2000 CITY NATIONAL BANK EXECUTIVE DEFERRED COMPENSATION PLAN

 

 

2000 City National Bank
Executive Deferred Compensation Plan

 

(Amended and Restated for Plan Years 2004/05 and Later

 

Effective on January 1, 2009)

 

TABLE OF CONTENTS

 

		Page
ARTICLE I
TITLE AND DEFINITIONS
1.1	Title	1
1.2	Definitions	1
ARTICLE II
PARTICIPATION
2.1	Participation	5
ARTICLE III
DEFERRAL ELECTIONS
3.1	Elections to Defer Compensation	6
3.2	Investment Elections	9
ARTICLE IV
ACCOUNTS
4.1	Deferral Account	12
4.2	Rollovers	13
4.3	Profit Sharing Make-Up Contributions	13
ARTICLE V
VESTING
5.1	Deferral Account	15

 

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5.2	Profit Sharing Make-Up Contributions	15
ARTICLE VI
DISTRIBUTIONS
6.1	Distribution of Deferred Compensation	16
6.2	Nonscheduled In-Service Withdrawals	17
6.3	Hardship Withdrawals	17
6.4	Inability to Locate Participant	17
6.5	Death Benefit for Certain Participants	18
ARTICLE VII
ADMINISTRATION
7.1	Committee Action	19
7.2	Powers and Duties of the Committee	19
7.3	Construction and Interpretation	19
7.4	Information	20
7.5	Compensation, Expenses and Indemnity	20
7.6	Quarterly Statements	20
7.7	Claims Procedure	20
ARTICLE VIII
MISCELLANEOUS
8.1	Unsecured General Creditor	22
8.2	Restriction Against Assignment	22
8.3	Withholding	22
8.4	Amendment, Modification, Suspension or Termination	22
8.5	Governing Law	23
8.6	Receipt or Release	23
8.7	Payments on Behalf of Persons Under Incapacity	23
8.8	Headings, etc. Not Part of Agreement	23
8.9	Section 409A of the Code	23
8.10	Qualified Domestic Relations Orders	24

 

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2000 City National Bank
Executive Deferred Compensation Plan

 

(Amended and Restated for Plan Years 2004/05 and Later

Effective on January 1, 2009)

 

This 2000 City National Bank Executive 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 a select group of management and highly compensated employees through deferral of salary, bonuses and/or commissions, and subsequently amended on several occasions, is hereby amended and restated for Plan Years 2004/05 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 Executive 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.

 

“Affiliate” shall mean (a) each corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1563(a)(1), (2) and (3) of the Code) of which City National Bank is a component member and (b) each entity (whether or not incorporated) which is under common control with City National Bank, as such common control is defined in Section 414(c) of the Code and the Treasury Regulations issued thereunder, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1.414(c)-2 of the Treasury Regulations.

 

“Bank” shall mean City National Bank (or any successor corporation) and its Affiliates.

 

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“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 6.5) 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 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” shall mean the board of directors of the Bank.

 

“Bonus” shall mean any annual bonus payable to a Participant under any formal annual cash incentive compensation program maintained by the Bank in addition to the Participant’s Salary.

 

“CNC Profit Sharing Plan” shall mean the City National Corporation Profit Sharing Plan, as amended from time to time.

 

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

 

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

 

“Commissions” shall mean any commissions payable to a Participant.

 

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

 

“Compensation” shall mean the Salary, Bonus and/or Commissions that the Participant is entitled to for services rendered to the Bank.

 

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

 

“Deferral Account” shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with amounts equal to (a) the portion of the Participant’s Salary that he or she elects to defer, (b) the portion of the Participant’s Bonus that he or she

 

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elects to defer, (c) the portion of the Participant’s Commissions that he or she elects to defer, (d) the Participant’s Rollover Amount, if any, (e) the Profit Sharing Make-Up Contributions made on behalf of the Participant, and (f) earnings or losses pursuant to Section 4.1.

 

“Disability” shall mean an incapacity which has rendered the Participant eligible to commence receiving benefits under the Bank’s long-term disability plan and which constitutes a “disability” under Section 1.409A-3(i)(4) of the Treasury Regulations.

 

“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 Employee” shall mean each officer of the Bank at the Senior Vice President level or above that is regularly scheduled to work thirty (30) or more hours per week or any other member of a select group of management and highly compensated employees of the Bank or its Affiliates that the Committee designates; provided, however, that no individual shall be an Eligible Employee until the first day of the calendar month coinciding with or following the date on which the individual first became such an officer or a member of such group.  Notwithstanding the foregoing, no employee of any Affiliate shall be an Eligible Employee unless such Affiliate has elected to participate in the Plan, and such participation shall be subject to approval by the Committee.

 

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

 

“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 Employee shall mean the thirty-day period beginning on the date on which an individual first becomes an Eligible Employee.

 

“Participant” shall mean (a) any Eligible Employee 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 is credited with a Rollover Amount pursuant to Section 4.2; and such Eligible Employee 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 date elected by the Participant pursuant to Section 3.1(h).

 

“Plan” shall mean the 2000 City National Bank Executive 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.

 

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“Prior Plan” shall mean the City National Bank Executive Deferred Compensation Plan.

 

“Profit Sharing Make-Up Contribution” shall mean an employer contribution made in accordance with Section 4.3.

 

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

 

“Salary” shall mean the Participant’s base salary.

 

“Separation from Service” shall mean a “separation from service” 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.  For purposes of determining whether a Separation from Service has occurred, a Participant shall be considered to have separated from service as an employee when the facts and circumstances indicate that the Participant and the Bank reasonably anticipate that either (i) no further services will be performed for the Bank (including any Affiliates) after a certain date, or (ii) that the level of bona fide services the Participant will perform for the Bank (including any Affiliates) after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Bank if the Participant has been providing services to the Bank less than 36 months).

 

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ARTICLE II

PARTICIPATION

 

2.1                                Participation .

 

(a)  Generally .  An Eligible Employee 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 Employee 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.  Notwithstanding anything contained herein to the contrary, (i) if an Eligible Employee is allowed to defer Compensation under this Plan without executing an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” (a “Policy Transfer Agreement”), then no portion of such Participant’s account balance under the Prior Plan shall be transferred to his or her Account under this Plan and (ii) if an Eligible Employee is allowed to defer Compensation under this Plan prior to executing a Policy Transfer Agreement, then no portion of such Participant’s account balance under the Prior Plan shall be transferred to his or her Account under this Plan until such Participant executes a Policy Transfer Agreement.

 

(c)  Duration of Participation .  Any deferral election of a Participant who ceases to be an Eligible Employee shall terminate effective as of December 31 of the Plan Year in which such cessation occurs (but shall apply to any Compensation earned during such Plan Year that becomes payable following the end of such Plan Year).

 

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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 Salary, Commissions and/or Bonus earned during pay periods beginning on or after January 1 of the Plan Year for which the election applies.

 

(f)  Duration of Deferral Elections .  Any election made under this Plan to defer Compensation shall apply only to Compensation payable with respect to services performed during the Plan Year for which the election is made.  For each subsequent Plan Year, a Participant who remains an Eligible Employee 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 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 pursuant to 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).

 

(h)  Elections for Alternative Time and 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 time or form of benefit for distribution of the Compensation deferred for that Plan Year pursuant to Section 6.1(b), as follows:

 

(i)             The Participant may elect one of the following Payment Eligibility Dates:

 

(A)           The first day of the first calendar quarter following the calendar quarter in which the Participant has a Separation from Service with the Bank, incurs a Disability or dies;

 

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(B)            January 1 of the first calendar year following the calendar year in which the Participant has a Separation from Service with the Bank, incurs a Disability or dies; or

 

(C)            January 1 of any one of the second, third, fourth, fifth, or sixth calendar years following the calendar year in which the Participant has a Separation from Service with the Bank, incurs a Disability or dies (which may otherwise be described in any enrollment forms or materials as the January that is 1-5 years following termination of employment, or 1-5 years following the anniversary of termination of employment).

 

(ii)            The Participant may elect one of the following forms of benefit:

 

(A)           A lump sum payment; or

 

(B)            Payment in 20, 40, or 60 substantially equal quarterly installments.

 

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, Disability or death occurs prior to commencement of such in-service distribution.  If the Participant does not elect a Payment Eligibility Date, the Participant will be deemed to have elected the Payment Eligibility Date set forth in clause (i)(A) of this Section 3.1(h).  If the Participant does not elect a form of benefit, the Participant will be deemed to have elected a lump sum payment.

 

A Participant who has elected a Payment Eligibility Date set forth in clause (i)(A) of this Section 3.1(h) may make a one-time election to change the Payment Eligibility Date to the date that is five years following the original Payment Eligibility Date or to the January 1 following such date, and a Participant who has elected the Payment Eligibility Date set forth in clause (i)(B) of this Section 3.1(h) may make a one-time election to change the Payment Eligibility Date to the date that is five years following the original Payment Eligibility Date, in each case 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 original Payment Eligibility Date; and a Participant making such change may at the Participant’s option also concurrently change the form of benefit.  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.

 

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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 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