Document

DEF 14A 1 nrimdef14a123121.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. __)


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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material Pursuant to §240.14a-12

NORTHRIM BANCORP, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Date Filed:

3111 C Street

Anchorage, AK 99503

April 19, 2022

Dear Shareholder:

I am pleased to invite you to attend the Northrim BanCorp, Inc. (the "Company") Annual Shareholders’ Meeting (the "Annual Meeting") where you will have the opportunity to hear about our 2021 operations and our plans for 2022. The Annual Meeting will be on Thursday, May 26, 2022, at 9 A.M. Alaska Daylight Time. The Annual Meeting will be a completely “virtual meeting" of shareholders. You will be able to attend the Annual Meeting online, vote your shares electronically and submit your questions during the live webcast of the Annual Meeting by visiting www.virtualshareholdermeeting.com/NRIM2022. You will need to have your 16-Digit Control Number included on your Notice or proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting. Please keep your 16-Digit Control Number in a safe place so it is available to you for the Annual Meeting.

You will find additional information concerning the Company and our operations in the enclosed 2021 Annual Report and Form 10-K, which includes our audited financial statements for the year ended December 31, 2021.

Your opinion and your vote are very important to us. Please sign and return your proxy card, which is included with this document, as soon as possible. If you choose to attend the Annual Meeting online, voting by proxy will not prevent you from voting electronically; however, if you are unable to attend online, voting by proxy will ensure that your vote is counted.

Thank you for your continued support of the Company. If you have any questions, please feel free to contact the Corporate Secretary at (907) 562-0062.

Sincerely,

Joseph M. Schierhorn

Chairman, Chief Executive Officer, President & Chief Operating Officer

NOTICE OF ANNUAL SHAREHOLDERS’ MEETING

To Be Held Online at www.virtualshareholdermeeting.com/NRIM2022 on May 26, 2022

Notice is hereby given that Northrim BanCorp, Inc. (the "Company") will hold its 2022 Annual Shareholders’ Meeting (the "Annual Meeting") at 9 A.M. Alaska Daylight Time, on Thursday, May 26, 2022 at www.virtualshareholdermeeting.com/NRIM2022. The Annual Meeting will be a completely “virtual meeting" of shareholders. You will be able to attend the Annual Meeting online, vote your shares electronically and submit your questions during the live webcast of the Annual Meeting by visiting www.virtualshareholdermeeting.com/NRIM2022. You will need to have your 16-Digit Control Number included on your Notice or proxy card (if you received a printed copy of the proxy materials) to participate in the Annual Meeting. The Annual Meeting will be held for the following purposes, as more fully described in the accompanying proxy statement:

1) To elect twelve directors nominated by the Company's Board of Directors (the "Board") for a term ending at the 2023 Annual Meeting or such other date as their successors may be elected and qualified;

2) To approve, by nonbinding vote, the compensation of the named executive officers as disclosed in these materials;

3) To ratify the selection of Moss Adams LLP as the Company’s independent registered public accounting firm for fiscal year 2022; and

4) To transact any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

Shareholders owning the Company's shares of common stock at the close of business on April 1, 2022 are entitled to receive notice of and to vote online during the Annual Meeting or any adjournment or postponement of that meeting.

The Board recommends that shareholders vote "FOR" the slate of nominees to the Board outlined in this proxy statement; "FOR" the approval of the compensation of the Company's named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure in this proxy statement; and "FOR" the ratification of Moss Adams LLP as the Company’s independent registered public accounting firm for the fiscal year 2022.

By order of the Board of Directors,

/s/ Susan Stenstrom

Susan Stenstrom

Acting Corporate Secretary

April 19, 2022

Whether or not you plan to attend the Annual Meeting online, please complete, sign and date the enclosed form of proxy and mail it promptly in the enclosed return envelope, which requires no postage if mailed in the United States. Alternatively, you may vote using the Internet by following the instructions described in the enclosed proxy statement. Your vote is important to us. If you participate in the Annual Meeting online, you may vote your shares online if you wish to do so even if you have previously sent in your proxy.

TABLE OF CONTENTS



Solicitation, Voting, and Revocability of Proxies			1

Q & A about Voting and the Annual Shareholder’s Meeting			2

Proposal 1: Election of Directors			5

Executive Officers			18

Compensation Discussion and Analysis			19

Executive Compensation			27

Director Compensation			41



Interest of Management in Certain Transactions			42

Security Ownership of Certain Beneficial Owners and Management			44

Relationship with the Independent Registered Public Accounting Firm			45

Committee Reports			46

Proposal 2: Advisory Vote on Executive Compensation			48

Proposal 3: Ratification of the Independent Registered Public Accounting Firm			48

Information Concerning Shareholder Proposals			48

Householding			48

2021 Report to Shareholders and Annual Report on Form 10-K			49

Other Matters			49

Exhibit A: Audit Committee Charter			50

Exhibit B: Compensation Committee Charter			53

Exhibit C: Governance and Nominating Committee Charter			55

NORTHRIM BANCORP, INC.

3111 C Street

Anchorage, Alaska 99503

PROXY STATEMENT

The Board is soliciting proxies for this year’s Annual Meeting. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.

The Board set April 1, 2022, as the record date for the Annual Meeting. Shareholders who owned the Company’s common stock on that date are entitled to vote online during the Annual Meeting, with each share entitled to one vote. There were 5,877,971 shares of the Company's common stock outstanding as of the record date.

Voting materials, which include this proxy statement dated April 19, 2022, a proxy card, the 2021 Annual Report and the Company’s Annual Report on Form 10-K, are first being mailed to shareholders on or about April 19, 2022, unless the shareholder has elected electronic delivery. If the shareholder has elected electronic delivery, we have provided a notice of Internet availability of proxy materials which contains instructions on how to access proxy materials via the Internet or how to request a printed set of proxy materials. Additionally, this Proxy Statement, the 2021 Annual Report and the Company's Annual Report on Form 10-K are available at www.northrim.com by clicking the "Investor Relations" link. In accordance with Securities and Exchange Commission rules, our proxy materials posted on both our website and the website described below do not contain any cookies or other tracking features.

INTERNET AVAILABILITY OF PROXY MATERIALS

*****IMPORTANT NOTICE*****

Regarding the Availability of Proxy Materials for the Annual Shareholders’ Meeting

To be Held Online at www.virtualshareholdermeeting.com/NRIM2022 on May 26, 2022

The Proxy Statement and Annual Report to Shareholders are available at

www.proxyvote.com

QUESTIONS AND ANSWERS ABOUT VOTING AND THE ANNUAL SHAREHOLDERS’ MEETING

______________________________________________________________________________________________________

Why is the Annual Meeting being held online?

As permitted by the Company’s Bylaws, as amended (the "Bylaws"), we will utilize the virtual meeting format for the Annual Meeting in order to mitigate the risk to the health of the Company’s personnel and its shareholders related to the novel coronavirus disease and to facilitate and increase shareholder attendance and participation by enabling shareholders to participate fully and equally from any location around the world, at no cost. We believe that the use of the virtual annual meeting format is the right choice for the Company under the circumstances, as it not only brings cost savings to the Company and our shareholders, but also increases our ability to engage with all shareholders, regardless of their size, resources, or physical location. We view the virtual meeting format as consistent with our commitment to shareholder engagement as one of our tools by which to further reach our shareholder base. A virtual meeting is also environmentally friendly and in line with our commitment to sustainable business practices.

We remain sensitive to concerns regarding virtual meetings generally from investor advisory groups and other shareholder rights advocates who have voiced concerns that virtual meetings may diminish shareholder voice or reduce accountability. Our Bylaws provide that our annual meetings may be held virtually, by means of remote communication, and our virtual shareholder meeting guidelines provide that (i) we implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting is a shareholder or proxy holder, (ii) we implement reasonable measures to provide shareholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) we maintain a record of any votes or other action taken by shareholders or proxy holders at the meeting. Accordingly, the procedures for our virtual meeting format comply with these requirements, and in fact, we believe that our format enhances, rather than constrains, shareholder access, participation and communication. For example, the online format allows shareholders to communicate with us during the meeting so they can ask appropriate questions of our Board or management in accordance with the rules of conduct for the meeting. A further description regarding this process can be found under “Questions and Answers About Voting and the Annual Shareholders’ Meeting - How Do I Attend and Participate in the Annual Meeting.” During the live Q&A session of the meeting, we will answer questions as they come in, as time permits.

See “Questions and Answers About Voting and the Annual Shareholders’ Meeting - How Do I Attend and Participate in the Annual Meeting” in this proxy statement for more information regarding this year’s virtual Annual Meeting. In addition, information regarding the ability of shareholders to ask questions during the Annual Meeting, related rules of conduct at the Annual Meeting, and procedures for posting appropriate questions received during the Annual Meeting, will be available on our website at www.northrim.com under "Investor Relations." Similarly, matters addressing technical and logistical issues, including technical support during the Annual Meeting and related to accessing the Annual Meeting’s virtual meeting platform, will be available at www.virtualshareholdermeeting.com/NRIM2022.

Why am I receiving this proxy statement and proxy card?

You are receiving this proxy statement and proxy card because you own shares of the Company’s common stock. This proxy statement describes matters on which we would like you to vote on at the Annual Meeting.

When you sign the proxy card, you appoint the persons named in the proxy, Messrs. Joseph M. Schierhorn and Jed W. Ballard, as your representatives at the Annual Meeting, and those persons will vote your shares at the Annual Meeting as you have instructed on the proxy card. This way, your shares will be voted even if you cannot attend the Annual Meeting online.

Who is soliciting my proxy, and who is paying the cost of solicitation?

The enclosed proxy is solicited by and on behalf of the Board, and the Company will bear the costs of solicitation. Certain directors, officers, and employees of the Company and/or its subsidiary, Northrim Bank (the "Bank"), may solicit proxies by telephone, facsimile, the Internet, and personal contact.

The Company does not expect to pay any compensation to employees, officers, or directors for soliciting proxies, but will reimburse brokers, nominees, and similar record holders for reasonable expenses in mailing proxy materials to beneficial owners of the Company’s common stock.

How do I attend and participate in the Annual Meeting?

Our completely virtual Annual Meeting will be conducted on the internet via live audio webcast. You will be able to attend the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/NRIM2022. You also will be able to vote your shares online during the Annual Meeting.

All shareholders of record as of April 1, 2022, or their duly appointed proxies, may participate in the Annual Meeting. To participate in the Annual Meeting, you will need the 16-Digit Control Number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. The Annual Meeting webcast will begin promptly at 9:00 A.M. Alaska Daylight Time. We encourage you to access the meeting prior to the start time. Online access will begin at 8:45 A.M. Alaska Daylight Time.

The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong internet connection wherever they intend to participate in the Annual Meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Annual Meeting.

If you choose to vote your shares online during the Annual Meeting, please follow the instructions provided on the Notice to log in to www.virtualshareholdermeeting.com/NRIM2022. You will need the 16-Digit Control Number included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials.

Even if you plan to participate in the Annual Meeting, the Company strongly recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. Voting promptly will save us the expense of further requests for proxies in order to ensure a quorum at the Annual Meeting.

Shareholders may submit questions during the Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/NRIM2022, type your question into the “Ask a Question” field, and click “Submit.”

Questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints. Questions regarding matters irrelevant to the Company’s business, material non-public information, related to threatened or ongoing litigation, repetitious statements, or personal matters, are not pertinent to meeting matters and therefore will not be answered.

What if I experience technical difficulties with attending the virtual Annual Meeting?

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.

What am I voting on, and what vote is required for approval?

At the Annual Meeting, you will be asked to vote on:

● the election of twelve directors to serve on the Board until the 2023 Annual Meeting or until their successors have been elected and have qualified ("Proposal 1");

•a non-binding advisory vote on the compensation of the named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure in this proxy statement ("Proposal 2"); and,

● the ratification of Moss Adams LLP as the Company’s independent registered accounting firm for fiscal year 2022 ("Proposal 3").

All proposals will require the affirmative vote of a majority of the Company's shareholders online or represented by a duly executed proxy at the Annual Meeting.

Who is entitled to vote?

Only shareholders who owned the Company’s common stock as of the close of business on the record date, April 1, 2022, are entitled to receive notice of the Annual Meeting and to vote the shares online that they held on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting.

How do I vote, and how are the votes counted?

Registered shareholders may vote online during the Annual Meeting, on the Internet, or by mail.

● Voting Online during the Annual Meeting. If you attend the Annual Meeting online, you may vote as instructed at the Annual Meeting. However, if you hold your shares in street name (that is, through a broker/dealer or other nominee), you will need to have with you during the Annual Meeting a proxy delivered to you by such nominee reflecting your share ownership as of the record date and your 16-Digit Control Number.

● Voting on the Internet. Go to www.proxyvote.com and follow the instructions. You will need your proxy when you access the website.

● Voting by Mail. Complete, date, sign, and mail the proxy in the enclosed postage pre-paid envelope. If you mark your voting instructions on the proxy, your shares will be voted at the Annual Meeting as you instruct. Please see the proxy for voting instructions.

If you own your shares through a brokerage account or in other nominee form, you should follow the instructions you receive from the record holder to see which voting methods are available. If your shares are registered in your own name and you attend the Annual Meeting online, you may vote online during the Annual Meeting, prior to the vote being closed. "Street name" shareholders, that is, those shareholders whose shares are held in the name of and through a broker or other nominee, who wish to vote online during the Annual Meeting will need to obtain a proxy from the broker or nominee that holds their shares. Your broker or nominee will generally provide you with the appropriate forms at the time you receive this proxy statement, including your 16-Digit Control Number. If you own your shares through a broker or other nominee, you cannot vote online during the Annual Meeting unless you receive a proxy card, including a 16-Digit Control Number, from the broker or nominee.

Each shareholder will be entitled to one vote for each share of common stock held of record by the shareholder on the record date, April 1, 2022. With regard to the election of directors, you may cast your vote in favor of some or all of the nominees, or you may withhold your vote for any nominee in the election of directors. Withheld votes will be excluded entirely from the vote and will have no effect on the outcome. On other proposals, you can "abstain." If you abstain, your shares will be counted as present at the Annual Meeting for purposes of that proposal and your abstention will have the effect of a vote against the proposal. Shareholders may not cumulate their votes for the election of directors.

If your shares are held in street name, the broker or nominee is permitted to exercise voting discretion under certain circumstances. At the Annual Meeting, if the broker or nominee is not given specific voting instructions, the shares may not be voted on Proposal 1 or Proposal 2 by the broker or nominee in their own discretion. If your shares are held in street name and you do not give instructions to your broker or nominee on how to vote them, the votes will be "broker non-votes," which will have the effect of excluding your vote from the tallies. However, in these cases, and in cases where the shareholder abstains from voting on a matter, those shares will be counted for determining whether a quorum is present. We expect that brokers or nominees will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions with respect to Proposal 3 to ratify the Company’s selected independent registered public accounting firm, but abstentions will have the effect of a vote against the Proposal 3.

If your shares are held of record in your own name and you do not vote, your shares will not be voted.

What does it mean if I receive more than one proxy card?

It means that you hold shares in multiple accounts. Please complete and return all proxies (either by mail or over the Internet) to ensure that your shares are all voted in accordance with your instructions.

Can I change my vote after I return my proxy card?

Yes. If the enclosed proxy is duly executed and received in time for the Annual Meeting, the persons named in the proxy will vote the shares represented by the proxy "FOR" the twelve nominees listed in the proxy statement, "FOR" the approval of the compensation of the named executive officers, and "FOR" the ratification of the Company’s independent registered public accounting firm. If you grant a proxy, you may revoke it at any time before its exercise by submitting a second proxy with a subsequent date either over the Internet or by mail to the attention of the Corporate Secretary at P.O. Box 241489, Anchorage, AK 99524-1489 or by announcing your revocation to the Corporate Secretary online during the Annual Meeting prior to the taking of a shareholder vote. The shares represented by properly executed proxies that are not revoked will be voted in accordance with the specifications in such proxies.

Can I vote on other matters or submit a proposal to be considered at the Annual Meeting?

The Company has not received timely notice of any shareholder proposals to be considered at the Annual Meeting, and shareholders may submit matters for a vote only in accordance with the Bylaws. The Board does not presently know of any other matters to be brought before the Annual Meeting.

For shareholders seeking to include proposals in the proxy materials for the 2023 Annual Meeting, the proposing shareholder or shareholders must comply with all applicable regulations, including Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the proposals must be received by the Corporate Secretary of the Company on or before December 20, 2022. Upon receipt of such proposal, the Company will determine whether to include the proposal in its proxy materials for the 2023 Annual Meeting in accordance with applicable law. A shareholder that wishes to present a proposal at the 2023 Annual Meeting, but not submit such proposal for inclusion in our proxy statement for our 2023 Annual Meeting must submit such proposal to the Corporate Secretary on or before March 5, 2023. Shareholder proposals should be sent to the attention of the Corporate Secretary, Northrim BanCorp, Inc., P.O. Box 241489, Anchorage, AK 99524-1489.

How many votes are needed to hold the Annual Meeting?

A majority of the Company’s outstanding shares as of the record date (a quorum) must be present at the Annual Meeting in order to hold the Annual Meeting and conduct business. Shares are counted as present at the Annual Meeting if a shareholder is online and votes online during the Annual Meeting or has properly submitted an executed proxy card either over the Internet or by mail. Broker non-votes will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting. As of April 1, 2022, the record date for the Annual Meeting, 5,877,971 shares of the Company’s common stock were outstanding and eligible to vote.

How many shares are owned by the Directors and Executive Officers?

All directors and named executive officers of the Company as a group (comprised of 16 individuals) beneficially held 210,709 shares of the Company's common stock as of April 19, 2022, representing 3.5% of the outstanding common stock of the Company.

Where and when will I be able to find the results of the voting?

The results of the voting will be announced at the Annual Meeting. Final results will be disclosed in the Company’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission within four business days after the conclusion of the Annual Meeting.

How do I communicate with Directors?

The Board provides a process for shareholders to send communications to the Board or any of the individual directors. Shareholders may send communications to the Board or any of the directors at c/o Corporate Secretary, Northrim BanCorp, Inc., P.O. Box 241489, Anchorage, AK 99524-1489. All communications will be compiled by the Corporate Secretary of the Company and submitted to the Board or the individual directors on a periodic basis.

PROPOSAL 1: ELECTION OF DIRECTORS

______________________________________________________________________________________________________

General Information

How many directors are nominated?

The Company’s Articles of Incorporation provide that the Board will consist of not less than five nor more than twenty-five directors. Currently, the Board consists of twelve directors, and the Board has set the number of directors to be elected at the Annual Meeting at twelve.

Who are the nominees?

The Board has nominated the individuals listed on the following pages for election as directors for a one year term expiring at the 2023 Annual Meeting or until their successors have been elected and qualified. If any nominee declines or becomes unable to serve as a director before the Annual Meeting, the Board will select a replacement nominee, and your proxies will be voted for that replacement nominee. The Board presently has no knowledge that any nominee will decline or be unable to serve.

It is the Company’s policy to encourage director nominees up for election at the Annual Meeting to attend the Annual Meeting. All directors up for election at the 2022 Annual Meeting attended the 2021 Annual Meeting with the exception of Director Schutt who was excused from the meeting.

Information about the Nominees

The following table provides certain information about the nominees for director, including age, principal occupation(s), and public company directorships held during the past five years, and year first elected a director of the Company. All of the nominees are presently directors of the Company and the Bank. There are no family relationships among any of our current directors, director nominees, or executive officers. All of the nominees, with the exception of Messrs Schierhorn and Schutt, are deemed by the Board to be independent within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements.


Name/Age	Occupation of Nominee During Past Five Years
Larry S. Cash, 70 Director Since: 1995	Since 2020	Chair, RIM Architects, LLC (Alaska, California, Guam and Hawaii)
	2017 to 2020	Chief Executive Officer, RIM Architects, LLC (Alaska, California, Guam and Hawaii)
	1986 to 2016	President of RIM Architects, LLC

Anthony Drabek, 74 Director Since: 1991	Since 2019	Director, Koniag, Inc., an Alaska Native Corporation
	1989 to 2010	President and Chief Executive Officer, Natives of Kodiak, Inc., an Alaska Native Corporation
	2001 to 2010	President, Koncor Forest Products Co.
	1986 to 2010	Chairman, Koncor Forest Products Co.

Karl L. Hanneman, 64 Director Since: 2014	Since 2020	Director, Gatos Silver, Inc.
	Since 2018	Director, International Tower Hill Mines, Ltd. (An advanced exploration stage mining company.)(1)
	Since 2017	Chief Executive Officer, International Tower Hill Mines, Ltd.
	2018 to 2020	Director, Sunshine Silver Mining & Refining Corp.
	2015 to 2016	Alaska Chief Operating Officer, International Tower Hill Mines, Ltd.
	2010 to 2015	Alaska General Manager, International Tower Hill Mines, Ltd.
	2010 to 2020	Director, Fairbanks Chamber of Commerce
	2008 to 2010	Director of Corporate Affairs, Teck Resources, Ltd. (A mining and mineral development company.)
	Since 2011	Director, Usibelli Coal Mine, Inc.
	Since 1997	Director, Alaska Mining Hall of Fame
	Since 1998	Director, Resource Development Council


Name/Age	Occupation of Nominee During Past Five Years
David W. Karp, 55 Director Since: 2015	Since 2022	Chairman, Community Advisory Board Alaska Communications Systems Group, Inc.
	Since 2020	Director, Resource Development Council
	Since 2020	Board Member, KEEP Alaska Competitive
	Since 2020	Board Member, Anchorage Economic Development Corp.
	Since 2019	Senior Vice President & Managing Director, Alaska, Saltchuk
	Since 2019	Board Member, Alaska Resource Education
	2018 to 2021	Chairman, Alaska Communications Systems Group, Inc. (A publicly traded company.)
	2011 to 2021	Board Member, Alaska Communications Systems Group, Inc. (A publicly traded company.) Member, Nominating and Corporate Governance Committee
	2011 to 2018	President and Chief Executive Officer, Northern Aviation Services, Inc.
	2007 to 2018	President and Chief Executive Officer, Northern Air Cargo, Inc.

Joseph P. Marushack, 63 Director Since: 2021	Since 2015	Board Member, Yellowstone Forever
	2015 to 2021	President, ConocoPhillips Alaska
	2012 to 2015	President, ConocoPhillips Asia, Pacific and Middle East
	2010 to 2012	President, ConocoPhillips Canada
	2007 to 2010	President, ConocoPhillips Australia

David J. McCambridge, 66 Director Since: 2011	1999 to 2020	President and Director, Alaska Kidney Foundation (nonprofit)
	1978 to 2010	Audit Partner, KPMG LLP
	1985 to 2015	Treasurer and Director, The Tanaka Foundation
	1993 to 2012	Director, Great Alaska Council Boy Scouts of America

Krystal M. Nelson, 49 Director Since: 2015	Since 2014	Chief Operating Officer, and Executive Vice President, Bering Straits Native Corporation
	2014 to 2017	Trustee, Pacific Northern Academy Board
	2007 to 2014	Vice President and Chief Operating Officer, Ahtna Engineering Services

Joseph M. Schierhorn, 64 Director Since: 2016	Since 2018	Chair, the Company and the Bank Board
	Since 2017	President and Chief Executive Officer, the Company
	Since 2020	Co-Chair, KEEP Alaska Competitive
	2016 to 2019	Member, Federal Reserve Bank of San Francisco's Twelfth District Community Depository Institutions Advisory Council
	Since 2017	Member and Director, Pacific Wealth Advisors, LLC and Pacific Portfolio Trust Co.
	Since 2016	Chief Executive Officer, the Bank
	2015 to 2022	President, the Bank
	Since 2013	Chief Operating Officer, the Company
	2013 to 2015	Corporate Secretary, the Company and the Bank
	2013 to 2014	Chief Operating Officer, the Bank
	Since 2017	Member, Board of Directors of the Pacific Bankers Management Institute Representing the Pacific Coast Banking School
	2005 to 2017	Executive Vice President, the Company
	2005 to 2014	Executive Vice President, the Bank
	2001 to 2014	Chief Financial Officer, the Company and the Bank


Name/Age	Occupation of Nominee During Past Five Years
Aaron M. Schutt, 49 Director Since: 2018	Since 2011	President and Chief Executive Officer, Doyon Limited (an Alaska Native Corporation)
	Since 2018	Chair, Akeela, Inc.
	Since 2018	Chair, ANCSA Regional Association
	Since 2021	Member, University of Alaska Fairbanks Advisory Board
	2012 to 2019	Director and Vice President, Alaska Native Heritage Center
	Since 2011	Director, ANCSA Regional Association
	2008 to 2011	Chief Operating Officer, Doyon Limited
	Since 2007	Board of Managers, Doyon Utilities, LLC
	2006 to 2011	Senior Vice President, Doyon Limited
	Since 2001	Director, Akeela, Inc.

John C. Swalling, 72 Director Since: 2002	Since 2018	Director, Ted Stevens Foundation
	Since 2005	Director and Vice Chairman, Civic Ventures
	Since 2001	Director, Alaska Pacific University Foundation
	Since 1990	Director, Anchorage Museum Foundation
	Since 1986	Board Member, Visit Anchorage
	1991 to 2019	President and Director, Swalling & Associates PC
	1975 to 2018	Director, Swalling Construction Co., Inc
	Since 1974	Member, American Institute of CPAs
	Since 1974	Member and past-President, Alaska Society of CPAs
	1994 to 2017	Director, DFK International
	1985 to 2020	Board Member (and former Chair), Providence St. Joseph Health Alaska Community Ministry Board

Linda C. Thomas, 68 Director Since: 2014	Since 2016	Chief Executive Officer, Alaskan Brewing Company
	Since 2021	Board Member, League of Women Voters
	1996 to 2016	Chief Operations Officer, Alaskan Brewing Company
	1994 to 1996	Chief Financial Officer, Alaskan Brewing Company
	2013 to 2019	Director, Juneau Chamber of Commerce
	2007 to 2019	Director, Bartlett Regional Hospital

David G. Wight, 81 Director Since: 2006	Since 2018	Board Member, The Dome (a non-profit company)
	Since 2016	Director, Alaska Gasline Development Corporation
	Since 2014	Unpaid Insider/consultant, Saturn Ferrestol
	2006 to 2010	Director, Storm Cat Energy (Denver based company)
	Since 2002	Board Member, CommonWealth North
	2000 to 2005	President and Chief Executive Officer, Alyeska Pipeline Service Company
	1992 to 2000	President, BP Amoco Energy Co. Trinidad and Tobago

(1) Effective March 12, 2018, Karl Hanneman entered into a new employment agreement with International Tower Hill Mines Ltd. that states that Mr. Hanneman continues to be responsible for all duties normally incidental to the position of CEO. However, it reduces his salary by 50% due to a 50% reduction in the amount of time required to perform those duties as the scope of work for International Tower Hill Mines, Ltd. Mr. Hanneman is performing is reduced.

Board Composition: The following Board members Diversity Matrix provides a high-level overview of certain personal characteristics and backgrounds of directors serving as of the date of this proxy statement.


Board Diversity Matrix
Number of Directors	12
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	2	10	—	—
Part II: Demographic Background
African American or Black	—	—	—	—
Alaskan Native or Native American	—	2	—	—
Asian	—	—	—	—
Hispanic or Latinx	—	—	—	—
Native Hawaiian or Pacific Islander	—	—	—	—
White	2	8	—	—
Two or More Races or Ethnicities	—	—	—	—
LGBTQ+	—	—	—	—
Did Not Disclose Demographic Background	—	—	—	—

Director Qualifications and Experience: The following table identifies the experience, qualifications, attributes, and skills that the Board considered in making its decision to appoint and nominate directors to our Board. The nominees' breadth and diversity of experience, mix of qualifications, attributes and skills strengthen our Board's effective oversight of the Company's business. While our longer tenured directors bring a wealth of experience and deep understanding of the business and local community in which we operate, we recognize the need for fresh perspectives, have consistently added new directors, and are committed to continued board and committee diversity and refreshment. This information supplements the biographical information provided above.

Specific skills/knowledge:

Professional standing in chosen field

Expertise in financial services or related industry

Community involvement

Other Board experience

Other public company experience

Accounting

Legal

Business management

Larry S. Cash

Anthony Drabek

Karl L. Hanneman

David W. Karp

David J. McCambridge

Joseph P. Marushack

Krystal M. Nelson

Joseph M. Schierhorn

Aaron M. Schutt

John C. Swalling

Linda C. Thomas

David G. Wight

THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THESE NOMINEES.

Shareholder Nominations for 2022 Annual Shareholders’ Meeting

In accordance with the Bylaws, shareholder nominations for the 2022 Annual Meeting may be made (i) by, or at the direction of, a majority of the Board or (ii) by any shareholder entitled to vote online during the Annual Meeting. Only persons nominated in accordance with the procedures set forth in the Bylaws shall be eligible for election as directors at the Annual

Meeting. Nominations, other than those made by or at the direction of the Board, shall be made pursuant to timely notice in writing to the Corporate Secretary of the Company as set forth in the Bylaws. To be timely, a shareholder's notice shall be delivered to, or mailed and received at, the principal office of the Company not later than one-hundred-twenty days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the Company. Such shareholder’s notice shall set forth (i) the name, age, business address and residence address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) the principal occupation or employment of the shareholder submitting the notice and of each person being nominated; (iii) the class and number of shares of the Company’s stock owned of record and beneficially by the shareholder who intends to make the nomination and of the person or persons to be nominated; (iv) a representation that the shareholder is and will continue to be a holder of record of stock of the Company entitled to vote at such meeting and intends to attend online or by proxy at the meeting to nominate the person or persons specified in the notice; (v) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (vi) such other information regarding the shareholder submitting the notice, each nominee proposed by such shareholder and any other person covered by clause (iii) of this paragraph as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, whether or not the Company's common stock is registered under the Exchange Act, as amended; and (vii) the consent of each nominee to serve as a director of the Company if so elected. At the request or at the direction of the Board, any person nominated for election as a director at the Annual Meeting shall furnish to the Corporate Secretary of the Company that information required to be set forth in a shareholder's notice of nomination, which pertains to the nominee. The Company may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee. The Board may reject any nomination by a shareholder not timely made in accordance with the requirements. If the Board, a designated committee thereof, or other authorized individual determines that the information provided in a shareholder's notice does not satisfy the informational requirements in any material respect, the Secretary of the Company or a duly authorized representative of the Company shall promptly notify such shareholder of the deficiency in the notice. If the deficiency is not cured within five days from the date such deficiency notice is given to the shareholder, or if the Board or such committee or other authorized individual reasonably determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements in any material respect, then the Board may reject such shareholder's nomination. The Secretary of the Company or a duly authorized representative of the Company shall notify a shareholder in writing whether his nomination has been made in accordance with the time and informational requirements.

Information Regarding the Board of Directors and Its Committees

The Board has determined that all nominees other than Messrs Schierhorn and Schutt are independent within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements. The Company Board of Directors met ten times during 2021 and the Bank Board of Directors met eleven times during 2021. The Board has adopted certain standing committees, including an Audit Committee, a Compensation Committee, and a Governance and Nominating Committee. During 2021, all directors attended at least seventy-five percent (75%) of the total meetings of the Board and committee meetings that they were each required to attend. The Board did not hold any special meetings related to the novel coronavirus 19 ("COVID-19"). COVID-19 matters were addressed in regularly scheduled meetings of the Company and the Bank Boards and committee meetings.

Currently, the Board has determined that having the Company's Chief Executive Officer also serve as Chair of the Board is in the best interests of the Company's shareholders. Given Mr. Schierhorn's in-depth knowledge of the Company's business, his leadership in formulating and implementing strategic initiatives and the current regulatory and market environment, the Board believes that having one leader serving as both Chair and Chief Executive Officer provides the most decisive and effective leadership for the Company. Further, having a combined Chair and Chief Executive Officer enables the Company to speak with a unified voice to the Company's shareholders, employees, governmental and regulatory agencies, and other stakeholders. The Board believes that this current structure is optimal for the Company because it provides the Company with consistent leadership.

The Board has also designated one of its independent members as an independent lead director. Mr. John C. Swalling currently serves as the Company’s independent lead director. The lead director’s primary responsibilities are to preside over executive sessions of non-management directors; to conduct annual interviews with all directors regarding each director’s own self-assessment of their contribution to the Board prior to nominations for election at the Annual Meeting; and, to recommend to the Governance and Nominating Committee, in consultation with the Chair of the Board, proposed committee assignments and chairmanships. The Board believes that our leadership structure of combining the Chair and Chief Executive Officer roles as part of a governance structure that includes an independent lead director, plus the exercise of key board oversight responsibilities by independent directors, is appropriate for the Company at this time.

Risk Oversight

The Company and the Bank have in place policies and procedures to manage risks that could affect their operational and strategic position as a profitable, safe and sound financial institution. The Bank’s Internal Audit Department provides written results of internal and out-sourced audits, including review of the credit quality of the loan portfolio, directly to the Audit Committee and management. The Audit Committee, which is made up entirely of directors deemed independent of the Company by the Board, reviews, and reports to the Board on the results of these audits. The Audit Committee also reports to the Board on any deficiencies identified, as well as any steps deemed necessary to resolve and mitigate risk. An officer, appointed by the Board, serves as the Bank’s risk manager and is responsible for monitoring and maintaining the Bank’s company-wide contingency plan. This contingency plan addresses and provides guidelines for the restoration of business in the event of man-made and natural disruptive events.

With regard to certain risks affecting the Company and the Bank, we recognize that not maintaining the privacy and security of customer information could damage our reputation and cause us to incur additional costs or even litigation. As part of its oversight of cybersecurity risk, on an annual basis, the Bank’s Board of Directors reviews its Information Security Policy with its appointed Information Security Officer. We work to educate our customers about the importance and understanding of their role in protecting their identities and the privacy of their information. We consider customer education regarding the use of electronic convenience products to be especially important due to the Bank’s increased exposure to loss related to these products if procedures are not followed. A Vendor Management Policy is in place, which is approved by the Bank’s Board of Directors annually. The Vendor Management Policy calls for the assignment of levels of risk to each vendor based upon an assessment of the degree to which their relationship could expose the Company to risk in relation to the Company’s reliance on the vendor’s promise to perform and to protect customer privacy and based on the vendor’s fiscal strength.

The Company monitors its interest rate risk through a review of its sensitivity to upward and downward movements of interest rates and their impact on the Company’s interest-earning assets, interest-bearing liabilities, and the net interest margin. The Company monitors concentrations and economic trends in the communities it serves and in the global economy in order to respond to issues that could affect the economic climate in which it operates. The Company's management reports its analysis of these areas to the Bank’s Board of Directors on a periodic basis.

It is management’s policy to discuss a detailed analysis of any proposed major project with the Board. This analysis generally includes management’s reasons for the proposal, results of due diligence analysis, potential risks, costs, and the estimated period for implementation of the project, and the Bank's Compliance Department and Operations and Technology Committee's recommendations prior to seeking the Board’s approval.

From time to time, the Company provides director education and discussion as to bank directorship issues, the management of risk, miscellaneous timely topics affecting the Company, as well as future corporate governance matters by receiving periodic briefings from senior management of the Company, legal counsel, auditors and other consultants. In addition, the Company periodically engages the services of experienced consultants to facilitate more formal director education matters, strategic planning, and other topics affecting the Company. During 2021, the Company retained a third party consultant who assisted the Company and its directors with strategic planning matters.

Audit Committee

The primary functions of the Audit Committee, which met seven times in 2021, include reviewing and approving the services of the independent registered public accounting firm; reviewing the Company’s financial statements; review of the Company's processes and procedures in place for maintaining the Company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") as evaluated by the Company’s internal audit manager, internal SOX Committee, and the Company's independent registered public accounting firm, reviewing the plan, scope, and audit results of the internal and external auditors; reviewing the reports of regulatory authorities; and, reviewing and overseeing the Company's external reporting on environmental, social and governance related matters. The Board has adopted a written charter for the Audit Committee. A copy of the Audit Committee charter is attached to this proxy statement as Exhibit A. Members of the Audit Committee in 2021 were Mr. David J. McCambridge, Ms. Linda C. Thomas, and Mr. David G. Wight. Mr. McCambridge was appointed to the Committee in 2011, Ms. Thomas was appointed in 2016, and Mr. Wight was appointed in 2007. Mr. McCambridge has been the Chair of the Audit Committee since 2017. The Board has determined that each of the members of the Audit Committee are independent directors within the meaning of the Securities and Exchange Commission rules applying to Audit Committee members and the Nasdaq Global Select Market listing standards. The Audit Committee and the Board have also determined that Mr. McCambridge qualifies as an Audit Committee financial expert within the meaning of such rules.

Compensation Committee

The primary functions of the Compensation Committee, which met three times in 2021, are: to review and approve Executive and all Senior Vice President compensation; to select and approve employee benefits and retirement plans; to review and approve the Company’s stock incentive and profit sharing plans; and, to oversee environmental, social and governance matters related to human resource management including review of the effectiveness and continuous improvement of the Company's strategies and practices regarding its human resources management function including total rewards, corporate culture, human capital and talent management, management succession, and diversity and inclusion practices. The Board has adopted a written charter for the Compensation Committee. A copy of the Compensation Committee charter is attached to this proxy statement as Exhibit B. Compensation Committee members are Mr. Karl L. Hanneman, Mr. David J. McCambridge, Ms. Krystal M. Nelson, and Mr. John C. Swalling. Mr. Hanneman was appointed to the Compensation Committee in 2014, Mr. McCambridge was appointed in 2011, Ms. Nelson was appointed in 2015, and Mr. Swalling was appointed in 2005. Ms. Nelson has been the Chair of the Compensation Committee since 2017. All members of the Compensation Committee have been determined by the Board to be independent directors within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements.

Governance and Nominating Committee

The primary functions of the Governance and Nominating Committee, which met four times in 2021, are to evaluate the size and composition of the Board; to develop criteria for Board membership; to identify, recruit, interview, and evaluate individuals qualified to become Board members; to evaluate the independence of existing and prospective directors; and, to review the Company's practices that relate to matters of environmental, social and governance framework initiatives. A copy of the Governance and Nominating Committee charter is attached to this proxy statement as Exhibit C. With respect to nomination of director candidates, the Governance and Nominating Committee will consider nominations from the Company’s shareholders using the same criteria as for all other nominations. Shareholder nominations must be made in writing and delivered or mailed to the Corporate Secretary no later than one-hundred-twenty days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the Company. Any nomination not made in accordance with the Bylaws may be disregarded at the discretion of the Chair of the Annual Meeting.

Additionally, the Governance and Nominating Committee recommends appointments of directors to the Board’s Committees, reviews and approves the related party nature of all related party transactions, and reviews the adequacy of the Company’s Corporate Governance Guidelines, the Company's environmental, social and governance framework and initiatives, and the Company’s Code of Business Conduct and Ethics and recommends any proposed changes to the Board for approval. Current members of the Governance and Nominating Committee are Mr. David W. Karp, Mr. John C. Swalling, and Ms. Linda C. Thomas. Mr. Karp was appointed to the Governance and Nominating Committee in 2015, Mr. Swalling was appointed in 2011, and Ms. Thomas was appointed in 2014. Mr. Swalling is the Chair of the Governance and Nominating Committee. All of the members of the Governance and Nominating Committee are considered by the Board to be independent directors within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements.

Director Nomination Criteria

The Governance and Nominating Committee believes that certain criteria should be met by director nominees to ensure effective corporate governance of the Company. Qualified candidates are those who, in the judgment of the Governance and Nominating Committee, possess certain personal attributes, a diversity of ideas and viewpoints, and a sufficient mix of experience and related attributes to assure effective service on the Board. The personal attributes of director nominees that the Governance and Nominating Committee considers include:

● Integrity. Each candidate shall be an individual who has demonstrated integrity, honesty, fairness, responsibility, good judgment, and ethics in his or her personal and professional life and has established a record of professional accomplishment in his or her chosen field.

● Leadership. Each candidate should be or have been in a generally recognized position of leadership in the candidate’s field of endeavors.

● Independence. No candidate, or family member (as defined in Nasdaq Global Select Market rules) or affiliate or associate (as defined in federal securities laws) of a candidate, shall have any material personal, financial or professional interest in any present or potential competitor of the Company.

● Active Participation. Each candidate must be prepared to participate fully in Board activities, attendance at, and active participation in, meetings of the Board and the committee(s) of which they are a member, and not have other personal or professional commitments that would, in the Governance and Nominating Committee's sole judgment, interfere with or limit their ability to do so.

● Best Interests of All Shareholders. Each candidate must be prepared to represent the best interests of all the Company’s shareholders and be willing to state their independent opinions in a constructive manner.

● Collegiality. Each candidate should be able to work well with other directors and executives of the Company.

● Diversity. Each candidate's background, qualifications and personal characteristics and the candidate's impact on the diversity of the Board's composition in terms of age, skills, ethnicity and other factors relevant to the Company's business.

The Governance and Nominating Committee will consider and evaluate all candidates identified through the processes described above, including incumbents and candidates proposed by the Company’s shareholders. After consideration, the Governance and Nominating Committee will finalize its list of recommended candidates for the Board's consideration. Candidates who are then approved by the Board are included in the recommended slate of director nominees in the Company's proxy statement.

Director Experience, Tenure, Diversity and Refreshment

The Board maintains a unique balance of experience, tenure, diversity, cultural and local market knowledge and broad subject matter expertise. While our longer-tenured directors carry a wealth of experience and deep understanding of the Company and our industry, the Board embraces the need for fresh perspectives and is committed to continued director refreshment.

The Board's refreshment activities are ongoing. Since 2014, the Board added seven new directors including one in 2021 and one in 2018.

The Board employs a balanced approach to populating Board committees. We believe this refreshment strategy results in a membership that maintains new and contemporary perspectives, ideas and approaches.

Board and Committee Evaluations

The Governance and Nominating Committee leads and oversees the annual evaluation of the Board and Board committees. The annual evaluation includes an individual director self-assessment and an independent third party hosted survey to determine whether the Board and its committees are functioning effectively. The Governance and Nominating Committee establishes the evaluation criteria, oversees the evaluation process, discusses the results with the Board, and implements any changes that emerge from the evaluations that the Board deems appropriate to enhance Board effectiveness.

An independent consultant provides assistance with the design of the online survey instrument and administers the survey on behalf of the Governance and Nominating Committee, thereby assuring anonymity of participant responses through a secure,

encrypted website. A written report of total Board data, as well as data for the Board committees, is prepared by the consultant, analyzing the closed-end questions and including the verbatim comments offered by directors at the close of each section of the survey that may provide recommendations for improvement. The report also tracks current data against results from previous surveys, where comparable.

Director Compensation

In 2021, all non-officer directors who did not serve as a committee chair received a $26,000 annual cash retainer. Annual cash retainers of $37,000, $32,000, and $29,500 were paid to the non-officer Lead Director and Chair of the Governance and Nominating Committee, the non-officer Chair of the Audit Committee, and the non-officer Chair of the Compensation Committee, respectively, in 2021. All non-officer directors received an additional $25,000 in cash to be used for the purchase of the Company’s common stock on the open market following the 2021 Annual Meeting. Members of the Audit Committee receive $1,000 for each Audit Committee meeting attended and members of the Governance and Nominating, and Compensation Committees receive $850 for each committee meeting attended. For information as to specific amounts paid to each of our directors in 2021, see "Director Compensation" in this proxy statement.

Compensation Committee Interlocks and Insider Participation

The following directors served as members of the Compensation Committee during 2021: Mr. Hanneman, Mr. McCambridge, Ms. Nelson, and Mr. Swalling. No member of the Compensation Committee was, during the year ended December 31, 2021, an officer, former officer, or employee of the Company or any of its subsidiaries, or had any relationship requiring disclosure by the Company under the Securities and Exchange Commission rules requiring disclosure of certain relationships and related party transactions. No executive officer of the Company served as a member of the compensation committee of another entity in which one of the executive officers of such entity served on the Company's Compensation Committee, the board of directors of another entity in which one of the executive officers of such entity served on the Company’s Compensation Committee, or the compensation committee of another entity in which one of the executive officers of such entity served as a member of the Board during the year ended December 31, 2021.

Code of Conduct

The Company has adopted a Code of Conduct, which includes a Code of Ethics for all employees, including executive officers, and all of our non-employee directors. We will furnish a copy of the Code of Conduct to shareholders, at no charge, upon written request to the Corporate Secretary at P.O. Box 241489, Anchorage, AK 99524-1489.

The Code of Conduct addresses the professional, honest and ethical conduct required of each employee and director, conflicts of interest, disclosure process, compliance with laws, rules and regulations (including securities trading), corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, and encourages the reporting of any illegal or unethical behavior through robust reporting protocols and whistleblower protections. A waiver of any provision of the Code of Conduct may be made only by the Company's Governance and Nominating Committee of the Board and must be promptly disclosed as required by SEC and NASDAQ rules. The Company will disclose any such waivers.

The Company’s management team develops the Company’s strategic direction and oversees its execution, while the Board is charged with providing guidance, insight and oversight as to the strategy, initiatives and management’s performance. As discussed elsewhere in this proxy statement, the Board and management also remain committed to fostering an effective and efficient risk and control environment that includes an emphasis on an ethically driven culture and an ongoing investment in our employees and community.

Environmental, Social, Governance and Leadership Highlights

The Company is committed to promoting sound environmental, social, governance ("ESG") and effective leadership through strong Board leadership and management oversight of the Company’s processes. Broadly speaking, our senior management team develops the Company’s ESG strategic direction and oversees its execution while the Board, primarily through the Governance and Nominating Committee is charged with providing guidance, insight and oversight as to the strategy, initiatives and management’s performance. In addition, the Company’s Audit Committee and Compensation Committee also play significant oversight roles with respect to the external communications and human resources implementation elements, respectively, of the Company’s overall environmental, social and governance initiatives.

Diversity, Equity, and Inclusion

Employee Diversity: We strive to ensure a respectful, diverse, and inclusive environment and experience for all of our employees. We support and cultivate an open and respectful environment where everyone can actively contribute, have equal access to opportunities and resources, be themselves, and realize their potential. This is reflected in our policies, which encourage individual values, strengths and protections to provide gender diversity and equality in the workplace and are reinforced through our annual anti-harassment training. As an Equal Opportunity Employer, we emphasize inclusion through hiring and compensation practices and consider a pool of diverse candidates for open positions and internal advancement opportunities and treat all our applicants with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status. To address issues related to pay discrimination, we do not ask potential candidates about their current or previous compensation during the hiring process, and we incorporate equal and fair pay reviews into every employment compensation decision. Our annual Affirmative Action Plan continues to focus our diversity, equity, and inclusion efforts on increasing the number of veterans and persons with disabilities in our workforce.

Among the Company's full-time equivalent employees as of December 31, 2021, 72% identify as women and 28% as men. Approximately 34% of the workforce identify as a member of a racial minority, 4% identify as individuals with a disability, and 2% identify as veterans. In executive and senior management positions, 56% identify as women and 44% as men as of December 31, 2021. Approximately 4% of those in executive and senior management positions identify as a member of a racial minority, 4% identify as individuals with a disability, and 4% identify as veterans.

Workplace Flexibility and Paid Time Off: COVID-19 acted as a catalyst for expanding workplace flexibility options at Northrim. We have increased employees working remotely from less than 8% before the pandemic to 50% working remotely and in a hybrid capacity as of December 31, 2021. We also offer our employees other flexible work options, such as variable work hours, condensed workweeks and part-time hours. There have been no material impacts on our operations due to these alternative working arrangements and we are pleased to provide our employees with more flexibility to accommodate their needs. In addition, Northrim provides for a strong work /life balance, including generous paid time off and paid parental leave.

Employee Learning: At Northrim, we believe that well-trained and highly motivated employees are better able to understand and fulfill customer needs and preferences, which are key to providing our “Superior Customer First Service”. Our current company-wide employee training program focuses on Northrim’s culture, Superior Customer First Service, general sales skills, and various technical areas related to job function. We focus on virtual learning to encourage and support remote and on-demand learning, reducing our need to commute or travel to in-person learning events. We also ensure that our employees complete all necessary consumer compliance trainings. Employees are required to read the Employee Handbook, the Code of Business Conduct and Ethics, as well as our Information Technology policies annually. We continue to enhance our employee training and are expanding to include a management training academy, training webinars, and a development program for commercial lenders and analysts in 2022.

Employee Health and Wellness: We understand the importance of prioritizing our employees’ health. We offer a comprehensive benefits plan for our employees that includes medical, dental, vision and prescription drug insurance, preventive healthcare benefits, and employee assistance programs for mental health, among others. Additionally, we assist our employees with setting up ergonomic offices upon request, such as through providing a standing desk, to promote employee health and wellness.

We also have developed a robust Wellness Program that includes a platform that allows employees to link a fitness device and track their steps, participate in company sponsored wellness competitions, share healthy recipes, complete personal health assessments and more. The Company sponsors wellness events such as 5K walks/runs, as well as team sporting events to encourage wellness and team building. Additionally, the Company provides annual State of Alaska Park parking passes to all employees to encourage them to get outside, be healthy and explore nature.

Throughout the pandemic, we have continued to follow all CDC-approved COVID-19 safety measures to ensure the safety and wellness of our employees, customers and vendors. We provide employees paid time off to receive their COVID-19 vaccinations and recover from vaccination side effects that prevent them from working.

Protecting and Preserving the Environment

Paper Reduction: Internally, Northrim has operated at a primarily paperless level for several years. Externally, in 2020, we implemented customer-facing software that allows for completely paperless deposit and loan account opening, as well as completely paperless closings for new or modified loans and we continue to use these paperless platforms.

Office Efficiency Improvements: Northrim has improved our facilities efficiency by deploying a large array of solutions including:

a.Upgraded HVAC control systems. These systems provide the ability to program and control equipment based on building occupancy and exterior temperatures to decrease energy consumption;

b.Installation of new high-efficiency water heaters that provide up to 99% thermal efficiency by modulating fuel supply and demand; and

c.Lighting fixture upgrades to LED. LED lighting has an extended lifespan, reduced energy consumption, and lower ongoing maintenance requirements.

This energy efficient technology has been implemented at both our owned and leased facilities when we build new branches, update existing branches, and renovate our corporate office facilities. In 2021, a number of energy efficient upgrades were realized at several Bank locations: a new branch building in Fairbanks, two remodeled Anchorage branches, and installation of exterior LED lighting at four branch locations including the Bank’s corporate office building. As new branches are built or remodeled, branch footprints are right-sized, which reduces energy consumption and occupancy expense.

Another efficiency across the Bank, has been the Statewide Transport/Courier Cost Reduction initiative implemented in 2016. This multi-phase project spanning over five years recognizes a decreasing need for the physical transport of transaction items and supplies. The initiative focused on reducing regularly scheduled expenses while maintaining compliance, customer service, and transaction item workflow.

Financing the Clean Energy Transition: Northrim recognizes the risks created by climate change and we are working to be part of the solution. To accelerate the transition to clean energy, we have been actively engaged with the C-PACE program in Alaska to drive energy improvements in local communities and create energy jobs. Additionally, this year we approved the creation of a renewable energy financing group as part of our 2022 strategic plan to increase investments. By financing energy improvements and renewable energy in Alaska, we are doing our part in accelerating the clean energy transition while building a greener, stronger community.

Commercial Property Assessed Clean Energy (C-PACE) Financing: C-PACE financing creates energy efficiencies and energy jobs, supports local governments in meeting efficiency and clean energy standards, drives private sector investment into local communities and overall lowers the cost of energy in Alaska by providing long-term low-cost financing. We believe that the Bank is the most engaged firm in the state for the Alaska C-PACE program and the Bank helped develop the C-PACE program for Alaska and its communities.

Supporting Our Communities

Low Income and Affordable Housing: Affordable housing continues to be a critical need throughout Alaska, which was only exacerbated by the economic impacts of the pandemic. In 2021, Northrim was awarded the Charles L. Edson Tax Credit Excellence Award by the Affordable Housing Tax Credit Coalition for our involvement in the Coronado Park II/Qintali View project – a project that provides safe and quality affordable housing to residents of Eagle River, Alaska – alongside our project partners, including Cook Inlet Housing Authority, R4 Capital, The Rasmuson Foundation and the Federal Home Loan Bank of Des Moines. This annual award recognizes outstanding affordable housing developments and organizations that have demonstrated especially impactful use of the Low-Income Housing Tax Credits.

Starting in 2020 and continuing into 2021, we were also recognized as an eligible lender in the Tribal Housing Activities Loan Guarantee program, making Northrim just the second financial institution in Alaska to offer these loans. Housing in Alaska’s remote communities is challenging to construct and make affordable to homebuyers. With this program, we have the opportunity to help many residents throughout the state achieve the dream of homeownership.

Volunteering and Employee Giving: We actively support employees taking part in a variety of community activities, and we provide community volunteer opportunities during work hours. Employees are encouraged to serve in leadership roles with nonprofit organizations and to share their expertise in the community. We continued to take extra precautions and safety measures this year during our volunteering efforts and our employees continued to give generously of their time. In 2021, Northrim employees volunteered over 1,340 hours in their local communities and 1,100 hours in 2020. Some of the areas where our employees have supported their community can be found below:

a.Teach Children to Save. Teams of employees help students learn the importance of saving for the future through the American Bankers Association Teach Children to Save program.

b.School-Business Partnership. Employees work closely with neighborhood schools to encourage students to become engaged in their community and school.

c.Financial Literacy Classes. Our financial literacy classes at local nonprofits provide an underserved community with critical lessons in establishing credit, saving, and budgeting.

d.Paint the Town. Employees volunteer to paint the home of an individual or family through the popular annual NeighborWorks' Paint the Town event.

e.United Way. Since the Bank was founded, Northrim and our employees have contributed over $1 million to support United Way. In 2021, employees participated in the annual United Way Campaign and pledged $152,845 in support of local communities throughout Alaska and in Washington State. This total includes direct donations from employees and Northrim’s 50% match for employee gifts to United Way.

Community Giving: As a local, community bank, Northrim takes its commitments to Alaska very seriously and we pride ourselves in taking an active role in building the communities we serve. Improving the economic vitality and quality of life where we do business is in the best interest of our customers, our employees, our company, and our industry. We are committed to sharing our time, talents, and other resources to meet community needs.

We focus our giving so we can make meaningful contributions, measure the results of our contributions, and work more closely with the organizations we support. Our focus areas are:

a.Community and economic development

b.Programs to strengthen low-income families

c.Health and wellness programs that support healthy communities

d.Higher education through the State of Alaska Education Tax Credit Program

In 2021, Northrim Bank contributed over $745,000 to organizations throughout Alaska. Some of these organizations include:

a.United Way. Northrim provides a 50% employee match for our United Way fundraiser. In 2021, our employee match totaled $50,948.

b.Camp Fire Alaska. Camp Fire Alaska is a youth development organization that provides Alaskan youth with the opportunity to find their spark, lift their voice, and discover who they are.

c.Alaska Native Heritage Center. In 2021, Northrim Bank contributed to the Alaska Native Heritage Center’s mission bundles at the Ivory Level to support mission-driven programming that promotes work between generations and continued education through Alaska Native Cultural workshops.

d.Cook Inlet Soccer Club. Northrim has partnered with the Cook Inlet Soccer Club, the largest club soccer program in Alaska. Partnerships such as these are part of the Bank’s ongoing efforts to support Alaskans and Alaska communities in a variety of ways to encourage strong, healthy and active communities. The Bank’s contribution to CISC will allow the club to make a record amount of financial aid available to youth players. Northrim representatives will donate time to lead periodic financial literacy seminars to help CISC families prepare for their financial futures.

e.Skinny Raven Event Series Sponsorship. Northrim Bank is the newest gold sponsor of the Skinny Raven Event Series which includes nine annual events that provide a unique, fun, and first-class experience for runners and walkers of all levels and abilities. We are proud to sponsor this series as it aligns with the Bank’s health and wellness initiatives.

f.Iditarod Sponsorship. Northrim Bank joined the Iditarod’s sponsorship family as a Lead Dog sponsor in 2017. This long-term partnership offers Northrim Bank broader outreach and engagement in communities statewide as the Iditarod race trail passes through communities across Alaska.

Higher Education Giving: Northrim makes annual contributions to the University of Alaska and supports higher education as the backbone of a strong community. We believe that it is important to have a strong system for higher education that is accessible to many throughout Alaska. By continuing our longstanding support of the University of Alaska and its programs, Northrim remains an advocate for higher education throughout Alaska.

EXECUTIVE OFFICERS

______________________________________________________________________________________________________

The following table sets forth certain information about the Company’s executive officers:


Name/Age	Position	Has Served as an Executive Officer Since
Jed W. Ballard, 43 (1)	Executive Vice President, Chief Financial Officer of the Company and the Bank	2018
Benjamin D. Craig, 47(2)	Executive Vice President, Chief Information Officer of the Bank	2015
Michael G. Huston, 54 (3)	President, Chief Lending Officer of the Bank	2017
Michael A. Martin, Deceased (4)	Executive Vice President, General Counsel and Corporate Secretary of the Company and Executive Vice President, Chief Operating Officer, General Counsel and Corporate Secretary of the Bank	2016 until November 11, 2021
Joseph M. Schierhorn, 64(5)	Chairman, President, Chief Executive Officer and Chief Operating Officer of the Company. Chairman, and Chief Executive Officer of the Bank	2001
Steve R. Aldrich, 54(6)	President and Chief Executive Officer of Residential Mortgage Holding Company, LLC,	2019

(1) Mr. Ballard joined the Company at the beginning of 2018 as Executive Vice President, Chief Financial officer for both the Company and the Bank. Prior to joining the Company, Mr. Ballard was with KPMG, an international public accounting firm, for over sixteen years, with his last role being Senior Audit Manager for KPMG. Mr. Ballard holds a Bachelors of Business Administration, with a major in Accounting from the University of Alaska Fairbanks and is a Certified Public Accountant. Mr. Ballard is a lifelong Alaskan and a shareholder of Bering Straits Native Corporation. He is a past mentor for the University of Alaska Anchorage Leadership Fellows program. Mr. Ballard is currently a Board Member of Junior Achievement of Alaska and is a Board Member and President of the Bering Straits Foundation. Mr. Ballard is also currently a Board Member and Vice-Chair of the Audit and Finance Committee of the Alaska Native Heritage Center. Mr. Ballard is also a graduate of the Pacific Coast Banking School.

(2) Mr. Craig joined the Bank in 2009 as Vice President, Information Technology Manager. He was promoted to Senior Vice President, Chief Technology Officer in 2010 and to his current position as Executive Vice President, Chief Information Officer in 2015. Mr. Craig began his technology career in the United States Air Force in 1995, where he honorably served until 2000 as a Computer and Communications Systems Manager. From 2000 to 2001, Mr. Craig was Director of Network Operations at 3NF Corporation. Immediately prior to joining the Bank, from 2001 until 2009, Mr. Craig served as the Vice President, Information Technology Manager for River City Bank in California. Mr. Craig also formed the Anchorage Technology Forum in 2017, which he continues to lead, and in 2018 joined the Alaska Association for Career and Technical Education as a Board member until 2020. In 2018, Mr. Craig became an Advisory Board Member for both the University of Alaska Anchorage Computer & Networking Technology and the Information Systems & Decision Science division.

(3) Mr. Huston joined the Bank in May of 2017 as Executive Vice President, Chief Lending Officer. Mr. Huston was promoted to President of the Bank on March 26, 2022. Prior to joining the Bank, Mr. Huston was Executive Vice President and Chief Banking Officer at First Interstate BancSystem, where he worked for twenty-five years. He graduated Magna Cum Laude from Arizona State University with a Bachelor of Science degree in Finance. Mr. Huston is also a graduate of the Pacific Coast Banking School.

(4) Mr. Martin joined the Bank in 2011. Unfortunately, Mr. Martin passed away unexpectedly on November 11, 2021. Mr. Martin served as Executive Vice President, Chief Operating Officer of the Bank from 2016 until his passing. Mr. Martin had been in the financial industry since 1995. Mr. Martin held a Juris Doctorate from Ohio Northern University, Bachelors of Science from Juniata College, and was a graduate of the Pacific Coast Banking School.

(5) Mr. Schierhorn previously served as Assistant Vice President, Commercial Loan Officer, with Key Bank Alaska from 1988 until 1990. He joined the Bank in 1990 as Vice President and Commercial Loan Officer, was appointed Senior Vice President, Commercial Loan, and Compliance Manager in 2000, and in 2001 was named an executive officer as Senior Vice President, Chief Financial Officer, and Compliance Manager of the Company and the Bank. He was named Executive Vice President, Chief Financial Officer in 2005, and Corporate Secretary in 2013. In 2013, Mr.

Schierhorn was appointed Chief Operating Officer of the Company and the Bank while continuing to serve as the Executive Vice President, Chief Financial Officer, and Corporate Secretary of the Company and the Bank until May 2014. In March of 2015, Mr. Schierhorn was promoted to President of the Bank and in January 2016, was named Chief Executive Officer of the Bank, and retained his title of Executive Vice President, Chief Operating Officer of the Company. In June of 2017, Mr. Schierhorn was named President and Chief Executive Officer of the Company, while retaining the titles of Chief Operating Officer. At the beginning of 2018, he was named Chairman of both the Company's and the Bank's Board of Directors while retaining his titles of President and Chief Executive Officer of the Bank, and President, Chief Executive Officer and Chief Operating Officer of the Company. On March 26, 2022, Mr. Schierhorn ceased serving as the President of the Bank, while continuing to serve as the Chairman, President & Chief Executive Officer and Chief Operating Officer of the Company and Chairman and Chief Executive Officer of the Bank. Mr. Schierhorn earned his Juris Doctorate and Masters in Management from Willamette University in 1985, is a Certified Public Accountant, and member of the Alaska Bar Association. Mr. Schierhorn is a past-President of the Alaska Bankers Association and has been on the Board of Directors of the Pacific Bankers Management Institute Representing the Pacific Coast Banking School since 2017. Mr. Schierhorn has been a Director of Pacific Wealth Advisors, LLC, and Pacific Portfolio Trust Company since 2017.

(6) Mr. Aldrich joined Residential Mortgage, LLC when it was founded in 1998 as a Vice President. In 1999, Mr. Aldrich was named as an Executive Vice President. He became President of Residential Mortgage, LLC in 2017 then Chief Executive Officer and Chief Operating Officer in 2019. Prior to joining Residential Mortgage, LLC, Mr. Aldrich was with City Mortgage for 8 years where he was Vice President. Mr. Aldrich holds a Bachelors of Business Administration, with a major in Accounting from Auburn University.

Each of our named executive officers has employment agreements with the Company with the exception of Messrs. Craig and Huston, whose employment agreements are solely with the Bank and Mr. Aldrich, whose employment agreement is solely with Residential Mortgage Holding Company, LLC. In addition, the employment agreement with Mr. Martin concluded upon his death in November 2021. See "Executive Compensation - Employment Agreements."

COMPENSATION DISCUSSION AND ANALYSIS

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This section provides information regarding the compensation program in place for those who served as Chief Executive Officer, Chief Financial Officer, and the three other most highly compensated executive officers who were serving as executive officers of the Company or the Bank at the end of 2021, outside of those who served as Chief Executive Officer and Chief Financial Officer (collectively, the "named executive officers"). This section includes information regarding the overall objectives of our compensation program and each element of compensation.

The Compensation Committee believes that the Company’s current annual and long-term incentive compensation programs for its executives, including the named executive officers, senior managers and key employees serve to appropriately focus these individuals on the Company's current and future business needs. The Company’s compensation program is designed to mitigate risk by capping performance-based payments and defining performance criteria focused not only on profitability and growth, but also on managing risk and expenses and improving credit quality. The Compensation Committee continually assesses the Company’s compensation objectives, philosophy, forms of compensation for the Company’s executives, and has determined that the Company’s current compensation practices and policies do not create risks that are reasonably likely to have a material adverse effect on the Company.

The Company has included Proposal 2, a non-binding advisory vote on executive compensation, in this proxy statement in accordance with the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and regulations of the Securities and Exchange Commission. Proposal 2 provides the shareholders of the Company with a non-binding advisory vote on compensation programs for our named executive officers (sometimes referred to as "say on pay") as described in this section of this proxy statement. Although the vote is non-binding, the Board and the Compensation Committee value the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers. At the annual meeting of our shareholders that was held on May 25, 2017, the Company’s shareholders expressed a preference that an advisory vote on executive compensation of the Company’s named officers should occur every year. Accordingly, we are holding the non-binding advisory vote outlined in Proposal 2 at the Annual Meeting.

Overview of Compensation Program

The Compensation Committee bases its compensation strategy on maintaining the Company’s primary strategic goal: to maintain, over the next several years, a well-capitalized, superior customer first service-focused financial institution headquartered in Anchorage and serving the greater Anchorage, Matanuska Valley, Fairbanks, Kenai Peninsula, Kodiak, and Southeast Alaska areas, as well as various other markets in and outside Alaska. We believe that achieving the Company’s business and growth strategies will create long-term value for shareholders and will protect the interests of our customers.

Compensation Philosophy and Objectives

The Compensation Committee believes that compensation packages for the Company’s named executive officers, key personnel, and other employees should be based, to a substantial extent, on achievement of the goals and strategies the Board has established. When establishing salaries, performance based payments, and stock option awards for named executive officers, the Compensation Committee considers: (i) the Company’s financial performance during the past year; (ii) the individual officer’s performance during the past year based upon the officer’s scope and level of responsibility and how well they managed and carried out those responsibilities to achieve the Company’s goals, as well as how well that officer dealt with unexpected challenges and opportunities that were not anticipated in the Company’s annual goal setting process; and (iii) market data related to the salaries of executive officers and key personnel in similar positions with companies of comparable size, as well as other companies within the financial institutions industry. For named executive officers other than the Chief Executive Officer, the Compensation Committee considers recommendations made by the Chief Executive Officer.

The Company has developed and implemented policies for determining salary structure, annual performance based payments, and employee stock option and other stock-based awards based on recommendations of independent, nationally recognized compensation consultants. These consultants periodically evaluate the Company’s executive compensation programs at the request of the Compensation Committee.

Role of Executive Officers in Compensation Decisions

The Compensation Committee makes all decisions related to the compensation of the Company’s Chief Executive Officer, subject to the Board’s further approval. The Compensation Committee approves recommendations made by the Chief Executive Officer for all compensation for other executive officers of the Company. All Compensation for the Company’s Chief Executive Officer and Chief Financial Officer, and the Bank's Chief Operating Officer is further approved by the Board.

The Chief Executive Officer annually reviews the individual performance of the Company’s key employees. The Chief Executive Officer's recommendations for all compensation, based upon individual officer performance evaluations, are presented to and discussed with the Compensation Committee. The Compensation Committee can modify any recommended adjustments or awards as deemed to be appropriate.

Independent Consultants

The Compensation Committee has the authority to engage independent compensation consultants. The Compensation Committee, from time-to-time as deemed appropriate, has engaged the services of Frederic W. Cook and Co., Inc. ("FWCC") to analyze and evaluate the Company’s overall compensation program and practices as compared to a selected group of publicly traded peer group banks of similar size within the Pacific Northwest region and California. The Company engaged FWCC to assist the Governance and Nominating Committee with a review of compensation for non-officer members of the Board in 2019 and 2021. In 2018 and 2020, the Compensation Committee engaged FWCC to assist the Compensation Committee with a compensation survey in connection with the review of compensation for the named executive officers and other senior officers. Additionally, in 2017, FWCC advised the Compensation Committee regarding the creation of the 2017 Stock Incentive Plan, and in 2019 regarding changes to the Company's Profit Sharing Plan, and in 2020 regarding the creation of the 2020 Stock Incentive Plan.

In connection with its engagements with FWCC, the Compensation Committee considered various factors bearing upon FWCC’s independence, including, but not limited to, FWCC’s policies and procedures designed to prevent conflicts of interest and the existence of any business or personal relationship that could affect FWCC’s independence. After reviewing these and other factors, the Compensation Committee determined that FWCC was independent and that FWCC's engagements with the Compensation Committee did not present any conflicts of interest.

COVID-19

The COVID-19 pandemic significantly impacted our Company throughout 2020 and 2021. The Company’s named executive officers have actively navigated the business disruptions, employee and customer safety, government financial aid packages for

customers, customer loan accommodations and credit risks. The Board did not hold any special meetings related to COVID-19 matters. COVID-19 matters were addressed in regularly scheduled meetings of the Company and Bank Boards and committee meetings.

Because of our strong performance against these unprecedented circumstances, the Compensation Committee made no adjustment to our executive compensation programs for 2020 and 2021, with the exception of the annual cash bonus as discussed further in the Elements of Compensation – Performance Based Annual Payment section of this proxy statement. There are no current plans for any changes in 2022 as a result of the impacts of COVID-19. On a Company-wide basis, there have been no salary reductions or modifications to the Company’s bonus plans. All compensation plans have remained unaltered during the COVID-19 pandemic.

Executive Compensation

The Company’s executive compensation program currently consists of four key elements: (i) base salary; (ii) a performance-based annual payment; (iii) periodic stock option grants and other stock-based compensation awards; and, (iv) retirement and other deferred benefits. The Compensation Committee engages the services of a qualified compensation consultant as appropriate, and it considers the Company’s executive compensation package as a whole. Each component of the executive’s package is in large part provided for under the terms of the executive’s employment agreement including base salary, which can change from time-to-time, as well as a performance based payment opportunity for certain named executive officers under the Company’s Profit Sharing Plan and retirement benefits according to the prescribed terms of the executive’s employment agreement. The Compensation Committee’s and the Company’s philosophy is to be consistent in the timing of its review of the executive's performance and opportunities for compensatory recognition. Review occurs several times in a given year. The Compensation Committee and the Company believe that this practice facilitates the retention of the executive over the short and long-term and appropriately rewards performance based upon each executive’s level of responsibility, accountability, leadership, and measured contributions to the organization.

The Compensation Committee believes that this four-part approach best serves the interests of the Bank, the Company, and its shareholders. This approach enables the Company to meet the requirements of the highly competitive banking and lending environment in which it currently operates while ensuring that executive officers are compensated in a way that advances both the short and long-term interests of shareholders. The performance based annual payment opportunity, which is provided for certain named executive officers under the Company’s Profit Sharing Plan, rewards and motivates individual performance, and is based in large part on the contribution made by the officer to the Company’s overall performance. Stock options and other stock-based awards relate a significant portion of long-term remuneration directly to stock price appreciation and serve to promote the executive's continued service with the Company. The Compensation Committee believes that these awards also closely align the interests of the executive and the Company’s shareholders.

The Compensation Committee annually evaluates both executive performance and the structure of executive compensation to ensure that the Company maintains its ability to attract and retain customer service motivated employees in key positions. From time-to-time, the Compensation Committee engages an independent consultant to analyze executive compensation. The last evaluation of executive compensation that included an analysis by FWCC was done in 2020. This evaluation ensures that compensation for executives is reasonable and competitive with similar positions held in peer group organizations in the local Alaska market, the Pacific Northwest, and California. The peer group that the Compensation Committee used for this evaluation in 2020 consisted of 14 Pacific Northwest and California commercial banks similar in size to Northrim: FS BanCorp; F&M BanCorp; First Financial Northwest, Inc.; Territorial BanCorp; Heritage Commerce; Riverview Bancorp; Bank of Commerce; Bank of Marin Bancorp; First Northern Community Bancorp; Oak Valley Bancorp; Sierra Bancorp; Central Valley Bancorp; First Northwest; and Timberland Bancorp. The Compensation Committee objectively evaluates the performance of the Company’s compensation program by periodically comparing the weight and values of its components to the Company’s peer group of Pacific Northwest and California financial institutions as surveyed by independent compensation consultants who gather pertinent salary, benefit, and equity compensation data from then current proxy statement disclosures of the Company's peer group.

The Compensation Committee’s approach for giving consideration to each element of the Company’s executive compensation package multiple times during a given year is intended to bring consistency to the overall program, and to support the Company’s philosophy to provide more than one opportunity during a given year to measure and recognize the performance and contributions of individual executive officers and officers in key positions. For example, in the first quarter, the Compensation Committee considers and approves awards to participants under the Company’s Profit Sharing Plan, selects criteria for the Company’s Profit Sharing Plan’s plan year and conducts the annual officer and executive officer salary review. In the fourth quarter, the Compensation Committee considers and approves stock option grants and stock awards with pricing based upon the closing price of the Company’s stock on the date of grant.

The Compensation Committee takes an approach based on both quantitative and qualitative factors when considering the compensation of the Company’s Chief Executive Officer. The Compensation Committee considers the Company’s financial results for a given year compared to the Company’s plan and actual results for the previous year. The Compensation Committee also considers certain qualitative accomplishments of the Chief Executive Officer in terms of the Company’s realization of its corporate objectives, his foresight, his extensive community involvement, as well as his leadership in strategically positioning the Company for future significant developments in the banking industry and the Company’s market and developing long-term strategies for the future direction and growth of the organization.

Elements of Executive Compensation

Each year, the Compensation Committee determines whether or not the employment agreements of the named executive officers should be renewed, and whether or not a change in terms is appropriate. See further discussion of the employment agreements under Executive Compensation - Employment Agreements.

The Company and the Bank do not have any arrangements in place for or with the named executive officers whereby their compensation may be comprised of proportionate amounts of base salary, performance based annual payments, options and other stock-based compensation, or retirement and other deferred benefits. Instead, compensation is comprised of such components in amounts as determined by the Compensation Committee at its discretion and with respect to the components of compensation for the Company's Chief Executive Officer and Chief Financial Officer, and the Bank's Chief Operating Officer, approved by the Board.

Base Salary. Based on its consideration of competitive industry salaries and general economic conditions within the Company’s market area and the financial institution industry, the Company’s Human Resources Department has established a graded salary structure for all of the Company’s employees. Every salary grade is structured to allow for personal growth ranging from the grade’s entry-level benchmark through the mid-point range and to the upper-most level of annual salary for each grade. The matrix used to calculate annual merit increases applies factors related to the position of the individual’s current salary within the established ranges for her or his salary grade, predetermined rates of increase based on an annual survey of market data, and an evaluation of the employee’s performance. The Company's Human Resources Department reviews the schedule of matrix driven changes to individual officer annual base salaries and can make recommendations for any additional adjustments. Additionally, individual base salaries for named executive officers and other officers in key positions, other than the Chief Executive Officer, are reviewed and may be adjusted by the Chief Executive Officer. The Compensation Committee makes all decisions related to the compensation of the Company’s Chief Executive Officer. Officer base salary levels are reviewed annually in the first quarter of the Company’s fiscal year and any increases to base annual salaries are recommended to the Compensation Committee by the Chief Executive Officer for approval based on an assessment of an officer’s scope of responsibilities, experience, the officer’s individual performance, and contributions to the success of the organization. Additionally, the salaries of the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's Chief Operating Officer, are reviewed and approved by the Compensation Committee and the Board.

Performance Based Annual Payment. In November of 2011, the Board approved the Company’s Profit Sharing Plan. Executive officers, in addition to all current employees of the Company and Bank who commenced employment payments calculated during the performance period, are eligible to participate in profit sharing in accordance with the provisions of the Company's Profit Sharing Plan. The selection of the Company's Profit Sharing Plan criteria occurs within one-hundred-twenty days of the beginning of the Company’s fiscal year. The selection of the criteria for 2021 occurred in March of 2021.

The Company's Profit Sharing Plan also provides that the Compensation Committee may designate any employee, including an executive officer, as ineligible to receive a profit sharing payment at its complete discretion. Additionally, the Compensation Committee may adjust any employee’s profit sharing payment at its discretion. However, no individual profit sharing payment can exceed ten percent (10%) of the entire profit sharing pool for any performance period. Unless otherwise approved by the Compensation Committee, no individual profit sharing allocation can exceed 50% of that individual’s base salary or 150% of target. Total profit sharing allocations made to the Chief Executive Officer and Chief Financial Officer of the Company, and the Chief Operating Officer of the Bank, cannot exceed 25% of the profit sharing pool in any performance period. The profit sharing awards to the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's Chief Operating Officer, are reviewed and approved by the Compensation Committee and the Board.

In March of 2019, the Board amended the Company’s Profit Sharing Plan to fund the plan based on a target percentage of employees’ base salary as opposed to creating a pool based on a percentage of the Company’s pre-tax income. This target is based on the financial results of the Company. Specifically, 60% of the profit sharing is based on a comparison of annual budget to actual pre-tax income for the Community Banking segment and 40% is based on the Company’s consolidated return on average assets rank in a peer comparison of U.S. banks with assets between one and five billion dollars. A tiered approach is taken for both criteria. In general, funding between 50% and 150% of the target occurs for the portion of the profit sharing that

is based on budget to actual performance at the Community Banking segment. Funding of 50% of the target occurs when actual pre-tax income is equal to or less than 85% of budgeted pre-tax income. The maximum funding of 150% of the target occurs when actual pre-tax income is equal to or greater than 125% of budgeted pre-tax income. Funding between 50% and 150% of the target occurs using a tiered scale when actual pre-tax income is greater than 85% but less than 125% of budgeted pre-tax income. Funding between 50% and 150% of the target for the portion of the profit sharing that is based on the Company’s return on average assets as compared to peers occurs when the Company’s return on average assets is ranked in the top 71% to the top 10% of peer banks. A weighted average based on this funding criteria determines the total funding percentage of the target. The funding percentage, which may be adjusted by the Compensation Committee at its discretion, is then applied to an individual’s targeted percent of base salary based on their grade to establish the total profit sharing amount. Once this amount is determined, 10% of the total profit share is reserved for allocation at the Chief Executive Officer's discretion.

The performance goals established by the Compensation Committee for the Company's Profit Sharing Plan for 2021 include measures based on the Company’s strategic goals for 2021. The Compensation Committee reviewed and approved management’s recommended thresholds for each criterion. In 2021, the Company had to meet the following minimum criteria in order for the approval of the profit sharing:

● A ratio of total regulatory capital to risk-weighted assets of at least ten percent (10%) for both the Bank and the Company;

● A ratio of tier one regulatory capital to risk-weighted assets of at least eight percent (8%) for both the Bank and the Company;

● A ratio of tier one regulatory capital to total average assets of at least five percent (5%) for both the Bank and the Company;

● A ratio of classified assets to total risk-based regulatory capital for the Company of no more than thirty percent (30%). (Classified assets include loans classified as substandard, doubtful or loss assets within the Bank’s internal risk rating system, plus other real estate owned and other repossessed assets.); and,

● Regulatory examination results must be acceptable.

Once the Company determined that the above criteria were met for 2021, the Compensation Committee approved management’s recommendation based upon the calculated payout under the Profit Sharing Plan’s matrix methodology resulting in an aggregate payout of $4.1 million for 2021, $722,969 of which was paid, in aggregate, to the named executive officers.

As an employee of Residential Mortgage LLC, Mr. Aldrich does not participate in the Company's Profit Sharing Plan. Instead, Mr. Aldrich's employment agreement includes an annual bonus equal to a percentage of pre-tax net earnings of Residential Mortgage, LLC. This bonus arrangement is part of Mr. Aldrich's employment agreement and is not determined under a formal plan adopted by Residential Mortgage, LLC. The Chairman of the Board of Managers of Residential Mortgage Holding Company, LLC designed this bonus arrangement to incentivize financial performance at Residential Mortgage, LLC. This bonus arrangement does not include regulatory capital and classified asset ratio targets because the nature of the operations of Residential Mortgage, LLC do not lend themselves to these performance metrics.

Options and Other Stock-Based Compensation. The Compensation Committee is of the philosophy that offering stock-based incentives to executives and key employees: (i) attracts and retains the best available personnel for the long-term; (ii) enhances long-term profitability and shareholder value; and (iii) encourages employees to acquire and maintain stock ownership in the Company, thereby more closely aligning the interests of employees and shareholders. The Compensation Committee follows this philosophy, and subject to the Company’s employee stock incentive plans, the Compensation Committee may determine the employees eligible to receive stock options and other equity awards and to assess the amount of each such stock option or other equity award.

The Company’s 2020 Stock Incentive Plan ("2020 Plan"), an omnibus plan approved by the Company's shareholders, authorizes the Board or the Compensation Committee to administer the 2020 Plan and to grant to eligible key employees nonqualified stock options, restricted stock, restricted units, performance shares, performance units, stock appreciation rights, or dividend equivalent rights. The Compensation Committee has not delegated any aspect of the administration of any of the Company’s stock incentive plans, including the 2020 Plan, to any other persons.

The 2020 Plan is designed to afford the Compensation Committee flexibility, consistency, and balance in determining and governing the terms and mix of the annual grant of long- and short-term equity based compensation awards to the Company’s

executive officers and other employees key to the safe and profitable operation of the Bank. The participants in the 2020 Plan are members of the Bank’s senior management team. Participants, including certain of the Company’s named executive officers, are awarded options and other stock-based compensation based on the value of equity compensation awards, and overall compensation, for comparable positions at peer institutions. Peer data was obtained from data received from FWCC, an independent, nationally recognized compensation-consulting firm, in 2020. The banks that were used to obtain this peer group median were 14 Pacific Northwest and California commercial banks similar in size to Northrim: FS BanCorp; F&M BanCorp; First Financial Northwest, Inc.; Territorial BanCorp; Heritage Commerce; Riverview Bancorp; Bank of Commerce; Bank of Marin Bancorp; First Northern Community Bancorp; Oak Valley Bancorp; Sierra Bancorp; Central Valley Bancorp; First Northwest; and Timberland Bancorp.

The Compensation Committee believes that the awards of stock options and shorter-term restricted stock units serve to tie the executives’ interests to those of the Company’s shareholders. These awards also provide an incentive for the executives’ long-term retention given the competitive climate in the Bank’s marketplace for experienced and seasoned bankers. The methodology for calculating the maximum total value of equity awards that will be awarded to employees, including certain of the named executive officers, is calculated by taking the Company’s market capitalization times point five percent (0.50%). The Chief Executive Officer recommends proposed grantees and proposed award levels based on performance. The Compensation Committee has full discretion to approve, deny, or change any recommendations from the Chief Executive Officer. Additionally, awards of stock options and restricted units made to the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's Chief Operating Officer, are reviewed and approved by the Board. The Compensation Committee also analyzes the financial impact of the grant on the Company’s income statement and the potential dilution of the grant to existing shareholders compared to prior grants and the Company’s peer group.

The Company has not established any program whereby executives or key personnel are required to own and purchase within any specific schedule a defined number of shares of the Company’s common stock.

Retirement and Other Deferred Benefits

Deferred Compensation Plan. The Bank established a Deferred Compensation Plan ("DCP") dated January 1, 1995, as amended October 3, 1996 and January 1, 2005, for the purpose of providing benefit planning to key employees of the Bank by permitting them to defer the receipt of compensation. All officers of the Bank and the Company, including the named executive officers (other than Mr. Aldrich), are eligible to participate and other key employees may become eligible to participate if so notified by the Compensation Committee.

The DCP provides that on or prior to December 31 of each year the DCP is in effect, any eligible employee may elect in writing to defer receipt of at least five percent (5%) to a maximum of one hundred percent (100%) of their salary to be paid in the calendar year following the year of election. Any election is irrevocable as to any salary payable in the next year and effective with respect to future years unless revoked by the participant prior to December 31 of the year preceding the year in which the deferral is to take effect. Under the DCP, eligible employees, including certain of the named executive officers, may elect to defer receipt of all or a portion of their remaining salary to be paid in the current calendar year if such written election is made within thirty days after they are first notified by the Compensation Committee of their eligibility to become a participant. The DCP provides that any eligible employee may elect to defer receipt of at least five percent (5%) to a maximum of one hundred percent (100%) of their performance-based payments for services to be performed in a succeeding plan year under the same conditions described above. All amounts deferred are credited to participant accounts with interest compounded annually. According to the DCP, interest while an eligible employee is not eligible for distributions is based on the Bank’s average yield on its total assets calculated on January 1, based on the prior year’s performance, less one percentage point. Interest after an employee starts taking distributions from the DCP is based on the market yield on U.S. Treasury securities for a term equal to two-thirds of the installment period of payments to the employee. None of the named executive officers elected to defer receipt of compensation in 2021.

Northrim Bank Savings Incentive Plan 401k. Named executive officers participate in the Company’s qualified retirement plan, the Northrim Bank Savings Incentive Plan ("401k Plan"), to the same extent and subject to the same rules and limitations as the Company’s and the Bank’s other employees. The 401k Plan provides a $1.00 match for each $1.00 contributed by an employee up to five point five percent (5.5%) of the employee’s salary.

Supplemental Executive Retirement Plan. Effective July 1, 1994, the Bank adopted the Northrim Bank Supplemental Executive Retirement Plan ("SERP") for the benefit of its executive officers, including the named executive officers. As provided by the SERP, the Company makes annual contributions to participant accounts on January 1 at a percentage rate of annual base salary determined and approved by the Compensation Committee. The Compensation Committee can exercise its authority to determine and approve changes to this percentage, as well as approve new participants under the SERP. The Compensation Committee generally makes these determinations based upon recommendations of the Chief Executive Officer

or the Bank's Chief Operating Officer and upon consideration of the percentage rates of annual base salary contributed by the Company for each SERP participant and relative levels of each participant’s current responsibility. Additionally, contributions made to the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's Chief Operating Officer, under the SERP Plan are reviewed and approved by the Board.

Earnings under the SERP are credited for the year on January 1 and based on the Bank’s average yield on its total assets, less a three year rolling average of net loan charge-offs as a percentage of average loans outstanding for the respective periods. The SERP provides for payment of a specified amount to plan participants upon retirement, with early retirement permitted after the participant’s fifty-fifth birthday, if she or he has completed at least five years of vesting service under the terms of the Company’s Savings Incentive Plan prior to early retirement. Benefits are payable in lump sum or in monthly installments beginning ninety-one days after retirement, with the amount payable being equal to the total plan account balance for that participant (including interest at a specified fixed rate) divided by twelve months, divided by the number of years over which the participant elects to receive payments, with fifteen years being the maximum period over which payout is permitted. If the participant dies prior to commencement of benefits, benefits are paid to the participant’s survivors in equal installments over fifteen years unless the Compensation Committee elects to accelerate payment. Additionally, the SERP was amended in August 2015 to provide for a distribution of benefits upon termination of employment resulting from disability. Under the terms of the SERP a participant will receive such participant’s account in the most recent form of payment properly elected prior to his or her disability in accordance with the terms of this SERP, with payments commencing as soon as reasonably practicable after such participant’s disability. If the SERP participant made no form of payment election, the participant’s account will be paid to the participant in ten annual installments, beginning as soon as reasonably practicable after the participant’s disability.

Nonqualified Deferred Bonus Plan - Residential Mortgage, LLC. Residential Mortgage, LLC adopted the Nonqualified Deferred Bonus Plan ("NQDBP") effective January 1, 2004 for the benefit of certain executive officers, including Mr. Aldrich, the President and Chief Executive officer of Residential Mortgage Holding Company, LLC, as well as certain loan officers who have achieved certain production volume levels. Fixed annual contributions are made for participating executive officers. The annual contribution to the NQDBP for Mr. Aldrich is included in his employment agreement. Contributions for loan officers participating in the NQDBP vary based on production levels using a tiered structure. All contributions to the NQDBP are non-interest bearing. The period for full vesting is 10 years or age 65. Prior to the last year of vesting the employee may elect to take distributions of vested account balances or to have the funds remain in the plan for an addition 5 years. The employee will be asked to make this election every 5 years until he/she ceases to be employed with Residential Mortgage, LLC.

Supplemental Executive Retirement Deferred Compensation Plan. The Compensation Committee, the Board and management have deemed it prudent for the Bank to have life insurance protection on certain of the Company's executive officers, including the named executive officers, considering the out-of-pocket costs related to replacing an executive officer, as well as the intangible but real loss due to disruptions in management and loss of existing or new business because of the death of a key individual. For these reasons, the Compensation Committee and the Board authorized the Bank to establish the Supplemental Executive Retirement Deferred Compensation Plan ("SERDCP"), a non-qualified deferred compensation plan. Certain executive officers, including the named executive officers, as identified by the Compensation Committee, are entitled to participate in the SERDCP. The SERDCP is intended to provide a source of funds for participants’ retirement through the Bank’s purchase and ownership of key man insurance coverage in the form of a variable adjustable life policy in an amount approved by the Compensation Committee and the Board for each participant. The annual premium payment covers the cost of providing the Bank with a full death benefit for the face amount of the policy, and the cost of providing the executive officer the deferred compensation retirement benefit or a death benefit to the executive officer’s beneficiaries in the event of the executive officer’s death before retirement. Earnings are based upon the participant’s discretionary selection of investment opportunities available through the insurance provider to develop the cash surrender value of the portion of the premiums paid and allocated for that purpose.

In the event of the participant’s retirement, the cash surrender value of the policy can be paid out in a lump sum or in installments not to exceed ten years. The participant can also elect to receive the insurance policy net of a distribution of cash value sufficient to pay taxes upon receipt of the policy. In the event of the participant’s death, an amount equal to the greater of the cash surrender value or a stated death benefit, as described in the SERDCP, would be paid to the participant’s beneficiaries. Additionally, the SERDCP was amended in August 2015 to provide for a distribution of benefits upon termination of employment resulting from disability. Under the terms of the SERDCP a participant will receive such participant’s account in the most recent form of payment properly elected prior to his or her disability in accordance with the terms of this SERDCP, with payments commencing as soon as reasonably practicable after such participant’s disability.

Tax and Accounting Treatment of Executive Compensation

Nonqualified Deferred Compensation. Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") imposes election, payment, and funding requirements on "nonqualified deferred compensation" plans. If a nonqualified deferred compensation arrangement subject to Section 409A of the Code fails to meet, or is not operated in accordance with, the

requirements of Section 409A, then compensation deferred under the arrangement may become immediately taxable and subject to a twenty percent (20%) additional tax. Certain awards that may be issued under the plan may constitute a "deferral of compensation" subject to the requirements of Section 409A of the Code.

Prohibition against Hedging

The Board has approved a policy that prohibits our directors and executive officers, including the named executive officers, from hedging their ownership of Company shares of common stock including trading in options, puts, calls, or other derivative instruments relating to our securities.

2021 Advisory Vote on Executive Compensation

The Company provided shareholders a non-binding advisory vote on executive compensation in 2021. At the Company’s 2021 Annual Meeting, shareholders expressed substantial support for the compensation of the Company’s named executive officers, with approximately ninety-eight percent (98%) of the votes cast for approval of the "say-on-pay" vote on executive compensation. The Compensation Committee considered the results of the 2021 advisory vote. The Compensation Committee also considered many other factors in evaluating the interaction of the Company’s compensation programs with its business objectives. While all of these factors bore on the Compensation Committee’s decisions regarding named executive officer compensation, the Compensation Committee did not make any changes to the Company’s executive compensation program and policies as a result of the shareholders’ 2021 "say-on-pay" advisory vote.

EXECUTIVE COMPENSATION

_____________________________________________________________________________________________________

Summary Compensation Table

The following table sets forth information regarding compensation earned by our named executive officers for 2021, which includes our Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated officers who were serving as executive officers at the end of 2021, as well as Michael Martin who passed away in November 2021, but otherwise would have qualified as one of our three most highly compensated executive officers in 2021. The information in the following table is provided for the fiscal years ended December 31, 2021, 2020, and 2019, and includes all compensation awarded to, earned by, or paid to our named executive officers during the years indicated:


SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary	Bonus (1)	Stock Awards (2)	Option Awards (3)	Non-Equity Incentive Plan Compensation (4)	Change in Pension Value and Nonqualified Deferred Compensation Earnings (5)	All Other Compensation (6)	Total
Joseph M. Schierhorn, President, Chief Executive Officer, and Chief Operating Officer of the Company and Chief Executive Officer of the Bank:
	2021	$458,838	N/A	$60,677	$60,675	$229,419	$52,596	$149,226	$1,011,431
	2020	$434,692	N/A	$60,714	$60,705	$217,346	$24,847	$143,954	$942,259
	2019	$411,263	N/A	$39,559	$39,564	$172,730	$9,967	$138,192	$811,275
Jed W. Ballard, Executive Vice President, Chief Financial Officer of the Company and the Bank:
	2021	$292,598	N/A	$42,356	$14,111	$128,158	$1,251	$44,809	$523,283
	2020	$275,641	N/A	$42,327	$14,102	$114,115	$1,614	$27,416	$475,215
	2019	$236,630	N/A	$39,231	$13,083	$85,187	$647	$31,000	$405,778
Michael G. Huston, President, Chief Lending Officer of the Bank:
	2021	$293,368	N/A	$35,549	$11,841	$128,495	$1,697	$44,781	$515,731
	2020	$281,254	$10,000	$35,363	$11,790	$116,439	$2,411	$41,885	$499,142
	2019	$259,801	N/A	$36,825	$12,282	$93,529	$1,103	$40,390	$443,930
Benjamin D. Craig, Executive Vice President, Chief Information Officer of the Bank:
	2021	$247,426	N/A	$22,859	$7,620	$111,342	$916	$28,065	$418,228
	2020	$240,238	$7,500	$22,656	$7,559	$108,107	$1,376	$27,408	$414,844
	2019	$233,146	N/A	$31,574	$10,525	$91,702	$674	$48,385	$416,006
Michael A. Martin, Executive Vice President, General Counsel and Corporate Secretary of the Company and Executive Vice President, Chief Operating Officer, General Counsel and Corporate Secretary of the Bank:
	2021	$286,657	N/A	$47,693	$15,898	$125,556	$1,851	$47,823	$525,478
	2020	$317,043	N/A	$47,589	$15,871	$131,256	$2,648	$46,923	$561,330
	2019	$299,047	N/A	$70,805	$23,608	$107,657	$1,178	$39,039	$541,334
Steve R. Aldrich, President, Chief Executive Office of Residential Mortgage, LLC:
	2021	$252,384	$902,399	$—	$—	$—	$—	$78,700	$1,233,483

(1) The amounts listed for Mr. Huston and Mr. Craig under this category in 2020 represent a project bonus related to the Company's successful navigation of the Paycheck Protection Program in response to the COVID-19 pandemic. The amount listed for Mr. Aldrich represents a bonus per his employment agreement.

(2) The amounts listed for each named executive officer’s stock award represent the aggregate grant date fair value of the awards determined in accordance with FASB ASC Topic 718 and are based on the price of the Company’s stock at the close of business on the date of each grant.

(3) The amount listed for each named executive officer’s option award represents the aggregate grant date fair value of the awards determined in accordance with FASB ASC Topic 718. See further discussion about the assumptions used in the pricing model at Note 22 in Part II. Item 8 of the Company’s Form 10-k for the year ended December 31, 2021.

(4) The amount listed for each named executive officer represents the individual’s performance based payment earned in such fiscal year, but paid in the following fiscal year, as calculated according to the provisions of the Company’s Profit

Sharing Plan in 2021, 2020 and 2019 as approved by the Compensation Committee. See Non-Equity Incentive Plan Awards and Employment Agreements contained in this proxy statement.

(5) The amount listed for each named executive officer under this category is the excess earnings on the named executive officer’s account over one-hundred-twenty percent (120%) of the federal rate for each applicable year.

(6) The amount listed for each named executive officer represents items of compensation not reflected elsewhere in this Summary Compensation Table:

The aggregate total of all other compensation disclosed for Mr. Schierhorn for 2021 is equal to the amounts of $15,950 representing contributions to the Company’s 401k Plan for Mr. Schierhorn as well as the Company’s contributions to the SERP and SERDCP for Mr. Schierhorn in the amounts of $88,284 and $44,992, respectively. These amounts contributed to the SERP and SERDCP for Mr. Schierhorn are disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Ballard for 2021 is equal to the amounts of $15,950 and $28,859 representing contributions to the Company’s 401k Plan for Mr. Ballard and the Company’s contribution to the SERP for Mr. Ballard. The amount contributed to the SERP for Mr. Ballard is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Huston for 2021 is equal to the amounts of $15,950 and $28,831 representing contributions to the Company’s 401k Plan for Mr. Huston and the Company’s contribution to the SERP for Mr. Huston. The amount contributed to the SERP for Mr. Huston is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Craig for 2021 is equal to the amounts of $15,950 and $12,115 representing contributions to the Company’s 401k Plan for Mr. Craig and the Company’s contribution to the SERP for Mr. Craig. The amount contributed to the SERP for Mr. Craig is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Martin for 2021 is equal to the amounts of $15,950 and $31,873 representing contributions to the Company’s 401k Plan for Mr. Martin and the Company’s contribution to the SERP for Mr. Martin. The amount contributed to the SERP for Mr. Martin is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Aldrich for 2021 is equal to the amounts of $8,700 representing contributions to the Company’s 401k Plan for Mr. Aldrich as well as the Company’s contribution to the NQDBP for Mr. Aldrich in the amounts of $70,000. The amount contributed to the NQDBP for Mr. Aldrich is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

Employment Agreements

The Company and the Compensation Committee share the philosophy that employment agreements serve to further strengthen the relationships between the Company, its key executives, and its shareholders, particularly in light of the highly competitive climate in which the Bank and the Company currently operate.

Messrs. Schierhorn, Ballard, Craig and Aldrich entered into new employment agreements effective January 1, 2022, while Mr. Huston entered into a new employment agreement effective March 26, 2022, and included the following entitlements: reasonable health insurance, disability and other employee benefits on a basis at least as favorable as that accorded to any other officer, as well as allowance for adjustments to annual base salary as deemed appropriate by the Compensation Committee.

The contracts of Messrs. Schierhorn, Ballard, Craig, Huston and Aldrich included nearly identical terms and provisions as their previous employment agreements. Each new employment agreement also provides that in the event of termination of employment by the Company or the Bank (or in the case of Mr. Aldrich, Residential Mortgage, LLC) without cause or by the employee for good reason, health and insurance benefits for such employee will be continued for a period of twelve months from the termination date, with the exception of Mr. Craig, who's benefits will be continued for a period of nine months from the termination date.

Each of the new employment agreements has an initial term ending on December 31, 2022, which will be automatically extended for an additional one year term unless at least ninety days prior to any January 1, either party gives notice of its intent not to extend such term or the employment agreement is terminated in accordance with its termination provisions.

All of the employment agreements, with the exception of Mr. Aldrich, reflect the named executive officer’s eligibility to participate in the Company’s Profit Sharing Plan. The employment agreements with the named executive officers also contain a covenant not to compete, which stipulates that for a period of one year following termination of the agreement (or in the case of Mr. Craig, nine months following the termination of his employment agreement), or one year following the close of a transaction constituting a change of control agreement (or in the case of Mr. Craig, nine months following the close of such a change in control transaction), the named executive officer will not be directly or indirectly employed by or own any business activity that is competitive with the Company or the Bank. As defined in each of their employment agreements, each of the named executive officers is also entitled to the severance benefits discussed herein under the heading Potential Payments upon Termination or Change of Control.

Jed W. Ballard

The employment agreement dated January 1, 2022, by and among the Company, the Bank and Mr. Ballard, as Executive Vice President and Chief Financial Officer of both the Company and the Bank, established Mr. Ballard's annual salary at $294,074. Mr. Ballard received $292,598 in salary in 2021, which reflected a $288,591 annual salary specified in his previous employment agreement combined with a salary increase approved by the Compensation Committee in 2021 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $128,158 was earned by Mr. Ballard in 2021, under the provisions of the Company's Profit Sharing Plan. Mr. Ballard is entitled to receive an annual contribution equal to ten percent (10%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs.

Benjamin D. Craig

The employment agreement dated January 1, 2022 between the Bank and Mr. Craig, as Executive Vice President, Chief Information Officer, establishes Mr. Craig’s annual salary at $249,318. Mr. Craig received $247,426 in salary in 2021, which reflected a $242,291 annual salary specified in his previous employment agreement combined with a salary increase approved by the Compensation Committee in 2021 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $111,342 was earned by Mr. Craig in 2021 under the provisions of the Company's Profit Sharing Plan. Mr. Craig is entitled to receive an annual contribution equal to five percent (5%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs.

Steve R. Aldrich

The employment agreement dated January 1, 2022 between the Residential Mortgage Holding Company, LLC and Mr. Aldrich, as President and Chief Executive Officer, establishes Mr. Aldrich's annual base salary at $252,384. Mr. Aldrich received $252,384 in salary in 2021, which reflected the $250,000 annual salary specified in his previous employment agreement combined with a salary increase approved by the Residential Mortgage, LLC Chairman of the Board of Managers in 2021 and distributed in accordance with the Residential Mortgage's biweekly payroll cycle. A bonus of $902,399 was earned by Mr. Aldrich in 2021 under the provisions of his employment agreement. Mr. Aldrich is entitled to receive an annual contribution equal to $50,000 to the NQDBP and may be adjusted at the discretion of the employer's Board of Managers.

Michael G. Huston

The employment agreement dated March 26, 2022 between the Bank and Mr. Huston, as President, Chief Lending Officer of the Bank, establishes Mr. Huston's annual base salary at $332,872. Mr. Huston received $293,368 in salary in 2021, which reflected the $288,311 annual salary specified in his previous employment agreement combined with a salary increase approved by the Compensation Committee in 2021 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $128,495 was earned by Mr. Huston in 2021 under the provisions of the Company's Profit Sharing Plan. Mr. Huston is entitled to receive an annual contribution equal to fifteen percent (15%) of annual base salary in accordance with the Company's SERP, which may be adjusted at the Compensation Committee's and the Board's discretion. Interest on the accruing contributions is credited based on the average yield of the Bank's assets less a three year moving average rate of loan charge-offs.

Michael A. Martin

Mr. Martin, Executive Vice President, General Counsel and Corporate Secretary of the Company, and Executive Vice President, Chief Operating Officer, General Counsel and Corporate Secretary of the Bank passed away November 11, 2021.

Mr. Martin received $286,657 in salary in 2021, which reflected the $318,726 annual salary specified in his previous employment agreement combined with a salary increase approved by the Compensation Committee in 2021 and distributed in accordance with the Bank's biweekly payroll cycle through the date of Mr. Martin's death. A profit sharing allocation of $125,556 was earned by Mr. Martin in 2021 under the provisions of the Company's Profit Sharing Plan. Mr. Martin was also entitled to receive an annual contribution equal to ten percent (10%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs.

Joseph M. Schierhorn

The employment agreement dated January 1, 2022, by and among the Company, the Bank, and Mr. Schierhorn, as Chairman, President, Chief Executive Officer, and Chief Operating Officer of the Company, and Chairman and Chief Executive Officer of the Bank, establishes Mr. Schierhorn’s annual salary at $465,255. Mr. Schierhorn received $458,838 in salary in 2021, which reflected the $441,419 annual salary specified in his previous employment agreement combined with a salary increase approved by the Compensation Committee in 2021 and distributed in accordance with the Company’s biweekly payroll cycle. A profit sharing allocation of $229,419 was earned by Mr. Schierhorn in 2021 under the provisions of the Company's Profit Sharing Plan. Mr. Schierhorn is entitled to receive an annual contribution equal to twenty percent (20%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs. Annually, the Company will make payment to the Mr. Schierhorn's account as outlined in the Company’s Supplemental Executive Retirement Deferred Compensation Plan.

Potential Payments upon Termination or Change in Control

In accordance with the terms of the 2020 Plan, which applied to all named executive officers except for Mr. Aldrich, if the Company or the Bank is subjected to a change of control, any outstanding stock option grants or stock awards held by the named executive officers would not automatically vest. However, if the awards were not assumed by or replaced with comparable awards by the successor company, the Compensation Committee may immediately vest all shares at its sole discretion.

Additionally, the current employment agreements with Messrs. Schierhorn, Ballard, Craig, Huston, and Aldrich specify that if the Company or the Bank (or in the case of Mr. Aldrich, Residential Mortgage, LLC) is subjected to a change of control and either the Company or the Bank (or in the case of Mr. Aldrich, Residential Mortgage, LLC) terminates a named executive officer’s employment without cause or if a named executive terminates his or her employment for good reason within seven hundred and thirty days of the change in control for the named executive is entitled to:

● All base salary earned and all reimbursable expenses incurred through the termination date payable by the Company in a lump sum no later than forty-five days after the day on which employment is terminated;

● An amount equal to two times their highest base salary over the prior three years for Messrs. Schierhorn, Ballard, Huston and Aldrich; and, one times the highest base salary over the prior three years for Mr. Craig, also payable by the Company in a lump sum no later than forty-five days after the day on which employment is terminated;

● An amount equal to two times their average profit share (bonus for Mr. Aldrich) received over the prior three years for Messrs. Schierhorn, Ballard, Huston and Aldrich; and, one times the average profit share received over the prior three years for Mr. Craig payable by the Company in a lump sum no later than forty-five days after the day on which employment is terminated;

● The continuation of health and insurance benefits for two years following the termination date of their agreement for Messrs. Schierhorn, Ballard, Huston and Aldrich; and, one year for Mr. Craig; and,

● Receive age credit and credit for period of service towards all SERP and NQDBP plans for the remaining term covered by each named executive officer’s individual employment agreement.

For Messrs. Schierhorn, Ballard, Craig, Huston and Aldrich, if the Company (or in the case of Mr. Aldrich, Residential Mortgage, LLC) terminates the named executive officer’s employment without cause, or if they terminate their employment for good reason, the named executive officer is entitled to:

● All base salary earned and all reimbursable expenses incurred under the agreement through their termination date payable by the Company in a lump sum no later than forty-five days after the day on which employment is terminated;

● An amount equal to one times their highest base salary over the prior three years for Messrs. Schierhorn, Ballard, Huston, and Aldrich; and, seventy-five percent (75%) of his highest base salary over the prior three years for Mr. Craig, to be paid on the first day of the month following a period of six months after the termination;

● Continuation of health and insurance benefits for twelve months for Messrs. Schierhorn, Ballard, Huston and Aldrich; and nine months for Mr. Craig following the termination date of their agreement; and,

● Receive age credit and credit for period of service towards all SERP and NQDBP plans for the remaining term covered by each named executive officer’s individual employment agreement.

For Messrs. Schierhorn, Ballard, Craig, Huston and Aldrich, in the event the Company terminates the named executive officer’s employment for cause or the named executive officer terminates their employment without good reason, the named executive officer is entitled only to payment of all base salary earned and all reimbursable expenses incurred through the termination date payable upon the effective date of termination and will have no right to receive compensation or other benefits for any period after termination.

If the Company terminates the employment of Messrs. Schierhorn, Ballard, Craig, Huston or Aldrich on account of any mental or physical disability that prevents them from performing their duties, then they are entitled to one lump sum payment, on the first day of the month following a period of six months after employment was terminated, of all base salary earned and reimbursable expenses incurred through the termination date, as well as full base salary and health and dental insurance benefits provided, at the Company’s expense, for one year following the termination date.

If a named executive officer’s employment agreement is terminated due to their death, under the terms of the agreement, their beneficiaries will receive that portion of their base salary that otherwise would have been paid to them for the month in which their death occurred and any other amounts due them pursuant to the Company’s SERP, any supplemental deferred compensation plan, and any other death, insurance, employee benefit plan or stock benefit plan provided to them by the Company according to the terms of the respective plans.

The following table sets forth potential payments payable to our named executive officers in the event of termination of their employment or a change of control of the Company or the Bank (or in the case of Mr. Aldrich, Residential Mortgage, LLC) as of December 31, 2021 under the provisions of their employment agreements as described above. The value of unvested options and restricted stock units in the discussion below is based on the closing price of the Company’s common stock on December 31, 2021 at $43.460 per share.


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Joseph M. Schierhorn
Termination by Employer Without Cause	$17,894	$465,255	$—	$—	$—
By Executive For Good Reason	$17,894	$465,255	$—	$—	$—
Termination by Employer for Cause	$17,894	$—	$—	$—	$—
By Executive Without Good Reason	$17,894	$—	$—	$—	$—
Change in Control:
Without Cause	$17,894	$1,343,506	$—	$—	$—
For Good Reason within 730 days of change in control	$17,894	$1,343,506	$—	$—	$—
Death	$17,894	$—	$96,053	$192,137	$1,861,238
Disability	$17,894	$345,255	$96,053	$192,137	$1,845,288


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Jed W. Ballard
Termination by Employer Without Cause	$11,311	$294,074	$—	$—	$41,326
By Executive For Good Reason	$11,311	$294,074	$—	$—	$41,326
Termination by Employer for Cause	$11,311	$—	$—	$—	$—
By Executive Without Good Reason	$11,311	$—	$—	$—	$—
Change in Control:
Without Cause	$11,311	$806,454	$—	$—	$82,652
For Good Reason within 730 days of change in control	$11,311	$806,454	$—	$—	$82,652
Death	$11,311	$—	$24,014	$147,894	$121,953
Disability	$11,311	$174,074	$24,014	$147,894	$147,329


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Michael G. Huston
Termination by Employer Without Cause	$12,803	$332,872	$—	$—	$41,326
By Executive For Good Reason	$12,803	$332,872	$—	$—	$41,326
Termination by Employer for Cause	$12,803	$—	$—	$—	$—
By Executive Without Good Reason	$12,803	$—	$—	$—	$—
Change in Control:
Without Cause	$12,803	$891,386	$—	$—	$82,652
For Good Reason within 730 days of change in control	$12,803	$891,386	$—	$—	$82,652
Death	$12,803	$—	$20,673	$128,555	$159,791
Disability	$12,803	$212,872	$20,673	$128,555	$185,167


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Benjamin D. Craig
Termination by Employer Without Cause	$9,589	$186,989	$—	$—	$—
By Executive For Good Reason	$9,589	$186,989	$—	$—	$—
Termination by Employer for Cause	$9,589	$—	$—	$—	$—
By Executive Without Good Reason	$9,589	$—	$—	$—	$—
Change in Control:
Without Cause	$9,589	$353,035	$—	$—	$—
For Good Reason within 730 days of change in control	$9,589	$353,035	$—	$—	$—
Death	$9,589	$—	$14,411	$91,961	$93,540
Disability	$9,589	$129,318	$14,411	$91,961	$77,590


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Steve R. Aldrich
Termination by Employer Without Cause	$9,707	$252,384	$—	$—	$52,060
By Executive For Good Reason	$9,707	$252,384	$—	$—	$52,060
Termination by Employer for Cause	$9,707	$—	$—	$—	$—
By Executive Without Good Reason	$9,707	$—	$—	$—	$—
Change in Control:
Without Cause	$9,707	$2,013,614	$—	$—	$104,121
For Good Reason within 730 days of change in control	$9,707	$2,013,614	$—	$—	$104,121
Death	$9,707	$—	$—	$—	$8,700
Disability	$9,707	$132,384	$—	$—	$52,060

In addition to the above provisions, the Company’s Profit Sharing Plan contains what is commonly referred to as a "claw back provision" with respect to bonuses or profit sharing allocations paid under the plan. Under this provision, if the Company is required to restate the financial statements due to material noncompliance with generally accepted accounting principles, the Company will recover from the named executive officers any excess incentive compensation that was paid as a result of the restatement during the three years prior to the restatement.

Grants of Plan-Based Awards

The Compensation Committee approved awards under our Profit Sharing Plan and awarded stock options, and restricted stock grants under our 2020 Plan to our named executive officers during 2021. Set forth below is information regarding awards granted during 2021:


Name	Estimated Future Payouts Under Non-Equity Incentive Plan Awards			Equity Incentive Grant Date	Estimated Future Payouts Under Equity Incentive Plan Awards	All Other Stock Awards: Number of Shares of Stock or Units	All Other Option Awards: Number of Shares Underlying Options	Exercise or Base Price of Option Awards per share	Grant Date Fair Value of Stock and Option Awards
	Threshold	Target	Maximum
Joseph M. Schierhorn	$55,061	$183,535	$229,419	12/1/2021	$—	1,444	5,908	$42.02	$121,352
Jed W. Ballard	$26,334	$87,779	$131,669	12/1/2021	$—	1,008	1,374	$42.02	$56,467
Michael G. Huston	$26,403	$88,010	$132,015	12/1/2021	$—	846	1,153	$42.02	$47,390
Benjamin D. Craig	$22,268	$74,228	$111,342	12/1/2021	$—	544	742	$42.02	$30,479
Michael A. Martin	$25,799	$85,997	$128,996	12/1/2021	$—	1,135	1,548	$42.02	$63,591
Steve R. Aldrich	$—	$—	$—		$—	—	—	$—	$—

Profit Sharing Plan

The dollar values reflected in the above table as to estimated future payouts under the non-equity incentive plan awards to the named executive officers are based on a formula driven methodology applied to determine the annual profit sharing allocation to the Company’s Profit Sharing Plan participants recommended by the Chief Executive Officer as described above in the section entitled "Performance Based Annual Payment." The Company’s Profit Sharing Plan applies a weighted average based on the funding criteria to determine the total funding percentage of the target amount. The funding percentage is then applied to an individual’s targeted percent of base salary based on their grade to establish the total profit sharing amount, subject to the Chief Executive Officer's discretion and Compensation Committee and Board approval.

2020 Stock Incentive Plan

The provisions of the 2020 Plan under which the above equity grants were made permit the Compensation Committee flexibility in determining the terms of the stock option agreements and letter agreements for restricted/performance shares and units granted, respectively, as related to the death, disability, retirement, and termination of employment, and in the event of a change in control.

Shares Available for Issuance

The 2020 Plan provides that a total of 325,000 shares may be issued to eligible participants. Additionally, any shares under the 2020 Plan that are forfeited back to the Company and shares that are withheld by the Company to pay for taxes with respect to awards other than options or stock appreciation rights shall again be available for issue pursuant to new awards granted under this plan. For purposes of calculating available shares, stock options or stock appreciation rights granted are counted as one share for every one share granted, and any shares that are subject to awards other than stock options or stock appreciation rights are counted as three shares for every one share granted. As of December 31, 2021 under the 2020 Plan and previous plans, there were a total of 136,819 options, 53,459 shares of restricted stock, and no performance shares or performance units outstanding and there were 170,905 shares available for issuance.

Stock Options

The 2020 Plan provides that the exercise price of stock options or any other awards as set by the Compensation Committee shall not be less than one-hundred percent (100%) of the fair market value of the shares at the close of business on the date of grant. Outstanding options may not be repriced without shareholder approval. All options granted under the 2020 Plan will expire not more than ten years from the date of grant. Each option is exercisable subject to the vesting schedule determined by the Compensation Committee. The exercise price for shares purchased upon the exercise of an option must be paid in cash or such other consideration, including shares of the Company’s common stock, as the Compensation Committee deems acceptable.

Stock Awards

Stock awards are earned and vest over a period of at least three years and can be governed by conditions, restrictions, and contingencies determined at the discretion of the Compensation Committee such as continuous service and/or the achievement of performance goals. The stock awards will be in the form of restricted stock, restricted units, performance shares, and performance units.

Stock Appreciation Rights

The 2020 Plan also authorizes the grants of stock appreciation rights, which are grants of rights that entitle the holder to payment equal to the difference between the fair market value of a share at the time of grant versus the fair market value at the time the stock appreciation right is exercised. Stock appreciation rights may be granted in connection with options or separately. Similarly, the 2020 Plan authorizes the grant of dividend equivalent rights, either in connection with other awards (particularly stock awards and stock appreciation rights) or separately.

Administration

Historically, it has been the Compensation Committee’s overall practice to consider and grant stock based incentives to employees in the fourth quarter of the Company’s fiscal year. In the fourth quarter of 2021, the Compensation Committee analyzed and considered the estimated impact of proposed grants on the Company’s income statement, as well as the potential dilution from options outstanding and available for future grant. The number of shares of the Company’s common stock underlying equity awards granted to employees in 2021 under the 2020 Plan as a percent of fully diluted shares outstanding was point forty eight-percent (0.48%) as compared to point fifty-nine percent (0.59%) for our peer median. The Company’s shares of common stock underlying equity awards granted in 2021 was lower than our peer median mainly due to fewer Nonqualified Stock Options and awards being granted to Executive Vice Presidents and named executive officers of the Company as a result of higher stock price and corresponding value awarded. Peer median data was obtained from data received from FWCC, an independent, nationally recognized compensation-consulting firm, in 2020. The banks that were used to obtain this peer group median were 14 Pacific Northwest and California commercial banks similar in size to Northrim: FS BanCorp; F&M BanCorp; First Financial Northwest, Inc.; Territorial BanCorp; Heritage Commerce; Riverview Bancorp; Bank of Commerce; Bank of Marin Bancorp; First Northern Community Bancorp; Oak Valley Bancorp; Sierra Bancorp; Central Valley Bancorp; First Northwest; and Timberland Bancorp.

Amendment and Termination

The 2020 Plan may be modified, amended or terminated by the Board, except that shareholder approval is required for any amendment which increases the number of shares subject to the 2020 Plan other than in the cases of certain automatic adjustments such as (but not limited to) changes in the Company's total shares outstanding resulting from a merger, reorganization, recapitalization, stock split, or stock dividend; which increases or expands the category of eligible recipients; or whenever applicable law requires that a proposed amendment of the 2020 Plan receive shareholder approval. The Compensation Committee may amend the terms and conditions of outstanding stock options as long as such amendments do not terminate the option or otherwise adversely affect the holders of such stock options without the holders’ consent. Additional amendments to terms and conditions of outstanding stock options are subject to vote by the Board.

Shares of Common Stock Authorized for Issuance under Equity Compensation Plans

The following table sets forth information regarding securities authorized for issuance under the Company’s equity plans as of December 31, 2021:

Plan category

Number of shares to be issued upon exercise of outstanding options, warrants and rights (a) (1)

Weighted-average exercise price of outstanding options, warrants and rights (b)

Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) (c )

Equity compensation plans approved by security holders

190,278

$24.11

170,905

(1) Includes 68,997 outstanding awards granted under the 2020 Plan and 121,281 outstanding awards granted under previous stock option plans.

We do not have any equity compensation plans that have not been approved by our shareholders.

Outstanding Equity Awards at Fiscal Year-End

The following table summarizes the outstanding equity award holdings, as adjusted for dividends, held by our named executive officers as of December 31, 2021:


	Option Awards					Stock Awards
Name	Number of Shares Underlying Unexercised Options Exercisable	Number of Shares Underlying Unexercised Options Unexercisable (1)	Equity Incentive Plan Awards: Number of Shares Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (2)	Market Value of Shares or Units of Stock That Have Not Vested (3)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Jed W. Ballard	—	1,374	—	$42.02	12/1/2031	3,403	$147,894	—	—
	718	1,435	—	$32.09	12/2/2030	—	—	—	—
	1,633	817	—	$36.46	12/4/2029	—	—	—	—
	2,487	—	—	$37.06	11/28/2028	—	—	—	—
(1) The number of shares underlying unexercised options that have not vested as of December 31, 2021 total 3,626 in the aggregate and vest as follows:

December 1, 2022					458
December 2, 2022					717
December 4, 2022					817
December 1, 2023					458
December 2, 2023					718
December 1, 2024					458
(2) The number of shares or units of stock that have not vested as of December 31, 2021 total 3,403 in the aggregate and vest as follows:

December 4, 2022					1,076
December 2, 2023					1,319
December 1, 2024					1,008
(3) Based on the closing price of $43.46 per share of our shares of common stock on the Nasdaq Global Select Market on December 31, 2021.


	Option Awards					Stock Awards
Name	Number of Shares Underlying Unexercised Options Exercisable	Number of Shares Underlying Unexercised Options Unexercisable (1)	Equity Incentive Plan Awards: Number of Shares Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (2)	Market Value of Shares or Units of Stock That Have Not Vested (3)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Joseph M. Schierhorn	—	5,908	—	$42.02	12/1/2031	4,421	$192,137	—	—
	3,089	6,179	—	$32.09	12/2/2030	—	$—	—	—
	4,939	2,470	—	$36.46	12/4/2029	—	$—	—	—
	11,192	—	—	$37.06	11/28/2028	—	$—	—	—
	10,423	—	—	$33.30	11/15/2027	—	$—	—	—
	3,830	—	—	$28.10	11/16/2026	—	$—	—	—
	7,035	—	—	$28.76	11/18/2025	—	$—	—	—
	4,958	—	—	$27.28	11/19/2024	—	$—	—	—
	4,707	—	—	$23.74	10/23/2023	—	$—	—	—
	—	—	—	$—	0	—	$—	—	—

(1) The number of shares underlying unexercised options unexerciseable as of December 31, 2021 total 14,557 in the aggregate and vest as follows:

December 1, 2022					1,969
December 2, 2022					3,090
December 4, 2022					2,470
December 1, 2023					1,970
December 2, 2023					3,089
December 1, 2024					1,969
(2) The number of shares or units of stock that have not vested as of December 31, 2021 total 4,421 in the aggregate and vest as follows:

December 4, 2022					1,085
December 2, 2023					1,892
December 1, 2024					1,444
(3) Based on the closing price of $43.46 per share of our shares of common stock on the Nasdaq Global Select Market on December 31, 2021.


	Option Awards					Stock Awards
Name	Number of Shares Underlying Unexercised Options Exercisable	Number of Shares Underlying Unexercised Options Unexercisable (1)	Equity Incentive Plan Awards: Number of Shares Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (2)	Market Value of Shares or Units of Stock That Have Not Vested (3)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Michael G. Huston	—	1,153	—	$42.02	12/1/2031	2,958	$128,555	—	—
	600	1,200	—	$32.09	12/2/2030	—	—	—	—
	1,533	767	—	$36.46	12/4/2029	—	—	—	—
	1,658	—	—	$37.06	11/28/2028	—	—	—	—
	1,702	—	—	$33.30	11/15/2027	—	—	—	—
	3,775	—	—	$31.45	5/8/2027	—	—	—	—
(1) The number of shares underlying unexercised options unexerciseable as of December 31, 2021 total 3,120 in the aggregate and vest as follows:

December 1, 2022					384
December 2, 2022					600
December 4, 2022					767
December 1, 2023					385
December 2, 2023					600
December 1, 2024					384
(2) The number of shares or units of stock that have not vested as of December 31, 2021 total 2,958 in the aggregate and vest as follows:

November 15, 2020					1,010
November 28, 2021					1,102
December 4, 2022					846

SEC Form DEF 14A filed by Northrim BanCorp Inc