Northrim BanCorp Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Northrim BanCorp, Inc. on January 3, 2018, regarding events occurring on January 2, 2018. The filing addresses Item 5.02, detailing the execution of new employment agreements with five named executive officers effective January 2, 2018.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes and Executive Compensation
The Compensation Committee approved new employment agreements for the following executives, effective January 2, 2018:
- Joseph M. Schierhorn (President, CEO, COO): Base salary increased to $389,000. Other terms remain essentially the same as the prior agreement.
- Benjamin Craig (EVP, CIO): Base salary increased to $221,647. Other terms remain essentially the same as the prior agreement.
- Michael A. Martin (EVP, General Counsel, Corporate Secretary): Entered a new agreement with terms essentially the same as the prior agreement.
- Jed Ballard (EVP, CFO): Entered a new agreement with an initial term ending December 31, 2018, automatically extending for one-year terms. Base salary set at $220,000. Includes a 10% annual contribution to the supplemental executive retirement plan.
- Michael G. Huston (EVP, Chief Lending Officer): Entered a new agreement with an initial term ending December 31, 2018, automatically extending for one-year terms. Base salary set at $245,000. Includes a 10% annual contribution to the supplemental executive retirement plan.
Outlook, Risks, and Contingencies
The agreements for Messrs. Ballard and Huston include specific severance provisions triggered by a "Change of Control," termination without "Cause," or termination for "Good Reason" within 730 days of a Change in Control. These provisions include:
- Payment of earned base salary and reimbursable expenses.
- A lump sum equal to two times the highest base salary earned over the prior three years.
- A lump sum equal to two times the average profit sharing contribution paid over the prior three years.
- Continuation of health and dental insurance for two years post-termination.
- A "golden parachute" reduction clause to ensure payments do not exceed 2.99 times the base amount under Internal Revenue Code Section 280G.
Messrs. Ballard and Huston are also subject to confidentiality, non-competition, non-solicitation, and non-disparagement provisions.
Investor Verification Checklist
- Verify the total annual compensation impact of the salary increases for Messrs. Schierhorn and Craig.
- Review the full text of Exhibits 10.1 through 10.5 to understand specific termination triggers and definitions of "Cause" and "Good Reason."
- Assess the potential liability exposure regarding the "Change of Control" severance packages for Messrs. Ballard and Huston.
- Confirm the automatic renewal terms for the agreements of Messrs. Ballard and Huston.