Exhibit 10(b)

 

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

 

COLLATERAL ASSIGNMENT PLAN

 

THIS AGREEMENT, made as of this 13th day of June 1980, by and between the City
National Bank, a National Bank hereinafter called the Bank, and the Goldsmith
1980 Insurance Trust hereinafter called the Trust.

 

WHEREAS, Bram Goldsmith, hereinafter called the Employee, has rendered competent
and faithful efforts on behalf of the Bank resulting in substantial growth and
profits to the Bank, and,

 

WHEREAS, the Bank highly values the efforts, abilities, and accomplishments of
the Employee as an important member of management and wishes to provide a death
benefit for the Employee’s designee through a Split Dollar Life Insurance
program, and,

 

WHEREAS, the Trust agrees to participate in such program to the extent
hereinafter provided,

 

NOW, THEREFORE, it is mutually agreed that:

 

1. In furtherance of the purposes of this Agreement, the parties hereto shall
utilize the following personal insurance policy owned by the Trust on the life
of Bram Goldsmith (hereinafter call the Insured):

 

Policy No. 3837807 in the face amount of $1,500,000 issued by Connecticut Mutual
Life Insurance Company.

 

2. As security for the Bank’s premium payments on the insurance policy as
provided in Article 4 below, the Trust shall execute, on a form provided by the
insurance company, a collateral assignment of the policy to the Bank. The policy
shall be delivered to the Bank to hold for purposes of this Agreement. The Bank
shall make the policy available to the insurance company in order to effectuate
any change desired by the Trust, as to the designation of a beneficiary,
election of an income settlement option or assignment with respect to the risk
element as defined in Article 3 below.

 

3. It is understood by the parties hereto that, as provided under the terms of
the policy, ownership of the policy is actually divided into two separate and
distinct elements. The “cash value” element is owned by the Bank and the “risk”
element is owned by the Trust. Except as modified by the following paragraph,
the Bank has all incidents of ownership and privileges in the policy with
respect only to the cash value element, which is defined as an amount equal to
the premiums it has paid, excluding premiums for any extra benefit agreements or
riders issued under the policy, but reduced by any indebtedness (along with any
unpaid interest) on the policy, or if greater, an amount equal to the cash value
of the policy (including dividend additions) as of the date to which premiums
have been paid, plus any dividend credits outstanding, but reduced by any
indebtedness (along with any unpaid interest) on the policy.

 

The Trust has all incidents of ownership in the risk element, which is defined
as the right to surrender the policy (but not the right to receive the cash
value upon surrender); the right to change a nonforfeiture provision; the right
to agree with the insurance company to any release, modification, or amendment
to the policy; the right to designate the beneficiary, to elect an income
settlement option and to assign all rights and interests with respect to any
portion of the death proceeds in excess of the cash value element; and all
rights with respect to any One Year Term rider issued under the policy.

 

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As a result of the terms of the policy and of this Agreement, the Bank has no
incidents of ownership of any kind with respect to the risk element and may not
unilaterally impair or defeat the rights and interests of the Trust in any way.

 

4. All premiums due on the insurance policy referred to in Article 1 shall be
paid by the Bank.

 

5. One Year Term Insurance will be purchased on each policy anniversary from the
dividend credits outstanding under the policy and will be purchased in an amount
equal to the guaranteed cash values of the policy at the end of the following
year. Any balance of dividends not used to buy One Year Term Insurance shall be
applied to the purchase of paid-up-additions from Connecticut Mutual Life
Insurance Company.

 

6. In the event of the death of the Insured, the Bank, its successors or
assigns, shall be entitled to receive from the life insurance proceeds an amount
equal to the cash value element as defined in Article 3 above.

 

Any portion of the death proceeds which is in excess of the amount payable to
the Bank, its successors or assigns, shall be payable to the Trust in accordance
with Article 3 of the Agreement.

 

7. This Agreement shall terminate on May 15, 1985 or; either party’s submission
of written notice to the other party; or if the Bank attempts to undertake any
action which would impair or defeat the Trust’s interest in the risk element.
Such action by the Bank might include, but is not necessarily limited to, lapse
of the policy for nonpayment of premiums. If this Agreement terminates for any
reason, the Trust shall have the option, exercisable within 60 days, to have the
collateral assignment of the policy released by the Bank.

 

If the Trust elects to exercise such option it shall pay to the Bank an amount
equal to the cash value element as defined in Article 3 of this Agreement. If
the Trust does not elect to have the collateral assignment released, it shall,
at the Bank’s request, execute such documents as are required to transfer its
interest in the risk element of the policy to the Bank as of the date preceding
termination of this Agreement.

 

8. At the Insured’s death, the Bank and the beneficiary designated to receive
the proceeds attributable to the risk element shall execute such forms and
furnish such other documents or information as are required to receive payment
under the policy. The Bank shall also furnish to the insurance company an
affidavit specifying the amount of the death proceeds payable to the Bank which
is attributable to the cash value element, as defined herein.

 

All death benefits under this Agreement shall be paid in accordance with the
terms and conditions of the life insurance policy referred to in Article 1 and
pursuant to the claims and review procedures of the insurance company. The
Bank’s liability to provide benefits under this Agreement shall be limited
solely to the payment of its share of premiums, as provided in Article 4. The
Bank assumes no responsibility for payment of death benefits under the policy.

 

9. In lieu of a lump sum payable by reason of the Insured’s death which is
attributable to the risk element, the Trust may, in accordance with the
procedures of the insurance company, elect any of the optional modes of payment
for the death proceeds as enumerated in the policy and known as “settlement
options.” If no such election is in effect at the Insured’s death, the
beneficiary of the risk element shall have the right to elect such settlement
option.

 

The Bank shall have a similar right to elect a settlement option for the
proceeds attributable to the cash value element.

 

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10. For purposes of the Employee Retirement Income Security Act of 1974 (P.L.
93-406), the Bank is the “named fiduciary” of the Split Dollar Life Insurance
plan for which this Agreement is hereby designated the written plan instrument.

 

11. This Agreement may be altered, amended, or modified, including the addition
of any extra policy provisions, by a written agreement signed by the Bank and
the Trust. In addition, either party may assign its rights, interests and
obligations under this Agreement, provided, however, that any assignment shall
be made subject to the terms of this Agreement. The law of the state of
California shall govern this Agreement.

 

12. Where appropriate in this Agreement, words used in the singular shall
include the plural and words used in the masculine shall include the feminine.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first herein above written.

 

 

 

/s/ Bruce Leigh Goldsmith

 

 

Bruce Leigh Goldsmith, Trustee of the

 

Goldsmith 1980 Insurance Trust

 

 

 

 

/s/ Bruce Norman

 

/s/ Russell David Goldsmith

 

Witness

Russell David Goldsmith, Trustee of the

 

Goldsmith 1980 Insurance Trust

 

 

 

 

 

/s/ Gary W. Fentress

 

 

City National Bank, Trustee of the

 

Goldsmith 1980 Insurance Trust

 

 

 

 

 

/s/ James P. Del Guercio

 

 

City National Bank, a National Bank

 

By:

James P. Del Guercio

 

 

Executive Vice President

 

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AMENDMENT TO

 

 

 

 

 

SPLIT-DOLLAR LIFE INSURANCE

 

 

AGREEMENT

 

 

 

This Amendment relates to that certain Split-Dollar Life Insurance Agreement
made as of the 13th day of June, 1980 between CITY NATIONAL BANK and THE
GOLDSMITH 1980 INSURANCE TRUST (the “Agreement”) and shall hereby amend
paragraph 7 thereof, to provide that the Agreement shall terminate on May 15,
1990.

 

Except as amended by the foregoing, the Agreement shall remain in full force and
effect and without any other change.

 

This Amendment is made and agreed to as of this 15th day of May, 1985.

 

 

 

THE GOLDSMITH

 

 

 

 

1980 INSURANCE TRUST

 

 

CITY NATIONAL BANK

 

 

 

 

 

 

 

 

 

 

By

/s/ Bruce Leigh Goldsmith

 

By

/s/ James P. Del Guercio

 

 

BRUCE LEIGH GOLDSMITH

 

 

JAMES P. DEL GUERCIO

 

Trustee

 

Its

Executive Vice President

 

 

 

 

 

By

/s/ Russell David Goldsmith

 

 

 

 

RUSSELL DAVID GOLDSMITH

 

 

 

 

Trustee

 

 

 

 

 

 

 

 

 

CITY NATIONAL BANK

 

 

 

 

 

 

 

 

By

/s/ Gary W. Fentress

 

 

 

 

Trustee

 

 

 

 

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AMENDMENT TO

 

SPLIT-DOLLAR LIFE INSURANCE

AGREEMENT

 

This Amendment relates to that certain Split-Dollar Life Insurance Agreement
made as of the 13th day of June, 1980 between CITY NATIONAL BANK and THE
GOLDSMITH 1980 INSURANCE TRUST (the “Agreement”) and shall hereby amend
paragraph 7 thereof, to provide that the Agreement shall terminate on May 15,
1995.

 

Except as amended by the foregoing, the Agreement shall remain in full force and
effect and without any other change.

 

This Amendment is made and agreed to as of this 15th day of May, 1990.

 

 

 

THE GOLDSMITH

 

 

 

 

1980 INSURANCE TRUST

 

 

CITY NATIONAL BANK

 

 

 

 

 

 

 

 

 

 

By

/s/ Bruce Leigh Goldsmith

 

By

/s/ James P. Del Guercio

 

BRUCE LEIGH GOLDSMITH

 

 

JAMES P. DEL GUERCIO

 

Trustee

 

Its

Executive Vice President

 

 

 

 

 

 

 

 

 

 

By

/s/ Russell David Goldsmith

 

 

 

 

RUSSELL DAVID GOLDSMITH

 

 

 

 

Trustee

 

 

 

 

 

 

 

 

 

CITY NATIONAL BANK

 

 

 

 

 

 

 

 

By

/s/ Gary W. Fentress

 

 

 

 

Trustee

 

 

 

 

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THIRD AMENDMENT TO SPLIT DOLLAR LIFE INSURANCE AGREEMENT

 

COLLATERAL ASSIGNMENT PLAN

 

This Third Amendment is made and entered into as of the 19th day of
December 1990, by and between THE GOLDSMITH 1980 INSURANCE TRUST (the “Trust”)
and CITY NATIONAL BANK, a national banking association (“CNB”) with reference to
the following:

 

A. The Trust and CNB are parties to that certain SPLIT DOLLAR LIFE INSURANCE
COLLATERAL ASSIGNMENT PLAN dated as of June 13, 1980, as amended by amendments
dated as of May 15, 1985 and May 15, 1990 (collectively, the “Agreement”), by
which the Trust grants CNB certain rights with respect to a personal life
insurance policy insuring the life of Mr. Bram Goldsmith (“Employee”) owned by
the Trust.

 

B. The Trust and CNB wish to replace such insurance policy with another
insurance policy and to define their respective rights and obligations with
respect thereto, all as more particularly set forth below.

 

NOW, THEREFORE, CNB and the Trust hereby agree as follows:

 

1. The insurance policy subject to the Agreement, which is presently held by
CNB, will be surrendered to the insurer, and the cash surrender value thereof
will be applied to the premium for a new personal policy of life insurance to be
owned by the Trust on the joint lives of Employee and Mrs. Elaine Goldsmith (the
“Insureds”) in the face amount of $5,521,946.00, to be issued by Transamerica
Occidental Life Insurance Co. (the “Joint Policy”). Any premium for the Joint
Policy in excess of the cash surrender value of the insurance policy so
surrendered will be paid by the Trust, provided, however, that if the Trust
fails to pay any such premium for any reason, CNB may do so in its sole
discretion. The Joint Policy will be delivered to CNB subject to a collateral
assignment executed by the Trust and held pursuant to the terms of the
Agreement, except as amended hereby. The Joint Policy or the collateral
assignment executed by the Trust with respect thereto will provide (i) that the
insurer will provide CNB with not less than sixty (60) days’ prior written
notice of its intent to cancel the Joint Policy for any failure to make any
premium payment and will allow CNB either to make such premium payment and
maintain the Joint Policy in force or to surrender the Joint Policy in exchange
for payment of the cash value thereof, and (ii) upon the death of the second
Insured or the simultaneous death of both Insureds, or in the event of the
surrender of the Joint Policy, the death benefit or the cash value, as the case
may be, will be paid by the insurer directly to CNB in an amount equal to the
cash value element, and thereafter to the beneficiary or party otherwise
entitled thereto.

 

2. Notwithstanding Article 6 of the Agreement, CNB will be entitled to receive
from the Joint Policy death benefits an amount equal to the cash value element,
as defined in Article 3 of the Agreement (as modified hereinafter) only upon the
death of the second Insured or the simultaneous deaths of the Insureds. The cash
value element of the Joint Policy will be as defined in Article 3 of the
Agreement, except that (i) in the event CNB has paid any premium with respect to
the Joint Policy in excess of the cash surrender value of the original policy,
the cash value element will be increased by the amount of such premium, and (ii)
in the event Employee predeceases Mrs. Elaine Goldsmith, the cash value element,
determined as of the date of Employee’s death, will bear interest from the date
of Employee’s death at CNB’s Prime Rate plus one percent (1.0%) per annum.
Interest on the cash value element will be payable by the Trust to CNB on the
first business day of each calendar quarter.

 

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3. Notwithstanding Article 3 of the Agreement, in the event that the Trust fails
to make any premium or interest payment called for hereby, CNB may, in its sole
discretion, surrender the Joint Policy in exchange for payment of the cash value
thereof, and the Agreement, as amended hereby, will thereupon terminate.

 

4. Except as otherwise set forth above, the Agreement, as amended to date,
remains in full force and effect according to its terms.

 

IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of
the day and year first set forth above.

 

CITY NATIONAL BANK, a national banking association

 

 

THE GOLDSMITH 1980 INSURANCE TRUST

 

 

 

 

 

By:

/s/ A.J. Kyman

 

By:

/s/ Bruce Leigh Goldsmith

 

 

A. J. KYMAN

 

 

BRUCE LEIGH GOLDSMITH, Trustee

Its:

President

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Russell David Goldsmith

 

 

 

 

 

RUSSELL DAVID GOLDSMITH, Trustee

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

CITY NATIONAL BANK, a national
banking association, Trustee

 

 

 

 

 

 

 

 

By:

 

/s/ Gary W. Fentress

 

 

 

 

 

 

GARY W. FENTRESS

 

 

 

Its:

 

Vice President &

 

 

 

 

 

Trust Officer

 

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FOURTH AMENDMENT TO SPLIT DOLLAR LIFE INSURANCE AGREEMENT

 

COLLATERAL ASSIGNMENT PLAN

 

This Fourth Amendment is made and entered into as of the 31ST day of March,
1991, by and between The Goldsmith 1980 Insurance Trust (the “Trust”) and City
National Bank, a national banking association (“CNB”), with reference to the
following:

 

A. The Trust and CNB are parties to that certain Split Dollar Life Insurance
Collateral Assignment Plan dated as of June 13, 1980, as amended to date (the
“Agreement”), by which the Trust grants CNB certain rights with respect to a
personal life insurance policy insuring the life of Mr. Bram Goldsmith owned by
the Trust.

 

B. Pursuant to the Third Amendment to the Agreement, dated as of December 19,
1990, the Trust and CNB agreed to replace the insurance policy then in effect,
issued by Connecticut General Life Insurance Company (the “Connecticut General
Policy”), with a policy insuring the joint lives of Mr. Bram Goldsmith and Mrs.
Elaine Goldsmith (the “Insureds”), issued by Transamerica Occidental Life
Insurance Company (the “Joint Policy”), by surrendering the Connecticut General
Policy to the insurer and applying the cash surrender value therefrom to the
premium for the Joint Policy.

 

C. CNB paid premiums with respect to the Connecticut General Policy in the
aggregate amount of $600,841.80, and the cash surrender value of the Connecticut
General Policy was equal to $524,981.88.

 

D. CNB has paid premiums with respect to the Joint Policy to the date of this
Fourth Amendment in the total amount of $524,981.88.

 

E. The Trust and CNB wish to clarify the Third Amendment to ensure that, upon
the death of the second Insured or the simultaneous deaths of both Insureds, CNB
will recover premiums paid with respect to the Connecticut General Policy which
exceeded the cash surrender value thereof applied as the premium payment with
respect to the Joint Policy.

 

NOW, THEREFORE, CNB and the Trust hereby agree as follows:

 

1. The third sentence of Article 3 of the Agreement and the second sentence of
Paragraph 1 of the Third Amendment to the Agreement are hereby removed, and the
following is hereby substituted in the place thereof:

 

Except as modified by the second paragraph of Article 3 of the Agreement, CNB
has all incidents of ownership and privileges in the Joint Policy with respect
only to the cash value element of the Joint Policy, which is defined as an
amount equal to the premiums it has paid with respect to the Joint Policy,
increased by $75,859.92 (the difference between the premiums paid with respect
to the Connecticut General Policy and the cash surrender value thereof, which
was applied as the premium with respect to the Joint Policy), excluding premiums
for any extra benefit agreements or riders issued under the Joint Policy, but
reduced by any indebtedness (along with unpaid interest) on the policy, or if
greater, an amount equal to the cash value of the Joint Policy (including
dividend additions) as of the date to which premiums have been paid by CNB, plus
any dividend credits outstanding, but reduced by any indebtedness (along with
any unpaid interest) on the Joint Policy. In the event Employee predeceases Mrs.
Elaine Goldsmith, the cash value element, determined as of the date of
Employee’s death, will bear interest from the date of Employee’s death to the

 

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date of death of Mrs. Elaine Goldsmith at CNB’s Prime Rate plus one percent
(1.0%) per annum.

 

2. Except as otherwise set forth above, the Agreement, as amended to date,
remains in full force and effect according to its terms.

 

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of
the day and year first set forth above.

 

 

CITY NATIONAL BANK, a
 national banking association

 

THE GOLDSMITH 1980
INSURANCE TRUST

 

 

 

 

 

By:

/s/ Alex J. Kyman

 

By:

/s/ Bruce Leigh Goldsmith

 

Its:

President

 

 

Bruce Leigh Goldsmith,

 

 

 

 

Trustee

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Russell David Goldsmith

 

 

 

 

 

Russell David Goldsmith,

 

 

 

 

Trustee

 

By: CITY NATIONAL BANK, a national banking association, Trustee

 

 

 

By:

/s/ Gary W. Fentress

 

 

 

Gary W. Fentress

 

Its:

Vice President & Trust

 

 

Officer

 

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