EXHIBIT 10.20

 

 

 

 

 

 

 

 

 

 

 

 

2000 CITY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION PLAN

 

 

 

 

 

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2000 CITY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION PLAN

 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

ARTICLE I

 

 

TITLE AND DEFINITIONS

 

 

 

 

1.1

Title

1

1.2

Definitions

1

 

 

 

 

ARTICLE II

 

 

PARTICIPATION

 

 

 

 

2.1

Participation

5

 

 

 

 

ARTICLE III

 

 

DEFERRAL ELECTIONS

 

 

 

 

3.1

Elections to Defer Compensation

6

3.2

Investment Elections

8

 

 

 

 

ARTICLE IV

 

 

ACCOUNTS

 

 

 

 

4.1

Deferral Account

10

4.2

Rollovers

11

 

 

 

 

ARTICLE V

 

 

VESTING

 

 

 

 

5.1

Deferral Account

12

 

 

 

 

ARTICLE VI

 

 

DISTRIBUTIONS

 

 

 

 

6.1

Distribution of Deferred Compensation

13

6.2

Nonscheduled In-Service Withdrawals

14

6.3

Hardship Withdrawals

15

6.4

Inability to Locate Participant

15

6.5

Death Benefit for Certain Participants

16

 

 

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ARTICLE VII

 

 

ADMINISTRATION

 

 

 

 

7.1

Committee Action

17

7.2

Powers and Duties of the Committee

17

7.3

Construction and Interpretation

18

7.4

Information

18

7.5

Compensation, Expenses and Indemnity

18

7.6

Quarterly Statements

18

7.7

Claims Procedure

19

 

 

 

 

ARTICLE VIII

 

 

MISCELLANEOUS

 

 

 

 

8.1

Unsecured General Creditor

20

8.2

Restriction Against Assignment

20

8.3

Withholding

20

8.4

Amendment, Modification, Suspension or Termination

21

8.5

Governing Law

21

8.6

Receipt or Release

21

8.7

Payments on Behalf of Persons Under Incapacity

21

8.8

Headings, etc. Not Part of Agreement

21

 

 

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2000 CITY NATIONAL BANK
EXECUTIVE DEFERRED COMPENSATION PLAN

(EFFECTIVE AS OF JANUARY 1, 2000)

 

                    City National Bank (the “Bank”) hereby establishes the 2000
City National Bank Executive Deferred Compensation Plan (the “Plan”), effective
as of January 1, 2000, to provide a tax-deferred capital accumulation
opportunity to a select group of management and highly compensated employees
through deferral of salary, bonuses and/or commissions.

 

ARTICLE I
TITLE AND DEFINITIONS

 

1.1               TITLE.

 

                    This Plan shall be known as the 2000 City National Bank
Executive Deferred Compensation Plan.

 

1.2               DEFINITIONS.

 

                    Whenever the following words and phrases are used in this
Plan, with the first letter capitalized, they shall have the meanings specified
below.

 

                    “Account” shall mean a Participant’s Deferral Account.

 

                    “Bank” shall mean (a) City National Bank or any successor
corporation, (b) each corporation which is a member of a controlled group of
corporations (within the meaning of Section 414(b) of the Code) of which City
National Bank is a component member and (c) each entity (whether or not
incorporated) which is under common control with City National Bank, as such
common control is defined in Section 414(c) of the Code and regulations issued
thereunder.

 

                    “Beneficiary” or “Beneficiaries” shall mean the person or
persons, including a trustee, personal representative or other fiduciary, last
designated in writing by a Participant in accordance with procedures established
by the Committee to receive the benefits specified hereunder (other than those
benefits set forth in Section 6.5) in the event of the Participant’s death. No
beneficiary designation shall become effective until it is filed with the
Committee, and no beneficiary designation of someone other than the
Participant’s spouse shall be effective unless such designation is consented to
by the Participant’s spouse on a form provided by and in accordance with
procedures established by the Committee. If there is no Beneficiary designation
in effect, or if there is no surviving designated Beneficiary, then the
Participant’s surviving spouse shall be the Beneficiary. If there is no
surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the duly appointed and currently acting personal

 

 

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representative of the Participant’s estate (which shall include either the
Participant’s probate estate or living trust) shall be the Beneficiary. In any
case where there is no such personal representative of the Participant’s estate
duly appointed and acting in that capacity within 90 days after the
Participant’s death (or such extended period as the Committee determines is
reasonably necessary to allow such personal representative to be appointed, but
not to exceed 180 days after the Participant’s death), then Beneficiary shall
mean the person or persons who can verify by affidavit or court order to the
satisfaction of the Committee that they are legally entitled to receive the
benefits specified hereunder. In the event any amount is payable under the Plan
to a minor, payment shall not be made to the minor, but instead shall be paid
(a) to that person’s living parent(s) to act as custodian, (b) if that person’s
parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (c) if no parent of that person is then living, to a
custodian selected by the Committee to hold the funds for the minor under the
Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which
the minor resides. If no parent is living and the Committee decides not to
select another custodian to hold the funds for the minor, then payment shall be
made to the duly appointed and currently acting guardian of the estate for the
minor or, if no guardian of the estate for the minor is duly appointed and
currently acting within 60 days after the date the amount becomes payable,
payment shall be deposited with the court having jurisdiction over the estate of
the minor.

 

                    “Board of Directors” shall mean the board of directors of
the Bank.

 

                    “Bonus” shall mean any bonus payable to a Participant under
any formal cash incentive compensation program maintained by the Bank in
addition to the Participant’s Salary.

 

                    “Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

                    “Commissions” shall mean any commissions payable to a
Participant.

 

                    “Committee” shall mean the Corporation’s Benefits Committee.

 

                    “Compensation” shall mean the Salary, Bonus and/or
Commissions that the Participant is entitled to for services rendered to the
Bank.

 

                    “Corporation” shall mean City National Corporation.

 

                    “Deferral Account” shall mean the bookkeeping account
maintained by the Committee for each Participant that is credited with amounts
equal to (a) the portion of the Participant’s Salary that he or she elects to
defer, (b) the portion of the Participant’s Bonus that he or she elects to
defer, (c) the portion of the Participant’s Commissions that he or she elects to
defer, (d) the Participant’s Rollover Amount, if any, and (e) earnings or losses
pursuant to Section 4.1.

 

 

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                    “Disability” shall mean an incapacity which has rendered the
Participant eligible to commence receiving benefits under the Bank’s long-term
disability plan.

 

                    “Earnings Rate” shall mean, for each Fund, an amount equal
to the net rate of gain or loss on the assets of such Fund during each business
day.

 

                    “Effective Date” shall mean January 1, 2000.

 

                    “Eligible Employee” shall mean each officer of the Bank at
the Senior Vice President level or above that is regularly scheduled to work
thirty (30) or more hours per week.

 

                    “Fund” or “Funds” shall mean one or more of the investment
funds or portfolios selected by the Committee pursuant to Section 3.2(b).

 

                    “Initial Election Period” for an Eligible Employee shall
mean the later of: (a) the period beginning upon notification to the
Participants of this Plan and ending December 31, 1999; or (b) the thirty-day
period following the Eligible Employee’s date of hire or if later the date on
which an individual becomes an Eligible Employee.

 

                    “Participant” shall mean (a) any Eligible Employee who
elects to defer Compensation in accordance with Section 3.1 and complies with
the requirements of Section 2.1 and (b) any individual who is credited with a
Rollover Amount pursuant to Section 4.2.

 

                    “Payment Eligibility Date” shall mean the first day of the
month following the end of the calendar quarter in which a Participant ceases to
be employed by the Bank, incurs a Disability or dies.

 

                    “Plan” shall mean the 2000 City National Bank Executive
Deferred Compensation Plan set forth herein, now in effect, or as amended from
time to time.

 

                    “Plan Year” shall mean the 12 consecutive month period
beginning on January 1 and ending the following December 31.

 

                    “Plan Year Subaccounts” shall mean subaccounts of a
Participant’s Deferral Account established to separately account for
Compensation deferred (and earnings or losses thereon) for each Plan Year in
which a Participant participates in the Plan and for any Rollover Amounts.

 

                    “Prior Plan” shall mean the City National Bank Executive
Deferred Compensation Plan.

 

                    “Rollover Amount” shall mean the amount determined in
accordance with Section 4.2.

 

 

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                    “Salary” shall mean the Participant’s base salary.

 

 

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ARTICLE II
PARTICIPATION

 

2.1                 PARTICIPATION.

 

                    (a)                GENERALLY. An Eligible Employee shall
become a Participant in the Plan by (i) electing to defer Compensation in
accordance with Section 3.1, (ii) if required by the Committee, filing a life
insurance application form along with his or her deferral election form, and
(iii) satisfying any medical underwriting requirement established by the
Committee.

 

                    (b)               PARTICIPANTS WITH SPLIT-DOLLAR LIFE
INSURANCE AGREEMENTS. Notwithstanding the foregoing, unless the Committee
provides otherwise, an Eligible Employee who has entered into a Split-Dollar
Life Insurance Agreement with the Corporation must execute an “Agreement for
Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” in
order to defer Compensation under this Plan. Notwithstanding anything contained
herein to the contrary, (i) if an Eligible Employee is allowed to defer
Compensation under this Plan without executing an “Agreement for Transfer of
Policy and Termination of Split-Dollar Life Insurance Agreement” (a “Policy
Transfer Agreement”), then no portion of such Participant’s account balance
under the Prior Plan shall be transferred to his or her Account under this Plan
and (ii) if an Eligible Employee is allowed to defer Compensation under this
Plan prior to executing a Policy Transfer Agreement, then no portion of such
Participant’s account balance under the Prior Plan shall be transferred to his
or her Account under this Plan until such Participant executes a Policy Transfer
Agreement.

 

                    (c)                DURATION OF PARTICIPATION. Any deferral
election of a Participant who ceases to be an Eligible Employee shall terminate
effective as of December 31 of the Plan Year in which such cessation occurs (but
shall apply to any bonus earned during such Plan Year that becomes payable
following the end of such Plan Year).

 

 

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ARTICLE III
DEFERRAL ELECTIONS

 

3.1               ELECTIONS TO DEFER COMPENSATION.

 

                    (a)                INITIAL ELECTION PERIOD. Subject to
Section 2.1, each Eligible Employee may elect to defer Compensation by filing
with the Committee an election that conforms to the requirements of this Section
3.1, on a form provided and in a manner specified by the Committee, no later
than the last day of his or her Initial Election Period.

 

                    (b)               GENERAL RULE. Subject to the minimum
deferral provisions of Section 3.1(c) below, the amount of Compensation which an
Eligible Employee may elect to defer is as follows:

 

(i)                 Any percentage or dollar amount of Salary up to 100%;

 

(ii)                Any percentage or dollar amount of Bonus up to 100%; and/or

 

(iii)               Any percentage or dollar amount of Commissions up to 100%;

 

provided, however, that no election shall be effective to reduce the
Compensation paid to an Eligible Employee for a calendar year to an amount which
is less than the sum of: (a) the amount that the Bank is required to withhold
from such Eligible Employee’s Compensation for such calendar year for purposes
of federal, state and local (if any) income tax and employment tax (including
Federal Insurance Contributions Act (FICA) tax withholding); and (b) the amount
that the Bank is required to withhold from such Eligible Employee’s Compensation
for such calendar year for contributions to any employee benefit plan (other
than this Plan).

 

                    (c)                MINIMUM DEFERRALS. For each Plan Year
during which an Eligible Employee is a Participant, the minimum amount that may
be elected under Section 3.1(b) is $5,000. This $5,000 minimum deferral for any
Plan Year may be met by a combination of deferrals of Salary, Commissions and/or
Bonus. If the Compensation that the Participant has elected to defer for a Plan
Year includes a percentage of the Bonus payable in such Plan Year and the actual
amount of such Bonus to be deferred, when combined with the percentage of Salary
and/or Commissions elected to be deferred for the Plan Year, is less than
$5,000, then no portion of such Bonus shall be deferred under this Plan, no
further Salary and/or Commissions shall be deferred for such Plan Year and any
Salary or Commissions previously deferred for such Plan Year shall be refunded
to the Participant together with any earnings or losses that have been credited
pursuant to Section 4.1(c) of the Plan.

 

                    (d)               EFFECT OF INITIAL ELECTION. An election to
defer Compensation during the Initial Election Period shall be effective with
respect to (i) Salary and/or Commissions earned during the

 

 

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first pay period beginning after the date on which the Committee receives a
Participant’s election to defer Compensation and each subsequent pay period
beginning in the same Plan Year and (ii) to the Bonus paid with respect to
services performed in the Plan Year for which the election is made.

 

                    (e)                ELECTIONS OTHER THAN ELECTIONS DURING THE
INITIAL ELECTION PERIOD. Subject to the requirements of Section 2.1, any
Eligible Employee may participate for any Plan Year by filing an election, on a
form provided and in a manner specified by the Committee, to defer Compensation
as described in paragraph (b) above. An election to defer Compensation for a
Plan Year must be filed on or before December 1 of the preceding Plan Year, or
such other date as the Committee establishes, which date shall be no later than
December 31 of the preceding Plan Year, and will be effective for Salary,
Commissions and/or Bonus earned during pay periods beginning on or after January
1 of the Plan Year for which the election applies.

 

                    (f)                DURATION OF DEFERRAL ELECTIONS. Any
election made under this Plan to defer Compensation shall apply only to
Compensation payable with respect to services performed during the Plan Year for
which the election is made. For each subsequent Plan Year, a Participant who
remains an Eligible Employee may make a new election, subject to the limitations
set forth in this Section 3.1, to defer a percentage of his or her Compensation.

 

                    (g)               IN-SERVICE DISTRIBUTIONS. At the time of
making an election to defer Compensation for a Plan Year pursuant to this
Section 3.1, a Participant may elect (in the manner specified by the Committee)
to receive an in-service distribution of the amount deferred under such
election, together with earnings or losses credited with respect to such amounts
pursuant to Article IV, in a lump sum payment or in annual installments over 2,
3, 4, or 5 years in any January that occurs after the second anniversary of the
last day of the Plan Year in which the amount deferred was earned. In addition,
each Participant who has a Rollover Amount credited to his or her Account
pursuant to Section 4.2 shall be permitted to elect, on or before December 31,
1999, to receive an in-service distribution of such Rollover Amount, together
with earnings or losses, in January of 2003 or any later year. A Participant may
subsequently elect to defer the year of any such in-service distribution to any
subsequent date that is at least two years from the prior scheduled distribution
date by filing a written election with the Committee, on a form provided and in
a manner specified by the Committee, at least one year prior to the first day of
the previously elected in-service distribution year. The election to defer the
year of an in-service distribution may be made no more than twice. A Participant
may elect to change the form of an in-service distribution, provided that his or
her election is made on a form and in a manner specified by the Committee and
such election is received by the Committee at least one year prior to the date
distribution is to be made (or installments are to commence). If a Participant
fails to make a

 

 

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distribution election under this Section 3.1(g) for a Plan Year, the
Compensation deferred for that Plan Year shall be distributed as set forth in
Section 6.1(b).

 

                    (h)               ELECTIONS FOR ALTERNATIVE FORM OF
DISTRIBUTION. At the time of making an election to defer Compensation for a Plan
Year pursuant to this Section 3.1, a Participant may elect (in the manner
specified by the Committee) an alternative form of benefit for distribution of
the Compensation deferred for that Plan Year pursuant to Section 6.1(b). Subject
to the provisions of Section 6.1(b), this election will apply to the
Compensation deferred for such Plan Year if (i) the Participant does not elect
an in-service distribution with respect to such deferred Compensation pursuant
to Section 3.1(g) or (ii) the Participant elects an in-service distribution but
terminates employment prior to commencement of such in-service distribution.

 

                    (i)                 EFFECT OF ELECTIONS. Each distribution
election under Section 3.1(g) and Section 3.1(h) shall apply only to the
Compensation deferred for the Plan Year for which the election is made. For each
subsequent Plan Year a Participant may make a separate election. Any election
filed pursuant to this Section 3.1 shall be irrevocable for any one Plan Year
except to the extent provided in subsection (g) hereof, Section 6.1, Section 6.2
and Section 6.3.

 

3.2                 INVESTMENT ELECTIONS.

 

                    (a)                At the time of making each deferral
election described in Section 3.1, the Participant shall designate, on a form
provided and in a manner specified by the Committee, which Fund or Funds the
Compensation deferred pursuant to such election will be deemed to be invested in
for purposes of determining the amount of earnings or losses to be credited or
debited to his or her Plan Year Subaccount that the Committee establishes
pursuant to Section 4.1 to account for such deferred Compensation.

 

                    (b)               In making the designation pursuant to this
Section 3.2, the Participant must specify, in multiples of 10, the percentage of
his or her corresponding Plan Year Subaccount that shall be deemed to be
invested in one or more Funds. Effective as of the first business day of any
month, a Participant may change the designation made under this Section 3.2 with
respect to any or all of his or her Plan Year Subaccounts by filing an election,
on a form provided and in a manner specified by the Committee. If a Participant
fails to make an investment election for Compensation deferred in any Plan Year,
the Participant’s most recent investment election shall apply to the Plan Year
Subaccount established for such Plan Year and each Plan Year Subaccount
established with respect to any subsequent Plan Year Subaccount(s) until the
Participant files an election with the Committee in accordance with the
provisions of this Section 3.2 with respect to such Plan Year Subaccount(s).
Notwithstanding the foregoing, if a Participant has not previously elected a
Fund under this Section 3.2, he or she shall be deemed to have elected the money
market

 

 

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option, or such other Fund that the Committee designates as the default fund for
purposes of this Plan.

 

                    (c)                The Committee shall select from time to
time, in its sole discretion, the Funds in which Compensation deferred under
this Plan will be deemed to be invested. The Earnings Rate of each Fund shall be
used to determine the amount of earnings or losses to be credited or debited to
the Participant’s Deferral Account under Article IV. The Bank reserves the right
to change the Funds, and to increase or decrease the number of Funds, available
as the Funds for purposes of this Plan.

 

                    (d)               Notwithstanding the Participant’s ability
to designate the Funds in which the Plan Year Subaccounts of his or her Deferral
Account shall be deemed to be invested, the Bank shall have no obligation to
invest any funds in accordance with any Participant’s election. A Participant’s
Deferral Account shall merely be a bookkeeping entry on the Bank’s books, and no
Participant shall obtain any interest in any of the Funds.

 

 

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ARTICLE IV
ACCOUNTS

 

4.1               DEFERRAL ACCOUNT.

 

                    The Committee shall establish and maintain a Deferral
Account for each Participant under the Plan. The Deferral Account shall be
divided into Plan Year Subaccounts to separately account for deferrals made for
each Plan Year. A Participant’s Plan Year Subaccounts shall be divided into
separate subaccounts (“investment subaccounts”), each of which corresponds to a
Fund elected by the Participant pursuant to Section 3.2(a). A Participant’s Plan
Year Subaccount for a Plan Year shall be credited as follows:

 

(a)                The Committee shall credit the investment subaccounts    of
the Plan Year Subaccount of the Participant’s Deferral Account with an amount
equal to Salary deferred by the Participant during each pay period that begins
in the Plan Year for which the Plan Year Subaccount is established on the fifth
business day after the end of the pay period, in accordance with the
Participant’s election under Section 3.2(a); that is, the portion of the
Participant’s deferred Salary that the Participant has elected to be deemed to
be  invested in a certain Fund shall be credited to the investment subaccount
corresponding to that Fund;

 

(b)               The Committee shall credit the investment subaccounts of the
Plan Year Subaccount of the Participant’s  Deferral Account with an amount equal
to the portion  of the Bonus deferred by the Participant for the Plan  Year for
which the Plan Year Subaccount is  established on the fifth business day after
the Bonus or partial Bonus would have been paid, in accordance  with the
Participant’s election under Section 3.2(a);  that is, the portion of the
Participant’s deferred  Bonus that the Participant has elected to be deemed  to
be invested in a certain Fund shall be credited to the investment subaccount
corresponding to that Fund;

 

(c)                The Committee shall credit the investment subaccounts of the
Plan Year Subaccount of the Participant’s  Deferral Account with an amount equal
to the portion  of the Commissions deferred by the Participant earned  during
the Plan Year for which the Plan Year  Subaccount is established on the fifth
business day after the Commissions would have been paid, in  accordance with the
Participant’s election under  Section 3.2(a); that is, the portion of the
 Participant’s deferred Commission that the  Participant has

 

 

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elected to be deemed to be invested in a certain Fund shall be credited to the
investment subaccount  corresponding to that Fund; and

 

(d)               As of the close of each business day, each investment
subaccount of a Participant’s Plan Year Subaccount of  the Participant’s
Deferral Account shall be credited  with earnings or losses in an amount
determined by  multiplying the balance credited to such investment  subaccount
as of the beginning of the same business day by the Earnings Rate for the
corresponding Fund.

 

4.2               ROLLOVERS.

 

                    If an individual who was both an active employee of the Bank
and a participant in the Prior Plan on December 31, 1999 either (a) executes an
“Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance
Agreement” or (b) did not own a life insurance policy that was subject to a
Split-Dollar Life Insurance Agreement with the Company on December 31, 1999,
then his or her account balance under the Prior Plan shall be transferred to an
Account established for such individual under this Plan, shall be governed by
the terms and conditions of this Plan and shall be referred to as the “Rollover
Amount.” A Participant’s Rollover Amount shall be credited to a separate Plan
Year Subaccount. A Participant may make separate distribution and investment
elections applicable to his or her Rollover Amount in accordance with Articles
III and VI of this Plan.

 

 

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ARTICLE V

VESTING

 

5.1               DEFERRAL ACCOUNT.

 

                    A Participant’s Deferral Account shall be 100% vested at all
times.

 

 

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ARTICLE VI
DISTRIBUTIONS

 

6.1               DISTRIBUTION OF DEFERRED COMPENSATION.

 

                    (a)                Distribution of the amount credited to
each Plan Year Subaccount of the Participant’s Deferral Account that is subject
to an in-service distribution election made by the Participant pursuant to
Section 3.1(g) shall be made beginning in January of the year elected by the
Participant in the form elected by the Participant, provided that the
Participant is employed by the Bank on January 1 of such year. Notwithstanding
the foregoing, if the amount credited to a Plan Year Subaccount as of the end of
the month immediately preceding the date that distributions are scheduled to
commence is $25,000 or less (or, if distributions from two or more Plan Year
Subaccounts are scheduled to commence in the same year for the same number of
annual installments, if the sum of the amounts credited to such Plan Year
Subaccounts is $25,000 or less), payment will be made in the form of a single
lump sum rather than annual installments. In the event the Participant’s
employment with the Bank is terminated for any reason prior to January 1 of a
year elected by the Participant for a Plan Year Subaccount pursuant to Section
3.1(g), the Participant’s in-service distribution election for such Plan Year
Subaccount shall no longer be effective and all of the amounts credited to such
Plan Year Subaccount shall be distributed as set forth in the following
subsections of this Section 6.1 in accordance with any applicable election by
the Participant. In the event the Participant terminates employment while
receiving an in-service distribution from one or more Plan Year Subaccounts in
the form of annual installments, such payments will continue as scheduled.

 

                    (b)               In the event a Participant terminates
employment for a reason other than involuntary termination, the amounts credited
to his or her Plan Year Subaccounts that are not then in pay status pursuant to
in-service distribution elections shall be distributed in 60 substantially equal
quarterly installments beginning as soon as practicable following his or her
Payment Eligibility Date. Notwithstanding the foregoing, a Participant may elect
to receive distribution of one or more of his or her Plan Year Subaccounts in a
lump sum or in 20, 40 or 60 substantially equal quarterly installments beginning
as soon as practicable following the Participant’s Payment Eligibility Date,
provided that his or her election is filed with the Committee either (i) at the
time of making his or her deferral election for the Plan Year for which the Plan
Year Subaccount was established (as described in Section 3.1(h)) or (ii) at
least one year prior to his or her termination of employment on a form provided
and in a manner specified by the Committee. A Participant may change the form of
distribution, provided that his or her change election is made on a form and in
a manner specified by the Committee and such election is received by the
Committee at least one year prior to the date distribution is to be made (or
installments are to commence). Notwithstanding anything contained herein to the
contrary, (i) in the event that the amount

 

 

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credited to a Participant’s Deferral Account is less than $50,000 as of the end
of the month in which his or her employment with the Bank terminates, such
amount shall be paid in a cash lump sum payment as soon as practicable following
his or her Payment Eligibility Date, or (ii) in the event that the sum of the
amounts credited to the Participant’s Plan Year Subaccounts that are subject to
the same election as to date of commencement of distribution and number of
installments is less than $50,000 at the end of the month in which the
Participants employment with the Bank terminates, such amount shall be paid in a
cash lump sum payment as soon as practicable following his or Payment
Eligibility Date.

 

                    (c)                In the event a Participant terminates
employment because of death, the amount credited to his or her Plan Year
Subaccounts shall be paid to his or her Beneficiary in the form and at the time
that such amounts would have been paid to the Participant if he or she had
voluntarily terminated employment on the date his or her death.

 

                    (d)               The Participant’s Plan Year Subaccounts
shall continue to be credited with earnings pursuant to Sections 4.1 and 4.2 of
the Plan until all amounts credited to his or her Plan Year Subaccounts under
the Plan have been distributed.

 

                    (e)                In the event that a former Participant
dies while receiving installment payments under this Plan, any remaining
installments shall be paid to the Participant’s Beneficiary as such installments
would have otherwise been due to the Participant.

 

                    (f)                In the event that a Participant
terminates employment because of an involuntary termination, the amounts
credited to his or her Deferral Account shall be paid in a lump sum as soon as
administratively practicable following his or her Payment Eligibility Date.

 

                    (g)               A change in control of the Bank or the
Corporation shall not accelerate the distribution of amounts credited to
Participants’ Deferral Accounts.

 

6.2               NONSCHEDULED IN-SERVICE WITHDRAWALS.

 

                    At any time prior to his or her termination of employment
from the Bank, a Participant may elect to withdraw an amount not in excess of
the amounts credited to his or her Deferral Account, reduced by the withdrawal
penalty described below. The Participant may make such an election by filing a
written notice with the Committee on a form provided and in the manner specified
by the Committee. Within 90 days following the Committee’s receipt of such
notice, an amount equal to 90% of the amount that the Participant has elected to
withdraw from his or her Deferral Account shall be paid to the Participant in a
cash lump sum payment. Upon the payment of such withdrawal, (a) an amount equal
to 10% of the amount the Participant has elected to withdraw from the
Participant’s Deferred Compensation Account shall be forfeited, (b) the

 

 

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Participant shall cease to participate in the Plan for the remainder of the Plan
Year in which the withdrawal occurs and shall be ineligible to participate
during the Plan Year immediately following the Plan Year in which the withdrawal
occurs, and (c) any deferral elections made by the Participant for such periods
shall terminate. A Participant may not make more than two withdrawals under this
Section 6.2. The amount of any such payments and forfeitures shall be deducted
from the amounts credited to the Participant’s Plan Year Subaccounts in such
order and in such proportions as the Committee may determine in its sole
discretion. The remaining amounts credited to a Participant’s Plan Year
Subaccounts shall be distributed in accordance with the Participant’s elections
with respect to such Plan Year Subaccounts.

 

6.3                 HARDSHIP WITHDRAWALS.

 

                    Upon written request of a Participant, the Committee may, in
its sole discretion, make a lump sum payment to a Participant and/or accelerate
the payment of installment payments due to the Participant in order to meet a
severe financial hardship to the Participant resulting from (a) a sudden and
unexpected illness or accident of the Participant or a dependent of the
Participant, (b) loss of the Participant’s property due to casualty or (c) other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. However, no payment shall be made
under this Section 6.3 to the extent that a hardship is or may be relieved (a)
through reimbursement or compensation by insurance or otherwise, (b) by
liquidation of the Participant’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship or (c) by cessation of
deferrals under the Plan effective for the next Plan Year. The amount of any
hardship lump sum payment and/or accelerated amount under this Section 6.3 shall
not exceed the lesser of (a) the amount required to meet the immediate financial
need created by such hardship or (b) the entire amounts credited to the
Participant’s Accounts. The amount of any such payments shall be deducted from
the amounts credited to the Participant’s Plan Year Subaccounts in such order
and in such proportions as the Committee may determine in its sole discretion.
The remaining amounts credited to a Participant’s Plan Year Subaccounts shall be
distributed in accordance with the Participant’s elections with respect to such
Plan Year Subaccounts.

 

6.4                 INABILITY TO LOCATE PARTICIPANT.

 

                    In the event that the Committee is unable to locate a
Participant or Beneficiary within two years following the Participant’s Payment
Eligibility Date, the amounts allocated to the Participant’s Deferral Account
shall be forfeited. If, after such forfeiture, the Participant or Beneficiary
later claims such benefits, such benefits shall be reinstated without interest
or earnings.

 

 

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6.5               DEATH BENEFIT FOR CERTAIN PARTICIPANTS.

 

                    (a)                For each Participant who is named in the
list attached hereto as Schedule 1, the Bank shall provide life insurance
coverage in the amount set forth next to his or her name in Schedule 1,
beginning on the date such Participant executes an “Agreement for Transfer of
Policy and Termination of Split-Dollar Life Insurance Agreement” and ending on
December 31, 2009 (the “Coverage Period”). Such life insurance coverage shall
remain in effect throughout the Coverage Period even if the Participant ceases
to be employed by the Bank.

 

                    (b)               The Bank shall provide such life insurance
coverage by maintaining a life insurance policy (the “Policy”) on the life of
each named Participant. Each such Participant shall be entitled to name a
beneficiary (which need not be his or her Beneficiary under this Plan) to
receive the portion of the death benefit under the Policy that is equal to the
amount set forth as his or her death benefit in Schedule 1 (his or her “Death
Benefit”). The Participant may make a beneficiary designation or change a
beneficiary designation in writing in accordance with procedures established by
the Committee. No beneficiary designation will become effective until it is
filed in accordance with the Committee’s procedures. If no beneficiary
designation is in effect, the Death Benefit shall be paid to the Participant’s
Beneficiary under this Plan. If the actual death benefit under the Policy
exceeds the Death Benefit, the excess death benefit under the Policy shall be
paid to the Bank.

 

                    (c)                At the end of the Coverage Period, the
Bank shall cease to provide the life insurance coverage described herein and the
provisions of this Section 6.5 shall terminate and have no further effect.

 

 

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ARTICLE VII
ADMINISTRATION

 

7.1               COMMITTEE ACTION.

 

                    The Committee shall act at meetings by affirmative vote of a
majority of the members of the Committee. Any action permitted to be taken at a
meeting may be taken without a meeting if, prior to such action, a written
consent to the action is signed by all members of the Committee and such written
consent is filed with the minutes of the proceedings of the Committee. A member
of the Committee shall not vote or act upon any matter which relates solely to
himself or herself as a Participant. The Chairman or any other member or members
of the Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.

 

7.2               POWERS AND DUTIES OF THE COMMITTEE.

 

(a)               The Committee, on behalf of the Participants and their
Beneficiaries, shall enforce the Plan in accordance with its terms, shall be
charged with the general administration of the Plan, and shall have all powers
necessary to accomplish its purposes, including, but not by way of limitation,
the following:

 

(i)                To select the funds or portfolios to be the Funds in
 accordance with Section 3.2(b) hereof;

 

(ii)               To construe and interpret the terms and provisions of  this
Plan;

 

(iii)              To compute and certify to the amount and kind of  benefits
payable to Participants and their  Beneficiaries;

 

(iv)              To maintain all records that may be necessary for the
 administration of the Plan;

 

(v)               To provide for the disclosure of all information and  the
filing or provision of all reports and statements  to Participants,
Beneficiaries or governmental  agencies as shall be required by law;

 

(vi)              To make and publish such rules for the regulation of  the Plan
and procedures for the administration of the  Plan as are not inconsistent with
the terms hereof;  and

 

 

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(vii)             To appoint a plan administrator or any other agent,  and to
delegate to them such powers and duties in  connection with the administration
of the Plan as the  Committee may from time to time prescribe.

 

7.3               CONSTRUCTION AND INTERPRETATION.

 

                    The Committee shall have full discretion to construe and
interpret the terms and provisions of this Plan, which interpretation or
construction shall be final and binding on all parties, including but not
limited to the Bank and any Participant or Beneficiary. The Committee shall
administer such terms and provisions in a uniform and nondiscriminatory manner
and in full accordance with any and all laws applicable to the Plan.

 

7.4               INFORMATION.

 

                    To enable the Committee to perform its functions, the Bank
shall supply full and timely information to the Committee on all matters
relating to the Compensation of all Participants, their death or other cause of
termination, and such other pertinent facts as the Committee may require.

 

7.5               COMPENSATION, EXPENSES AND INDEMNITY.

 

                    (a)                The members of the Committee shall serve
without compensation for their services hereunder.

 

                    (b)               The Committee is authorized at the expense
of the Bank to employ such legal counsel as it may deem advisable to assist in
the performance of its duties hereunder. Expenses and fees in connection with
the administration of the Plan shall be paid by the Bank.

 

                    (c)                To the extent permitted by applicable
state law, the Bank shall indemnify and save harmless the Committee and each
member thereof, the Board of Directors and each member thereof, and delegates of
the Committee who are employees of the Bank against any and all expenses,
liabilities and claims, including legal fees to defend against such liabilities
and claims arising out of their discharge in good faith of responsibilities
under or incident to the Plan, other than expenses and liabilities arising out
of willful misconduct. This indemnity shall not preclude such further
indemnities as may be available under insurance purchased by the Bank or
provided by the Bank under any bylaw, agreement or otherwise, as such
indemnities are permitted under state law.

 

7.6               QUARTERLY STATEMENTS.

 

                    Under procedures established by the Committee, a Participant
shall receive a statement with respect to such Participant’s Account as of the
last day of each calendar quarter.

 

 

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7.7               CLAIMS PROCEDURE.

 

                    (a)                CLAIM. A person who believes that he or
she is being denied a benefit to which he or she is entitled under this Plan
(hereinafter referred to as “Claimant”) may file a written request for such
benefit with the Committee, setting forth his or her claim. The request must be
addressed to the Committee at the Bank’s principal place of business.

 

                    (b)               CLAIM DECISION. Upon receipt of a claim,
the Committee shall advise the Claimant that a reply will be forthcoming within
ninety (90) days and shall, in fact, deliver such reply within such period. The
Committee may, however, extend the reply period for an additional ninety (90)
days for special circumstances. If the claim is denied in whole or in part, the
Committee shall inform the Claimant in writing, using language calculated to be
understood by the Claimant, setting forth: (i) the specified reason or reasons
for such denial; (ii) the specific reference to pertinent provisions of this
Plan on which such denial is based; (iii) a description of any additional
material or information necessary for the Claimant to perfect his or her claim
and an explanation why such material or such information is necessary; (iv)
appropriate information as to the steps to be taken if the Claimant wishes to
submit the claim for review; and (v) the time limits for requesting a review
under subsection (c).

 

                    (c)                REQUEST FOR REVIEW. Within sixty (60)
days after the receipt by the Claimant of the written opinion described above,
the Claimant may request in writing that the Committee review the determination.
Such request must be addressed to the Committee, at the Bank’s principal place
of business. The Claimant or his or her duly authorized representative may, but
need not, review the pertinent documents and submit issues and comments in
writing for consideration by the Committee. If the Claimant does not request a
review within such sixty (60) day period, he or she shall be barred and estopped
from challenging the original determination.

 

                    (d)               REVIEW OF DECISION. Within sixty (60) days
after the Committee’s receipt of a request for review, after considering all
materials presented by the Claimant, the Committee will inform the Claimant in
writing, in a manner calculated to be understood by the Claimant, of its
decision setting forth the specific reasons for the decision and containing
specific references to the pertinent provisions of this Plan on which the
decision is based. If special circumstances require that the sixty (60) day time
period be extended, the Committee will so notify the Claimant and will render
the decision as soon as possible, but no later than one hundred twenty (120)
days after receipt of the request for review.

 

 

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ARTICLE VIII
MISCELLANEOUS

 

8.1               UNSECURED GENERAL CREDITOR.

 

                    Participants and their Beneficiaries, heirs, successors, and
assigns shall have no legal or equitable rights, claims, or interest in any
specific property or assets of the Bank. No assets of the Bank shall be held
under any trust, or held in any way as collateral security for the fulfilling of
the obligations of the Bank under this Plan, although the Bank may establish one
or more grantor trusts subject to Code Section 671 to facilitate the payment of
benefits hereunder. Any and all of the Bank’s assets shall be, and remain, the
general unpledged, unrestricted assets of the Bank. The Bank’s obligation under
the Plan shall be merely that of an unfunded and unsecured promise of the Bank
to pay money in the future, and the rights of the Participants and Beneficiaries
shall be no greater than those of unsecured general creditors. It is the
intention of the Bank that this Plan and any trust established to facilitate the
payment of benefits hereunder be unfunded for purposes of the Code and for
purposes of Title I of ERISA.

 

8.2               RESTRICTION AGAINST ASSIGNMENT.

 

                    The Bank shall pay all amounts payable hereunder only to the
person or persons designated by the Plan and not to any other person or
corporation. No part of a Participant’s Account shall be liable for the debts,
contracts, or engagements of any Participant, his or her Beneficiary, or
successors in interest, nor shall a Participant’s Account be subject to
execution by levy, attachment, or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate,
sell, transfer, commute, pledge, encumber, or assign any benefits or payments
hereunder in any manner whatsoever. If any Participant, Beneficiary or successor
in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any distribution or payment from
the Plan, voluntarily or involuntarily, the Committee, in its discretion, may
cancel such distribution or payment (or any part thereof) to or for the benefit
of such Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.

 

8.3               WITHHOLDING.

 

                    There shall be deducted from each payment made under the
Plan or any other compensation payable to the Participant (or Beneficiary) all
taxes which are required to be withheld by the Bank in respect to such payment
or this Plan. The Bank shall have the right to reduce any payment (or other
compensation) by the amount of cash sufficient to provide the amount of said
taxes.

 

 

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8.4               AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION.

 

                    The Bank may amend, modify, suspend or terminate the Plan in
whole or in part, except that no amendment, modification, suspension or
termination shall have any retroactive effect to reduce any amounts allocated to
a Participant’s Account. In the event that this Plan is terminated, the
distribution of the amounts credited to a Participant’s Deferral Account shall
not be accelerated but shall be paid at such time and in such manner as
determined under the terms of the Plan immediately prior to termination as if
the Plan had not been terminated. (Neither the Policies themselves nor the death
benefit described in Section 6.5 shall be treated as allocated to Accounts.)

 

8.5               GOVERNING LAW.

 

                    This Plan shall be construed, governed and administered in
accordance with the laws of the State of California.

 

8.6               RECEIPT OR RELEASE.

 

                    Any payment to a Participant or the Participant’s
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Committee, and the
Bank. The Committee may require such Participant or Beneficiary, as a condition
precedent to such payment, to execute a receipt and release to such effect.

 

8.7               PAYMENTS ON BEHALF OF PERSONS UNDER INCAPACITY.

 

                    In the event that any amount becomes payable under the Plan
to a person who, in the sole judgment of the Committee, is considered by reason
of physical or mental condition to be unable to give a valid receipt therefor
the Committee may direct that such payment be made to any person found by the
Committee, in its sole judgment, to have assumed the care of such person. Any
payment made pursuant to such determination shall constitute a full release and
discharge of the Committee and the Bank.

 

8.8               HEADINGS, ETC. NOT PART OF AGREEMENT.

 

                    Headings and subheadings in this Plan are inserted for
convenience of reference only and are not to be considered in the construction
of the provisions hereof.

 

 

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                    IN WITNESS WHEREOF, the Bank has executed this document this
28th day of February, 2001.

 

 

CITY NATIONAL BANK

 

 

 

 By:

 /s/ KATE DWYER

 

 

Kate Dwyer

 

Its:

Executive Vice President
Human Resources Division

 

 

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