Exhibit 10.5

 

ANNUAL STOCK UNIT AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

 

THIS ANNUAL STOCKUNIT AWARD AGREEMENT is made by and between CITY NATIONAL
CORPORATION, a Delaware corporation (the “Company”), and Russell Goldsmith, an
employee of the Company or a subsidiary of the Company (“Colleague”), with
reference to the following:

 

A.                                    On April 23, 2008 the shareholders of the
Company adopted the City National Corporation 2008 Omnibus Plan, as amended from
time to time thereafter (the “Plan”), pursuant to which the Compensation,
Nominating & Governance Committee of the Board of Directors (the “Committee”)
may award selected officers and other Company or Company subsidiary employees
Awards, including awards of restricted stock units payable solely in cash, or
other deferred Awards of the Company’s common stock.

 

B.                                    The Committee has determined to grant to
Colleague an award of restricted stock units payable solely in cash and dividend
equivalent units pursuant to the terms and conditions of this Agreement (“Annual
Stock Unit Award”).

 

1.                                      Grant of Annual Stock Unit Award.

 

(a)                                 Details of Annual Stock Unit Award. 
Pursuant to the Plan, the Company hereby grants an Annual Stock Unit Award with
the following terms:

 

(i)                                     On the Award Date, Colleague shall be
granted an Annual Stock Unit Award with an aggregate Fair Market Value of
$1,225,000 (the “Target Annual Stock Amount”).

 

(ii)                                  The target number of restricted stock
units to be awarded pursuant to the Annual Stock Unit Award shall be determined
by dividing the Target Annual Stock Amount by the Fair Market Value of a Share
on the Award Date (the “Restricted Stock Units”).

 

(iii)                               Except as otherwise provided in
Section 1(a)(v) of this Agreement, the Restricted Stock Units shall be earned
based on the achievement of the Company’s net income goal (the “Performance
Goal”) established by the Committee for the  Performance Period, measured
without regard to any costs and expenses associated with any transactions
constituting a Change in Control Event or any non-recurring charges that would
not reasonably be expected to have been incurred by Company and its subsidiaries
had the transactions constituting a Change in Control Event not arose.  The
number of earned Restricted Stock Units shall be determined by calculating the

 

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Performance Goal achievement and determining the corresponding percentage of
Restricted Stock Units that become earned Restricted Stock Units in accordance
with the following table.  The percentage of Restricted Stock Units that become
earned if the performance is between the levels specified in the table below
will be determined on a straight line basis.  Any Restricted Stock Units that do
not become earned will be forfeited.

 

Level of Performance Goal
Achievement 

 

Earned Restricted Stock Units as a
Percentage of Total Restricted
Stock Units

 

75% of target and above

 

100

%

62.5% of target

 

75

%

50% of target

 

50

%

Below 50% of target

 

0

%

 

(iv)                              The Performance Period means the period
commencing on January 1, 2015 and ending on December 31, 2015.

 

(v)                                 If Colleague’s employment is terminated
during the Performance Period in circumstances that result in a lapse of the
service-based forfeiture restrictions applicable to the Restricted Stock Units
pursuant to Section D of the Addendum then (A) if no Change in Control Event has
occurred during the Performance Period and prior to such termination, the
Restricted Stock Units will remain outstanding and the number of earned
Performance Units will be determined based on actual achievement of the
Performance Goal through the end of the Performance Period or (B) if a Change in
Control Event has occurred during the Performance Period and prior to such
termination, then one hundred percent (100%) of the Restricted Stock Units will
become earned as of the date of termination.

 

(vi)                              The date of the Annual Stock Unit Award (the
“Award Date”):  February 25, 2015; and

 

(vii)                           The consideration, if any, for the Annual Stock
Unit Award:  Colleague’s Employment with the Company.

 

(b)                                 Restricted Stock Unit Account.  The target
number of Restricted Stock Units will be credited to Colleague’s Restricted
Stock Unit Account as of the Award Date and upon satisfaction of the conditions
of this Agreement.

 

2.                                      Annual Stock Unit Award.  Colleague
hereby accepts the Annual Stock Unit Award and agrees with respect thereto as
follows:

 

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(a)                                 Forfeiture. In the event of termination of
Colleague’s employment with the Company or an employing subsidiary for any
reason other than as provided in Section D of the Addendum prior to the last
Vesting Date set forth in Section 2(b) of this Agreement, Colleague shall, for
no consideration, immediately forfeit to the Company the Restricted Stock Units.

 

(b)                                 Lapse of Forfeiture Restrictions.  All
earned Restricted Stock Units are subject to forfeiture based on continued
service, as provided in subparagraph (a), until the forfeiture restrictions
lapse in accordance with the following schedule provided that Colleague has been
continuously employed by the Company from the Award Date through the lapse date:

 

Time From

 

Percentage of

 

 

 

Date of Award

 

Restrictions Which

 

Total Percentage of

 

(“Vesting Date”)

 

Lapse (Vesting)

 

Restrictions Lapsed

 

 

 

 

 

 

 

After 1 year

 

0

%

0

%

After 2 years

 

25

%

25

%

After 3 years

 

25

%

50

%

After 4 years

 

25

%

75

%

After 5 years

 

25

%

100

%

 

Notwithstanding the foregoing, the forfeiture restrictions shall lapse as to all
of the Restricted Stock Units earlier upon the termination and vesting events
provided in Section D of the Addendum.  In the event Colleague’s employment is
terminated for any reason other than as provided in Section D of the Addendum,
the Committee or its delegate, as appropriate, may, in the Committee’s or such
delegate’s sole discretion, approve the lapse of forfeiture restrictions as to
any or all Restricted Stock Units still subject to such conditions, such lapse
to be effective on the date of such approval or Colleague’s termination date, if
later.

 

(c)                                  Restricted Stock Unit Account/Dividend
Equivalent Unit Accounts.  Colleague’s Restricted Stock Unit Account and
Dividend Equivalent Unit Account shall be memorandum accounts on the books of
the Company. The Restricted Stock Units credited to the Restricted Stock Unit
Account and the Dividend Equivalent Units credited to Colleague’s Dividend
Equivalent Unit Account shall be used solely as the basis for the determination
of the amount of cash to be eventually distributed to Colleague in accordance
with the Addendum to this Agreement. The Restricted Stock Units and the Dividend
Equivalent Units shall not be treated as property or as a trust fund of any
kind. Colleague shall not be entitled to any voting or other stockholder rights
with respect to Restricted Stock Units awarded or credited under the Plan.  The
number of Restricted Stock Units credited (and the amount of cash to which
Colleague is entitled under the Plan) shall be subject to adjustment in
accordance with the terms of the Plan.

 

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(d)                                 Dividend Equivalents.

 

(i)                                     Colleague’s Dividend Equivalent Unit
Account shall be credited with Dividend Equivalent Units in an amount equal to
the dividend per Share for the applicable dividend payment date (which, in the
case of any dividend distributable in property other than Shares, shall be the
per Share value of such dividend, as determined by the Company for purposes of
income tax reporting) times the number of Restricted Stock Units held by
Colleague on the record date for the payment of such dividend.

 

(ii)                                  Colleague’s Dividend Equivalent Unit
Account shall be subject to adjustment in the event that Colleague’s Restricted
Stock Unit Account is adjusted pursuant to Section 1(a)(iii) or (v) of this
Agreement).  In the event that Colleague’s Restricted Stock Unit Account is
adjusted pursuant to Section 1(a)(iii) or (v) of this Agreement, the Dividend
Equivalent Unit Account shall be adjusted to reflect the Dividend Equivalent
Units equal to the dividend per Share for the applicable dividend payment date
times the number of Restricted Stock Units earned in accordance with
Section 1(a)(iii) or (v) of this Agreement which shall be deemed to have been
held by Colleague on the record date for the payment of such dividend.

 

(iii)                               Dividend Equivalent Units credited to
Colleague’s Dividend Equivalent Unit Account shall vest and be paid on the same
basis and at the same time as the underlying Restricted Stock Units for which
such Dividend Equivalent Units were credited vest and are paid, and may be
subject to forfeiture in the same manner as the underlying Restricted Stock
Units for which such Dividend Equivalent Units were credited, in any case,
subject to adjustment as provided herein.

 

(e)                                  Nontransferability.  The Annual Stock Unit
Award, the Restricted Stock Units and the Dividend Equivalent Units and the
rights and interests of Colleague under this Agreement may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of prior to distribution.

 

3.                                      Withholding of Tax.  The Company is
authorized to withhold from any cash remuneration otherwise payable to Colleague
pursuant to this Agreement and the Addendum any taxes required to be withheld by
applicable law.

 

4.                                      Limitation on Transfer.  Other than upon
death or pursuant to a DRO, the Restricted Stock Units and the Dividend
Equivalent Units and all rights granted under this Agreement are personal to
Colleague and cannot be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and will not be subject to
execution, attachment or similar processes.

 

5.                                      Plan and Addendum
Incorporated/Availability.  Colleague acknowledges that the Company has made
available a copy of the Plan and the Addendum to this Agreement, and agrees that
this Annual Stock Unit Award, Restricted Stock Units and

 

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Dividend Equivalent Units award shall be subject to all of the terms and
conditions set forth in the Plan and the Addendum, including future amendments
thereto, if any, pursuant to the terms thereof, which Plan and Addendum are
incorporated herein by reference as a part of this Agreement. In the event of
any conflict between the Plan, the Addendum and this Agreement, the provisions
of the Plan will prevail.  Colleague’s rights hereunder are subject to
modification or termination in certain events, as provided in the Plan,
including without limitation such rules and regulations as may from time to time
be adopted or promulgated in accordance with paragraph 1.3 of the Plan. 
Capitalized terms not defined in this Agreement shall have the meanings set
forth in the Plan and the Addendum.

 

6.                                      Employment Relationship.  For purposes
of this Agreement, Colleague shall be considered to be in the employment of the
Company as long as Colleague remains an employee of either the Company, any
successor corporation or a parent or subsidiary corporation (as defined in
section 424 of the Internal Revenue Code) of the Company or any successor
corporation.  Any question as to whether and when there has been a termination
of such employment, and the cause of such termination, shall be determined by
the Committee, or its delegate, as appropriate, and its determination shall be
final.

 

7.                                      Committee’s Powers.  No provision
contained in this Agreement shall in any way terminate, modify or alter, or be
construed or interpreted as terminating, modifying or altering any of the
powers, rights or authority vested in the Committee or, to the extent delegated,
in its delegate pursuant to the terms of the Plan or resolutions adopted in
furtherance of the Plan, including, without limitation, the right to make
certain determinations and elections with respect to the Annual Stock Unit
Award, Restricted Stock Units and Dividend Equivalent Units.  All decisions of
the Committee (as established pursuant to the Plan) with respect to any
questions concerning the application, administration or interpretation of the
Plan will be conclusive and binding on the Company and Colleague.

 

8.                                      Binding Effect.  This Agreement shall be
binding upon and inure to the benefit of any successors to the Company and all
persons lawfully claiming under Colleague.

 

9.                                      Dispute Resolution.  If a dispute arises
between Colleague and Company in connection with the Annual Stock Unit Award,
including the Restricted Stock Units and Dividend Equivalent Units, the dispute
will be resolved by binding arbitration with the American Arbitration
Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then
in effect.

 

10.                               Governing Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
California.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and Colleague has executed this Agreement,
all effective as of March 11, 2015.

 

 

 

CITY NATIONAL CORPORATION

 

 

 

 

 

By:

/s/ Christopher J. Carey

 

Christopher J. Carey, Executive Vice

 

President, Chief Financial Officer

 

 

 

 

 

/s/ Russell Goldsmith

 

Russell Goldsmith

 

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