Document:

Exhibit 10.6

 

ANNUAL STOCK UNIT AWARD AGREEMENT

ADDENDUM

 

THIS ADDENDUM TO THE ANNUAL STOCK UNIT AWARD AGREEMENT provides the rules and procedures relating to the grant of the Annual Stock Unit Award and the operation of the Restricted Stock Unit Account and the Dividend Equivalent Unit Account.

 

A.                                    Definitions.  Any capitalized terms used, but not defined, in this Addendum shall have the meaning set forth in the Annual Stock Unit Award Agreement.  Whenever the following terms are used in the Annual Stock 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.                                      Dividend Equivalent Unit Account means the memorandum account maintained by the Company or its agent on behalf of Colleague which is credited with Dividend Equivalent Units.

 

6.                                      Dividend Equivalent Unit means a unit of measurement which is deemed for bookkeeping and payment purposes to represent one dollar ($1.00).

 

7.                                      Fair Market Value shall have the meaning assigned to it in the Plan.

 

8.                                      Restricted Stock Unit means a non-voting unit of measurement which is deemed for bookkeeping and payment purposes to represent one outstanding share of Common Stock of the Company.

 

9.                                      Restricted Stock Unit Account means the memorandum account maintained by the Company on behalf of each Colleague which is credited with Restricted Stock Units under the Annual Stock Unit Award Agreement.  Each Restricted Stock Unit represents the right to receive a distribution of cash in the amount of the Fair Market Value of one Share at the date of distribution as provided in the Annual Stock Unit Award Agreement and this Addendum.

 

10.                               Shares shall have the meaning assigned to it in the Plan.

 

11.                               Vested RSUs means the earned Restricted Stock Units (determined in accordance with Section 1(a) of the Annual Stock Unit Award Agreement) with respect to which the forfeiture restrictions set forth in Section 2(b) of the Annual Stock Unit Award Agreement have lapsed.

 

B.                                    Restricted Stock Unit Account.  As soon as practicable following the Award Date, the Company shall credit Colleague’s Restricted Stock Unit Account with the target number of Restricted Stock Units awarded determined in accordance with Section 1(a)(ii) of the Annual Stock Unit Award Agreement.

 

 

C.                                    Dividend Equivalent Unit Account. As soon as practical following each of the Company’s dividend payable dates, Colleague’s Dividend Equivalent Unit Account shall be credited with the number of Dividend Equivalent Units equal to the dividends paid by the Company during the quarter on a number of Shares equal to the aggregate number of Restricted Stock Units credited to Colleague’s Restricted Stock Unit Account as of the record date for such quarter’s dividend payment.

 

D.                                    Lapse of Forfeiture Restrictions.  The Restricted Stock Units are subject to forfeiture based on continued service until the forfeiture restrictions lapse in accordance with Section 2(b) of the Annual Stock Unit Award Agreement.

 

Notwithstanding the forfeiture provision in Section 2(b) of the Annual Stock Unit Award Agreement, the service-based forfeiture restrictions on the Restricted Stock 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 and 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.

 

E.                                     Distributions.

 

1.                                      Subject to Section G, the Vested RSUs with respect to which the forfeiture restrictions as set forth in Paragraph 2(b) of Colleague’s Annual Stock Unit Award Agreement lapse on a Vesting Date and the Dividend Equivalent Units credited to Colleague’s Dividend Equivalent Unit Account in respect of such Vested RSUs shall be converted to cash as of the Vesting Date and be paid to Colleague (or, in the event of his or her death, Colleague’s Beneficiary) in a lump sum payment as soon as reasonably practicable following the Vesting Date, but in no event later than thirty (30) days thereafter.

 

2.                                      Subject to Section G, the Vested RSUs with respect to which the forfeiture restrictions as set forth in Paragraph 2(b) of the Colleague’s Annual Stock Unit Award Agreement lapse upon an event specified in Section D of this Addendum and the Dividend Equivalent Units credited to Colleague’s  Dividend Equivalent Unit Account in respect of such Vested RSUs shall be converted to cash as of the date of the applicable event specified in Section D of this Addendum and paid (a) if the applicable event specified in Section D occurs on or after the first February 15 following the end of the Performance Period, as soon as reasonably practicable (but in no event later than thirty (30) days following such event) or (b) if the applicable event set forth in Section D occurs prior to the first February 15 following the end of the Performance Period, during the seventy-five (75) day period beginning on the first January 1 following the end of the Performance Period; provided that, notwithstanding the foregoing, if the applicable event set forth in Section D occurs within twenty-four months following a Change in Control Event that constitutes a “change in control event” within the meaning of Treasury Regulation

 

2

 

Section 1.409A-3(i)(5), payment will be made as soon as reasonably practicable (but in no event later than thirty (30) days following the occurrence of such event set forth in Section D).

 

F.                                      Adjustments in Case of Changes in Common Stock.  If there shall occur any change in the outstanding Shares of the Company’s Common Stock such as described in Section 6.2(a) of the Plan, the Company shall make such proportionate and equitable adjustments consistent with the effect of such event on stockholders generally, as the Committee determines to be necessary or appropriate, in the number, kind and/or character of Colleague’s Restricted Stock Units or other securities, property and/or rights contemplated hereunder, including any appropriate adjustments to the market prices used in the determination of the number and Restricted Stock Units, and in rights in respect of Colleague’s Restricted Stock Unit Account credited under Colleague’s Annual Stock Unit Award Agreement so as to preserve the benefits intended.

 

G.                                    Plan Construction.  It is the intent of the Company that the Annual Stock Unit Award shall comply with Section 409A of the Code, and the Annual Stock Unit Award Agreement and this Addendum shall be interpreted in a manner which is consistent with the foregoing intent.  Any provisions of the Annual Stock 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 is hereby incorporated by reference.  Notwithstanding anything in the Plan, the Annual Stock 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 Annual Stock Unit Award granted hereunder in a manner consistent with Section 1.409A-3(j)(ix)(B) of the Treasury Regulations under Section 409A of the Code.

 

H.                                   Unfunded Plan.  The liability of the Company to Colleague under the Annual Stock Unit Award Agreement shall be that of a debtor only pursuant to such contractual obligations as are created by the Plan, the Annual Stock 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 Annual Stock 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 10.7

 

ELEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS ELEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is dated as of   February 27  , 2015, by and between BRAM GOLDSMITH (“Goldsmith”), on the one hand, and CITY NATIONAL CORPORATION, a Delaware corporation (“CNC”) and CITY NATIONAL BANK, a national banking association (“CNB”), on the other hand.

 

WHEREAS, the parties have entered into that certain Employment Agreement, dated as of May 15, 2003, as amended (as amended, the “Agreement”);

 

WHEREAS, the initial term of the Agreement was two years from May 15, 2003 to May 15, 2005;

 

WHEREAS, at various times, the Agreement has been amended to extend the term for an additional two years to May 15, 2007, further amended to extend the term for an additional year to May 14, 2008, further amended to extend the term for an additional year until May 14, 2009, further amended December 22, 2008 in recognition of the requirements of Internal Revenue Code § 409A, further amended to extend the term for an additional year to May 14, 2010, further amended to extend the term for an additional year until May 14, 2011, further amended to extend the term for an additional year until May 14, 2012, further amended to extend the term for an additional year until May 14, 2013; and further amended to extend the term for an additional year until May 14, 2014; and further amended to extend the term for an additional year until May 14, 2015;

 

WHEREAS, the parties have mutually agreed to change Goldsmith’s role on the Board of Directors of CNC to that of Chairman Emeritus effective October 1, 2013;

 

WHEREAS, the parties now wish to further extend the term of the Agreement for an additional period of time on substantially the same terms and conditions presently in effect but with modifications to Goldsmith’s title and benefits under the City National Corporation Strategy and Planning Committee Change in Control Severance Plan (the “CIC Severance Plan”) which would be effective, if at all, upon completion of the merger contemplated by the Agreement and Plan of Merger, dated as of January 22, 2015, by and among CNC, Royal Bank of Canada (“RBC”) and RBC USA Holdco Corporation (the date of such completion, the “Effective Date”); and

 

WHEREAS, the Board of Directors of CNB and of CNC have each approved such extension of the term of the Agreement through May 14, 2016 and, if the Effective Date occurs prior to May 14, 2016 and Goldsmith remains employed on the Effective Date, through the second anniversary of the Effective Date;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

1.              The term of the Agreement is hereby initially extended through May 14, 2016 and, if the Effective Date occurs prior to May 14, 2016 and Goldsmith remains employed on the Effective Date, further extended through the second anniversary of the Effective Date;

 

2.              During the term of the Agreement, as extended hereby, Goldsmith shall be employed as an unspecified officer of CNB;

 

3.              Through the earlier of the Effective Date and May 14, 2016, Goldsmith shall also continue to be employed as Chairman Emeritus of the Board of Directors of CNC;

 

4.              Upon the Effective Date, subject to Goldsmith’s continued employment through such date, Goldsmith shall be entitled to receive from CNC or its successor a lump sum payment in the gross amount of $1,500,000.00 (One Million Five Hundred Thousand Dollars and No Cents), less applicable mandatory state and federal withholdings, in full satisfaction of his participation in and continued eligibility for any benefits under the CIC Severance Plan; such payment to be made within thirty days of the Effective Date;

 

5.              Except as amended hereby, the Agreement shall remain in full force and effect with respect to all other terms and conditions currently in effect;

 

6.              All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Agreement; and

 

7.              This Amendment shall be governed by, and construed in accordance with the laws of the State of California.

 

IN WITNESS WHEREOF, the parties hereto have executed this ELEVENTH Amendment to their Employment Agreement dated May 15, 2003, as of the date first written above.

 

	
/s/ BRAM GOLDSMITH
    	
 
    	
 
    
	
Bram Goldsmith
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CITY NATIONAL CORPORATION
    	
 
    	
CITY   NATIONAL BANK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   MICHAEL B. CAHILL
    	
 
    	
By:
    	
/s/   MICHAEL B. CAHILL
    
	
Name:   
    	
Michael   B. Cahill
    	
 
    	
Name:   
    	
Michael   B. Cahill
    
	
Title:   
    	
EVP,   Secretary & General Counsel
    	
 
    	
Title:
    	
EVP,   Secretary & General Counsel

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