued with respect to an Option granted
under this Plan unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Alaska Securities Act or applicable securities statutes of other states, the rules and regulations promulgated
under all such statutes, and the requirements of any stock exchange upon which the Common Stock may then be listed, and shall be further subject to the approval of counsel for the Bank with respect to
such compliance. 

    As
a condition to the exercise of an Option, the Bank may require the person exercising such Option to represent and warrant at the time of exercise that the shares of Common Stock
are being purchased only for investment and without any present intention to sell or distribute such Common Stock if, in the opinion of counsel for the Bank, such a representation is required by any
applicable law. 

    (k) Merger, Sale of Assets, etc. In the event of a proposed merger of the Bank with or into any other corporation, or in
the event of a proposed sale of substantially all of the assets of the Bank, or in the event of a proposed dissolution or liquidation of the Bank, the Committee may, in the exercise of its sole
discretion, terminate all outstanding Options as of a date fixed by the Committee. In such event, however, the Committee shall notify each Optionee of such action in writing not less than sixty
(60) days prior to the termination date fixed by the Committee, and each Optionee shall have the right to exercise his or her Option prior to such termination date. 

    (l)  Substitute Stock Options. In connection with the acquisition or proposed acquisition by the Bank or any Subsidiary,
whether by merger, acquisition of stock or assets, or other reorganization transaction, of a business any employees of which have been granted stock options, the Committee is authorized to issue, in
substitution of any such unexercised stock option, a new Option under this Plan that confers upon the Optionee substantially the same benefits as the old option; 

6

 

 provided, however, that the issuance of any new Incentive Stock Option for an old incentive stock option shall satisfy the
requirements of Section 425(a) of the Internal Revenue Code. 

    (m) Tax Compliance. The Employer, in its sole discretion, may take any actions reasonably believed by it to be required
to comply with any local, state, or federal tax laws relating to the reporting or withholding of taxes attributable to the grant or exercise of any Option or the disposition of any shares of Common
Stock issued upon exercise of an Option, including, but not limited to, (i) withholding from any Optionee exercising an Option a number of shares of Common Stock having a fair market value
equal to the amount required to be withheld by the Employer under applicable tax laws, and (ii) withholding from any form of compensation or other amount due an Optionee or holder of shares of
Common Stock issued upon exercise of an Option any amount required to be withheld by the Employer under applicable tax laws. Withholding or reporting shall be considered required for purposes of this
subparagraph if any tax deduction or other favorable tax treatment available to Employer is conditioned upon such reporting or withholding. 

    (n) Other Provisions. Option agreements executed pursuant to this Plan may contain such other provisions as the
Committee shall deem advisable, provided, in the case of Incentive Stock Options, that the provisions are not inconsistent with the provisions of Section 422A of the Internal Revenue Code or
with any of the other terms and conditions of this Plan. 

7

 
 
 

III.
  RESTRICTED STOCK    
  

    1.  Restricted Stock Awards.  Common Stock of the Bank may be awarded to an eligible Employee in the form
of a Restricted Stock Award pursuant to the provisions and subject to the limitations of this Part III. 

    2.  Eligibility.  Eligibility for the grant of a Restricted Stock Award under this Part III shall
be determined as provided in Section 2 of Part II of the Plan. 

    3.  Shares Subject to Award.  The shares of Common Stock subject to Restricted Stock Awards are as stated
in Section 3 of Part I. 

    4.  Escrow.  Stock certificates evidencing shares of Common Stock granted as a Restricted Stock Award
shall be issued in the name of the Grantee and deposited in escrow with      (the "Escrow Agent") to be held by the Escrow Agent subject to the terms hereof and subject to delivery to the
Grantee or redelivery to the Escrow Agent in accordance with the terms and provisions of this Part III. By acceptance of the Award, the Grantee grants an irrevocable power of attorney to the
Escrow Agent to
transfer and deliver such Common Stock and stock certificates evidencing the same in accordance with the terms and provisions hereof and the directions of the Committee given pursuant to this Plan. 

    5.  Dividends and Voting Rights.  During the period while the stock certificates evidencing restricted
stock are held in escrow as provided in this Plan, all dividends payable with respect to such stock shall be paid by the Escrow Agent directly to the Grantee named therein and such Grantee shall be
entitled to exercise all voting rights with respect to such stock, all in the same manner and to the full extent as though such stock were held by the Grantee free of the escrow. 

    6.  Escrow Stock Not Transferable.  No transfer or other disposition of Common Stock held in escrow under
this Plan may be made by the Grantee so long as such stock is held under and remains subject to the escrow. 

    7.  Release of Stock From Escrow.  Common Stock held in escrow pursuant to the provisions of this
Part III shall be released from such escrow by the delivery of the stock certificate evidencing such shares to the Grantee (or, in the case of death or disability of the Grantee, to the
Grantee's estate or legal guardian) at: 

    (a) The
completion by the Grantee of such number of years of Continuous Status as an Employee measured from the date of the Award as the Committee shall determine; 

    (b) The
death of the Grantee; 

    (c) The
determination by the Committee, acting in its sole discretion, to authorize the release of such stock to the Grantee upon the occurrence of any event that the
Committee determines to warrant such release; or 

    (d) The
occurrence of a change in control of the Bank. The term "control" shall refer to the acquisition of 20 percent or more of the voting securities of the
Bank by any person or by persons acting as a group within the meaning of Section 13(d) of the Securities Exchange Act of 1934; provided,  however, that
for the purposes of this subsection no change in control shall be deemed to have occurred if prior to the acquisition of, or offer to
acquire, 20 percent or more of the voting securities of the Bank, the full Board of Directors shall have adopted by not less than a two-thirds vote a resolution specifically
approving such acquisition or offer. For purposes of this subsection, the term "person" refers to an individual or a corporation, partnership, trust, association, joint 

8

 

venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein. 

    8.  Termination of Employment.  In the event of the termination of employment of the Grantee during the
period that any Common Stock is held in escrow hereunder for the Grantee's account, other than by reason of death, normal retirement or approved early retirement (and such Common Stock is not then
subject to release under items (a), (b) or (c) of Section 7 above), such stock shall be forfeited to the Bank and all rights of the Grantee with respect thereto terminated,
unless, in the case of termination by act of the Bank, the Committee, within thirty (30) days following such termination, authorizes the release of such Common Stock to such Grantee under the
authority granted to it by item (d) of Section 7. Upon the expiration of such thirty (30) day period without action by the Committee to release such Common Stock to the Grantee,
the Common Stock shall be deemed forfeited and the stock certificates evidencing the same shall be redelivered to the Bank, whereupon they shall be canceled and retired. 

 
 

IV.
  ADOPTION, AMENDMENT AND TERMINATION PROVISIONS    
  

    1.  Term of the Plan.  This Plan shall become effective on the earlier of (i) the date of adoption
of this Plan by the Board; or (ii) the date of shareholder approval of the Plan as hereinafter set forth in this Part IV.
Unless sooner terminated as provided below, the Plan shall terminate on the tenth anniversary of its effective date. Options may be granted at any time after the effective date and prior to the date
of termination of the Plan. 

    2.  Amendment or Early Termination of the Plan.  

    (a) Amendment or Early Termination. The Board may terminate this Plan at any time. The Board may amend this Plan at any
time and from time to time in such respects as the Board may deem advisable, except that, without approval of the holders of a majority of the outstanding shares of the Common Stock, no such revision
or amendment shall: 

     (i) increase
the number of shares of Common Stock subject to the Plan other than in connection with an adjustment under Section 3 of Part I, or 

    (ii) change
the designation of the class of Employees eligible to be granted Options or Awards 

    (iii) become
effective if such approval is required under any applicable law or regulation. 

    (b) Effect of Amendment or Termination. No amendment or termination of the Plan shall affect Options or Awards granted
prior to such amendment or termination, and all such Options and Awards shall remain in full force and effect notwithstanding such amendment or termination. 

    3.  Shareholder Approval. Continuance of the Plan shall be subject to approval of the Plan by affirmative vote of the
holders of a majority of the outstanding shares of Common Stock of the Bank at a duly convened meeting of the shareholders of the Bank, which approval must occur within twelve (12) months
before or after the date of adoption of the Plan by the Board. 

9

 
 
 

CERTIFICATE OF ADOPTION    
  

    I certify that the foregoing Plan was adopted by the Board of Directors of Northrim Bank on  October 8, 1990. One amendment to the Plan
was approved and adopted by the Board of Directors of Northrim Bank on February 3, 1994, and the Shareholders of Northrim Bank on May 5, 1994. 

    I
certify that an amendment to the Plan was approved and adopted by the Board of Directors of Northrim Bank on July 7, 1994. 

    I
certify that an amendment to the Plan was approved and adopted by the Board of Directors of Northrim Bank on November 2, 1995. 

    I
certify that an amendment to the Plan was approved and adopted by the Board of Directors of Northrim Bank on January 8, 1998. 

    I
certify that an amendment to the Plan was approved and adopted by the Board of Directors of Northrim Bank on February 5, 1998, and the Shareholders of Northrim Bank on
May 7, 1998. 

	

 	
 	

/s/ Mary A. Finkle
 Secretary

10

 
 

AMENDMENT TO
  NORTHRIM BANK
  EMPLOYEE STOCK AND
  RESTRICTED STOCK AWARD PLAN    
  

    This Amendment to the Northrim Bank Employee Stock Option and Restricted Stock Award Plan (the "Plan") is made effective as set forth below. The purpose of the
Amendment is to increase the number of Northrim Bank (the "Bank") shares available for issuance under the Plan by 100,000 from 273,489 to 373,489 shares of common stock. 

    The
Plan is hereby amended as follows: 

    Part I,
Section 3(a) is amended to read: 

    "(a)  Total Shares Available. 

    The
number of shares that may be issued and sold pursuant to Options granted under the Stock Option provisions of this Plan (Part II) and that may be issued pursuant to the
Restricted Stock Award provisions of this Plan (Part III) shall not, in the aggregate, exceed 373,489 shares of the Common Stock of the Bank. 

    Common
Stock issued under this Plan may be either authorized or unissued shares or shares issued and thereafter acquired by the Bank. If any Options granted under the Plan shall, for
any reason, expire without having been exercised in full, or if any Awards shall, for any reason, be forfeited or canceled, the Common Stock not purchased under such options, or so forfeited shall be
available again for the purposes of this Plan." 

    The
foregoing amendment to the Plan shall not affect any Option or Award outstanding at the effective date hereof. The effective date shall be the date approved by the Board of
Directors of the Bank, subject to subsequent approval by the shareholders of the Bank. 

	 	 	NORTHRIM BANK
	 	 	 	 	 
	

 	
 	

By:	
 	

/s/ Marc Langland

	

 	
 	
Its:	
 	

President & CEO
	

 	
 	

Date of Approval by the Board of Directors:

February 5, 1998.
	

 	
 	

Date of Approval by Shareholders:

May 7, 1998.

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NORTHRIM BANK EMPLOYEE STOCK OPTION AND RESTRICTED STOCK AWARD PLAN

I. GENERAL PROVISIONS

II. STOCK OPTIONS

III. RESTRICTED STOCK

IV. ADOPTION, AMENDMENT AND TERMINATION PROVISIONS

CERTIFICATE OF ADOPTION

AMENDMENT TO NORTHRIM BANK EMPLOYEE STOCK AND RESTRICTED STOCK AWARD PLANPrepared by MERRILL CORPORATION

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NORTHRIM BANK
  
    2000 EMPLOYEE STOCK INCENTIVE PLAN    
  

I.

GENERAL PROVISIONS  

    1.  Purpose of the Plan.  The purpose of this Plan is to provide additional incentives to selected
eligible key officers of Northrim Bank (the "Bank") and future subsidiaries of the Bank, thereby helping to attract and retain the best available personnel for positions of responsibility with such
corporations and otherwise promoting the success of the business activities of such corporations. The incentives will be in the form of options to purchase shares of the Bank's common stock ("Common
Stock") and/or other stock awards of the Bank's common stock, as described in Part III of the Plan. 

    2.  Definitions.  As used in this Plan, the following definitions shall apply: 

    (a) "Bank"
shall mean Northrim Bank, a state-chartered commercial bank located in Anchorage, Alaska. 

    (b) "Board
shall mean the Board of Directors of the Bank. 

    (c) "Common
Stock" shall mean the Bank's common stock. 

    (d) "Committee"
shall mean the Committee appointed by the Board in accordance with Section 4(a) of this Part I. 

    (e) "Continuous
Status as an Employee" shall mean the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not
be considered interrupted in the case of sick leave, military leave, or any other leave of absence approved by the Committee. 

    (f)  "Employee"
shall mean any person employed by the Bank or any Parent or Subsidiary of the Bank that now exists or is hereafter organized or acquired by the Bank. 

    (g) "Employer"
shall mean the Bank or any Parent or Subsidiary of the Bank that now exists or hereafter organized or acquired by the Bank. 

    (h) "Fair
Market Value" means, as of any date, the value of the Common Stock determined as follows: 

     (i) If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or the Nasdaq
Small Market of the Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day on the date of such determination, as reported in The Wall Street Journal or other source as the Committee deems reliable;
or 

    (ii) If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the
closing bid and asked prices for such stock on the date of such determination, as reported in The Wall Street Journal or other source as the Committee
deems reliable; or 

    (iii) In
the absence of an established market for the Common Stock, the Fair Market Value shall be determined by the Committee. 

    (i)  "Incentive
Stock Options" shall mean incentive stock options within the meaning of Section 422 of the Internal Revenue Code, as now in effect or as
hereafter amended. 

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    (j)  "Nonqualified Stock Options" shall mean any options granted pursuant to this Plan that are not Incentive Stock Options. 

    (k) "Option"
shall mean a right to purchase Common Stock of the Bank pursuant to the Stock option provisions of this Plan (Part II). Options shall include both
Incentive Stock Options and Nonqualified Stock Options. 

    (l)  "Optioned
Stock" shall mean the Common Stock subject to an option. 

    (m) "Plan"
shall mean this Plan, including without limitation both the Stock Option and Other Stock Awards provisions of this Plan. 

    (n) "Parent"
shall mean any corporation having a relationship with the Bank as described in Section 424(e) of the Internal Revenue Code. 

    (o) "Shareholder-Employee"
shall mean an Employee who owns, at the time an Incentive Stock Option is granted, stock representing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Employer or of any Parent or Subsidiary. For this purpose, the attribution of stock ownership rules provided in Section 424(d) of the
Internal Revenue Code shall apply. 

    (p) "Subsidiary"
shall mean any corporation having a relationship with the Bank as described in Section 424(f) of the Internal Revenue Code. 

    3.  Shares Subject to the Plan.  

    (a) Total Shares Available. Subject to adjustments under Section 3(b) below, the number of shares of Common Stock
("Shares") that may be delivered to participants under this Plan shall include the sum of (i) 250,000; (ii) any Shares, as of the date of shareholder approval of this Plan, available for
future awards under the Northrim Bank Employee Stock Option and Restricted Stock Award Plan (the "Prior Plan"); and (iii) any Shares that are represented by awards under the Prior Plan, which
are forfeited, expire or are cancelled without the delivery of Shares or which result in the forfeiture of Shares back to the Bank. In addition, any Shares delivered under this Plan or the Prior Plan
which are forfeited back to the Bank because of the failure to meet an award contingency or condition shall again be available for delivery pursuant to new awards granted under the Plan. Any Shares
covered by an award (or portion of an award) granted under the Plan, which is forfeited or cancelled, expires or is settled in cash, including the settlement of tax withholding obligations using
Shares, shall be deemed not to have been delivered for purposes of determining the number of Shares available for delivery under the Plan. If any Option is exercised by tendering Shares, either
actually or by attestation, to the Bank as full or
partial payment for such exercise under this Plan or the Prior Plan, only the number of Shares issued net of the Shares tendered shall be deemed delivered for purposes of determining the maximum
number of Shares available for delivery under the Plan. Similarly, if Shares are used to settle tax withholding obligations arising from awards made under the Prior Plan, only the number of Shares
issued net of tax withholding will be deemed delivered for purposes of determining the number of Shares available for delivery under the Plan. 

    (b) Adjustments to Shares Available. The number of shares of Common Stock covered by each outstanding Award, the number
of shares of Common Stock available for grant of additional Awards, and the exercise price of outstanding Options, shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from any stock split or other subdivision or consolidation of shares, the payment of any stock dividend (but only on the Common Stock), or any other increase or
decrease in the number of such shares of Common Stock effected without receipt of consideration by the Bank; provided, however, that conversion of any convertible securities of the Bank shall not be
deemed to have been "effected 

2

 

without receipt of consideration." Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. 

    No
Option shall be adjusted by the Committee pursuant to this Section 3 in a manner that causes the Option, if an Incentive Stock Option, to fail to continue to qualify as an
Incentive Stock Option. 

    (c) Other Plan Limits. Subject to adjustment under Section 3(b), the following additional maximums are
established under the Plan. The maximum number of Shares that may be issued in conjunction with awards granted pursuant to Part III of the Plan shall not exceed 125,000 Shares. The maximum
aggregate number of Shares that may be covered by awards granted to any one individual pursuant to Parts II and III of the Plan shall not exceed 100,000 during any consecutive three calendar years. 

    (d) Payment Shares. Subject to the overall limitation on the number of Shares that may be delivered under the Plan, the
Committee may, in addition to granting awards under Part III of the Plan, use available Shares as the form of payment for compensation, grants or rights earned or due under any other
compensation plans or arrangements of the Bank, including those of any entity acquired by the Bank. 

    4.  Administration of the Plan.  

    (a) The Committee. This Plan shall be administered by the Compensation Committee of the Board or such other Committee as
shall be appointed by the Board. The Committee shall consist solely of two or more members of the Board. If the Committee does not exist, or if for any other reason as determined by the Board the
Board desires to directly exercise its powers under the Plan, then the Board may take any action under the Plan that would otherwise be the responsibility of the Committee. Once appointed, the
Committee shall continue to serve until otherwise directed by the Board. From time to time, the Board may increase the size of the Committee and appoint additional members, remove members (with or
without cause), appoint new members in substitution for existing members, and fill vacancies (however caused). The Committee shall select one of its members as chairman, and shall hold meetings at
such times and places as the chairman or a majority of the Committee may determine. 

    At
least annually, the Committee shall present a written report to the Board indicating the Employees to whom awards have been granted since the date of the last such report, and, in
each case, the date or dates of awards granted, the number of shares awarded, and the price or value per share awarded. 

    (b) Powers of the Committee. Subject to the provisions and limitations of this Plan, the Committee shall have the
authority and discretion: 

     (i) to
determine the Employees to whom awards are to be granted, the times of grant, and the number of shares to be represented by each award; 

    (ii) to
determine the Option price for the shares of Common Stock to be issued pursuant to each Option, subject to the provisions of Subparagraph 3(b) of Part II
of this Plan in the case of Incentive Stock Options; 

    (iii) to
determine the types and other terms and conditions of each award granted under this Plan (which need not be identical), including performance and/or vesting
contingencies; 

    (iv) to
modify or amend the terms of any award previously granted, or to grant substitute awards, subject to Part IV; 

    (v) to
interpret this Plan; 

3

 

    (vi) to authorize any person or persons to execute and deliver award agreements or to take any other actions deemed by the Committee to be necessary or appropriate to
effectuate the grant of awards by the Committee; 

   (vii) to
make all other determinations and take all other actions that the Committee deems necessary or appropriate to administer the Plan in accordance with its terms
and conditions and applicable law. 

    All
decisions, determinations, and interpretations of the Committee shall be final and binding upon all persons, including all optionees and grantees of awards and any other holders
or persons interested in any award, unless otherwise expressly determined by a vote of the majority of the entire Board. No member of the Committee or of the Board shall be liable for any action or
determination made in good faith with respect to this Plan or an award. 

II.

STOCK OPTIONS  

    1.  Nonqualified Stock Options and Incentive Stock Options.  Options in the form of Nonqualified Stock
Options and options that qualify as Incentive Stock Options may be granted under the Plan. 

    2.  Eligibility.  Options may be granted only to Employees whom the Committee, in its discretion,
determines to be key Employees of the Bank, a Parent or Subsidiary. Granting of Options or other awards pursuant to this Plan shall be entirely discretionary with the Committee, and the adoption of
this Plan shall not confer upon any Employee any right to receive any Option or other award pursuant to this Plan unless and until such Options or other awards are granted by the Committee, in its
sole discretion. Neither the adoption of this Plan nor the granting of any Options or other awards pursuant to this Plan shall confer upon any Employee any right with respect to continuation of
employment, nor shall the same interfere in any way with his or her right (or with the right of the Bank or a Subsidiary or a Parent) to terminate his or her employment at any time. 

    3.  Terms and Conditions of Options.  All Options granted pursuant to this Plan must be authorized by the
Committee or its designees and shall be subject to such terms and conditions, not inconsistent with this Plan, as the Committee shall prescribe. The terms and conditions shall be documented in written
agreements in such form as the Committee shall from time to time approve. Unless waived or modified by the Committee, all Options shall be subject to the following terms and conditions: 

    (a) Number of Shares; Annual Limitation. Each option agreement shall state the number of shares subject to Option. Any
number of Options may be granted to a single eligible Employee at any time
and from time to time, subject to Part I, Section 3(c), and, except in the case of Incentive Stock Options, the aggregate fair market value (determined as of the time each Option is
granted) of all shares of Common Stock with respect to which Options are exercisable for the first time by such Employee in any one calendar year (under all Incentive Stock Option plans of the Bank,
its Parent and all of its Subsidiaries taken together) shall not exceed $100,000. 

    (b) Option Price and Consideration. The Option price for the shares of Common Stock to be issued pursuant to the Option
shall be such price as is determined by the Committee, but, in the case of Incentive Stock Options, shall in no event be less than the fair market value of the Common Stock on the date of grant of the
Incentive Stock Option. 

    In
the case of an Incentive Stock Option granted to an Employee, who, immediately before the grant of such Incentive Stock Option, is a Shareholder-Employee, the Incentive Stock
Option price shall be at least 110% of the fair market value of the Common Stock on the date of grant of the Incentive Stock Option. 

4

 

    The Option price shall be payable either (i) in United States dollars upon exercise of the Option, or (ii) if so determined by the Committee and specified in the Option
agreement, in other property, including, without limitation, Common Stock of the Bank at its fair market value on the date of exercise. 

    (c) Term of Option. No Stock Option granted pursuant to this Plan shall in any event be exercisable after the expiration
of ten (10) years from the date such Option is granted, except that the term of an Incentive Stock Option granted to an Employee who, immediately before such Incentive Stock Option is granted,
is a Shareholder-Employee, shall be for not more than five (5) years from the date of grant of the Incentive Stock Option. Subject to the foregoing and other applicable provisions of this Plan,
the term of each Option shall be determined by the Committee in its discretion. 

    (d) Manner of Exercise. An Option shall be exercisable in accordance with such terms and conditions and during such
periods as may be established by the Committee. 

    Shares
of Common Stock delivered pursuant to the exercise of an Option shall be subject to such conditions, restrictions and contingencies as the Committee may establish. The
Committee may impose such conditions, restrictions and contingencies with respect to shares of Common Stock acquired pursuant to the exercise of an Option as the Committee determines to be desirable. 

    (e) Conditions Upon Issuance of Shares. Shares of Common Stock shall not be issued with respect to an Option granted
under this Plan unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Alaska Securities Act or applicable securities statutes of other states, the rules and regulations promulgated
under all such statutes, and the requirements of any stock exchange upon which the Common Stock may then be listed, and shall be further subject to the approval of counsel for the Bank with respect to
such compliance. 

    As
a condition to the exercise of an Option, the Bank may require the person exercising such Option to represent and warrant at the time of exercise that the shares of Common Stock
are being purchased only for investment and without any present intention to sell or distribute such Common Stock if, in the opinion of counsel for the Bank, such a representation is required by any
applicable law. 

    (f)  Merger, Sale of Assets, etc. Except as otherwise provided in the written agreement that evidences an Option, in the
event of a proposed merger or other reorganization of the Bank with and into any other corporation (other than a reorganization where the ownership of the surviving company is substantially the same
as that of the Bank), or in the event of a proposed sale of substantially all of the assets of the Bank, or in the event of a proposed dissolution or liquidation of the Bank, (i) all
outstanding and unexercised Options shall become immediately exercisable, and (ii) such Options shall either be assumed by a successor corporation, or parent thereof, or be replaced with a
comparable award for the purchase of Shares of the common stock of the successor corporation, except that if such Options are not so assumed or replaced, then (iii) the Committee may, in the
exercise of its sole discretion, terminate all outstanding Options as of a date fixed by the Committee. In such event, however, the Committee shall notify each Optionee of such action in writing not
less than sixty (60) days prior to the termination date fixed by the Committee, and each Optionee shall have the right to exercise his or her Option prior to such termination date. 

    (g) Substitute Stock Options. In connection with the acquisition or proposed acquisition by the Bank or any Subsidiary,
whether by merger, acquisition of stock or assets, or other reorganization transaction, of a business any employees of which have been granted stock options, the Committee 

5

 

is authorized to issue, in substitution of any such unexercised stock option, a new Option under this Plan that confers upon the Optionee substantially the same benefits as the old option;  provided, however, that the issuance of any new Incentive Stock Option for an old incentive stock option shall satisfy the requirements of
Section 425(a) of the Internal Revenue Code. 

    (h) Tax Compliance. The Employer, in its sole discretion, may take any actions reasonably believed by it to be required
to comply with any local, state, or federal tax laws relating to the reporting or withholding of taxes attributable to the grant or exercise of any option or the disposition of any shares
of Common Stock issued upon exercise of an Option, including, but not limited to, (i) withholding from any Optionee exercising an Option a number of shares of Common Stock having a fair market
value equal to the amount required to be withheld by the Employer under applicable tax laws, and (ii) withholding from any form of compensation or other amount due an Optionee or holder of
shares of Common Stock issued upon exercise of an Option any amount required to be withheld by the Employer under applicable tax laws. Withholding or reporting shall be considered required for
purposes of this subparagraph if any tax deduction or other favorable tax treatment available to Employer is conditioned upon such reporting or withholding. 

    (i)  Other Provisions. Option agreements executed pursuant to this Plan may contain such other provisions as the
Committee shall deem advisable, provided, in the case of Incentive Stock Options, that the provisions are not inconsistent with the provisions of Section 422A of the Internal Revenue Code or
with any of the other terms and conditions of this Plan. 

III.

OTHER STOCK AWARDS  

    1.  Types of Awards.  In addition to Stock Options, the types of awards that may be granted under the
Plan include stock awards. A stock award is a grant of Shares or of a right to receive Shares (or their cash equivalent or a combination of both) in the future. Except in case of certain terminations
of employment or an extraordinary event, each stock award shall be earned and vest over at least three years and shall be governed by such conditions, restrictions and contingencies as the Committee
shall determine. These may include continuous service and/or the achievement of performance goals. The performance goals that may be used by the Committee for such awards shall consist of: net income,
total revenue, earnings per share, profit returns and margins, cash flow, shareholder return and/or value, stock price, and working capital. Performance goals may be measured solely on a corporate,
subsidiary or division basis, or a combination thereof. Further, performance criteria may reflect absolute entity performance or a relative comparison of entity performance to the performance of a
peer group of entities or other external measure of the selected performance criteria. Profit, earnings and revenues used for any performance goal measurement shall exclude any extraordinary
nonrecurring items. 

    2.  Eligibility.  Eligibility for the grant of a stock award under this Part III shall be
determined as provided in Section 2 of Part II of the Plan. 

    3.  Shares Subject to Award.  The shares of Common Stock subject to stock awards are stated in
Section 3 of Part I. 

IV.

ADOPTION, AMENDMENT AND TERMINATION PROVISIONS  

    1.  Term of the Plan.  This Plan shall become effective on the earlier of (i) the date of adoption
of this Plan by the Board; or (ii) the date of shareholder approval of the Plan as hereinafter set forth in this Part IV. The Plan shall be unlimited in duration and, in the event of a
Plan termination as provided in Section 2 below, shall remain in effect as long as any awards under it are outstanding; 

6

 

provided, however, that, to the extent required by the Internal Revenue Code, no Incentive Stock Option may be granted under the Plan on a date that is more than ten years from the date the Plan is
adopted, or if earlier, the date the Plan is approved by Shareholders. 

    2.  Amendment or Early Termination of the Plan.  

    (a) Amendment or Early Termination. The Board may terminate this Plan at any time. The Board may amend this Plan at any
time and from time to time in such respects as the Board may deem advisable, except that, without proper approval of shareholders of the Bank, no such revision or amendment shall: 

     (i) increase
the number of shares of Common Stock subject to the Plan other than in connection with an adjustment under Section 3 of Part I, or 

    (ii) make
any amendment to the Plan which would require shareholder approval under any applicable law or regulation. 

    Any
amendment made to this Plan which would constitute a "modification" to Incentive Stock Options outstanding on the date of such amendment, shall not be applicable to such
outstanding Incentive Stock Options, but shall have prospective effect only, unless the Optionee agrees otherwise. 

    (b) Modification and Amendment of Option. Subject to the requirements of Internal Revenue Code Section 422 with
respect to Incentive Stock Options and to the terms and conditions and within the limitations of this Plan, the Committee may modify or amend outstanding Options granted under this Plan. The
modification or amendment of an outstanding Option shall not, without the consent of the
Optionee, impair or diminish any of his or her rights or any of the obligations of the Company under such Option. Except as otherwise provided in this Plan, no outstanding Option shall be terminated
without the consent of the Optionee. Unless the Optionee agrees otherwise, any changes or adjustments made to outstanding Incentive Stock Options granted under this Plan shall be made in such manner
so as not to constitute a "modification" as defined in Code Section 424(h) and so as not to cause any Incentive Stock Option issued hereunder to fail to continue to qualify as an Incentive
Stock Option as defined in Code Section 422(b). 

    3.  Shareholder Approval.  Continuance of the Plan shall be subject to proper approval of the Plan by the
shareholders of the Bank at a duly convened meeting of the shareholders of the Bank, which approval must occur within twelve (12) months before or after the date of adoption of the Plan by the
Board. 

CERTIFICATE OF ADOPTION  

    I certify that the foregoing Plan was adopted by the Board of Directors of Northrim Bank on February 3, 2000, and by the Shareholders of the Bank on
June 15, 2000. 

	 	 	/s/ Mary A. Finkle

	 	 	Mary A. Finkle

Secretary

7

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NORTHRIM BANK 2000 EMPLOYEE STOCK INCENTIVE PLAN

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