ARTICLE I		TITLE AND DEFINITIONS		1
1.1		Title		1
1.2		Definitions		1
ARTICLE II		PARTICIPATION		5
2.1		Participation		5
ARTICLE III		DEFERRAL ELECTIONS		5
3.1		Elections to Defer Compensation		5
3.2		Investment Elections		8
ARTICLE IV		ACCOUNTS		12
4.1		Deferral Account		12
4.2		Rollovers		13
ARTICLE V		VESTING		13
5.1		Deferral Account		13
ARTICLE VI		DISTRIBUTIONS		13
6.1		Distribution of Deferred Compensation		13
6.2		Nonscheduled In-Service Withdrawals		14
6.3		Hardship Withdrawals		15
6.4		Inability to Locate Participant		15
6.5		Change in Control		16
6.6		Death Benefit for Certain Participants		16
ARTICLE VII		ADMINISTRATION		17
7.1		Committee Action		17
7.2		Powers and Duties of the Committee		17
7.3		Construction and Interpretation		18
7.4		Information		18
7.5		Compensation, Expenses and Indemnity		18
7.6		Quarterly Statements		19
7.7		Claims Procedure		19
ARTICLE VIII		MISCELLANEOUS		20
8.1		Unsecured General Creditor		20
8.2		Restriction Against Assignment		20
8.3		Withholding		21
8.4		Amendment, Modification, Suspension or Termination		21

 

i

 

8.5		Governing Law		22
8.6		Receipt or Release		22
8.7		Payments on Behalf of Persons Under Incapacity		22
8.8		Headings, etc. Not Part of Agreement		22
8.9		Section 409A of the Code		22
8.10		Domestic Relations Orders		24

 

ii

 

2000 City National Bank
Director Deferred Compensation Plan

 

(Amended and Restated for Plan Years 2005 and Later

Effective on January 1, 2009)

 

This 2000 City National Bank Director Deferred Compensation Plan (the “Plan”), established by City National Bank effective as of January 1, 2000, to provide a tax-deferred capital accumulation opportunity to its outside directors through deferrals of directors’ fees, and subsequently amended on two occasions, is hereby amended and restated for Plan Years 2005 and later effective on January 1, 2009.  The principal purpose of this amendment and restatement is to bring the Plan into compliance with Section 409A of the Code and the Treasury Regulations issued thereunder.  All amounts which were deferred and vested under this Plan on December 31, 2004, together with earnings on such amounts (collectively “Grandfathered Amounts”), are intended to be grandfathered under Section 409A of the Code.  The Grandfathered Amounts shall not be subject to the terms of this amendment and restatement, but rather to the terms of the Plan as in effect immediately prior to January 1, 2009.  No prior amendments to the Plan subsequent to October 3, 2004 provided any new material benefits or rights or any material enhancement of any existing benefits or rights under the Plan with respect to the Grandfathered Amounts.

 

ARTICLE I
TITLE AND DEFINITIONS

 

1.1            Title.

 

This Plan shall be known as the 2000 City National Bank Director Deferred Compensation Plan.

 

1.2            Definitions .

 

Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

 

“Account” shall mean a Participant’s Deferral Account.

 

1

 

“Annual Award” shall mean the annual award to which a Director is entitled for service as a member of the board of directors of the Corporation or the Board of Directors of the Bank which is payable in cash in an amount equivalent to the value of a specified number of shares (currently 500) of Common Stock of the Corporation.

 

“Annual Retainer” shall mean the annual retainer fee for Committee Chairs to which a Director is entitled for service as a Chair of a board committee of the board of directors of the Corporation or the Board of Directors of the Bank.

 

“Bank” shall mean City National Bank and any successor corporation.

 

“Beneficiary” or “Beneficiaries” shall mean the person or persons last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder (other than those benefits set forth in Section 6.6) in the event of the Participant’s death. No beneficiary designation shall become effective until it is filed with the Bank or its agent. If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Beneficiary or Beneficiaries shall be, in order of priority: (a) the Participant’s surviving spouse, (b) if the Participant is not survived by a spouse, the revocable living trust established by the Participant during his or her lifetime, (c) the Participant’s children, per stirpes; or (d) the Participant’s estate.  The filing of a new beneficiary designation will cancel all beneficiary designations previously filed.  Any finalized divorce of a Participant subsequent to the date of filing of a beneficiary designation shall revoke such designation unless the previous spouse was not designated as the Beneficiary. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person’s living parent(s) to act as custodian, (ii) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and

 

2

 

currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

 

“Board of Directors” or “Board” shall mean the Board of Directors of City National Bank.

 

“CNC Stock” shall mean shares of City National Corporation Common Stock.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Committee” shall mean the Bank’s Benefits Committee.

 

“Compensation” shall mean the Participant’s Annual Award, Annual Retainer and Meeting Fees.

 

“Corporation” or “CNC” shall mean City National Corporation.

 

“Deferral Account” shall mean the bookkeeping account on the Bank’s books that is maintained by the Committee for each Participant that is credited with amounts equal to (a) the portion of the Participant’s Annual Award, Annual Retainer and Meeting Fees that he or she elects to defer, (b) the Participant’s Rollover Amount, if any, and (c) earnings or losses pursuant to Section 4.1.

 

“Director” shall mean a member of the Board of Directors of the Bank.

 

“Disability” shall mean an incapacity which has rendered the Participant unable to perform all of the material and substantial duties of a Director because of illness or injury.

 

“Earnings Rate” shall mean, for each Fund, an amount equal to the net rate of gain or loss on the assets of such Fund during each business day.

 

“Eligible Director” shall mean each Director who is not an employee of the Corporation, the Bank, any subsidiary of the Corporation or the Bank or any other entity affiliated with the Corporation or the Bank.

 

“Fund” or “Funds” shall mean one or more of the investment funds or portfolios selected by the Committee pursuant to Section 3.2(b).

 

3

 

“Grandfathered Amounts” shall mean all amounts which were deferred and vested under this Plan on December 31, 2004, together with earnings on such amounts.

 

“Initial Election Period” for an Eligible Director shall mean the thirty-day period beginning on the date of the Eligible Director’s initial election or appointment to the Board of Directors of the Bank (or, if later, on the date such Director first becomes an Eligible Director).

 

“Meeting Fees” shall mean the amounts to which a Director is entitled for attending meetings of (a) the board of directors of the Corporation, (b) the Board of Directors of the Bank, (c) a committee of the board of directors of the Corporation or (d) a committee of the Board of Directors of the Bank.

 

“Participant” shall mean (a) any Eligible Director who elects to defer Compensation in accordance with Section 3.1 and complies with the requirements of Section 2.1 and (b) any individual who was a participant in the City National Corporation Director Deferred Compensation Plan and had a positive account balance on December 31, 1999; and such Eligible Director or individual shall remain a Participant until all amounts credited to his or her Plan Year Subaccounts under the Plan have been distributed or forfeited.

 

“Payment Eligibility Date” shall mean the first day of the month following the end of the calendar quarter in which a Participant has a Separation from Service with the Bank for any reason, including by reason of Disability or death, subject to the provisions of Section 3.1(h).

 

“Plan” shall mean the 2000 City National Bank Director Deferred Compensation Plan set forth herein, now in effect, or as amended from time to time.

 

“Plan Year” shall mean the 12 consecutive month period beginning on January 1 and ending the following December 31.

 

“Plan Year Subaccounts” shall mean subaccounts of a Participant’s Deferral Account established to separately account for Compensation deferred (and earnings or losses thereon) for each Plan Year in which a Participant participates in the Plan and for any Rollover Amounts.

 

“Prior Plan” shall mean the City National Corporation Director Deferred Compensation Plan.

 

4

 

“Rollover Amount” shall mean the amount determined in accordance with Section 4.2.

 

“Separation from Service” shall mean the Participant’s “separation from service” as a Director, within the meaning of Section 409A of the Code, as determined by the Committee in accordance with Section 1.409A-1(h) of the Treasury Regulations.

 

ARTICLE II
PARTICIPATION

 

2.1            Participation.

 

(a)            Generally . An Eligible Director shall become a Participant in the Plan by (i) electing to defer Compensation in accordance with Section 3.1, (ii) if required by the Committee, filing a life insurance application form along with his or her deferral election form, and (iii) satisfying any medical underwriting requirement established by the Committee.

 

(b)            Participants with Split-Dollar Life Insurance Agreements . Notwithstanding the foregoing, unless the Committee provides otherwise, an Eligible Director who has entered into a Split-Dollar Life Insurance Agreement with the Corporation must execute an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” in order to defer Compensation under this Plan.

 

ARTICLE III
DEFERRAL ELECTIONS

 

3.1            Elections to Defer Compensation.

 

(a)            Initial Election Period . Subject to Section 2.1, each Eligible Director may elect to defer Compensation by filing with the Bank or its agent an election that conforms to the requirements of this Section 3.1, using a form, method, or process approved by the Committee, no later than the last day of his or her Initial Election Period, subject to Section 3.1(d).  Such election shall be irrevocable as of the date it is filed with the Bank or its agent. An Eligible Director who ceases to be a member of the Board of Directors of the Bank (or otherwise ceases to be an Eligible Director) and is subsequently re-elected, reappointed or reinstated as an Eligible

 

5

 

Director shall not be entitled to make an election pursuant to this Section 3.1(a) as a result of such re-election, reappointment or reinstatement.

 

(b)            General Rule . The amount of Compensation which an Eligible Director may elect to defer is as follows, subject to the limitations in Section 3.1(d), if applicable:

 

(i)             Any percentage or dollar amount of Annual Retainer up to 100%; and/or

 

(ii)            Any percentage or dollar amount of Meeting Fees up to 100%; and/or

 

(iii)           100% of the Annual Award; provided that any Annual Award which is deferred must be designated to be invested in the CNC Stock Fund (as defined in Section 3.2(e)).

 

(c)            Minimum Deferrals . [Intentionally Omitted.]

 

(d)            Effect of Initial Election . The amount of Meeting Fees deferred pursuant to an election made during the Initial Election Period shall not exceed the amount of Meeting Fees paid with respect to services performed in the Plan Year in which such initial election is made on or after the date on which the election is filed with the Bank or its agent.  No Annual Award or Annual Retainer (or portion thereof) shall be deferred for the Plan Year in which such initial election is made unless the election is filed on or before the date of such Eligible Director’s initial election or appointment to the Board of Directors.

 

(e)            Elections other than Elections during the Initial Election Period . Subject to the requirements of Section 2.1, any Eligible Director may participate for any Plan Year by filing an election, using a form, method, or process approved by the Committee, to defer Compensation as described in paragraph (b) above. An election to defer Compensation for a Plan Year must be filed on or before December 1 of the preceding Plan Year, or such other date as the Bank establishes, which date shall be no later than December 31 of the preceding Plan Year, and will be effective for Compensation earned on or after January 1 of the Plan Year for which the election applies.

 

(f)             Duration of Deferral Election . Any election made under this Plan to defer Compensation shall apply only to Compensation payable with respect to services performed

 

6

 

during the Plan Year for which the election is made. For each subsequent Plan Year, an Eligible Director may make a new election, subject to the limitations set forth in this Section 3.1, to defer a percentage of his or her Compensation.

 

(g)            In-Service Distributions . At the time of making an election to defer Compensation for a Plan Year (other than Plan Years 2008 or later) pursuant to this Section 3.1, a Participant may elect (using a form, method, or process approved by the Committee) to receive an in-service distribution of the amount deferred under such election, together with earnings or losses credited with respect to such amounts pursuant to Article IV, in a lump sum payment or in annual installments over 2, 3, 4, or 5 years, paid or commencing within 90 days following any January 1 that occurs after the second anniversary of the last day of the Plan Year in which the amount deferred was earned. In addition, each Participant who has a Rollover Amount credited to his or her Account under Section 4.2 shall be permitted to elect, on or before December 31, 1999, to receive an in-service distribution of such Rollover Amount, together with earnings or losses, within 90 days following January 1 of 2003 or any later year. A Participant who has timely elected an in-service distribution in accordance with this Section 3.1(g) may subsequently elect to defer the year of any such in-service distribution or to change the form of an in-service distribution by filing an election with the Bank or its agent, using a form, method, or process approved by the Committee, at least one year prior to the first day of the previously elected in-service distribution year; provided that pursuant to such election, the in-service distribution is deferred to the 90-day period following any subsequent January 1 that is at least five years from the prior scheduled distribution date. The election to defer the year of an in-service distribution may be made no more than twice. If a Participant elects an in-service distribution but fails to specify the form of payment, the Participant will be deemed to have elected a lump sum payment.  If a Participant fails to make a distribution election under this Section 3.1(g) for a Plan Year, or fails to specify the year in which the in-service distribution shall be made, the Compensation deferred for that Plan Year shall be distributed as set forth in Section 6.1(b).  No election under this Section 3.1(g) may be made for Plan Years 2008 or later.

 

(h)    Elections for Alternative Form of Distribution . At the time of making an election to defer Compensation for a Plan Year pursuant to this Section 3.1, a Participant may elect (using a form, method, or process approved by the Committee) an alternative form

 

7

 

of benefit for distribution of the Compensation deferred for that Plan Year pursuant to Section 6.1(b), which may be either a lump sum payment or payment in 20, 40, or 60 substantially equal quarterly installments.  If the Participant does not elect a form of benefit, the Participant will be deemed to have elected a lump sum payment. Subject to the provisions of Section 6.1(b), this election will apply to the Compensation deferred for such Plan Year if (x) the Participant does not elect an in-service distribution with respect to such deferred Compensation pursuant to Section 3.1(g), or (y) the Participant elects an in-service distribution but the Participant’s Separation from Service occurs prior to commencement of such in-service distribution.  A Participant may make a one-time election to change the form of benefit elected pursuant to this Section 3.1(h) by filing a written election with the Bank or its agent, using a form, method, or process by the Committee, provided that any such election shall not be effective for 12 months and that such election shall also change the Payment Eligibility Date to the date that is five years following the original Payment Eligibility Date.  No change to an election made under this Section 3.1(h) shall be permitted except as expressly permitted herein.

 

(i)             Effect of Elections . Each distribution election under Section 3.1(g) and Section 3.1(h) shall apply only to the Compensation deferred for the Plan Year for which the election is made. For each subsequent Plan Year a Participant may make a separate election. Any election filed pursuant to this Section 3.1 shall be irrevocable for any one Plan Year except to the extent provided in Section 3.1(g), Section 3.1(h), Section 6.1, Section 6.2 and Section 6.3.

 

3.2            Investment Elections.

 

(a)            At the time of making each deferral election described in Section 3.1, the Participant shall designate, using a form, method, or process approved by the Committee, which Fund or Funds the Compensation deferred pursuant to such election will be deemed to be invested in for purposes of determining the amount of earnings or losses to be credited or debited to his or her Plan Year Subaccount that the Committee establishes pursuant to Section 4.1 to account for such deferred Compensation.

 

(b)            In making the designation pursuant to this Section 3.2, the Participant must specify, in multiples of one (1), the percentage of his or her corresponding Plan Year Subaccount

 

8

 

that shall be deemed to be invested in one or more Funds. A Participant may change the designation made under this Section 3.2 with respect to any or all of his or her Plan Year Subaccounts by filing an election, using a form, method, or process approved by the Committee. If a Participant fails to make an investment election for Compensation deferred in any Plan Year, the Participant’s most recent investment election for future deferrals shall apply to the Plan Year Subaccount established for such Plan Year and each Plan Year Subaccount established with respect to any subsequent Plan Year Subaccount(s) until the Participant files an election with the Bank or its agent in accordance with the provisions of this Section 3.2 with respect to such Plan Year Subaccount(s). Notwithstanding the foregoing, if a Participant has not previously elected a Fund under this Section 3.2, he or she shall be deemed to have elected the money market option, or such other Fund that the Committee designates as the default fund for purposes of this Plan.

 

(c)            The Committee shall select from time to time, in its sole discretion, the Funds in which Compensation deferred under this Plan will be deemed to be invested. The Earnings Rate of each Fund shall be used to determine the amount of earnings or losses to be credited or debited to the Participant’s Deferral Account under Article IV. The Bank reserves the right to change the Funds, and to increase or decrease the number of Funds, available as the Funds for purposes of this Plan.

 

(d)            Notwithstanding the Participant’s ability to designate the Funds in which the Plan Year Subaccounts of his or her Deferral Account shall be deemed to be invested, the Bank shall have no obligation to invest any funds in accordance with any Participant’s election. A Participant’s Deferral Account shall merely be a bookkeeping entry on the Bank’s books, and no Participant shall obtain any interest in any of the Funds.

 

(e)            Effective as of January 1, 2008, the “CNC S