NORTHRIM BANK EXECUTIVE INCENTIVE PLAN

EXHIBIT 10.29

NORTHRIM BANK
EXECUTIVE INCENTIVE PLAN

Originally Effective as of
November 3, 1994

Amended Effective as of
May 14, 2009

NORTHRIM BANK ANNUAL
EXECUTIVE INCENTIVE PLAN

TYPE OF PLAN

Criteria Incentive Plan

PLAN YEAR

January 1 — December 31

PLAN ADMINISTRATION

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

PLAN PARTICIPATION

Participation in the plan is limited to members of management whose performance has a significant impact on the success of the Bank.

Participants in the Executive Incentive Plan (“Plan”) must be recommended by the Chairman of the Board or President and approved by the Committee prior to each plan year.

The minimum factors to be used in evaluating and recommending individuals for Plan participation are as follows:

	•		Head of a department or equivalent responsibilities.
	•		Significant impact on the bottom line of the Bank.
	•		Management responsibility.
	•		Record of superior performance and initiative to surpass expectation.
	•		This is an earned benefit and will not necessarily be made to newly hired or promoted managers who might otherwise be qualified for plan inclusion.

CONDITIONS PRECEDENT

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

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

INCENTIVE AWARD AMOUNTS

Each Plan participant will be assigned an incentive award amount established as a percent of their base salary. Base salary is the annual salary in effect at the close of the plan year, prior to any deductions, such as for 401(K), salary deferral, etc. Award amounts will be based on the participants’ officer title and their corresponding level of responsibilities.

There will be three tiers of incentive award amounts as follows:

TIER 1

     Participants: President and Chairman.

Minimum		Target		Maximum
20% Award		40% Award		50% Award

TIER 2

     Participants: Executive Officers

Minimum		Target		Maximum
15% Award		30% Award		40% Award

TIER 3

     Participants: Senior Vice Presidents and Other Participants

Minimum		Target		Maximum
10% Award		25% Award		35% Award

The listed award amounts are earned by the Plan participants at the completion of the plan year, if the performance standards achieved for the criteria are met by the Bank. If the Bank fails to meet the minimum criteria standards listed, then no award amounts would be made for those criteria for the plan year. Individual performance measures may be instituted in certain cases and would be in addition to the Bank-wide criteria.

PERFORMANCE CRITERIA AND STANDARDS

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

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

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

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

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

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

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

PAYMENT OF AWARDS

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

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

INCENTIVE AWARD LIMITATIONS

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

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

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

Example:

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

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

Deferred Payment

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

DISCRETIONARY AWARDS

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

APPLICABLE LAW

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

Adopted by the Board of Directors of Northrim Bank on November 3, 1994.
Adopted by the Board of Directors of Northrim Bank as Amended on May 14, 2009.