Exhibit 10.10


 





 


Executive Management Incentive
Compensation Plan


 


City
National Bank has an ongoing commitment to pay for performance, seeking to
provide eligible colleagues who make meaningful contributions to the Bank’s
success with opportunities to earn incentive pay.


 


Plan Definitions


 


Annual Base Salary: the
semi-monthly salary paid to the Participant in the last pay period of the Plan
Year just concluded, excluding any bonuses (including those that may be paid
under this Plan); commissions; overtime; automobile allowances; medical and tax
preparation reimbursements; or any similar non-salary items, multiplied by 24.


 


Award: a cash
distribution to a Participant in accordance with the provisions of the Plan.


 


Bank: City National Bank.


 


Beneficiary or Designated Beneficiary: the person
or persons designated to receive the amount, if any, payable under the Plan
upon the death of a Participant.


 


Compensation Committee: the
Compensation, Nominating & Governance Committee of the Board of
Directors of the Bank.


 


Corporation: City
National Corporation, a Delaware corporation.


 


Executive Committee: Executive
Committee of the Bank.


 


Executive Management: the
officers of the Bank who are appointed as members of the Executive Committee of
the Bank by the Strategy and Planning Committee or Chief Executive Officer of
the Bank.


 


Human Resources: the Bank’s
Human Resources Division.


 


Line Division: a division
of the Bank with profit and loss responsibilities.


 


Net Operating Income: the amount
by which in an accounting period operating revenue exceeds operating expenses
after income taxes.


 


Participant: a member of
the Executive Committee of the Bank designated by the Plan Administrator who
meets the eligibility criteria of this Plan.


 


Plan: this Executive Management Incentive Plan
as it may be amended, administered or interpreted from time to time.


 


Plan Administrator: the
Strategy and Planning Committee of the Bank.


 


Plan Year: the period
from January 1 through December 31 of any year this Plan is in
effect.


 


Staff Division: a division
of the Bank that is not a Line Division.


 


Strategy and Planning Committee: the
officers of the Bank who are appointed as members of the Strategy and Planning
Committee of the Bank by the Board of Directors of the Bank.


 


Target: that amount derived
for each Participant by multiplying such Participant’s Annual Base Salary by
the  percentage amount of each
Participant’s Annual Base Salary to be used with regard to calculating Awards
as recommended by the Plan Administrator and approved by the Compensation
Committee.


 


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Eligibility


 


Eligibility to participate in the Plan will be
limited to individuals who meet all of the following criteria:


 


·                  Be a member of the Executive Committee.


 


·                  Be performing at level “3” (meets
expectations) or higher throughout the Plan Year and not have been subject to
written warning at any time during the Plan Year.


 


·                  Not be participating in any other non-equity
incentive compensation plan of the Bank.


 


Plan Funding


 


·                  Award Targets: Participants are
assigned an Award Target as recommended by Human Resources to the Plan
Administrator and approved by the Compensation Committee based on market
considerations and the job position of the Plan participant.  Award Targets are calculated as a percentage
of base salary.


 


·                  Financial Goals:  For each Plan Year, the Plan Administrator
will establish, and the Compensation Committee will approve, the financial goal
for Net Operating Income for the Corporation and each Line Division for that
Plan Year against which actual performance is to be measured to determine
Awards as described herein.


 


·                  Funding Components:   Funding for the Plan for each Plan Year is
based on the following:


 


	
  Participants

  	
   

  	
  Measures/Weighting

  	
   

  	
  Funding Components

  
	
  Line
  Division Participant

  	
   

  	
  50% Corporation Performance

   

  50% Participant’s Area of Responsibility

  60% Corporation Performance 

  	
   

  	
   

  Corporation
  Performance*:
  Determined based on the Corporation’s performance relative to the financial
  goal for the Corporation’s Net Operating Income in accordance with the
  formula established annually by the Plan Administrator.  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Staff
  Division Participant

  	
   

  	
  40% Participant’s Area of Responsibility

  	
   

  	
  Participant’s
  Area of Responsibility** is determined based on the performance of
  each Participant’s area of responsibility:  

   

  Line*: Funding will be based on performance
  relative to the financial goal for each Line Division’s Net Operating Income
  in accordance with the formula established annually by the Plan
  Administrator.  

   

  Staff: Funding will be based on performance
  relative to achievement of key division and/or individual performance goals
  established annually by the Plan Administrator.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Strategy &
  Planning Committee Participants

  	
   

  	
  100% Corporation Performance

  	
   

  	
  *Funding levels with regard to NOI goals for the Corporation and the
  Line are adjusted both upwards (for performance above goal, up to a maximum
  level of 150% of target) and downwards (for performance below goal). Less
  than 85% threshold performance results in zero funding.

   

  ** Incentives based on Participant’s Area of
  Responsibility will not fund regardless of division results if overall
  Corporation Performance is less than 65% (except at the discretion of the
  Plan Administrator and the Compensation Committee).

  



 


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  Individual
  Performance Modifier — All Participants

  
	
   

  	
   

  	
   

  
	
  All Participants

  	
   

  	
  At the discretion of the
  Plan Administrator, incentives may be adjusted upward or downward by as much
  as 20% based on qualitative and quantitative assessment of individual
  performance. Criteria for consideration may include the Executive Committee
  Performance Standards (Leadership Behaviors, Financial, Credit Risk Review,
  Compliance and Internal Audit results).

  



 


·                  Discretionary Funding:  
The Compensation Committee has discretion in determining overall Plan
funding.  Without limiting the generality
of the foregoing, the Plan Administrator, with the concurrence of the
Compensation Committee, has the right to adjust the financial goal and
performance results for Net Operating Income of the Corporation by that amount
they deem to have resulted from material, unusual, extraordinary, and/or
non-recurring events that are not directly the result of the actions by Executive
Management.


 


Award Determination


 


At
the conclusion of each Plan Year, the Plan Administrator, in its sole
discretion, will recommend to the Compensation Committee, Awards to
Participants.  Consideration will be
given to the Participant’s contribution to meeting the overall goals of the
Bank, the Participant’s performance of basic job responsibilities and
achievement of individual and/or division objectives.


 


Initially,
the Plan Administrator will base its recommendations for Awards with regard to
the Plan Year just concluded as follows:


 


(1)          for each Participant of a Line Division, 50% of the amount of each
Participant’s Award will be determined based on the level of achievement of the
financial goal for Net Operating Income for the Corporation as applied to that
Participant’s Target;


 


(2)          for each Participant of a Line Division, 50% of his or her Award will
be determined based on the level of achievement of the financial goal for Net
Operating Income for that Participant’s Line Division as applied to that
Participant’s Target;


 


(3)          for each Participant of a Staff Division, 60% of the amount of each
Participant’s Award will be determined based on the level of achievement of the
financial goal for Net Operating Income for the Corporation as applied to that
Participant’s Target;


 


(4)          for each Participant of a Staff Division, 40% of his or her Award will
be determined based on the level of achievement of the key division and/or
individual performance goals established for such Participant by the Plan
Administrator, as evaluated by the Plan Administrator and as applied to such
Participant’s Target.


 


Overall Performance Rating:  The Plan Administrator will review the
Participant’s overall performance, quality of work performed during the Plan
Year and its overall satisfaction with the Participant’s accomplishments.  This qualitative assessment may include such
factors as an evaluation of the Participants responses to opportunities
presented, judgment exercised, ability and willingness to work as part of a team
and the possession of leadership and management skills expected to be found at
the executive level of management.  Based
upon such qualitative assessment, the Plan Administrator shall assign each
Participant a performance level rating between 5 (highest) and 2 (lowest).  The Plan Administrator, in its sole
discretion, will then make upward or downward adjustments of up to 20%, or no
adjustment, to the recommended Award.


 


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Compensation Committee Review and Approval:


 


(1)          Recommended Awards will be reviewed by the Compensation Committee, who
will, in its sole discretion, approve all Awards.  The Compensation Committee has the unilateral
right to modify or cancel any recommended Awards, with no liability to the Bank,
at any time prior to its final approval of Awards.  The Compensation Committee reserves the right
to modify Awards (up or down) for Participants. A colleague’s actual Award may
be more or less than his or her Award Target depending upon the colleague’s individual
performance, the Corporation and division performance and such other factors as
the Compensation Committee in its sole discretion many deem appropriate.


 


(2)          Without limiting the generality of the foregoing, to cause the Awards
in any Plan Year made to Participants in Line Divisions to be equitable with
Awards to Participants in Staff Divisions, as determined by the Plan
Administrator and the Compensation Committee, in their sole discretion, the
Compensation Committee may modify the recommended Awards.


 


(3)          Only upon final approval of Awards by the Compensation Committee shall
all Awards become fully vested, and payable as provided in “No Right of
Employment.”


 


 


Timing and Payment of Awards


 


Awards, if any, will be
calculated and paid to Participants no later than March 15 following the
close of the Plan Year ended on the preceding December 31.


 


·                  Awards
will be paid annually.


 


·                  Awards
will be reduced by any legally required or voluntary withholding.


 


·                  In order to receive an Award, a Participant must
be employed and actively providing services during the Plan Year and at the
time of the payment.


 


Additional Terms and Conditions


 


Adoption of the Plan


 


This Plan is effective as
of January 1, 2008. It is effective and continuous until amended, modified,
suspended or terminated.


 


Administration


 


The
Plan will be administered by the Plan Administrator.  The Plan Administrator, with the concurrence
of the Compensation Committee, shall have sole discretionary authority to
interpret the terms of this Plan, to decide any questions concerning
eligibility, and to resolve any disputes that may arise under or concerning the
Plan or any Plan benefit.  Any disputes arising under or relating in any
way to this Plan shall be first submitted in writing to the Plan Administrator.
The decisions of the Plan Administrator (with the approval of the Compensation
Committee) shall be final.


 


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No Right of Employment


 


This Plan shall not constitute a contract of
employment between the Bank and any person eligible for participation in the
Plan.  Each
Participant is an at-will employee. 
Nothing contained in this Plan (or any Award made pursuant to this Plan)
shall confer upon any eligible Participant any right to continue in the employment
of the Bank, or guarantee of payment of future incentives, or shall interfere
with, affect or restrict in any way, the rights of the Bank, which are
expressly reserved, to discharge any employee Participants, any time for any
reason whatsoever, with or without cause.


 


Partial Period Participation


 


Transfer
or Promotion


 


If
a Participant is transferred or promoted to a position not eligible for an
Award prior to the completion of a Plan Year, any Award shall be prorated for
the number of days the Participant participated in the Plan during the Plan
Year.


 


Leave of Absence


 


Unless
otherwise required by law, if a Participant requests and is granted a leave of
absence for any reason during a Plan Year, the Plan Administrator, in its sole
discretion, with the concurrence of the Compensation Committee, may make such
Participant an Award, prorated for the number of days during the Plan year that
the Participant was not on an approved leave of absence.


 


New
Hires


 


Participants who were
newly hired during the Plan Year may be eligible for an Award and will have
their earned incentive amount pro-rated based upon the time worked during the
Period.  Participants must meet all
eligibility requirements and be employed and actively providing services at the
time of the payout.


 


Termination of Employment


 


Death of Participant


 


(1)          Participants
are encouraged to file with the Bank a “Designation of Beneficiary or
Beneficiaries” on a form provided and maintained by Human Resources.  The designation may be changed or revoked by
the Participant at any time, in writing delivered to Human Resources.  If the Participant is married and designates
a beneficiary other than a spouse, spousal consent is required.  If no designation is filed with Human
Resources, any Award will be paid to the Participant’s estate.


 


(2)          If a
Participant dies prior to the completion of a Plan Year, the Participant’s
participation in the Plan shall immediately cease.  The Bank will pay to the designated
beneficiary an Award prorated for the number of days the Participant
participated in the Plan.


 


(3)          If a
Participant dies after the completion of a Plan Year, but before payment of an
Award for which the Participant was eligible, such  shall be paid to the Participant’s
beneficiary, or, if no beneficiary has been designated, to the Participant’s
estate.


 


(4)          If the Plan
Administrator is in doubt as to who receives an Award, the Bank may retain the
Award, without liability for interest thereon, until the Plan Administrator
determines the rights thereto, or until the 


 


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Bank pays such Award into a court of
appropriate jurisdiction, which payment shall be a complete discharge of the
liability of the Bank therefore.


 


(5)          If a
Participant dies having failed to designate a Beneficiary, or if no designated
Beneficiary survives the Participant as of the date of payment of an Award, the
Award shall be paid to the Participant’s estate.


 


Total and Permanent Disability of Participant


 


If,
prior to completion of a Plan Year, a Participant becomes totally and
permanently disabled, as defined in the City National Bank Long Term Disability
Plan, such Participant’s participation in the Plan shall immediately cease and
any Award shall be prorated for the number of days the Participant participated
in the Plan during the Plan Year.


 


Involuntary Termination Due to Job Elimination or Staff
Reduction.


 


If
a Participant is involuntarily terminated because of job elimination or staff
reduction during the course of a Plan Year, the Plan Administrator, in its sole
discretion, with the concurrence of the Compensation Committee, may elect to
prorate any Award for the number of days the Participant participated in the
Plan during the Plan Year.


 


Other Involuntary Termination of Employment.


 


If
the employment of a Participant is involuntarily terminated for any reason
other than those described above the Participant shall forfeit all rights to
any Award.


 


Voluntary Termination of Employment.


 


If
a Participant voluntarily terminates employment, such Participant shall forfeit
all rights to any Award.  However, the
Plan Administrator, in its sole discretion, with the concurrence of the
Compensation Committee, may elect to grant all or any portion of such Award to
the terminating Participant.


 


Amendment, Modification, Suspension, Reinstatement, Termination of Plan


 


The
Plan may be amended, modified, suspended, reinstated, or terminated by the
Compensation Committee in its sole discretion without prior notice to the
Participant.


 


Miscellaneous


 


No Award shall be deemed salary or compensation for
the purpose of computing benefits under any employee benefit Plan or other
arrangement of the Bank, unless the Plan Administrator, in its sole discretion,
shall determine otherwise.


 


The Human Resources Department shall make available
copies of the Plan and all amendments and any administrative rules or
procedures to all Participants at reasonable times upon request.


 


The Plan and the payment of Awards shall be subject
to all applicable federal and state laws, rules, and regulations, including the
withholding of any federal, state, local or foreign taxes and to such approvals
by any government or regulatory agency as may be required.  The terms of the Plan shall be binding upon
the Bank and its successors and assigns.


 


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