Document:

Exhibit 10.2

 

PERFORMANCE UNIT AWARD AGREEMENT

ADDENDUM

(TSR)

 

THIS ADDENDUM TO THE PERFORMANCE UNIT AWARD AGREEMENT provides the rules and procedures relating to the grant of the Performance Unit Award and the operation of the Performance Unit Account.

 

A.                                    Definitions.  Any capitalized terms used, but not defined, in this Addendum shall have the meaning set forth in the Performance Unit Award Agreement (TSR).  Whenever the following terms are used in the Performance Unit Award Agreement or in this Addendum, they shall have the meaning specified below, unless the context clearly indicates to the contrary:

 

1.                                      2008 Agreement means the Employment Agreement, dated as of December 22, 2008, by and between Colleague and City National Corporation, as amended.

 

2.                                      2010 Agreement means the Amended and Restated Employment Agreement made as of the 24th day of June, 2010, by and between Colleague, City National Bank and City National Corporation, as amended on March 14, 2012 and July 14, 2014.

 

3.                                      Change in Control Event shall have the meaning assigned to it in the Plan.

 

4.                                      Disability means Colleague shall become incapable of fulfilling his obligations because of injury or physical or mental illness which shall exist or may reasonably be anticipated to exist for a period of twelve (12) consecutive months or for an aggregate of twelve (12) months during any twenty-four (24) month period.

 

5.                                      Peer Banks means the component companies ranked as the 11th through 50th of the largest banks in the SNL Bank Index (but excluding Company) as measured by assets based on the most recently available public data as of the first day of the Performance Period or if the SNL Bank Index is no longer maintained or is no longer appropriate, in the reasonable judgment of the Committee, the Peer Banks listed in any other reasonably comparable index prepared by a third party or the Committee of publicly-traded financial companies such that Company falls between the 25th and 75th percentile in terms of size of market capitalization and/or assets.

 

6.                                      Performance Unit Account means the memorandum account maintained by the Company on behalf of Colleague which is credited with Performance Units.  Each Performance Unit represents the right to receive a distribution of cash in an amount as provided in the Performance Unit Award Agreement and this Addendum.

 

7.                                      Total Shareholder Return shall be determined with respect to the Company and the companies included in the Peer Banks at the end of the Performance Period (each an “index company”) and shall be determined as follows:

 

	
 
    	
(Price End – Price Begin) + Dividends
    	
 
    
	
 
    	
Price Begin
    	
 
    

 

1

 

with “Price Begin” equal to the average of each company’s closing price per share of common stock on the principal exchange or trading market over the 20 trading days ending on the first trading day in the Performance Period (adjusted to give effect to stock splits and stock dividends during the measurement period), “Price End” equal to the average of the company’s closing price per share of common stock on its principal exchange or trading market over the 20 trading days ending on the final trading day of the Performance Period (adjusted to give effect to stock splits and stock dividends during the measurement period) and “Dividends” equal to the aggregate cash dividend per share of common stock paid during the Performance Period.

 

B.                                    Performance Unit Account.  As soon as practicable following the first day of the Performance Period, the Company shall credit Colleague’s Performance Unit Account with the Performance Units.

 

C.                                    Lapse of Forfeiture Restrictions.  The Performance Unit Award is subject to forfeiture based on continued service until the forfeiture restrictions lapse in accordance with Section 2(b) of the Performance Unit Award Agreement.

 

Notwithstanding the forfeiture provision in Section 2(b) of the Performance Unit Award Agreement, the service-based forfeiture restrictions on the Performance Units shall immediately lapse:

 

·                  upon Colleague’s termination of employment by the Company without good cause or by Colleague for good reason (as those terms are defined in the 2010 Agreement) prior to a Change in Control Event;

 

·                  upon Colleague’s voluntary termination of employment for any reason or by the Company without good cause (as such term is defined in the 2010 Agreement) on or after expiration of the 2010 Agreement as provided in Section 10(f) of the 2010 Agreement prior to a Change in Control Event;

 

·                  upon Colleague’s termination of employment by the Company without cause or by Colleague for good reason (as those terms are defined in the 2008 Agreement) following a Change in Control Event; or

 

·                  upon Colleague’s termination of employment due to death or Disability.

 

D.                                    Payment Date.

 

1.                                      Except as set forth in paragraph 2 of this Section D, the Earned Payout as determined in Section 1(a)(i) of the Performance Unit Award Agreement, if any, shall be distributed to Colleague (or, in the event of his death, Colleague’s Beneficiary) in cash in a lump sum payment as soon as reasonably practicable following the end of the Performance Period, but no later than sixty (60) days thereafter.

 

2.                                      Subject to Section E, upon Colleague’s separation from service (within the meaning of Section 409A of the Code and the Treasury Regulations thereunder) following a Change in Control Event that results in the lapse of forfeiture restrictions as set forth in Section C of this Addendum, the payment shall be paid as soon as reasonably practicable following the date the lapse of forfeiture

 

2

 

restrictions occurs, but in no event later than thirty (30) days thereafter; provided that if the Performance Units constitute nonqualified deferred compensation within the meaning of Section 409A of the Code, then this sentence shall only apply to the Performance Units if (a) such separation from service occurs within twenty four months following a Change in Control Event and (b) such Change in Control Event constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5).  Except to the extent provided by the preceding sentence, the Earned Payout shall be paid according to the schedule set forth in paragraph 1 of this Section D.

 

E.                                 Plan Construction.  It is the intent of the Company that the Performance Units shall comply with Section 409A of the Code, and the Performance Unit Award Agreement and this Addendum shall be interpreted in a manner which is consistent with the foregoing intent.  Any provisions of the Performance Unit Award Agreement and this Addendum which would not comply with the requirements of Section 409A of the Code and the Treasury Regulations adopted thereunder shall be deemed to be modified or eliminated in order to comply with these requirements.  Sections 10(h) and 24 of the 2010 Employment Agreement addressing the application of Section 409A of the Code are hereby incorporated by reference.  Notwithstanding anything in the Plan, the Performance Unit Award Agreement or the Addendum to the contrary, in the event of a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), the Company may terminate the Performance Unit Awards granted hereunder in a manner consistent with Section 1.409A-3(j)(ix)(B) of the Treasury Regulations under Section 409A of the Code.

 

F.                                      Unfunded Plan.  The liability of the Company to the Colleague under this Performance Unit Award Agreement shall be that of a debtor only pursuant to such contractual obligations as are created by the Plan, the Performance Unit Award Agreement and this Addendum, and no such obligation of the Company shall be deemed to be secured by any assets, pledges, or other encumbrances on any property of the Company.  The Company has not segregated or earmarked any of the Company’s assets for the benefit of Colleague or his beneficiary or estate, and the Plan does not, and shall not be construed to, require the Company to do so.  Colleague and his beneficiary or estate shall have only an unsecured, contractual right against the Company with respect to any Performance Unit and such right shall not be deemed superior to the right of any other creditor.

 

G.                                    Clawback.  Section 7(e) of the 2010 Agreement addressing clawback is hereby incorporated by reference.

 

3Exhibit 10.3

 

PERFORMANCE UNIT AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

(PERFORMANCE METRICS BASED)

 

THIS PERFORMANCE UNIT AWARD AGREEMENT is made by and between CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and Russell D. 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 Performance Awards, including Performance 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 Performance Units payable solely in cash pursuant to the terms and conditions of this Agreement (“Performance Unit Award” or “Award”).

 

1.                                      Grant of Performance Unit Award.

 

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

 

(i)                                     On the Award Date, Colleague shall be granted an Award with a target payout of $1,325,000 (the “Target Award Amount”).  The Award will be divided into four segments (each, an “Award Segment”) and each Award Segment will have a target payout of 25% of the Target Award Amount ($331,250).  Each Award Segment shall be assigned one of four Award Metrics (as defined in the Addendum).

 

(ii)                                  Except as otherwise provided in Section 1(a)(vi) of this Agreement, each Award Segment shall have an earned value equal to Maximum (the amount of earned value for each Award Segment, the “Award Segment Earned Payout”) as set forth in the table below if the Company’s net income goal established by the Committee for the 2015 fiscal year (the “Section 162(m) Goal”) is achieved at 75% of target; provided, that the Award Segment Earned Payout, if any, for each Award Segment will be adjusted downward based on the percentile ranking of the Company with respect to the Award Metric for such Award Segment on the last day of the Performance Period relative to the performance of the companies comprising the Peer Banks with respect to the applicable Award Metric in accordance with the table below.  The amount of the Award Segment Earned Payout for performance between Threshold and Target and between Target and Maximum will be determined on a straight line basis.

 

	
Award Level
    	
 
    	
Percentile Achieved
    	
 
    	
Earned Payout per Award Segment
    	
 
    
	
Maximum
    	
 
    	
75th or above
    	
 
    	
$
    	
579,687.50
    	
 
    
	
Target
    	
 
    	
50th
    	
 
    	
$
    	
331,250
    	
 
    
	
Threshold
    	
 
    	
35th
    	
 
    	
$
    	
165,625
    	
 
    

 

 

(iii)                               The Performance Period means the period commencing on January 1, 2015 and ending December 31, 2017.

 

(iv)                              The total earned payout in respect of the Award (“Earned Payout”) will be the sum of the Award Segment Earned Payout for each Award Segment.

 

(v)                                 If (A) 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 Award pursuant to Section C of the Addendum and (B) no Change in Control Event has occurred during the Performance Period and prior to the Colleague’s termination of employment, then except as otherwise provided in Section 1(a)(vi) of this Agreement, the Award will remain outstanding and the Earned Payout will be determined in accordance with Section 1(a)(i) of this Agreement.

 

(vi)                              If a Change in Control Event occurs prior to completion of the Performance Period, whether prior to or after Colleague’s termination of employment under circumstances in which the Award remains outstanding (as provided in Section 1(a)(v) of this Agreement), the Award shall be deemed earned as of the date of the Change in Control Event and the Earned Payout will be equal to the greater of the Target Award Amount or the amount calculated pursuant to Section 1(a)(ii) of this Agreement as if the Performance Period ended on the last day of the last completed calendar quarter preceding the date of the Change in Control Event and assuming for this purpose that the Section 162(m) Goal is achieved.

 

(vii)                           The date of the Award (the “Award Date”): March 11, 2015; and

 

(viii)                        The consideration, if any, for the Performance Units:  Colleague’s Employment with the Company.

 

(b)                                 Performance Unit Account.  The Performance Units will be credited to Colleague’s Performance Unit Account as of the first day of the Performance Period and upon satisfaction of the conditions of this Agreement.

 

2.                                      Performance Units.  Colleague hereby accepts the Performance Units and agrees with respect thereto as follows:

 

(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 C of the Addendum prior to the last day of the Performance Period, Colleague shall, for no consideration, immediately forfeit to the Company the Performance Units.

 

(b)                                 Lapse of Forfeiture Restrictions.  Except as provided in Section 2(a), the forfeiture restrictions lapse as to one hundred percent of the underlying Performance Units on the last day of the Performance Period; provided that Colleague has been 

 

2

 

continuously employed by the Company from the beginning of the Performance Period through the last day of the Performance Period.

 

Notwithstanding the foregoing, the forfeiture restrictions shall lapse as to the Performance Units earlier upon the termination and vesting events provided in Section C of the Addendum. In the event Colleague’s employment is terminated for any reason other than as provided in Section C 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 Performance 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)                                  Performance Unit Account.  Colleague’s Performance Unit Account shall be a memorandum account on the books of the Company. The Performance Units credited to a Performance 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 Performance Units shall not be treated as property or as a trust fund of any kind. The Performance 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.

 

(d)                                 Nontransferability.  The Performance 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 the Performance Unit Award any taxes required to be withheld by applicable law.

 

4.                                      Limitation on Transfer.  Other than upon death or pursuant to a DRO, the Performance 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 Performance Unit 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 

 

3

 

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 Performance 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 Performance Unit Award, 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.

 

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 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
    

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]