Exhibit 10.3

CU BANCORP

2012 CHANGE IN CONTROL SEVERANCE PLAN

 

 

Effective August 1, 2012

 

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TABLE OF CONTENTS  

ARTICLE 1

  

DEFINITIONS

     1   

ARTICLE 2

  

SEVERANCE BENEFITS PROVISIONS

     5   

2.1

  

Eligibility for Severance Benefits

     5   

2.2

  

Severance Benefits

     5   

2.3

  

Delay of Payment Under Code Section 409A

     5   

ARTICLE 3

  

ADDITIONAL PROVISIONS

     6   

3.1

  

Ineligibility for Severance Benefits

     6   

3.2

  

Re-employment

     6   

3.3

  

Taxes

     6   

3.4

  

Limitations on Severance Benefits

     6   

3.5

  

Amendment or Termination

     7   

ARTICLE 4

  

SURVIVING PLAN PROVISIONS

     7   

4.1

  

Surviving Plan

     7   

ARTICLE 5

  

ADMINISTRATIVE PROVISIONS

     7   

5.1

  

General

     7   

5.2

  

Costs and Indemnification

     8   

5.3

  

Limitation on Employee Rights

     8   

5.4

  

Governing Law

     8   

5.5

  

Miscellaneous

     8   

5.6

  

Regulatory Provisions

     9   

5.7

  

Claims Procedures

     9   

APPENDIX I – ELIGIBLE COMPANY OFFICERS

  

APPENDIX II – FORM OF RABBI TRUST

  

 

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CU BANCORP

2012 CHANGE IN CONTROL SEVERANCE PLAN

Effective August 1, 2012

CU Bancorp, by resolution of its Board of Directors (“Board”) dated April 11,
2012, has adopted this CU Bancorp 2012 Change in Control Severance Plan (the
“Plan”), effective immediately after California United Bank (the “Bank”) becomes
a wholly-owned subsidiary of the CU Bancorp (“Effective Date”), for the benefit
of a select group of executives of the Company (as defined below) identified in
Appendix I, as may be amended from time to time. This Plan shall be unfunded for
tax purposes and for purposes and Title 1 of ERISA. As defined in Section 1.14
below, this Plan is subject to a ten (10) year Term, beginning on the Effective
Date. No benefits shall be payable under this Plan upon the expiration of the
Term in accordance with Section 1.14.

ARTICLE 1

DEFINITIONS

Unless otherwise defined in the Plan, terms used in the Plan with the first
letter capitalized shall have the meaning specified below.

 

  1.1 “Administrator” shall mean the Compensation, Nominating and Governance
Committee or certain officer or officers of the Company as designated by the
Board.

 

  1.2 “Board” shall mean the Board of Directors of the Company. The Board may
delegate its power or duty over this Plan to any other person or persons,
including a committee or sub-committee.

 

  1.3 “Cause” shall mean any of the following; provided, however, the
termination of the employee’s employment shall not be deemed to be for Cause
unless prior to any termination for Cause such employee is provided a written
finding in the good faith opinion of the Chief Executive Officer (“CEO”) of the
conduct constituting Cause in this Section 1.3 after such employee has been
provided a reasonable opportunity to respond to any written charges (together
with counsel) specifying the particulars thereof, and taking into account the
employee’s response (including any response from employee’s counsel), if any, to
such charges; provided, however, in the case of the CEO, termination for Cause
shall require an affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for such
purpose after reasonable notice has been provided to the CEO by the Board
specifying the particular charges and the CEO is given an opportunity, together
with counsel, if any, to respond to such charges:

 

  1.3.1 Fraud, misappropriation of corporate property or funds, or embezzlement;

 

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  1.3.2 Malfeasance in office, misfeasance in office which is willful or grossly
negligent, or nonfeasance in office which is willful or grossly negligent;

 

  1.3.3 Failure to materially comply with the Company’s Code of Conduct;

 

  1.3.4 Illegal conduct, gross misconduct or dishonesty, in each case which is
willful and results (or is reasonably likely to result) in substantial damage to
the Company;

 

  1.3.5 Willful and continued failure by the employee to perform substantially
his/her duties with the Company (other than any such failure resulting from
his/her incapacity due to physical or mental illness) after receiving written
demand for substantial performance from his/her immediate supervisor and after
having a reasonable period to correct the same, The written demand will
specifically identify the manner in which such immediate supervisor believes the
employee has not substantially performed his/her duties; or

 

  1.3.6 Willful and continued engaging by the employee in conduct which is
demonstrably and materially injurious to the Company and/or its subsidiaries,
monetarily or otherwise; provided that for purposes of this Section 1.3 and
Section 5.2, no act, or failure to act, on the employee’s part shall be
considered “willful” unless done, or omitted to be done, by the employee in bad
faith and without reasonable belief that his/her action or omission was in, or
not opposed to, the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Company’s CEO or other duly authorized senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the employee in
good faith and in the best interest of the Company and its subsidiaries.

 

  1.4 “Change of Control” shall mean any of the following:

 

  1.4.1

Any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange
Act (other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) becomes, after the
Effective Date, the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding
securities, other than (A) the Company or any successor to the Company by means
of a transaction that is not a Change of Control pursuant to subsection 1.4.3 of
this Section 1.4, or (B) a group of two or more persons not

 

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  acting in concert for the purpose of acquiring, holding or disposing of such
stock, The acquisition of additional stock by any person who immediately prior
to such acquisition already is the beneficial owner of more than fifty percent
(50%) of the capital stock of the Company entitled to vote in the election of
directors is not a Change of Control.

 

  1.4.2 During any period of 12 months, individuals who at the beginning of such
period constitute the Board, and any new director whose election by the Board or
nomination for election by the Company’s shareholders was approved by a vote of
a majority of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof.

 

  1.4.3 The merger or consolidation of the Company with any other corporation,
other than (A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, more than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation, (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires more than 50% of the combined voting power of the Company’s then
outstanding securities or (C) a merger or consolidation of the Company with one
or more other persons that are related to the Company immediately prior to the
merger or consolidation. For purposes of this provision, persons are “related”
if one of them owns, directly or indirectly, at least fifty percent (50%) of the
voting capital stock of the other or a third person owns, directly or
indirectly, at least fifty percent (50%) of the voting capital stock of each of
them.

 

  1.4.4 The sale or disposition by the Company of all or substantially all of
the Company’s assets to one or more persons that are not related, as defined in
subsection 1.4.3 of this Section 1.4, to the Company immediately prior to the
sale or transfer.

 

  1.5 “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, together with regulations thereunder.

 

  1.6 “Company” shall mean CU Bancorp and all of its affiliates, subsidiaries,
and any entity which is a successor in interest to the Company.

 

  1.7 “Compensation” shall mean the base salary in effect on the date of an
Eligible Employee’s termination of employment plus the average of the annual
bonus paid to such Eligible Employee in each of the previous two completed
fiscal years.

 

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  1.8 “Disability” shall mean that a Participant is (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, or (ii) by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months.

 

  1.9 “Eligible Employee” shall mean an employee of the Company who (i) is an
“officer” of the Company listed in Appendix I as of the Effective Date or who
later becomes an “officer” of the Company after the Effective Date and the
Administrator has determined such person is eligible to participate in the Plan,
and (ii) who is not ineligible under Section 3.1.

 

  1.10 “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, together with regulations there under.

 

  1.11 “Participant” shall mean an Eligible Employee.

 

  1.12 “Plan” shall mean this CU Bancorp 2012 Change in Control Severance Plan.

 

  1.13 “Severance Benefits” shall mean the benefits payable under this Plan.

 

  1.14 “Term” shall mean the period beginning on the Effective Date of the Plan
and ending on the tenth (10th) anniversary of such Effective Date; provided,
however, that if a Change of Control occurs during the Term, the Term for
purposes of the Change of Control Plan provisions shall continue in full force
and effect for a period of not less than twenty-four (24) months following such
Change of Control event; provided, further, however, if multiple Change of
Control events occur within any twenty-four (24) month period following a Change
of Control event, the Term shall again be extended for an additional twenty-four
(24) months from the latest in time Change of Control event.

 

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ARTICLE 2

SEVERANCE BENEFITS PROVISIONS

 

  2.1 Eligibility for Severance Benefits

You will receive the benefits described in Section 2.2.1 of the Plan if you are
an Eligible Employee upon the occurrence of a Change of Control (as defined in
Section 1.4). You will also receive the severance benefits under Section 2.2.2
of the Plan if (i) within twenty-four (24) months following the occurrence of
any Change of Control event described in Section 1.4 while you are an Eligible
Employee, (ii) your employment is terminated by the Company without Cause or by
you for any reason, and (iii) you execute a Waiver and Release Agreement
provided to you by the Company upon your termination of employment.
Notwithstanding the foregoing, in the event your employment is terminated by the
Company with or without Cause (as defined in Section 1.3), the Company shall
make payment to you for any earned or vested Compensation in accordance with
applicable state law.

 

  2.2 Severance Benefits

 

  2.2.1 Upon the occurrence of a Change of Control (as defined in Section 1.4),
any unvested equity compensation held by an Eligible Employee shall become
immediately vested in full.

 

  2.2.2 In the event that within twenty-four (24) months after a Change of
Control of the Company (if multiple Changes of Control occur within the Term or
within any twenty-four (24) month period following a Change of Control, then
twenty-four (24) months is measured from the latest in time Change of Control)
the employment of an Eligible Employee with the Company (i) is terminated by the
Company without Cause or (ii) is terminated by such Eligible Employee for any
reason, the Company upon receipt of a properly executed Waiver and Release
Agreement, shall pay to such Eligible Employee the following;

 

  (a) a lump sum cash payment equal to a multiple of Compensation set forth next
to the name of the Participant in Appendix I hereof; subject to Section 2.3
below such lump sum cash payment shall be payable within the payroll cycle
following the termination date but in no event later than thirty (30) days from
the date of termination of employment; and

 

  (b) reimbursement of any COBRA premiums paid by an Eligible Employee during
the twenty-four (24) month period following the date employment is terminated.

 

  2.3 Delay of Payment Under Code Section 409A

With respect to any Participant who is a “specified employee” as defined for
purposes of Code Section 409A, if any payment to be made hereunder is considered
nonqualified

 

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deferred compensation subject to Section 409A of the Code and otherwise would be
made within six months following such Participant’s termination of employment
(“Specified Employee Payments”), then such Specified Employee Payments shall be
delayed and paid no earlier than the first day of the seventh calendar month
following such termination of employment. The Specified Employee Payments to
which the Participant would otherwise have been entitled following the date of
Participant’s termination of employment shall be immediately accumulated and
contributed to a “rabbi trust” substantially in the form attached hereto as
Appendix II and paid as soon as administratively practicable following the first
date of the seventh month following the date of Participant’s termination of
employment, with interest on each of the Specified Employee Payments for the
period of deferral, at the prime rate, as published in the Wall Street Journal
(which shall be adjusted on the effective date of each change in such rate) plus
300 basis points.

ARTICLE 3

ADDITIONAL PROVISIONS

 

  3.1 Ineligibility for Severance Benefits

Persons who are terminated by the Company with Cause shall not be eligible for
Severance Benefits under the Plan.

 

  3.2 Re-employment

If you are re-employed by the Company or a successor to the Company while
severance benefits are being paid to you under the Plan, all such benefits will
cease, except as otherwise agreed by the Company or the successor to the
Company, as the case may be.

 

  3.3 Taxes

Taxes will be withheld from Severance Benefits under the Plan to the extent
required by any applicable laws.

 

  3.4 Limitations on Severance Benefits

In the event the Severance Benefits provided for under this Plan or otherwise
payable to Participant (i) constitute “parachute payments” within the meaning of
Code Section 280G and (ii) but for this Section 3.4, would be subject to the
excise tax imposed by Code Section 4999 (the “Excise Tax”), then Participant’s
Severance Benefits under Section 2.2 shall be delivered as to such lesser extent
which would result in no portion of such payments being subject to the Excise
Tax. Unless the Company and Participant otherwise agree in writing, any
determination required under this Section 3.4 shall be made in writing in good
faith by the accounting firm serving as the Company’s independent accountants
immediately prior to the Change in Control or any other mutually agreeable
independent accountants if the Company’s accountants decline or are prohibited
by law, regulations or accounting standards from providing such services (the
“Accountants”), in good faith consultation with Participant. In the event a
reduction of benefits is necessary under this Section 3.4, such reduction shall
occur in the following order: (1) reduction in cash payments; (2) reduction of
acceleration of vesting of equity awards; (3)

 

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reduction of the other benefits paid to the service provider. In the event that
acceleration of vesting of equity awards is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant for the
service provider’s equity awards, and if more than one equity award was made on
the same date of grant, all such awards shall have their acceleration reduced
pro rata. For purposes of making the calculations required by this Section 3.4,
the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Code Sections 280G and 4999. The Company and
Participant shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section 3.4. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section 3.4.

 

  3.5 Amendment or Termination

This Plan may not be amended, revised, changed, terminated or cancelled except
(i) as provided under Section 5.7.5, or (ii) to increase Severance Benefits
payable to Eligible Employees or to substitute a plan that would provide
Severance Benefits and terms that do not adversely affect the Eligible Employees
under this Plan during its Term (as defined in Section 1.14). Notwithstanding
the foregoing, nothing in this Plan precludes an Eligible Employee from waiving
his/her rights and/or entitlements to any benefits under this Plan in exchange
for alternative severance benefits payable by the Company under a separate
agreement.

ARTICLE 4

SURVIVING PLAN PROVISIONS

 

  4.1 Surviving Plan

This Plan shall be binding upon any successor to the Company and shall inure to
the benefit of the Plan Participants.

ARTICLE 5

ADMINISTRATIVE PROVISIONS

 

  5.1 General

The following provisions in this article apply to the Severance Benefits
provisions of this Plan.

 

  5.1.1

Discretion. The Administrator is responsible for the general administration and
management of the Plan and shall have all powers and duties necessary to fulfill
its responsibilities, including, but not limited to, the discretion to interpret
and apply the Plan and to determine all questions relating to eligibility for
benefits. The Plan shall be interpreted in accordance with its terms, their
intended meanings and to effectuate the letter and spirit of the Plan. The
Administrator shall have the discretion to interpret or construe ambiguous,
unclear or implied (but

 

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  omitted) terms as it deems appropriate in its sole discretion but to
effectuate the letter and spirit of the Plan and to make any findings of fact,
if needed, in the administration of the Plan. The validity of any such
interpretation, construction, decision or finding of fact shall not be given de
novo review if challenged in court, by arbitration, or in any other forum, and
shall be upheld unless clearly arbitrary or capricious.

 

  5.1.2 Finality of Determinations. All actions taken and all determinations
made in good faith by the Administrator will be final and binding on all persons
claiming any interest in or under the Plan. To the extent the Administrator has
been granted discretionary authority under the Plan, the Administrator’s prior
exercise of such authority shall not obligate it to exercise its authority in a
like fashion thereafter.

 

  5.1.3 Drafting Errors. If, due to errors in drafting, any Plan provision does
not accurately reflect its intended meaning, as demonstrated by consistent
interpretations or other evidence of intent, or as determined by the
Administrator in its sole discretion, the provision shall be considered
ambiguous and shall be interpreted by the Administrator in a fashion consistent
the evidenced intent.

 

  5.2 Costs and Indemnification

All costs of administering the Plan and providing Plan benefits will be paid by
the Company. To the extent permitted by applicable law and in addition to any
other indemnities or insurance provided by the Company, the Company shall
indemnify and hold harmless its affiliates and its (and its affiliates’) current
and former officers, directors, and employees against all expenses, liabilities
and claims (including legal fees incurred to defend against such liabilities and
claims) arising out of their discharge in good faith of their administrative and
fiduciary responsibilities with respect to the Plan. Expenses and liabilities
arising out of willful misconduct will not be covered under this indemnity.

 

  5.3 Limitation on Employee Rights

This Plan shall not give any employee the right to be retained in the service of
the Company or interfere with or restrict the right of the Company to discharge
or retire the employee. This Plan shall not constitute a contract of employment
of any kind.

 

  5.4 Governing Law

To the extent that state law is applicable, the statutes and common law of the
State of California (excluding any that mandate the use of another
jurisdiction’s laws) shall apply.

 

  5.5 Miscellaneous

Where the context so indicates, the singular will include the plural and vice
versa. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan. Unless the context clearly
indicates to the contrary, a reference to a statute or document shall be
construed as referring to any subsequently enacted, adopted or executed
counterpart.

 

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  5.6 Regulatory Provisions

Notwithstanding anything contained herein, in no event shall the Severance
Benefits be payable to a Participant in excess of that considered by the Board
of Governors of the Federal Reserve System or any other regulatory authority
having jurisdiction over the Company to be safe and sound at the time of such
payment, taking into consideration all applicable laws, regulations, or other
regulatory guidance. In addition, the Severance Benefits payable to a
Participant under this Plan are subject to and conditioned upon compliance with
12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.

 

  5.7 Claims Procedures

 

  5.7.1 Claims Normally Not Required. Normally, you do not need to present a
formal claim to receive benefits payable under this Plan.

 

  5.7.2 Disputes. If any person (Claimant) believes that benefits are being
denied improperly, that the Plan is not being operated properly, that
fiduciaries of the Plan have breached their duties, or that the Claimant’s legal
rights are being violated with respect to the Plan, the Claimant must file a
formal claim with the Administrator. This requirement applies to all claims that
any Claimant has with respect to the Plan, including claims against fiduciaries
and former fiduciaries, except to the extent the Administrator determines, in
its sole discretion, that it does not have the power to grant all relief
reasonably being sought by the Claimant.

 

  5.7.3 Time for Filing Claims. A formal claim must be filed within 90 days
after the date the Claimant first knew or should have known of the facts on
which the claim is based, unless the Administrator in writing consents
otherwise.

 

  5.7.4 Arbitration. The Participants and Company agree that any and all
disputes, controversies or claims of any kind or nature arising out of or in any
way related to the interpretation of this Plan, shall be submitted to binding
arbitration under the auspices and rules of the American Arbitration Association
located nearest to where the Eligible Employee resides. Judgment upon an award
rendered by the arbitrator may be entered in any competent court having
jurisdiction over the dispute, The Participants and Company agree that
arbitration is in lieu of any and all other civil legal proceedings and that all
rights to resolve disputes through court or trial by jury are hereby waived.
Furthermore, the Company agrees that it will reimburse an Eligible Employee for
any legal costs arising from an arbitration proceeding that results in a
favorable outcome for such Eligible Employee,

 

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  5.7.5 Procedures. The Administrator has adopted the procedures for considering
claims, which it may amend from time to time, as it sees fit, These procedures
shall comply with all applicable legal requirements. The right to receive
benefits under this Plan is contingent on a Claimant using the prescribed claims
procedures to resolve any claim. Therefore, if a Claimant (or his or her
successor or assign) seeks to resolve any claim by any means other than the
prescribed claims provisions, he or she must repay all benefits received under
this Plan and shall not be entitled to any further Plan benefits.

Adopted and Approved

 

By:  

 

   

April 10, 2012

  Signature     Date Title:   David I. Rainer, President and Chief Executive
Officer     By:  

 

   

April 10, 2012

  Signature     Date Title:   Steve G. Carpenter, Vice Chairman    

 

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APPENDIX I

ELIGIBLE COMPANY OFFICERS

 

Name

  

Title

  

Multiple of
Compensation

David Rainer    President & CEO    3x Anne Williams    EVP, CCO and COO    2x
Robert Dennen    EVP, CFO    2x Anita Wolman    EVP, General Counsel    2x Karen
Schoenbaum    EVP CFO    2x Emily Hamilton    SVP, Director of Human Resources
   1.5x Sam Kunianski    SVP, Commercial Banking    1.5x William Sloan    SVP,
Real Estate    1.5x      

 

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Amendment 1 to Appendix I

Eligible Company Officers shall also include:

 

Name

  

Title

  

Multiple of
Compensation

Richard Hernandez    Senior Vice President    1x                              
                 

Adopted by resolution of the Board of Directors on January 31, 2013

Dated this 1st Day of February, 2013

CU Bancorp

 

 

David I. Rainer, Chairman, President & CEO

 

Stephen G. Carpenter, Vice Chairman

 

 

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Appendix II

RABBI TRUST AGREEMENT FOR CU BANCORP

 

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TABLE OF CONTENTS

 

         Page  

1.

 

ESTABLISHMENT OF TRUST

     1   

2.

 

PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

     2   

3.

 

TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN COMPANY IS
INSOLVENT

     3   

4.

 

PAYMENTS TO COMPANY

     4   

5.

 

INVESTMENT AUTHORITY

     4   

6.

 

DISPOSITION OF INCOME

     5   

7.

 

ACCOUNTING BY TRUSTEE

     5   

8.

 

RESPONSIBILITY OF TRUSTEE

     5   

9.

 

COMPENSATION AND EXPENSES OF TRUSTEE

     6   

10.

 

RESIGNATION AND REMOVAL OF TRUSTEE

     7   

11.

 

APPOINTMENT OF SUCCESSOR

     7   

12.

 

AMENDMENT OR TERMINATION

     8   

13.

 

MISCELLANEOUS

     8   

14.

 

EFFECTIVE DATE

     10   

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Rabbi Trust Agreement

This Agreement, made this      day of                     ,         , by and
between CU Bancorp (“Company”) and its subsidiaries and affiliates, and [Insert
name of trustee.], (“Trustee”).

WITNESSETH:

WHEREAS, Company has adopted the CU Bancorp 2012 Change in Control Severance
Plan (the “Plan”);

WHEREAS, Company wishes to establish a trust (hereinafter called “Trust”) and to
contribute to the Trust assets that shall be held therein, subject to the claims
of Company’s creditors in the event of Company’s Insolvency, as herein defined,
until paid to Plan participants and their beneficiaries in such manner and at
such times as specified in the Plan;

WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974;

WHEREAS, it is the intention of Company to make contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:

 

  Section 1. Establishment of Trust.

(a) Company hereby deposits with Trustee in trust [describe assets], which shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.

(b) The Trust hereby established is revocable by Company; it shall become
irrevocable upon a Change of Control, as defined herein.

(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

 

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(d) The principal of the Trust, and any earnings thereon shall be held separate
and apart from other funds of Company and shall be used exclusively for the uses
and purposes of Plan participants and general creditors as herein set forth.
Plan participants and their beneficiaries shall have no preferred claim on, or
any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company’s general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.

(e) Company, in its sole discretion, may at any time, or from time to time, make
additional deposits of cash or other property, acceptable to Trustee, in trust
with Trustee to augment the principal to be held, administered and disposed of
by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan
participant or beneficiary shall have any right to compel such additional
deposits.

 

  Section 2. Payments to Plan Participants and Their Beneficiaries.

(a) Company shall deliver to Trustee a schedule (the “Payment Schedule”) that
indicates the amounts payable in respect of each Plan participant (and his or
her beneficiaries), that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which such amount is
to be paid (as provided for or available under the Plan), and the time of
commencement for payment of such amounts. Except as otherwise provided herein,
Trustee shall make payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. Company shall make provision for the
reporting and withholding of any Federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities. Trustee shall forward amounts to be withheld from the participants’
benefits paid from the Trust to Company for remittal to the appropriate taxing
authorities.

(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.

(c) Company may make payment of benefits directly to Plan participants or their
beneficiaries as they become due under the terms of the Plan. Company shall
notify Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to participants or their beneficiaries. In addition, if
the principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan, Company shall
make the balance of each such payment as it falls due. Trustee shall notify
Company where principal and earnings are not sufficient.

 

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  Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When
Company is Insolvent.

(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if Company is Insolvent. Company shall be considered “Insolvent”
for purposes of this Trust Agreement if (i) Company is unable to pay its debts
as they become due, or (ii) Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code or any comparable state or
federal regulatory law.

(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.

(1) The Board of Directors and the Chief Executive Officer of Company shall have
the duty to inform Trustee in writing of Company’s Insolvency. If a person
claiming to be a creditor of Company alleges in writing to Trustee that Company
has become Insolvent, Trustee shall determine whether Company is Insolvent and,
pending such determination, Trustee shall discontinue payment of benefits to
Plan participants or their beneficiaries.

(2) Unless Trustee has actual knowledge of Company’s Insolvency, or has received
notice from Company or a person claiming to be a creditor alleging that Company
is Insolvent, Trustee shall have no duty to inquire whether Company is
Insolvent. Trustee may in all events rely on such evidence concerning Company’s
solvency as may be furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning Company’s solvency.

(3) If at any time Trustee has determined that Company is Insolvent, Trustee
shall discontinue payments to Plan participants or their beneficiaries and shall
hold the assets of the Trust for the benefit of Company’s general creditors.
Nothing in this Trust Agreement shall in any way diminish any rights of the Plan
participants or their beneficiaries to pursue their rights as general creditors
of Company with respect to benefits due under the Plan or otherwise.

(4) Trustee shall resume the payment of benefits to Plan participants or their
beneficiaries in accordance with Section 2 of this Trust Agreement only after
Trustee has determined that Company is not Insolvent (or is no longer
Insolvent).

(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Company in lieu of the payments provided
for hereunder during any such period of discontinuance.

 

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  Section 4. Payments to Company.

Except as provided in Section 3 hereof, after the Trust has become irrevocable,
Company shall have no right or power to direct Trustee to return to Company or
to divert to others any of the Trust assets before all payment of benefits have
been made to Plan participants and their beneficiaries pursuant to the terms of
the Plan.

 

  Section 5. Investment Authority.

(a) All rights associated with assets of the Trust shall be exercised by Trustee
or the person(s) designated by Trustee, and shall in no event be exercisable by
or rest with Plan participants. In no event may Trustee invest in securities
(including stock or rights to acquire stock) or obligations issued by Company,
other than a de minimis amount held in common investment vehicles in which
Trustee invests. Company may from time to time issue directions to Trustee
instructing Trustee how to invest the Trust. Trustee shall follow any such
investment directions. Prior to issuing any such directions, Company shall
certify to Trustee the person(s) who have the authority to issue such directions
on behalf of Company. If such directions are issued, Trustee shall have no
fiduciary responsibility or liability over the investment of the Trust except to
follow the directions issued.

(b) Prior to the Trust becoming irrevocable, Company shall have the right, at
anytime, and from time to time in its sole discretion, to substitute assets of
equal fair market value for any asset held by the Trust. This right is
exercisable by Company in a nonfiduciary capacity without the approval or
consent of any person in a fiduciary capacity.

(c) Except as provided in paragraph (a), in the administration of the Trust,
Trustee shall have the following powers:

(1) To hold and control the assets in the Trust;

(2) To sell, exchange, assign, transfer, and convey any security or property
held in the Trust, at public or private sale, at such time and price and upon
such terms and conditions (including credit) as directed by Company or an
Investment Manager;

(3) To invest and reinvest assets of the Trust (including accumulated income) as
directed by Company or an Investment Manager;

(4) To notify Company of any vote on any stock or securities held in the Trust,
as all voting rights with respect to Trust assets will be exercised by Company;

(5) To consent to and participate in any plan for the liquidation,
reorganization, consolidation, or merger of any corporation, any security of
which is held in the Trust;

(6) To sell or exercise any “rights” issued on any securities held in the Trust
as directed by Company or an Investment Manager;

 

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(7) To cause all or any part of the assets of the Trust to be held in the name
of Trustee (which in such instance need not disclose its fiduciary capacity) or,
as permitted by laws, in the name of any nominee, and to acquire for the Trust
any investment in bearer form, but the books and records of the Trust shall at
all times show that all such investments are part of the Trust, and Trustee
shall hold evidence of title to all such investments; and

(8) To make such distributions to Plan participants in accordance with the
provisions of the Plan and this Trust Agreement.

(d) From time to time Company may appoint one or more investment managers who
shall have investment discretion over all or a portion of the assets of the
Trust (“Investment Managers”). Company shall notify Trustee of the appointment
of any Investment Manager. In the event more than one Investment Manager is
appointed, Company shall determine which assets shall be subject to the
investment discretion of each Investment Manager and shall also determine the
proportion in which funds withdrawn or disbursed shall be charged against the
assets subject to each Investment Manager’s investment discretion. As shall be
provided in any contract between an Investment Manager and Company, such
Investment Manager shall hold a revocable proxy with respect to all securities
which are held at the investment discretion of such Investment Manager pursuant
to such contract and such Investment Manager shall report the voting of all
securities subject to such proxy on an annual basis to Company.

 

  Section 6. Disposition of Income.

During the term of this Trust, all income received by the Trust, net of expenses
and taxes, shall be accumulated and reinvested.

 

  Section 7. Accounting by Trustee.

Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements, and all other transactions required to be made, including such
specific records as shall be agreed upon in writing between Company and Trustee.

 

  Section 8. Responsibility of Trustee.

(a) Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims; provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity with the
terms of the Plan or this Trust and is given in writing by Company. In the event
of a dispute between Company and a third party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.

 

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(b) If Trustee undertakes or defends any litigation arising in connection with
this Trust, Company agrees to indemnify Trustee against Trustee’s costs,
expenses and liabilities (including, without limitation, reasonable attorneys’
fees and expenses) relating thereto and to be primarily liable for such
payments, unless the litigation is a result of Trustee’s negligence, bad faith,
willful misconduct or breach of fiduciary duty. If Company does not pay such
costs, expenses and liabilities in a reasonably timely manner, Trustee may
obtain payment from the Trust.

(c) Trustee may consult with legal counsel (who may also be counsel for Company
generally) with respect to any of its duties or obligations hereunder.

(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.

(e) Trustee shall have, without exclusion, all powers conferred on Trustees by
applicable law, unless expressly provided otherwise herein; provided, however,
that if an insurance policy is held as an asset of the Trust, Trustee shall have
no power to name a beneficiary of the policy other than the Trust, to assign the
policy (as distinct from conversion of the policy to a different form) other
than to a successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy. Trustee shall not be liable for the failure or
omission of any insurance company for any reason to pay any benefits or furnish
any services under any policies or contracts.

(f) However, notwithstanding the provisions of Section 8(e) above, Trustee may
loan to Company the proceeds of any borrowing against an insurance policy held
as an asset of the Trust.

(g) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

(h) Company shall indemnify and hold Trustee harmless for any claims arising
from its administration of the Trust, provided Trustee acted in good faith in
the discharge of its duties under the Trust. Trustee shall not be liable for any
action taken or omitted, or for any loss or depreciation of value of the Trust
where Trustee has exercised good faith and diligence in the exercise of its
duties.

 

  Section 9. Compensation and Expenses of Trustee.

Company shall pay all administrative and Trustee’s fees and expenses.

 

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  Section 10. Resignation and Removal of Trustee.

(a) Trustee may resign at any time by written notice to Company, which shall be
effective 20 days after receipt of such notice unless Company and Trustee agree
otherwise.

(b) Trustee may be removed by Company on 20 days notice or upon shorter notice
accepted by Trustee.

(c) Upon a Change of Control, as defined herein, Trustee may not be removed by
Company for two (2) years.

(d) If Trustee resigns within two (2) years following a Change of Control, as
defined herein, Trustee shall select a successor Trustee in accordance with the
provisions of Section 11(b) hereof prior to the effective date of Trustee’s
resignation.

(e) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 10 days after receipt of notice of
resignation, removal or transfer, unless Company extends the time limit.

(f) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraph(s) (a) or (b) of this section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.

 

  Section 11. Appointment of Successor.

(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee, who shall have
all of the rights and powers of the former Trustee, including ownership rights
in the Trust assets. The former Trustee shall execute any instrument necessary
or reasonably requested by Company or the successor Trustee to evidence the
transfer.

(b) If Trustee resigns pursuant to the provisions of Section 10(d) hereof and
selects a successor Trustee, Trustee may appoint any third party such as a bank
trust department or other party that may be granted corporate trustee powers
under state law. The appointment of a successor Trustee shall be effective when
accepted in writing by the new Trustee. The new Trustee shall have all the
rights and powers of the former Trustee, including ownership rights in Trust
assets. The former Trustee shall execute any instrument necessary or reasonably
requested by the successor Trustee to evidence the transfer.

 

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(c) The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to Sections
5, 7 and 8 hereof. The successor Trustee shall not be responsible for and
Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.

 

  Section 12. Amendment or Termination.

(a) This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan.

(b) The Trust shall not terminate until the date on which Plan participants and
their beneficiaries are no longer entitled to benefits pursuant to the terms of
the Plan, unless sooner revoked in accordance with Section 1(b) hereof. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
Company.

(c) Upon written approval of participants or beneficiaries entitled to payment
of benefits pursuant to the terms of the Plan, Company may terminate this Trust
prior to the time all benefit payments under the Plan have been made. All assets
in the Trust at termination shall be returned to Company.

 

  Section 13. Miscellaneous.

(a) Any provision of this Trust Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating the remaining
provisions hereof.

(b) Benefits payable to Plan participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.

(c) This Trust Agreement shall be governed by and construed in accordance with
the laws of the State of California.

(d) Trustee shall be entitled to rely on the accuracy of any information
furnished to it by Company or any other person(s) from whom Trustee is directed
by Company to receive such information.

(e) The term “Change of Control” shall mean the first to occur of any of the
following events:

 

  (i)

Any “person” (as such term is used in sections 13 and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),

 

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  becomes the beneficial owner (as that term is used in section 13(d) of the
Exchange Act), directly or indirectly, of more than fifty percent (50%) of the
capital stock of Company entitled to vote in the election of directors, other
than a group of two or more persons not (1) acting in concert for the purpose of
acquiring, holding or disposing of such stock or (2) otherwise required to file
any form or report with any governmental agency or regulatory authority having
jurisdiction over Company which requires the reporting of any change in control.
The acquisition of additional stock by any person who immediately prior to such
acquisition already is the beneficial owner of more than fifty percent (50%) of
the capital stock of Company entitled to vote in the election of directors is
not a Change in Control.

 

  (ii) During any period of not more than twelve (12) consecutive months during
which Company continues in existence, not including any period prior to the
effective date of this Plan, individuals who, at the beginning of such period,
constitute the Board of Directors of Company, and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii) or (iv) of this
Section 13(e)) whose appointment to such Board of Directors or nomination for
election to such Board of Directors was approved by a vote of a majority of the
directors then still in office, either were directors at the beginning of such
period or whose appointment or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of such Board
of Directors.

 

  (iii) The effective date of any consolidation or merger of Company (after all
requisite shareholder, applicable regulatory and other approvals and consents
have been obtained), other than (1) a consolidation or merger of Company in
which the holders of the voting capital stock of Company immediately prior to
the consolidation or merger hold at least fifty percent (50%) of the voting
capital stock of the surviving entity immediately after the consolidation or
merger or (2) a consolidation or merger of Company with one or more other
persons that are related to Company immediately prior to the consolidation or
merger. For purposes of this provision, persons are “related” if one of them
owns, directly or indirectly, at least fifty percent (50%) of the voting capital
stock of the other or a third person owns, directly or indirectly, at least
fifty percent (50%) of the voting capital stock of each of them.

 

  (iv) The sale or transfer of substantially all of Company’s assets, to one or
more persons that are not related (as defined in clause (iii) of this
Section 13(e)) to Company immediately prior to the sale or transfer.

 

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Section 14. Effective Date.

The effective date of this Trust Agreement shall be [insert date].

IN WITNESS WHEREOF, Company and Trustee have caused this Agreement to be
executed by individuals thereunto duly authorized as of the day and year first
above written.

 

CU Bancorp     [Insert name of Trustee] By  

 

    By  

 

Title  

 

    Title  

 

By  

 

    By  

 

Title  

 

    Title  

 

 

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