Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered into on January 26, 2022, effective as of January 31, 2022
(the “Effective Date”), by and between Eric N. Berg (hereinafter referred to as the “Executive”), and Midwest
Holding Inc., a Delaware corporation (hereinafter referred to as “MHI” or the “Employer”).

 

WHEREAS, MHI operates as a
financial services holding company, and through its subsidiaries, MHI focuses on the underwriting, selling and servicing of life and annuity
insurance products (the “Business”);

 

WHEREAS, MHI desires to employ
the Executive as Senior Vice President of MHI effective as of January 31, 2022 and Chief Financial Officer (“CFO”) of
MHI which will become effective following the filing of MHI’s 10K Annual Report for the 2021 year, on the terms and conditions hereinafter
set forth; and

 

WHEREAS, the Executive desires
to accept employment as set forth above on the terms and conditions hereinafter set forth.

 

W I T N E S E T H

 

NOW, THEREFORE, the parties,
in consideration of their respective promises and undertakings as herein set forth, agree as follows:

 

1.          Employment.
As of the Effective Date, the Employer will initially employ the Executive as its Senior Vice President of MHI effective as of January 31,
2022 and Chief Financial Officer (“CFO”) of MHI which will become effective following the filing of MHI’s 10K Annual
Report for the 2021 year, subject to the terms and conditions set forth herein.

 

2.          Term. The
Employer shall employ Executive and Executive shall serve the Employer, for a continuous term beginning on the Effective Date of this
Agreement and ending on the second anniversary of the Effective Date hereof (the “Initial Term”). The Initial Term
shall be extended automatically for additional one-year periods (each a “Renewal Term”), on the same terms and conditions
as set forth in this Agreement (as may be modified by written agreement from time to time by the parties), beginning on the second anniversary
of the date hereof, unless either party gives the other party written notice of such party’s decision not to renew the terms of
this Agreement at least ninety (90) days prior to the end of the Initial Term or any Renewal Term. The Initial Term, together with all
Renewal Terms, are collectively referred to as the “Employment Term”. Notwithstanding the foregoing, either party may
terminate this Agreement at any time prior to the expiration of the Employment Term under the terms and conditions described in Section 6.

 

3.          Duties.
The duties of the Executive shall be those which are usually and customarily associated with the position of a Senior Vice President of
MHI effective as of January 31, 2022 and Chief Financial Officer (“CFO” of MHI which will become effective following
the filing of MHI’s 10K Annual Report for the 2021 year, of a comparably sized company. The Executive will have the duties, responsibilities
and authorities as detailed in Exhibit A attached hereto and incorporated herein, as well as such other reasonably related duties,
responsibilities and authorities as may be specified by the Chief Executive Officer of MHI, consistent with the title of a CFO of a comparably
sized company. The Executive shall report directly to the Chief Executive Officer of MHI for the performance of his duties. The Executive
shall be permitted to work remotely, provided, however, that he may be required to work from the Employer's Lincoln, Nebraska headquarters
("Employer HQ") up to ten (10) working days per month. The Executive shall devote substantially all of his working time,
attention, skill and reasonable best efforts to the performance of his duties hereunder in a manner that will faithfully and diligently
further the business and interests of MHI. During the Employment Term, the Executive shall refrain from acting as an employee, employer,
consultant, agent, principal, partner, stockholder, officer, director, or in any other individual or representative capacity own, operate,
control, assist, or participate in any business that is in competition in any way with the Employer; provided, that this prohibition shall
not preclude the Executive from: (i) serving as a member of the Board of Directors of one additional for profit company, if and only
if the company is not engaged in the Business, does not constitute a conflict of interest and does not create an appearance of impropriety;
(ii) engaging in charitable, civic or other volunteer activities, or (iii) owning stock of any company whose shares are listed
for trading over any public or over-the-counter exchange if, and only if, (a) the Executive does not own more than five percent (5%)
of such shares of any such company, and (b) the Executive does not control such company, and (c) such ownership does not constitute
a conflict of interest, create an appearance of impropriety or otherwise violate any provision of applicable law. Executive acknowledges
and agrees that Executive’s employment relationship is solely with Employer, that Employer retains all rights and authority to control
Executive’s activities in carrying out the terms of this Agreement, and that the subsidiaries of MHI and its affiliates shall not
be considered a joint employer of Executive for any purposes under this Agreement or under any federal, state or local laws.

 

     

     

    

 

4.          Compensation
for Services. In consideration for the services rendered to the Employer, the Executive shall be compensated as follows:

 

A.         Base
Salary. During the Employment Term, the Executive shall be compensated at the annualized rate of $275,000.00 per calendar year (“Base
Salary”). The Executive’s Base Salary, subject to applicable withholding and authorized deductions, shall be paid in twenty-four
(24) equal semi-monthly installments, in accordance with the usual and customary payroll practices of the Employer. The parties may discuss
renegotiation of the Base Salary each year. Neither party shall have any obligation to agree to an increase or decrease in Base Salary
and any such modification must be agreed to by the parties in writing.

 

B.          Bonus.
In addition to the Base Salary, during the Employment Term, Executive shall be eligible to receive an annual bonus of 0-100% of the Base
Salary as in effect for such year, which will be determined based upon achievement of performance goals established by the Chief Executive
Officer (after conferring with Executive) annually at or near the beginning of each calendar year during the Employment Term; with
a target bonus of 50% of the Base Salary (the "Target Bonus"), provided that, it is understood that such performance
goals shall be a meaningful test of Executive’s and MHI’s performance. The determination (i) whether any annual bonus
will be paid by the Employer and (ii) if such annual bonus is to be paid by the Employer, whether the specified performance goals
have been satisfied, shall be made by the Chief Executive Officer in her reasonable discretion. The annual bonus (if any) with respect
to any calendar year shall be payable in the following calendar year no later than the earlier of (i) 30 days from the date on which
audited financial statements covering such calendar year performance period become available to the Employer, or (ii) June 30
of the following calendar year. For the 2022 performance year, Executive will be paid a minimum annual bonus of $150,000.00 on or before
March 15, 2023. If Executive is not employed by Employer at the end of a calendar year, and except as otherwise provided in Sections
9(B) or (C) below with respect to severance, a pro rata Target Bonus based on the period of employment may be paid at the sole
discretion of the Chief Executive Officer; provided, that, a pro rata Target Bonus shall be paid to Executive (or to
the heirs or estate of Executive) if Executive’s employment ceases as a result of Executive’s death or Employer’s termination
of Executive’s employment due to Permanent Disability (as hereinafter defined). The pro rata Target Bonus, if any, shall be paid
to Executive on the date on which the annual bonus would have been paid to Executive for such calendar year, but for Executive’s
termination.

 

    2 

     

    

 

C.          Additional
Compensation. In addition to any other compensation set forth in this Section 4, Executive shall receive stock options to purchase
20,000 shares of common stock as of the Execution Date. Any such grant shall be subject to the terms and conditions set forth in either
the MHI 2019 or 2020 Long-Term Incentive Plan, as in effect and as amended from time to time (the “Incentive Plan”), together
with the Stock Option Agreement between MHI and Executive. The stock options shall have an exercise price of the fair market value as
of the date of the grant, which shall be the Execution Date, and shall expire 10 years from the date of grant. The stock options will
vest in equal installments on the second and fourth anniversaries of the Effective Date, subject (except as otherwise provided herein
or in the Incentive Plan) to Executive’s continuous employment with the Employer through the applicable vesting date, or as otherwise
provided in Section 9 below. Additional equity grants to Executive may be made by MHI in its reasonable discretion.

 

D.          Benefits.
During Executive’s employment with Employer, subject to the proviso in the final sentence of this Section 4.D, the Executive
shall receive the following benefits (together, the “Other Benefits”):

 

(i)          The
Employer shall pay the full premium required to provide the Executive and the Executive’s spouse, domestic partner and family with
coverage under the Employer’s group health and dental plan as per current practice with comparable executives employed by MHI.

 

(ii)         The
Executive shall be eligible to participate in all leave policies and “fringe” benefit programs, including, but not limited
to, sick leave, personal leave, insurance programs and/or a 401(k) plan, as and to the extent the same are from time to time made
available to employees of the Employer.

 

Anything herein to the contrary
notwithstanding, however, the Other Benefits and the terms and conditions thereof may be hereafter modified or terminated from time to
time by MHI consistent with other similarly situated employees and without amending this Agreement, and the Executive’s eligibility,
participation and benefit entitlement for each of the foregoing policies, plans, programs or Other Benefits shall be subject to all of
the terms and conditions of each such policy, plan or program and any third party contracts, agreements or policies of insurance which
may be applicable thereto.

 

E.          Continuation
of Salary During Illness. If the Executive shall become ill or temporarily disabled and shall be absent from work by reason thereof,
the Employer shall continue the Executive’s salary during said period of illness or disability for up to a maximum of six (6) months
or such lesser time as required to permit the Executive to qualify for any long disability income insurance maintained by the Executive.

 

F.          Clawback
Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other
compensation, paid to Executive pursuant to this Agreement or any other agreement or arrangement with MHI which is subject to recovery
under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be
required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by MHI pursuant
to any such law, government regulation or stock exchange listing requirement).

 

5.          Expense
Reimbursement. The Employer agrees to reimburse the Executive, in accordance with the Employer’s usual and customary practices,
for all other ordinary and necessary business expenses which are reasonably and necessarily incurred by the Executive in the course of
performing his duties on the Employer’s behalf under this Agreement, including travel to and from, and while working in, Employer
HQ. More specifically, Executive shall be reimbursed for the following expenses in connection with his trips to Employer HQ: round trip
coach airfare; transportation to and from airports; rental car; and hotel.

 

    3 

     

    

 

6.          Termination.
Nothing in this Agreement is intended to provide, nor shall this Agreement provide, the Executive with any contractual rights to employment
for any specified period of time. The Executive and the Employer acknowledge and agree that the employment relationship between the Executive
and the Employer is and shall remain strictly “at-will” during the Employment Term. This means that either the Executive or
the Employer may, at any time, for any reason or no reason, terminate the employment relationship between the Executive and the Employer.
In addition, and without limiting the foregoing, this Agreement may be terminated as follows:

 

A.          Death.
This Agreement shall immediately terminate upon the event of the Executive’s death.

 

B.          Disability.
Subject to Section 4.D with respect to applicable leave policies, this Agreement shall immediately terminate in the event the Executive
is Permanently Disabled, has exhausted all available leave, and is unable to return to work and perform the essential functions of his
employment. “Permanently Disabled” shall mean a physical or mental impairment rendering the Executive substantially
unable to carry out his then currently assigned day-to-day functions as CFO for any period of six (6) consecutive months. Any dispute
as to whether the Executive is Permanently Disabled, and the date on which such incapacity commenced, shall be resolved by the Board of
Directors of MHI with the assistance of a physician mutually selected by the parties. The decision of the Board of Directors of MHI shall
be final and binding upon the Executive and the Employer. If the Executive does not cooperate in selecting the physician, submit to examination
by the physician mutually selected by the parties, or provide access to needed information upon which such determination can be made,
then the Board of Directors shall have no continued obligation to consult with such physician and will have the authority to determine
whether Executive is Permanently Disabled on its own.

 

C.          Involuntary
Termination for Good Cause. The Employer may terminate the Executive’s employment at any time for Good Cause. “Good
Cause” shall be deemed to exist if, and only if:

 

(i)          Executive
willfully engages in acts or omissions determined to constitute fraud, breach of fiduciary duty or intentional wrongdoing, including without
limitation knowing falsification of the financial books or records of the Employer (or its subsidiaries or affiliates), embezzlement of
funds from the Employer (or its subsidiaries or affiliates) or other similar fraud; provided, however, that a
breach of fiduciary duty shall not be deemed to occur or exist as a result of any business decision made by Executive that is protected
by the “business judgment rule” as adopted by courts applying the General Corporation Law of the State of Delaware;

 

(ii)         Executive
is convicted of, or enters a plea of guilty or nolo contendere to charges of, any criminal violation involving fraud,
theft or dishonesty;

 

(iii)        Executive
is convicted of, or enters a plea of guilty or nolo contendere to charges of, any non-vehicular felony which has or is
substantially likely to have a material adverse effect on Executive’s ability to carry out his duties under this Agreement or on
the reputation or activities of the Employer (or its subsidiaries or affiliates);

 

(iv)        Executive
habitually abuses alcohol, illegal drugs or controlled substances or non-prescribed prescription medicine, and such abuse materially
and adversely interferes with the performance of the Executive’s duties and responsibilities to the Employer, and such acts remain
uncured for more than 30 days following receipt by Executive of written notice from the Employer specifying the nature of such acts demanding
cure thereof;

 

    4 

     

    

 

(v)         Executive
materially breaches the terms of any agreement between Executive and the Employer (or its subsidiaries or affiliates) relating to Executive’s
employment, materially fails to adhere to significant policies of Employer applicable to all employees, including, without limitation,
policies prohibiting sexual harassment in the workplace, or materially fails to satisfy the conditions and requirements of Executive’s
employment with the Employer (or its subsidiaries or affiliates), and such breach or failure remains uncured for more than thirty (30)
days following receipt by Executive of written notice from the Employer specifying the nature of such breach or failure and demanding
cure thereof;

 

(vi)        Executive
engages in acts or omissions constituting gross negligence by Executive in the performance (or non-performance) of his duties hereunder,
and such act or omission remains uncured for more than thirty (30) days following receipt by Executive of written notice from the Employer
specifying the nature of such act or omission and demanding cure thereof; or

 

(vii)       Executive
fails to comply with any material directive of the Chief Executive Officer consistent with the position of CFO and such failure remains
uncured for more than thirty (30) days following receipt by Executive of written notice from the Employer specifying the nature of the
failure and demanding cure thereof.

 

7.          Effect
of Termination. In the event the Executive’s employment is terminated pursuant to Section 6.A, 6.B or 6.C above, the Executive
shall only be entitled to receive that portion of his Base Salary and Target Bonus which has been earned but remains unpaid up to the
date of such termination, in addition to Other Benefits through the date of such termination and the reimbursement of any expenses as
provided in Section 5. In the event the Executive’s employment is terminated by the Employer for reasons other than those provided
in Section 6.A, 6.B. or 6.C., the Executive shall be entitled to the amounts set forth in Section 9 below subject to the terms
and conditions contained therein.

 

8.          Resignation
or Retirement; Effect. In the event Executive resigns without Good Reason (as defined below) or retires from Employer, the Executive
shall continue to receive his Base Salary for up to a period of twelve (12) months after the effective date of his resignation or retirement
and shall be paid any earned but unpaid Target Bonus for the prior calendar year, provided that, Executive signs and
does not revoke a Release as defined in Section 9.B below and remains in compliance with Section 12 below with respect to non-competition.
Executive agrees that he will immediately report to the Employer any offer of employment accepted by Executive within twelve (12) months
of his resignation or retirement, including the date such employment is to commence, for the purpose of allowing Employer to determine
compliance with Section 12 of this Agreement. Employer’s obligation to pay or continue payment of Base Salary and/or Target
Bonus shall cease in the event Executive is in breach of Section 12 of this Agreement. Alternatively, Employer may at any time on
ninety (90) days' written notice during the twelve (12)-month non-competition period contemplated by Section 12 terminate its continuing
obligation to pay or continue payment of the Base Salary if Employer releases Executive from his non-competition obligations under Section 12
by written notice to Executive. If the Executive resigns with Good Reason, he shall be entitled to the amounts set forth in Section 9
below subject to the terms and conditions contained therein. For purposes of this Agreement, “Good Reason” shall mean:

 

(i)          the
diminution of any duties, responsibilities, and authorities inconsistent in any respect with the Executive’s position as a CFO
of a comparably sized company (including status, offices, titles and reporting requirements), authority, duties or responsibilities as
contemplated by Sections 1 and 3 of this Agreement, excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by MHI within thirty (30) days after receipt of notice thereof given by the Executive;

 

    5 

     

    

 

(ii)         any
failure by MHI to comply with any of the provisions of Section 4 of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by MHI within thirty (30) days after receipt of written notice thereof given
by the Executive. For clarification purposes, MHI’s failure to grant Executive the stock options described in Section 4.C and
enter into the Stock Option Agreement within six (6) months following the Effective Date shall constitute Good Reason under
this Agreement provided that, MHI shall be entitled to the cure period described in the preceding sentence;

 

(iii)        MHI
materially breaches the terms of any agreement between the Executive and the Employer relating to the Executive’s employment (including,
without limitation, Employer's commitment to permit Executive to work remotely as described in Section 3), or materially fails to
satisfy the conditions and requirements of this Agreement, and such breach or failure by its nature is incapable of being cured, or such
breach or failure remains uncured for more than thirty (30) days following receipt by the Employer of written notice from the Executive
specifying the nature of the breach or failure and demanding the cure thereof; or

 

(iv)        a
resignation by the Executive for any reason within ninety (90) days after a Change in Control Event. A “Change in Control Event”
means:

 

(a)          Any
transaction in which shares of voting securities of MHI represent more than 50% of the total combined voting power of all outstanding
voting securities of MHI are issued by MHI, or sold or transferred by the stockholders of MHI, in either case resulting in those persons
and entities who beneficially owned voting securities of MHI representing more than 50% of the total combined voting power of all outstanding
voting securities of MHI immediately prior to such transaction ceasing to beneficially own voting securities of MHI representing more
than 50% of the total combined voting power of all outstanding voting securities of MHI immediately after such transaction;

 

(b)          The
merger or consolidation of MHI with or into another entity resulting in those persons and entities who beneficially owned voting securities
of MHI representing more than 50% of the total combined voting power of all outstanding voting securities of MHI immediately prior to
such transaction ceasing to beneficially own voting securities of MHI representing more than 50% of the total combined voting power of
all outstanding voting securities of the surviving corporation or resulting entity immediately after such merger or consolidation; or

 

(c)          The
sale of all or substantially all of MHI’s assets unless those person or entities who beneficially owned voting securities of MHI
representing more than 50% of the total combined voting power of all outstanding voting securities of MHI immediately prior to such asset
sale beneficially own voting securities of the purchasing entity representing more than 50% of the total combined voting power of all
outstanding voting securities of the purchasing entity immediately after such asset sale.

 

(d)          Notwithstanding
anything herein to the contrary, with respect to any amounts that constitute deferred compensation under Section 409A of the Code,
to the extent required to avoid accelerated taxation or penalties, no Change in Control Event will be deemed to have occurred unless
such Change in Control Event also constitutes a change in control in the ownership or effective control of MHI or a substantial portion
of MHI’s assets under Treasury Regulation Section 1.409A-3(i)(5).

 

    6 

     

    

 

Notwithstanding the foregoing,
except with respect to clause (iv) above, the Executive shall not have Good Reason to terminate his employment unless the event giving
rise to Good Reason is not fully remedied within thirty (30) days after receipt by Employer of a written notice from the Executive of
such event, specifying in detail the reason or reasons constituting Good Reason, which written notice must be provided within ninety (90)
days after the initial occurrence of such event. A termination for Good Reason cannot occur later than one-hundred and twenty (120) days
following the initial occurrence of the applicable event. For the purposes of this Agreement, termination by the Executive “without
Good Reason” shall mean termination by the Executive of his employment for any reasons other than a termination for Good Reason.

 

9.          Severance.

 

(A)          If
(i) the Employer terminates the Executive’s employment under this Agreement for reasons other than those provided in Sections
6.A, 6.B and 6.C or does not renew this Agreement for an additional one-year term at the end of the Initial Term or any Renewal Term (an
 "Employer Termination"), or (ii) if the Executive resigns and terminates this Agreement for Good Reason as provided in
Section 8 (a "Good Reason Termination" and, together with an Employer Termination, a “Qualifying Termination”),
the Employer shall pay to the Executive that portion of his Base Salary and Target Bonus which has been earned up to the date of such
termination, in addition to Other Benefits through the date of such termination and the reimbursement of any expenses as provided in Section 5.

 

(B)          In
connection with a Qualifying Termination that occurs at any time other than in connection with or within the twelve (12) month period
following the effective date of a Change in Control Event, and provided Executive signs and does not revoke as may be permitted by law
a general release of claims in a form similar to that attached as Exhibit C (the “Release”) and remains in compliance
with Section 12 below with respect to non-competition, the Employer shall (i) pay to the Executive on a quarterly basis following
the date of such termination an amount equal to the pro rata amount of (a) the Base Salary for each quarter of the Severance Period
(as hereinafter defined) commencing on the first payroll date falling after the Release becomes effective; and (b) the Target Bonus
for each quarter of the twelve (12) month period; (ii) fully vest as of the effective date of the Release, all the stock options
and other equity awards granted to Executive pursuant to Section 4.C above (with all performance vesting awards being deemed achieved
at target); and (iii) subject to Executive’s timely election of continuation coverage under COBRA, the Employer shall reimburse
the Executive the monthly premium payable to continue his and his eligible dependents’ participation in the Employer’s group
health plan (to the extent permitted under applicable law and the terms of such plan) which covers the Executive (and the Executive’s
eligible dependents) for a period of eighteen (18) months, provided that the Executive is eligible and remains eligible
for COBRA coverage; and provided, further, that in the event that the Executive obtains other employment that
offers group health benefits, such continuation of coverage by the Employer shall immediately cease. If the reimbursement of any COBRA
premiums would violate the nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection
and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010 (collectively, the “Act”)
or Section 105(h) of the Code, the Employer paid premiums shall be treated as taxable payments and be subject to imputed income
tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Act or Section 105(h) of
the Code. Executive may, at any time and on thirty (30) days' written notice to Employer, waive Executive's right to continue to receive
the benefits set forth in this Section 9(B), in which case the restrictions on Executive set forth in Section 12 hereof shall
immediately terminate. The term “Severance Period” shall mean a period extending from the date of termination and continuing
through twelve (12) months after the date of termination.

 

    7 

     

    

 

(C)          In
connection with a Qualifying Termination that occurs in connection with or within the twelve (12) month period following the effective
date of a Change in Control Event, and provided Executive signs and does not revoke the Release, the Employer shall (i) pay to the
Executive in a lump sum within an amount equal to two times the sum of the Base Salary and the Target Bonus; (ii) fully vest as
of the effective date of the Release, all the stock options and other equity awards granted to Executive pursuant to Section 4.C
above (with all performance vesting awards being deemed achieved at target); and (iii) subject to Executive’s timely election
of continuation coverage under COBRA, the Employer shall reimburse the Executive the monthly premium payable to continue his and his
eligible dependents’ participation in the Employer’s group health plan (to the extent permitted under applicable law and
the terms of such plan) which covers the Executive (and the Executive’s eligible dependents) for a period of eighteen (18) months, provided that
the Executive is eligible and remains eligible for COBRA coverage; and provided, further, that in the event that
the Executive obtains other employment that offers group health benefits, such continuation of coverage by the Employer shall immediately
cease. If the reimbursement of any COBRA premiums would violate the nondiscrimination rules or cause the reimbursement of claims
to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation
Act of 2010 (collectively, the “Act”) or Section 105(h) of the Code, the Employer paid premiums shall be
treated as taxable payments and be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment
or taxation under the Act or Section 105(h) of the Code.

 

(D)          The
payments and benefits provided for in Sections 8, 9.B and 9.C are conditioned on the Executive entering into the Release on or before
the sixtieth (60th) day following the date on which the Executive’s termination of employment becomes effective, and
not revoking it. The Employer shall be deemed to execute the Release on the date that the Executive executes the Release. If the Executive
fails to execute without revocation the Release, he shall be entitled to the benefits set forth in Section 9.A only and no other
benefits under Sections 8, 9.B or 9.C. The installments of severance under Section 8 shall commence with the first payroll period
following the date on which the Release becomes enforceable and irrevocable. The installments of severance provided under Section 9.B
shall commence in the quarter ending in which the Release becomes enforceable and irrevocable. If, however, the sixty (60) day period
in which the Release must become enforceable and irrevocable begins in one (1) year and ends in the following year, the Employer
shall commence payment of the severance installments in the following year. The first installment of the severance shall include all amounts
that would otherwise have been paid to the Executive between his termination date and the Executive’s receipt of the first installment,
assuming the first installment would otherwise have been paid at the end of the quarter in which the Executive’s employment terminates.
The lump sum payment provided under Section 9.C shall be paid on the sixtieth (60th) day following the date on which the
Executive’s termination of employment becomes effective.

 

(E)          The
Employer and the Executive agree that the Executive shall have no duty to mitigate his losses or obtain other employment. If the Executive
obtains other employment, it shall not affect his right to payment under this Section.

 

10.          Indemnification;
Directors’ and Officers’ Liability Insurance. Executive will be entitled to the indemnification provided to other executive
officers and directors of MHI. In addition, MHI agrees to include Executive as a covered person on the directors’ and officers’
liability insurance policy or policies covering its other executive officers and directors.

 

11.          Proprietary
Matters Agreement. Prior to or concurrently with the execution of this Agreement, Executive has signed the Employer’s Proprietary
Matters Agreement attached hereto as Exhibit B, the terms of which are expressly incorporated herein. The termination of this Agreement
or the termination of Executive’s employment with Employer for any reason shall in no way diminish Executive’s continuing
obligations under the Proprietary Matters Agreement signed by Executive.

 

    8 

     

    

 

12.          Non-Competition. During
the Executive’s employment with the Employer and for a period of twelve (12) months thereafter, the Executive agrees that he shall
not, within the United States, directly or indirectly, whether as an officer, director, stockholder, partner, member, employee, proprietor,
associate, representative, investor or consultant, or in any capacity whatsoever, engage in, become financially interested in, be employed
by or have any business connection with any other person, corporation, firm, partnership or other entity that is engaged in a Competitive
Business; provided, however, that the foregoing restriction shall not prevent the Executive from owning not more than two
percent (2%) of the outstanding shares in any publicly traded corporation or from having an interest in or being employed by an enterprise
having multiple business segments, divisions or product lines one or more of which is engaged in a Competitive Business, provided that
the Executive is not employed by, and does not render any services or support to or otherwise assist, the division or business segment
or product line of such enterprise that is engaged in a Competitive Business. "Competitive Business" shall be defined as an
entity that underwrites, sells and services equity index annuities and any other annuity products sold by Employer at the time of the
termination of employment.

 

The Executive agrees and acknowledges
that the time limitation and scope of activity to be restrained by the restrictions in this Section, combined with the geographic scope,
are reasonable. The Executive also acknowledges and agrees that this Section is reasonably necessary for the protection of the Employer’s
Confidential Information and trade secrets, is supported by adequate consideration, and provides a reasonable way of protecting the business
value of the Employer.

 

13.          Remedies
for Breach of Non-Competition Covenant.

 

A.          The
Executive acknowledges that, because the Executive’s services are personal and unique and because the Executive shall have access
to and become acquainted with the Confidential Information of the Employer, the damages that would be suffered by the Employer as a result
of the breach of the provisions of this Agreement contained in Section 12 above may not be calculable, and that an award of a monetary
judgment to Employer for such a breach would be an inadequate remedy. Consequently, Employer shall have the right, in addition to any
other rights it may have under this Agreement or elsewhere at law, to obtain injunctive relief in any court of competent jurisdiction
to restrain any breach or threatened breach hereof or otherwise to specifically enforce any of the provisions of this Agreement.

 

B.          The
covenants made by the Executive in Section 12 above shall be construed as agreements independent of any other provisions of this
Agreement (with the exception of Section 11 and the Proprietary Matters Agreement), and the existence of any claim or cause of action
of the Executive against Employer, whether predicted on this Agreement or otherwise, shall not constitute a defense to the enforcement
by MHI of these covenants.

 

C.          If
a court shall determine that any provision of (or portion of a provision of) Section 12 of this Agreement is unenforceable in accordance
with its terms, either because it extends for too long a period of time or over too great a range of activities or in too broad a geographic
area or for any other reason, it shall nonetheless be enforced on such terms as the court determines are equitable and legally enforceable.

 

14.          Severability.
Invalidity of any provision of this Agreement shall not render invalid any of the other provisions of this Agreement, and if any part
of this Agreement should be determined to be unlawful, unenforceable or against public policy, the remaining parts shall continue to be
fully effective and enforceable.

 

    9 

     

    

 

15.          Miscellaneous
Provisions.

 

A.         Successor
and Assigns. This Agreement is personal in nature and the Executive may not assign or delegate any rights or obligations hereunder
without first obtaining the express written consent of the Employer. The rights, benefits, and obligations of the Employer under this
Agreement and all covenants and agreements pertaining thereto hereunder shall be assignable by Employer only in connection with a Change
in Control. Further, this Agreement shall inure to the benefit of and be enforceable by or against the parties’ successors and assigns,
provided the Employer shall remain liable to the Executive for the performance of all obligations to be performed by it hereunder.

 

B.          Entire
Agreement. This Agreement, together with the Proprietary Matters Agreement, Incentive Plan and Stock Option Agreement, contain
the entire agreement of the parties with respect to the subject matter hereof and supersede and replace all prior agreements or understandings
and all negotiations, discussions, arrangements, and understandings with respect thereto. For purposes of clarification and the avoidance
of doubt, Executive acknowledges and agrees that the terms and provisions contained with the Proprietary Matters Agreement signed by Executive
and attached as Exhibit B shall remain in full force and effect and shall survive following Executive’s employment with Employer.

 

C.          Binding
Effect. This Agreement shall be binding upon the parties and their respective heirs, personal representatives, administrators, trustees,
successors, and permitted assigns.

 

D.          Amendment
or Modification. No amendment or modification of this Agreement shall be binding unless executed in writing by the parties hereto.

 

E.          Governing
Law. Employer and Executive agree that this Agreement shall be governed by and construed according to the laws of the State of Delaware.

 

F.          Interpretations.
Any uncertainty or ambiguity existing herein shall not be interpreted against either party because such party prepared any portion of
this Agreement, but shall be interpreted according to the application of rules of interpretation of contracts generally. The headings
used in this Agreement are inserted for convenience and reference only and are not intended to be an integral part of or to affect the
meaning or interpretation of this Agreement.

 

G.          Notices.
Any notice required to be given in writing by any party to this Agreement may be delivered personally or by certified mail. Any such notice
directed to the Employer shall be addressed to the Employer at 2900 South 70th Street, Suite 400, Lincoln, Nebraska
68510, Attention: Secretary, Board of Directors; or to such other address as the Employer may from time to time designate in writing to
the Executive. Any notice addressed to the Executive shall be addressed to his personal residence at 116 Hudson Street, # 2 New York,
NY 10013 or to such other address as the Executive may from time to time designate in writing to the Employer, with a copy to Warren Friss, Esq., Ingram
Yuzek Gainen Carroll & Bertolotti, LLP, 150 East 42nd Street, 19th Floor, New York, New York 10017.

 

H.          Survival.
Anything herein to the contrary notwithstanding, the rights and obligations of the parties hereunder which by their terms contemplate
or require performance or obligations which extend beyond or occur after the termination of this Agreement (specifically including, but
not limited to, the payments to the Executive provided for in Sections 7, 8 and 9, the indemnification of Executive provided for in Section 10,
the non-competition provisions of Section 12 and the Proprietary Matters Agreement signed by Executive) shall survive termination
of this Agreement and shall be and remain fully enforceable as between the parties in accordance with their terms.

 

    10 

     

    

 

I.          Voluntary
Execution; Conflict Waiver. Each of the Executive and the Employer is signing this Agreement knowingly and voluntarily. The Executive
and the Employer have been given the opportunity to consult with independent counsel of their choice regarding their rights under this
Agreement.

 

J.          Signatures.
This Agreement may be executed in counterparts, both of which shall be one and the same Agreement.

 

K.          Section 409A
Compliance.

 

(i)          To
the extent that any of the payments or benefits provided for in Section 8, 9.B or 9.C are deemed to constitute non-qualified deferred
compensation benefits subject to Section 409A of the United States Internal Revenue Code (the “Code”), the following
interpretations apply to Section 8, 9.B or 9.C:

 

(a)          Any
termination of the Executive’s employment triggering payment of benefits under Section 8, 9.B or 9.C must constitute a “separation
from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) for interpreting
a separation from service before distribution of such benefits can commence. To the extent that the termination of the Executive’s
employment does not constitute a separation of service, any benefits payable under Section 8, 9.B or 9.C that constitute deferred
compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event constituting a separation
of service. For purposes of clarification, this Section shall not cause any forfeiture of benefits on the Executive’s part,
but shall only act as a delay until such time as a separation from service occurs.

 

(b)          If
the Executive is a “specified employee” (as that term is used in Section 409A of the Code and regulations and other guidance
issued thereunder) on the date his separation from service becomes effective, any benefits payable under Section 8, 9.B or 9.C (if
any) that constitute non-qualified deferred compensation under Section 409A of the Code shall be delayed until the earlier of (1) the
business day following the six-month anniversary of the date his separation from service becomes effective, and (2) the date of the
Executive’s death, but only to the extent necessary to avoid penalties under Section 409A of the Code. On the earlier of (1) the
business day following the six-month anniversary of the date his separation from service becomes effective, and (2) the Executive’s
death, the Employer shall pay the Executive in a lump sum the aggregate value of the non-qualified deferred compensation that the Employer
otherwise would have paid the Executive prior to that date under Section 8, 9.B or 9.C of this Agreement.

 

(ii)          It
is intended that each installment of the payments and benefits provided under Section 8, 9.B or 9.C be treated as a separate “payment”
for purposes of Section 409A of the Code. In particular, the installment severance payments set forth in Section 8, 9.B or 9.C
of this Agreement shall be divided into two portions. The first portion will equal that number of installments commencing on the first
payment date set forth in Section 8, 9.B or 9.C that are in the aggregate less than two times the applicable compensation limit under
Section 401(a)(17) of the Code for the year in which the termination of the Executive’s employment occurs (provided the termination
of the Executive’s employment is also a separation from service) is payable in accordance with Treas. Reg. §1.409A-1(b)(9)(iii) as
an involuntary separation plan. The second portion will equal the remainder of the installments and shall be paid in accordance with Sections
15.K.i above.

 

    11 

     

    

 

(iii)          Neither
the Employer nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the
extent specifically permitted or required by Section 409A of the Code.

 

(iv)          It
is the intention of both the Employer and the Executive that the benefits and rights to which the Executive could be entitled pursuant
to this Agreement comply with Section 409A of the Code and the Treasury Regulations and other guidance promulgated or issued thereunder,
to the extent that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed
in a manner consistent with that intention. If the Executive or the Employer believes, at any time, that any such benefit or right that
is subject to Section 409A does not so comply, it shall promptly advise the other and shall negotiate reasonably and in good faith
to amend the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect
on the Executive and on the Employer) to the extent allowed by applicable law. In no event whatsoever shall the Employer be liable for
additional tax, interest or penalty that may be imposed on the Executive by Section 409A or damages for any payments or benefits
that fail to comply with Section 409A.

 

L.          Excess
Parachute Payments.

 

(i)          Notwithstanding
anything in this Agreement to the contrary, if any of the payments or benefits provided or to be provided by Employer to Executive or
for Executive’s benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) are determined
to constitute “excess parachute payments” within the meaning of Section 280G of the Code and would, but for this Section 15.L
be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed
by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then
the Covered Payments shall either (a) be paid in full or (b) be reduced (but not below zero) to the minimum extent necessary
to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of (a) or (b) maximizes the after-tax
results applicable to Executive. All determinations required to be made under this Section 15.L, including whether a payment would
result in an “excess parachute payment” and the assumptions utilized in arriving at such determination, shall be made in writing
by an accounting firm selected by Employer, which writings shall be shared with Executive.

 

(ii)          If
a reduction in the Covered Payments is required by the foregoing provisions of this Section 15.L, the reduction shall occur in the
following order: (i) reduction of cash payments for which the full amount is treated as a parachute payment; (ii) cancellation
of accelerated vesting (or, if necessary, payment) of cash awards for which the full amount is not treated as a parachute payment; (iii) cancellation
of any accelerated vesting of equity awards; and (iv) reduction of any continued employee benefits. In selecting the equity awards
(if any), for which vesting will be reduced under clause (iii) of the preceding sentence, awards shall be selected in a manner that
maximizes the after-tax aggregate amount of Covered Payments, provided that if (and only if) necessary in order to avoid the imposition
of an additional tax under Section 409A of the Code, awards instead shall be selected in the reverse order of the date
of grant. In no event shall Executive have any discretion with respect to the ordering of payment reductions.

 

(iii)          If
the Covered Payments to the Executive are reduced in accordance with this Section 15.L, as a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial reduction under Section 15.L, it is possible that Covered Payments to
the Executive which will not have been made by the Employer should have been made (“Underpayment”) or that Covered
Payments to the Executive which were made should not have been made (“Overpayment”). If an Underpayment has occurred,
the amount of any such Underpayment shall be promptly paid by the Employer to or for the benefit of the Executive. In the event of an
Overpayment, then the Executive shall promptly repay to the Employer the amount of any such Overpayment together with interest on such
amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor
thereto), from the date the reimbursable payment was received by the Executive to the date the same is repaid to the Employer.

 

[Remainder of Page Intentionally
Left Blank – Signature Page Follows]

 

    12 

     

    

 

IN WITNESS WHEREOF, the Employer
and the Executive have caused this Agreement to be signed with the intent it be effective as of the Effective Date, fully intending the
same to be binding upon themselves and their respective heirs, personal representatives, trustees, successors, receivers and assigns.

 

	EXECUTIVE	 
	 	 
	 	 	 
	By:	/s/ Eric N. Berg	 
	 	      Eric N. Berg	 
	 	 	 

 

	MIDWEST HOLDING INC.	 
	 	 
	 	 	 
	By:	/s/ Georgette Nicholas	 
	 	      Georgette Nicholas, Chief Executive Officer	 

 

    13Document

Exhibit 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made and entered into effective the 26th day of March, 2022 (the “Effective Date”), by and between Bank, a state-chartered commercial bank, with its principal office in Anchorage, Alaska (the “Employer”) and Michael G. Huston (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 President and Chief Lending Officer of Northrim Bank.
2.Term.
The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless terminated earlier pursuant to Section 5, shall continue through December 31, 2022; provided, however, that on January 1, 2023, and each succeeding January 1, the Term shall automatically be extended for one additional year unless, not later than ninety 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. In the event the Term is not extended, Executive shall have no rights to any of the severance payments or benefits continuation described in Section 5 except as specifically provided for in Section 5.a. 
3.Duties.
The Executive will serve as President and Chief Lending Officer of Northrim Bank. 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 the Executive’s position, subject to the direction of Employer’s President and Board of Directors. Executive shall devote necessary time, attention and effort to Employer’s business in order to properly discharge the Executive’s responsibilities under this Agreement.
4.Compensation, Benefits, Reimbursement and Profit Sharing.
a.Base Salary.
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 $332,872 as adjusted from time to time (“Base Salary”). The Board of Directors of the Employer shall review Executive’s salary 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.Profit Sharing Plan. 
Under the Northrim BanCorp, Inc. Profit Sharing Plan (the “Plan”), Executive shall be eligible to receive an annual profit share based on performance as defined by the Board of 

Page 1 of 13

Directors. Executive will be classified in the President tier under the Plan’s Responsibility Factors. If Employer is required to prepare an accounting restatement due to “material noncompliance of the Employer,” the Employer will recover from the Executive any incentive compensation during the three (3) years prior to the date of the restatement, in excess of what would have been paid under the restatement. Executive’s signature on this Agreement authorizes Employer to offset or deduct from any compensation Employer may owe Executive, any excess payments (in whole or in part) that Executive may owe Employer due to such restatement(s). 
c.Stock Incentive Plan. 
Executive shall be eligible for awards under the Employer’s Stock Incentive Plan. The type, timing and size of awards will be at the discretion of the Board of Directors.
d.Supplemental Executive Retirement Plan (“SERP”), and Deferred Compensation Plan. 
Executive shall also be entitled to receive an annual contribution equal to ten percent (15%) of annual Base Salary in accordance with the Employer’s SERP, as may be adjusted at the discretion of the Board of Directors from time to time. The Executive may also participate in the Employer’s Deferred Compensation Plan.
e.Other Benefits. 
Throughout the term of this Agreement, Executive shall be entitled to participate in health insurance, disability and other employee benefit plans and programs of Employer, as in effect from time to time, on a basis at least as favorable as that accorded to any other officer of Employer and to the extent consistent with applicable law and the terms of the applicable employee benefit plans and programs.
f.Expenses. 
Employer shall reimburse Executive for the Executive’s reasonable expenses (including, without limitation: travel, entertainment, and similar expenses) incurred in performing and promoting the business of the Employer, subject to any limits of company policy and the rules and regulations of the Internal Revenue Service, including the Internal Revenue Code of 1986, as amended (referred to throughout this Agreement as “IRC” or the “Code”). Executive shall present from time to time, itemized accounts and receipts of any such expenses as required by Employer and the Code.
5.Termination of Agreement.
a.Termination Due to a Change of Control. 
If (A) Employer (either Northrim BanCorp, Inc. or Northrim Bank) is subjected to a Change of Control (as defined in Section 5.f.(i)), and (B) either Employer or its assigns terminates Executive’s employment without Cause (as defined in Section 5.f.(ii)) (either during the annual term of this Agreement or by refusing to extend this Agreement when the annual termination occurs every December 31) or Executive terminates their employment for Good Reason (as defined in Section 5.f.(iii)) within seven hundred and thirty days of such Change of Control, then Employer shall pay Executive: (i) all Base Salary earned and all reimbursable expenses incurred under this Agreement through such termination date; (ii) an amount equal to 

Page 2 of 13

two times Executive’s highest Base Salary over the prior three years, and (iii) an amount equal to two times Executive’s average Profit Share over the prior three years. The amounts described in clause (i) shall be paid no later than three business days after the date on which employment is terminated.  The amounts described in clauses (ii), and (iii) herein shall be paid no later than forty-five calendar days after the day on which employment is terminated. No payment will be made pursuant to clauses (ii) and (iii) unless the Executive has signed 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”) and the Release Agreement has become irrevocable prior to the payment date.
(i)Benefits Continuation. 
In addition, Executive shall be entitled to health and dental insurance benefits for a period of two years 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 Code (commonly referred to as “COBRA”); provided, however, that if Employer determines in its sole discretion that its provision of COBRA or health or dental insurance benefits or any premium payments for such benefits cannot be made without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise or penalty tax, under either Section 105(h) of the Code or the Patient Protection and Affordable Care Act of 2010, Employer will in lieu thereof provide to Executive a taxable payment in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue their group health coverage in effect on the date of the Executive’s termination of employment (which amount will be based on the premium for the first month of COBRA coverage) for two years following the termination of employment (less the months, if any, for which any benefits or premium payments already made by the Employer pursuant to this Section 5.a.(i)), which payment will be made regardless of whether Executive elects COBRA continuation coverage and will be paid at the same time any amounts described in the first paragraph of Section 5.a. are paid to Executive.
(ii)Age and Service Credit. 
Executive shall also be entitled to receive age credit and credit for period of service towards all 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, and benefits, as if this Agreement had never been terminated and as if Executive had performed the Executive’s responsibilities as an executive throughout the period originally covered by this 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 their employment for Good Reason, Employer shall pay Executive in a lump sum: (i) 

Page 3 of 13

all Base Salary earned and all reimbursable expenses incurred under this Agreement through such termination date; and (ii) an amount equal to one times Executive’s highest Base Salary over the prior three years. The amount described in clause (i) shall be paid no later than three business days after the day on which employment is terminated. The amount described in clause (ii) shall be paid on the first day of the month following a period of six months after the termination of employment, provided that the payment may be made sooner if either (A) the amount does not exceed the amount described in Section 1.409A-1(b)(9)(iii)(A) (the “IRC Safe Harbor”) or (B) at the Executive’s election, the amount described in clause (ii), is reduced to fit within the IRC Safe Harbor. No payment will be made pursuant to clause (ii) unless the Executive has signed a Release Agreement which has become irrevocable prior to the payment date. 
(i)Benefits Continuation. 
In addition, Executive shall be entitled to health and dental insurance benefits for a period of one year 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 COBRA ; provided, however, that if Employer determines in its sole discretion that its provision of COBRA or health or dental insurance benefits or any premium payments for such benefits cannot be made without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise or penalty tax, under either Section 105(h) of the Code or the Patient Protection and Affordable Care Act of 2010, Employer will in lieu thereof provide to Executive a taxable payment in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue their group health coverage in effect on the date of termination of employment (which amount will be based on the premium for the first month of COBRA coverage) for one year following the termination of employment (less the months, if any, for which any benefits or premium payments already made by the Employer pursuant to this Section 5.b.(i)), which payment will be made regardless of whether Executive elects COBRA continuation coverage and will be paid at the same time any amounts described in clause (i) of the first paragraph of Section 5.b are paid to Executive.
(ii)Age and Service Credit. 
Executive shall also be entitled to receive age credit and credit for period of service towards all 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, and benefits, as if this Agreement had never been terminated and as if Executive had performed their responsibilities as an executive throughout the period originally covered by this Agreement.

Page 4 of 13

c.Termination by Employer for Cause or by Executive Without Good Reason. 
If Employer terminates Executive’s employment for Cause or if Executive terminates their 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. 
If any disputed termination under Section 5.c. is subsequently determined to have been without Cause, Executive's recovery shall be limited to those payments and benefits set out under Section 5.b.
d.Termination Due to Total Disability. 
If Executive shall have been unable to perform his duties due to a Total Disability (as defined in Section 5.f.(iv)), then Employer may at any time after the end of the applicable period of nonperformance terminate Executive’s employment, effective immediately, consistent with Employer’s obligation to provide a leave of absence and/or reasonably accommodate Executive under applicable laws, and Executive shall be entitled to: (A) all Base Salary earned and reimbursement for expenses incurred under this Agreement through the termination date; (B) full Base Salary for the one year following the termination date (less the amount of any payments received by Executive during such one year period under any Employer-sponsored disability plan); and (C) health and dental insurance benefits for a period of one 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 COBRA; provided, however, that if Employer determines in its sole discretion that its provision of COBRA or health or dental insurance benefits or any premium payments for such benefits cannot be made without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise or penalty tax, under either Section 105(h) of the Code or the Patient Protection and Affordable Care Act of 2010, Employer will in lieu thereof provide to Executive a taxable payment in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue their group health coverage in effect on the date of their termination of employment (which amount will be based on the premium for the first month of COBRA coverage) for one year following the termination of employment (less the months, if any, for which any benefits or premium payments already made by the Employer pursuant to this Section 5.d), which payment will be made regardless of whether Executive elects COBRA continuation coverage and will be paid at the same time any other amounts described in this Section 5.d are paid to Executive. All such compensation shall be paid Executive in one lump sum the first day of the month following a period of six months after Executive’s employment was terminated, provided that Executive has signed a Release Agreement which has become irrevocable prior to the payment date.

Page 5 of 13

e.Termination Upon Death of Executive. 
Executive’s 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, or if there is none, to the Executive’s estate: (A) that portion of Executive’s Base Salary that would otherwise have been paid to the Executive for the month in which their death occurred, and (B) any amounts due the Executive pursuant to the Northrim Bank Savings Incentive Plan (401-K) and the Plan, any supplemental deferred compensation plan, and any other death, insurance, employee benefit plan or stock benefit plan provided to Executive by the Employer, according to the terms of the respective plans.
f.Termination Definitions.

(i)“Change of Control.” 
For purposes of this Agreement, the term “Change of Control” shall mean the occurrence of one or more of the following events: (A) one person or entity acquiring or otherwise becoming the owner of twenty-five percent (25%) or more of Employer’s outstanding common stock; (B) replacement of a majority of the incumbent directors of Northrim BanCorp, Inc. or Northrim Bank by directors whose elections have not been supported by a majority of the Board of Directors of either company, as appropriate; (C) dissolution or sale of fifty percent (50%) or more in value of the assets, of either Northrim BanCorp, Inc. or Northrim Bank; or (D) a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of Employer, within the meaning of Section 280G of the Code.
(ii)“Cause.” 
For purposes of this Agreement, termination for “Cause” shall include termination because Executive: (A) continually fails to substantially perform his or her duties with the Employer, (B) is adjudged guilty of a felony, any crime involving dishonesty or breach of trust or any crime involving a breach of his or her fiduciary duties to the Employer; (C) is willfully and continually failing to comply with any law, rule, or regulation (other than traffic violations or similar offenses) or final cease and desist order of a regulatory agency having jurisdiction over Employer; (D) commits a material act of dishonesty or disloyalty related to the business of the Employer, or (E) is unable to substantially perform his or her duties with the Employer due to drug addiction or chronic alcoholism. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive, a copy of a resolution duly adopted by the affirmative vote of not less than threequarters (3/4) of the entire membership of the Employer’s Board of Directors at a meeting of the Board called for such purpose (after reasonable notice to Executive and an opportunity for the Executive, together with their counsel, to be heard before the Board), finding that in the good faith opinion of the Board, the Executive was guilty of conduct that constitutes Cause (as defined above) and specifying the conduct in detail.
(iii)“Good Reason.” 
For purposes of this Agreement, termination for “Good Reason” shall mean termination by Executive as a result of any material breach of this Agreement by Employer. Good Reason 

Page 6 of 13

shall include, but not be limited to: (A) a material reduction in Executive’s compensation defined as a reduction equal to or greater than five percent (5%) of Executive’s then annual base salary; (B) a material reduction in Executive’s duties and responsibilities, but not merely a change in title; or (C) relocation of Executive’s primary workplace by more than fifty miles. “Good Reason” will only be deemed to occur if, within ninety days after a material reduction or change described above first occurs, the Executive provides notice to the Employer of the existence of Good Reason and of the Executive’s intended termination of employment due to Good Reason, and the Employer does not remove the Good Reason condition within ninety days after receiving such notice from the Executive. The Executive’s written notice must explain the basis on which the Executive believes Good Reason exists, the cure period, and the date on which the Executive intends to terminate employment, which must be no later than six months after the existence of the Good Reason. The provisions of Section 5.f.(iii) are intended to comply with the Good Reason safe harbor provisions of Code Section 409A and applicable regulations.
(iv)“Total Disability.”
For purposes of this Agreement, “Total Disability” shall mean a medically diagnosed physical or mental illness, existing for a period of six consecutive months, or for a total of six months within any twelve month period, and that renders Executive incapable of performing their essential job functions under this Agreement, even after the Executive has been accorded reasonable accommodation. Employer’s Board of Directors, acting in good faith, in accordance with applicable law, shall make the final determination of whether Executive is suffering under any Total Disability (as herein defined) and, for purposes of making such determination, may require Executive to submit themselves to a physical examination by a physician mutually agreed upon by the Executive and Employer’s Board of Directors at Employer’s expense.

(v)Termination from Employment. 
A termination from employment under this Agreement shall mean a “Separation from Service” as interpreted in accordance with Code Section 409A and generally meaning the date on which the Executive is no longer performing services for the Employer. The Executive shall not have a Separation from Service while on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Executive retains a right to reemployment under an applicable statute or contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Executive will return to perform services. 
6.Limit on Severance Payment for Change of Control.
Notwithstanding anything above in Section 5.a., if the severance payment provided for in that Section, together with any other payments which the Executive has the right to receive from the Employer, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), the severance payment shall be reduced. The reduction shall be in an amount so that the present value of the total amount received by the Executive from the Employer or its affiliates and subsidiaries will be two point nine-nine (2.99) times the Executive’s base amount (as defined 

Page 7 of 13

in Section 280G(b)(3) of the Code) and so that no portion of the amounts received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code (excise tax). Insofar as permitted by the Code, Employer shall reduce those elements of the severance pay package specified by the Executive, provided, however, that Employer will not reduce the SERP credits provided for in Section 5.a.(ii). The determination as to whether any reduction in the severance payment is necessary shall be made by the Employer in good faith, and the determination shall be conclusive and binding on Executive. If through error or otherwise Executive should receive payments under this Agreement, together with other payments the Executive has the right to receive from the Employer, in excess of two point nine-nine (2.99) times their base amount, Executive shall immediately repay the excess to Employer upon notification that an overpayment has been made.
7.Covenant Not To Compete.
a.    Executive agrees that for the term of this Agreement and for a period of one year after this Agreement is terminated pursuant to Section 5.a. or 5.b., Executive will not directly or indirectly be employed by, own, manage, operate, support, join, or benefit in any way from any business activity within the State of Alaska that is competitive with Employer’s business or reasonably anticipated business of which Executive has knowledge. For purposes of the foregoing, Executive will be deemed to be connected with such business if the business is carried on by: (A) a partnership in which Executive is a general or limited partner; or (B) a corporation of which Executive is a shareholder (other than a shareholder owning less than five percent (5%) of the total outstanding shares of the corporation), officer, director, employee or consultant, whether paid or unpaid. In the event of an alleged breach by Executive of this Section 7, the one year non-compete period shall be extended until such breach or violation has been duly cured, and shall restart so that Employer has received the intended benefit of one full year of non-competition by Executive.
b.    The parties agree that if a trial judge with jurisdiction over a dispute related to this Agreement should determine that the restrictive covenant set forth above is unreasonably broad, the parties authorize such trial judge to narrow the covenant so as to make it reasonable, given all relevant circumstances, and to enforce such covenant. The provisions of this Section 7 shall survive termination of this Agreement.
8.Nondisclosure of Confidential Information.
a.    During the term of Executive’s employment and thereafter, Executive agrees to hold Employer’s Confidential Information (as defined in Section 8.b.) in strict confidence, and not disclose or use it at any time except as authorized by Employer and for Employer’s benefit. If anyone tries to compel Executive to disclose any Confidential Information, by subpoena or otherwise, Executive agrees immediately to notify Employer so that Employer may take any actions it deems necessary to protect its interests. Executive’s agreement to protect Employer’s Confidential Information applies both during the term of this Agreement and after employment ends, regardless of the reason it ends.

Page 8 of 13

b.    “Confidential Information” includes, without limitation, any information in whatever form that Employer considers to be confidential, proprietary, information and that is not publicly or generally available relating to Employer’s: trade secrets (as defined by the Uniform Trade Secrets Act), know-how, concepts, methods, research and development; product, content and technology development plans; marketing plans; databases; inventions; research data and mechanisms, software (including functional specifications, source code and object code), procedures, engineering, purchasing, accounting, marketing, sales, customers, advertisers, joint venture partners, suppliers, financial status, contracts or employees. Confidential Information includes information developed by Executive, alone or with others, or entrusted to Employer by its customers or others.
9.Non-Solicitation.
During the course of Executive’s employment and for a period of one year from the date of termination of employment for any reason, Executive shall not within the State of Alaska directly or indirectly solicit or entice any of the following to cease, terminate or reduce any relationship with Employer or to divert any business from Employer: (A) any person who was an employee of Employer during the one year period immediately preceding the termination of Executive’s employment; (B) any customer or client of Employer; or (C) any prospective customer or client of Employer from whom Executive actively solicited business within the last [nine months] of Executive’s employment. In the event of an alleged breach by Executive of this Section 9, the one year non-solicitation period shall be extended until such breach or violation has been duly cured, and shall restart so that Employer has received the intended benefit of one uninterrupted year of non-solicitation by Executive.
10.Non-Disparagement. 
Executive will not, during the Term or after the termination or expiration of this Agreement or Executive’s employment, make disparaging statements, in any form, about Employer’s officers, directors, agents, employees, products or services which Executive knows, or has reason to believe, are false or misleading. This Section 10 does not, in any way, restrict or impede Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation or order. Executive shall promptly provide written notice of any such order to Employer’s Board of Directors. Nothing in this Section 10 is intended to limit Executive’s legal right to make reports to or cooperate with any law enforcement or other government agency.  
11.Mutual Agreement to Arbitrate.
a.    Except as provided in Section 11.b., in the event of a dispute or claim between Executive and Employer related to Executive’s employment or termination of employment, all such disputes or claims will be resolved exclusively by confidential arbitration in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration 

Page 9 of 13

Association (“AAA”). This means that the parties agree to waive their rights to have such disputes or claims decided in court by a jury. Instead, such disputes or claims will be resolved by an impartial AAA arbitrator whose decision will be final. 
b.    The only disputes or claims that are not subject to arbitration are any claims by Executive for workers’ compensation or unemployment benefits, and any claim by Executive for benefits under an employee benefit plan that provides its own arbitration procedure. Also, Executive and Employer may seek equitable relief (such as an injunction or declaratory relief) in court in appropriate circumstances. Specifically, Executive recognizes that Employer does not have an adequate remedy at law to protect its business from Executive’s breach of Sections 7, 8, or 9 of this Agreement, and therefore Employer shall be entitled to bring an action for a temporary restraining order and preliminary injunctive relief pre-arbitration, in the event of any actual or threatened breach by Executive of Sections 7, 8, or 9. In such court proceeding, Employer shall not be required to post a bond or other security, and Employer may also be awarded actual damages caused by Executive’s breach of Sections 7, 8, or 9 of this Agreement as well as repayment of all or a portion of any severance that Employer previously paid to Executive.  
c.    Except as provided by section 11.b., the arbitration procedure will afford Executive and Employer the full range of legal, equitable, and/or statutory remedies. Employer will pay all costs that are unique to arbitration, except that the party who initiates arbitration will pay the filing fee charged by AAA. Executive and Employer shall be entitled to discovery sufficient to adequately arbitrate their claims, including access to essential documents and witnesses, as determined by the arbitrator and subject to limited judicial review. In order for any judicial review of the arbitrator’s decision to be successfully accomplished, the arbitrator will issue a written decision that will decide all issues submitted and will reveal the essential findings and conclusions on which the award is based. 
12.Miscellaneous.
a.    This Agreement contains the entire agreement between the parties with respect to Executive’s employment with Employer, and is subject to modification or amendment only upon agreement in writing signed by both parties.
b.    This Agreement shall bind and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties, except that Employer’s rights and obligations may not be assigned.
c.    If any provision of this Agreement is invalid or otherwise unenforceable, in whole or in part, then such provision shall be modified so as to be enforceable to the maximum extent permitted by law. If such provision cannot be modified to be enforceable, the provision shall be severed from the Agreement to the extent it is unenforceable. All other provisions and any partially enforceable provisions shall remain unaffected and shall remain in full force and effect.

Page 10 of 13

d.    In the event of any claim or dispute arising out of this Agreement, the party that substantially prevails shall be entitled to reimbursement of all expenses incurred in connection with such claim or dispute, including, without limitation, attorneys’ fees and other professional fees. This paragraph shall apply to expenses incurred with or without suit, and in any judicial, arbitration or administrative proceedings, including all appeals therefrom.
e.    Any notice required to be given under this Agreement to either party shall be given by personal service (i.e., via hand delivery) or by depositing a copy of such notice in the United States registered or certified mail, postage prepaid, addressed to the following address, or such other address as addressee shall designate in writing:

Employer:     

3111 “C” Street
Anchorage, AK 99503

Executive:    

Address on file with Northrim Bank Human Resources Department.

f.    This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by and construed and enforced according to the laws of the State of Alaska.
g.    This Agreement (and all payments and other benefits provided under this Agreement and provided under any other agreement incorporated by reference) is intended to be exempt from the requirements of Code Section 409A, to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise.  To the extent Code Section 409A is applicable to such payments and benefits, the parties intend that this Agreement (and such payments and benefits) comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A.  In the event that any provision of the Agreement would cause a benefit or amount provided hereunder to be subject to tax under the Internal Revenue Code prior to the time such amount is paid, such provision shall, without the necessity of further action by the signatories to this Agreement, be null and void as of the Effective Date. In addition, if Executive is a “specified employee” (within the meaning of Code Section 409A), then to the extent necessary to avoid subjecting Executive to the imposition of any additional tax under 

Page 11 of 13

Code Section 409A, amounts that would otherwise be payable under this Agreement during the six (6) month period immediately following Executive’s “Separation from Service” for reasons other than Executive’s death (except those payments that may be exempt from or otherwise not subject to Code Section 409A, as determined by Employer in its reasonable, good faith discretion) will not be paid to Executive during such period, but shall instead be accumulated and paid to Executive in a lump sum on the first business day after the date that is six months following Executive’s Separation from Service. Notwithstanding the foregoing, Employer makes no representations that the payments and benefits provided under this Agreement comply with, or are exempt from, Code Section 409A, and in no event will Employer be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Executive on account of any failure to comply with, or be exempt from, Code Section 409A, or for any interest on account of any delay in payment deemed necessary to comply with Code Section 409A.
h.    Notwithstanding any provision to the contrary in this Agreement, no payment of any type or amount of compensation or benefits shall be made or owed by Employer to Executive pursuant to this Agreement or otherwise to the extent that payment of such type or amount is restricted or prohibited by, is not permitted under, or has not received any required approval under, any applicable federal or state statute, regulation, rule, policy, order, opinion, interpretation or similar issuance, whether now in existence or hereafter adopted or imposed, including without limitation any provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act or regulations promulgated thereunder, 12 USC 1828(k) or 12 CFR Part 359. In the event that any payment made to Executive hereunder, under any prior employment agreement or arrangement or otherwise is required under any applicable federal or state statute, regulation, rule, policy, order, opinion, interpretation or similar issuance or under any agreement with or policy or plan of Employer to be paid back to Employer, Executive shall upon written demand from Employer promptly pay such amount back to Employer.

Page 12 of 13

EMPLOYER:
NORTHRIM BANCORP, INC.

By: /s/Krystal M. Nelson
Krystal M. Nelson
Its: Chairman of the Compensation Committee of the Board of Directors

EMPLOYER:
NORTHRIM BANK

By: /s/Krystal M. Nelson
Krystal M. Nelson
Its: Chairman of the Compensation Committee of the Board of Directors

EXECUTIVE:

/s/Michael G. Huston    
Michael G. Huston

Page 13 of 13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00342-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00342-of-00352.parquet"}]]