EXHIBIT 10.22.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 15th day of July, 1998 by
and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), on the one hand, and CITY
NATIONAL BANK, a National Bank ("CNB") and CITY NATIONAL CORPORATION ("Parent
Corporation"), on the other hand.
1. EMPLOYMENT. CNB and Parent Corporation (collectively the
"Employer") hereby employ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇ hereby accepts employment,
under the terms and conditions hereafter set forth. The Employment Agreement
dated as of the 16th of October, 1995 by and between ▇▇▇▇▇▇▇▇▇, CNB and
Parent Corporation, as amended, is terminated effective upon the execution
and delivery of this Employment Agreement.
2. DUTIES. ▇▇▇▇▇▇▇▇▇ shall be employed as the Chairman of the Board of
Directors and Chief Executive Officer of CNB and Vice-Chairman of the Board
of Directors and Chief Executive Officer of the Parent Corporation and his
powers and duties shall be consistent with such offices and positions. As
Chief Executive Officer of Employer, ▇▇▇▇▇▇▇▇▇ shall supervise, control and
be responsible for all aspects of the business and affairs of Employer and
their subsidiaries.
3. PLACE OF SERVICE. Substantially all of ▇▇▇▇▇▇▇▇▇'▇ duties shall be
performed in Los Angeles and Beverly Hills, California and unless mutually
agreed upon by ▇▇▇▇▇▇▇▇▇ and Employer, ▇▇▇▇▇▇▇▇▇ shall be headquartered in
Beverly Hills, California.
4. TERM. Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall commence on July 15, 1998 (the
"Start Date") and shall terminate four (4) years thereafter.
5. ANNUAL BASE COMPENSATION. Employer shall pay ▇▇▇▇▇▇▇▇▇ as annual
base compensation (the "Annual Base Compensation"), payable in equal
semimonthly payments, the sum of Six Hundred Seventy Five Thousand Dollars
($675,000) during the first year of the term hereof. On each July 15 during
the term hereof, the then Annual Base Compensation shall be increased by the
lesser of (i) that percentage equal to five percent (5%) plus the percentage
increase (but not decrease) in the Consumer Price Index for all Urban
Consumers for Los Angeles and Riverside-Orange Counties (or if no
longer being published, a comparable index) between the month of May of the
prior year and the month of May immediately preceding the July 15 date and
(ii) ten percent (10%).
6. BONUS COMPENSATION. ▇▇▇▇▇▇▇▇▇ shall participate in CNB's Executive
Management Bonus Plan and any other cash bonus or incentive compensation plan
of Employer established for corporate executive officers of Employer,
including corporate officers who
are members of the Executive Committee and the Strategy and Planning
Committee. The amount of annual bonus or incentive compensation (the "Annual
Bonus") paid to ▇▇▇▇▇▇▇▇▇ pursuant to the Executive Management Bonus Plan for
any year (including the fiscal year ending December 31, 1998 and the fiscal
year during which his employment is terminated) shall not be less than one
hundred twenty five percent (125%) of his Annual Base Compensation as of
December 31 of the year for which the bonus is being paid if plan goals for
the year are achieved, scaled up ratably to two hundred percent (200%) if one
hundred thirty percent (130%) of plan goals are achieved and scaled down
ratably to thirty five percent (35%) if eighty five percent (85%) of plan
goals are achieved. In determining the Annual Bonus payable to ▇▇▇▇▇▇▇▇▇ for
any year in which he was not employed by Employer for the entire year, the
Annual Bonus for the portion of such fiscal year preceding the termination of
his employment shall be an amount equal to (i) the amount which the Annual
Bonus would have been had the plan goals achieved through the month ending
immediately following the date of termination of his employment been the plan
goals for the entire fiscal year, the fiscal year had ended at the end of
such month and ▇▇▇▇▇▇▇▇▇'▇ Annual Base Compensation had been the Annual Base
Compensation payable to him as of the following December 31 had his
employment continued through the following December 31, (ii) multiplied by a
fraction, the numerator of which is the number of months in the fiscal year
through the end of the month immediately following the date of termination of
▇▇▇▇▇▇▇▇▇'▇ employment and the denominator of which is 12. Unless ▇▇▇▇▇▇▇▇▇
elects to defer receipt thereof, each Annual Bonus shall be paid no later
than the end of the third month of the fiscal year following the fiscal year
for which the bonus is being paid; provided, however, that if the employment
of ▇▇▇▇▇▇▇▇▇ is terminated prior to the end of the fiscal year for which the
bonus is being paid, the Annual Bonus for the partial year preceding the
termination of his employment shall be paid no later than the end of the
third month following the termination of his employment and any amounts
payable under any subparagraphs of Paragraph 10 as an Annual Bonus applicable
to any portion of a fiscal year of less than twelve months shall be paid no
later than the end of the third month following the end of the period for
which such amount is payable.
7. Stock Options. Prior to October 16, 1998, ▇▇▇▇▇▇▇▇▇ will be granted
by the Board of Directors of Parent Corporation, non-qualified stock options
to purchase an aggregate of three hundred fifty thousand (350,000) shares of
Common Stock of Parent Corporation at a purchase price equal to the fair
market value of the Common Stock on the date of grant. Said options will be
granted pursuant to the provisions of the 1995 Omnibus Plan of Parent
Corporation and be represented by an agreement executed by the Parent
Corporation. Such options will have a term of ten years and, subject to
subparagraphs 10(b), (c), (d) and (e) hereof, will be exercisable as to one
hundred sixteen thousand six hundred sixty seven (116,667) shares of Common
Stock from and after the date of grant, as to an additional one hundred
sixteen thousand six hundred sixty seven (116,667) shares of Common Stock
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from and after one year from the date of grant and in full from and after the
second year from the date of grant.
8. FRINGE BENEFITS AND REIMBURSEMENT OF EXPENSES. Employer shall
provide ▇▇▇▇▇▇▇▇▇ with such medical and other health, dental, accidental life
and disability insurance, and he shall be entitled to all employee and fringe
benefits and reimbursement of expenses and to participate in all benefit
plans (including stock option plans) as are consistent with his position and
duties and those previously provided to the Chief Executive Officer of
Employer; provided, however, that during the first two years of the term
hereof Employer shall not be required to grant any additional employee stock
options to ▇▇▇▇▇▇▇▇▇.
9. EXTENT OF SERVICE. ▇▇▇▇▇▇▇▇▇ shall devote his time, attention and
energies to the business of Employer and shall not, during the term of this
Agreement, be engaged in any other activity which will materially interfere
with the performance of his duties hereunder. Time expended by ▇▇▇▇▇▇▇▇▇ on
philanthropic activities, as a general partner of Sunbar Properties, as a
passive investor in real estate ventures and other investments, or in
managing the existing properties of ▇▇▇▇▇▇▇▇▇ Entertainment Corporation shall
be deemed not to interfere with the performance of his duties hereunder.
10. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY EMPLOYER FOR GOOD CAUSE. Employer may
terminate the employment of ▇▇▇▇▇▇▇▇▇ for "good cause" by written notice to
▇▇▇▇▇▇▇▇▇. For purposes of this Agreement, "good cause" shall mean only (i)
conviction of a crime directly related to his employment hereunder, (ii)
conviction of a felony involving moral turpitude, (iii) willful and gross
mismanagement of the business and affairs of Employer, or (iv) breach of any
material provision of this Agreement. In the event the employment of
▇▇▇▇▇▇▇▇▇ is terminated pursuant to this subparagraph 10(a), Employer shall
have no further liability to ▇▇▇▇▇▇▇▇▇ other than for compensation accrued
through the date of termination but not yet paid.
In the event Employer contends that it has good cause to terminate
▇▇▇▇▇▇▇▇▇ pursuant to clause (iii) or (iv) of the second sentence of this
subparagraph 10(a), Employer shall provide ▇▇▇▇▇▇▇▇▇ with written notice
specifying in reasonable detail the services or matters which it contends
▇▇▇▇▇▇▇▇▇ has not been adequately performing, or the material provisions of
this Agreement of which ▇▇▇▇▇▇▇▇▇ is in violation and the acts constituting
such violation, why Employer has good cause to terminate this Agreement, and
what ▇▇▇▇▇▇▇▇▇ should do to adequately perform his obligations hereunder. If
within thirty (30) days of receipt of the notice ▇▇▇▇▇▇▇▇▇ performs the
required services or modifies his performance to correct the matters
complained of, ▇▇▇▇▇▇▇▇▇'▇ breach will be deemed cured, and ▇▇▇▇▇▇▇▇▇'▇
employment shall not be terminated. However, if the nature of the service
not performed by ▇▇▇▇▇▇▇▇▇ or the
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matters complained of are such that more than thirty (30) days are reasonably
required to perform the required service or to correct the matters complained
of, then his breach will be deemed cured if he commences to perform such
service or to correct such matters within the thirty (30) day period and
thereafter diligently prosecutes such performance or correction to
completion. If ▇▇▇▇▇▇▇▇▇ does not perform the required services or modify his
performance to correct the matter complained of within the thirty (30) day
period or the extension thereof, Employer shall have the right to terminate
this Agreement at the end of the thirty (30) day period or extension thereof.
It is understood that ▇▇▇▇▇▇▇▇▇'▇ performance hereunder shall not be deemed
unsatisfactory solely on the basis of any economic performance of Employer
because this performance will depend in part on a variety of factors over
which ▇▇▇▇▇▇▇▇▇ has little control.
(b) TERMINATION BY EMPLOYER WITHOUT GOOD CAUSE. Employer may
terminate the employment of ▇▇▇▇▇▇▇▇▇ without "good cause" (as defined in
subparagraph 10(a) above) at any time during the term hereof by giving
written notice to ▇▇▇▇▇▇▇▇▇ specifying therein the effective date of
termination. Upon such notice being given, if not then exercisable in full,
the options described in Paragraph 7 hereof shall become exercisable in full.
In the event the employment of ▇▇▇▇▇▇▇▇▇ is terminated pursuant to this
subparagraph 10(b) without good cause, Employer shall be obligated to pay to
▇▇▇▇▇▇▇▇▇ (which shall be in lieu of any other amounts which would be payable
to ▇▇▇▇▇▇▇▇▇ on account of such termination pursuant to any separation pay
plan or policy of Employer) (i) the Annual Base Compensation and Annual Bonus
he would have been paid had he remained in the employ of the Employer
hereunder, and had the term hereof extended, for a period of three years
from the effective date of termination, provided that (x) the Annual Bonus for
any fiscal year ending after the date of termination (including the fiscal
year during which the termination of employment occurs and any portion of a
fiscal year for which he is entitled to an Annual Bonus under this
subparagraph) shall be computed by multiplying ▇▇▇▇▇▇▇▇▇'▇ Annual Base
Compensation (in case of an Annual Bonus for a partial year, the amount which
the Annual Base Compensation would have been as of the following December 31
had his employment continued through such December 31) by (in lieu of
percentages of Annual Compensation set forth in paragraph 6) the highest
percentage of Annual Base Compensation previously used in determining any
prior Annual Bonus paid or payable to ▇▇▇▇▇▇▇▇▇, (y) the Annual Bonus
applicable to any portion of a fiscal year of less than twelve months shall be
an amount determined as provided in the preceding subclause (x) multiplied by
a fraction, the numerator of which is the number of months of the fiscal year
with respect to which ▇▇▇▇▇▇▇▇▇ is entitled to the Annual Bonus pursuant to
this subparagraph (with each partial month being deemed a whole month) and the
denominator of which is 12, and (z) the penultimate sentence of paragraph 6
shall be disregarded and have no force or effect, and (ii) all other employee
benefits he would have received hereunder had he remained in the employ of
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the Employer for such three-year period (and, if required, the term hereof
would have been appropriately extended), including reimbursement of ▇▇▇▇▇▇▇▇▇
for all expenses and costs incurred by him during such three-year period in
obtaining and maintaining medical and health insurance (through COBRA or
otherwise) for him, his spouse and dependents for such three-year period
which is equivalent to that provided to him by Employer at the time of
termination of his employment. Notwithstanding the foregoing clause (ii) of
the immediately preceding sentence, if long-term disability insurance
coverage is an employee benefit which ▇▇▇▇▇▇▇▇▇ would have received had he
remained in the employ of Employer, Employer's obligation to provide
▇▇▇▇▇▇▇▇▇ with comparable long-term disability insurance coverage for such
three-year period shall be subject to ▇▇▇▇▇▇▇▇▇ being insurable at the
effective date of termination of his employment. ▇▇▇▇▇▇▇▇▇ shall have no duty
to mitigate and during the first eighteen months following the effective date
of termination of his employment, Employer shall have no right to offset any
other compensation paid to ▇▇▇▇▇▇▇▇▇ during such time period. Any
compensation paid to ▇▇▇▇▇▇▇▇▇ for services rendered as an employee of a
third party during the last eighteen months during which he is entitled to
compensation under this subparagraph 10(b) shall reduce (not below zero) the
compensation payable to ▇▇▇▇▇▇▇▇▇ by Employer during such period pursuant to
this subparagraph 10(b).
(c) TERMINATION BY DISABILITY. Employer may terminate the
employment of ▇▇▇▇▇▇▇▇▇ during the term hereof or the term of the Amended
Employment Agreement (as hereinafter defined) by written notice to ▇▇▇▇▇▇▇▇▇
if ▇▇▇▇▇▇▇▇▇ shall become incapable of fulfilling his obligations hereunder
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. In the event the employment of ▇▇▇▇▇▇▇▇▇ is terminated by
Employer pursuant to this subparagraph 10(c) because of injury, physical or
mental illness, Employer shall be obligated to pay ▇▇▇▇▇▇▇▇▇ (or his
personal representatives) from and after the termination of his employment
the same amounts and provide him with the same benefits for the same periods
it would have paid or provided him had his employment been terminated without
cause pursuant to subparagraph 10(b) as of the date his employment is
terminated pursuant to this subparagraph 10(c). If the employment of
▇▇▇▇▇▇▇▇▇ is terminated pursuant to this subparagraph 10(c), the options
described in Paragraph 7 shall, if not then fully exercisable, upon such
termination become exercisable in full.
(d) TERMINATION BY DEATH. Except for compensation accrued but not
paid at the date of death and as provided in this subparagraph 10(d), the
death of ▇▇▇▇▇▇▇▇▇ during the term of this Agreement shall terminate this
Agreement and the Amended Employment Agreement (as hereinafter defined). In
the event of the death of ▇▇▇▇▇▇▇▇▇ during the term hereof or the term of the
Amended Employment Agreement (as hereinafter defined), Employer
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shall be obligated to pay to whomever he shall have designated in writing to
Employer, or if no designation has been made by him, to ▇▇▇▇▇▇▇▇▇'▇ wife, if
she is then living, or if she is not then living, to his estate, the same
amounts and provide the same benefits Employer would have paid or provided
▇▇▇▇▇▇▇▇▇ pursuant to subparagraph 10(b) had his employment been terminated
without cause on the date of his death. If not then fully exercisable, the
options described in Paragraph 7 shall upon ▇▇▇▇▇▇▇▇▇'▇ death become
exercisable in full.
(e) CHANGE OF CONTROL. Attached to this Agreement as Annex A is a
copy of the Employment Agreement dated as of March 31, 1997 between Parent
Corporation and ▇▇▇▇▇▇▇▇▇ (the "Amended Employment Agreement"). Upon the
Effective Date (as defined in the Amended Employment Agreement) during the
term of ▇▇▇▇▇▇▇▇▇'▇ employment with Employer, the Amended Employment
Agreement shall become effective with (notwithstanding the provisions of the
Amended Employment Agreement to the contrary) the following modifications:
(i) the "Change of Control Period" as defined in the Amended Employment
Agreement shall not terminate prior to the end of the term of this Agreement;
(ii) the term thereof (referred to therein as the "Employment Period") shall
be the greater of three years, as provided therein, or the then remaining
term of this Agreement: (iii) Paragraphs 3 and 5 and subparagraph 10(g) of
this Agreement shall remain in full force and effect: (iv) clause (B) of
Section 4(a)(i) and all of Section 4(b)(i) (except for the last sentence
thereof) of the Amended Employment Agreement shall be of no force or effect,
all direct or indirect references in the Amended Employment Agreement to
Annual Base Salary or base salary (including, without limitation, references
to Section 4(b) in clause (ii) of Section 5(c) of the Amended Employment
Agreement) shall be deemed to refer to the Annual Base Compensation described
and determined and computed in accordance with Paragraph 5 hereof and the
reference in clause (iii) of Section 5(c) of the Amended Employment Agreement
shall be deemed a reference to Section 3 hereof; and (v) termination of
employment on account of the death or disability of ▇▇▇▇▇▇▇▇▇ as provided in
subparagraphs 10(c) and 10(d) hereof, respectively, shall remain in full
force and effect and the provisions of the Amended Employment Agreement
dealing with termination of employment on account of ▇▇▇▇▇▇▇▇▇'▇ death or
disability and the effects thereof shall be of no force and effect. In all
other respects the terms of the Amended Employment Agreement will thereafter
govern the employment of ▇▇▇▇▇▇▇▇▇, and subparagraphs 10(a), 10(b), 10(c) and
10(f) hereof shall be of no further force or effect (except to the extent
subparagraph 10(b), is incorporated into subparagraph 10(c) and 10(d) for
determining amounts payable or benefits to be provided pursuant to
subparagraph 10(c) and 10(d)).
(f) TERMINATION UPON EXPIRATION. At least six (6) months prior to
the end of the term hereof, a person designated by the Board of Directors of
Parent Corporation shall meet with ▇▇▇▇▇▇▇▇▇ for purposes of negotiating an
extension of the term of this Agreement. If by the ninetieth (90th) day prior
to the end
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of the term hereof Employer and ▇▇▇▇▇▇▇▇▇ have not agreed in writing to an
extension of the term hereof or renewal of this Agreement and during such
negotiations Employer offered ▇▇▇▇▇▇▇▇▇ an extension of this Agreement with a
term of at least three years and compensation at least equivalent to the
eightieth percentile for chief executive officers of Employer's peer group,
▇▇▇▇▇▇▇▇▇'▇ employment shall terminate as of the end of the term hereof and
Employer shall be obligated to pay and provide ▇▇▇▇▇▇▇▇▇ with, from and after
the expiration of the term hereof, (i) the Annual Base Compensation as in
effect under Paragraph 5 of this Agreement immediately prior to the
expiration of the term hereof (increased as of the end of the term hereof as
if the term of this agreement were extended for twelve months) for a period
of twelve (12) months from the end of the term of this Agreement, (ii) the
Annual Bonus he would have been paid hereunder if the term of this Agreement
was extended for twelve months, provided that (x) the Annual Bonus shall be
computed by multiplying ▇▇▇▇▇▇▇▇▇'▇ Annual Compensation (in case of an Annual
Bonus for a partial year, the amount which the Annual Base Compensation would
have been as of the following December 31 had his employment continued
through such December 31) by (in lieu of the percentage of Annual
Compensation set forth in paragraph 6) the highest percentage of Annual Base
Compensation previously used in determining any prior Annual Bonus paid to
▇▇▇▇▇▇▇▇▇, (y) the Annual Bonus applicable to any portion of a fiscal year of
less than twelve months shall be an amount determined as provided in the
preceding subclause (x) multiplied by a fraction, the numerator of which is
the number of months of the fiscal year with respect to which ▇▇▇▇▇▇▇▇▇ is
entitled to the Annual Bonus pursuant to this subparagraph (with each partial
month being deemed a whole month) and the denominator of which is 12, (z) and
the penultimate sentence of paragraph 6 shall be disregarded and have no
force or effect, and (iii) all other employee benefits he would have received
hereunder if the term of this Agreement and ▇▇▇▇▇▇▇▇▇'▇ employment had been
extended twelve months, including reimbursement of ▇▇▇▇▇▇▇▇▇ for all expenses
and costs incurred by him during such twelve (12) month period in obtaining
and maintaining medical and health insurance (through COBRA or otherwise) for
him, his spouse and dependents for such twelve (12) month period which is
equivalent to that provided to him by Employer at the time of termination of
his employment. If by the ninetieth (90th) day prior to the end of the term
hereof Employer and ▇▇▇▇▇▇▇▇▇ have not agreed in writing to an extension of
this Agreement with the term hereof or a renewal of this agreement and during
such negotiations the Employer did not offer ▇▇▇▇▇▇▇▇▇ an extension of the
term hereof of at least three years and compensation at least equivalent to
the eightieth percentile for chief executive officers of Employee's peer
group, ▇▇▇▇▇▇▇▇▇'▇ employment shall terminate as of the end of the term
hereof and Employer shall pay ▇▇▇▇▇▇▇▇▇ from and after the expiration of the
term hereof, the same amounts and provide him with the same benefits for the
same period it would have paid and provided him pursuant to subparagraph
10(b) had his employment been terminated without cause immediately prior to
the end of the term hereof. For purposes of this subparagraph 10(f), the
"Employer's peer
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group" shall consist of ten banks comparable to CNB as to size and
performance and as agreed to by Employer and ▇▇▇▇▇▇▇▇▇ and the compensation
which shall be employed in determining whether the compensation offered
▇▇▇▇▇▇▇▇▇ was at least equivalent to the eightieth percentile for chief
executive officers of Employer's peer group compensation shall mean the total
compensation (all forms of pay disclosed in the proxy statements). If
▇▇▇▇▇▇▇▇▇ and Employer shall be unable to agree by the ninetieth (90th) day
prior to the end of the term hereof as to the identity of the banks
constituting the "Employer's peer group", the ten companies constituting
Employer's peer group shall be determined by Sibson and Company or any
similar firm agreed to by Employer and ▇▇▇▇▇▇▇▇▇.
(g) OFFICE SPACE AND SECRETARIAL SUPPORT. From and after the
expiration of the term of this Agreement or the Amended Employment Agreement
or if ▇▇▇▇▇▇▇▇▇'▇ employment is terminated other than pursuant to
subparagraph 10(a) (or section 5(a) of the Amended Employment Agreement if
it is then in effect) for cause or other than pursuant to subparagraph 10(d)
on account of his death, Employer shall provide ▇▇▇▇▇▇▇▇▇ (at no cost or
expense to ▇▇▇▇▇▇▇▇▇) for a period of three years with an office in his
current office site or nearby of size, furnishings and other appointments and
exclusive personal secretarial support comparable to that provided ▇▇▇▇▇▇▇▇▇
at any time during the one hundred twenty (120) day period prior to the
expiration of the term or termination of his employment.
11. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained therein and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties. No supplement,
modification or amendment of this Agreement shall be binding unless executed
in writing by both parties. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
12. SEPARABILITY CLAUSE. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof.
13. BENEFIT. Except as herein and otherwise specifically provided, this
Agreement shall be binding upon and inure to the benefit of the parties, their
personal representatives, heirs, administrators, executors, successors, and
permitted assigns.
14. NOTICES. Any notice, request, or other communication required to
be given pursuant to the provisions of this Agreement shall be in writing and
shall be deemed to be duly given if delivered in person or mailed by
registered or certified United
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States mail, postage prepaid, and mailed to the parties at the following
addresses:
EMPLOYER ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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City National Bank ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Beverly Hills, CA
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
General Counsel with copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Sanders, Barnet, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Mosk
Suite 850
1901 Avenue of the Stars
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The parties hereto may change the above addresses from time to time by
giving notice thereof to each other in conformity with this Paragraph 14.
15. CONFIDENTIALITY. ▇▇▇▇▇▇▇▇▇ covenants and agrees with Employer that
▇▇▇▇▇▇▇▇▇ shall not, during or after the term of this Agreement, disclose to
anyone any confidential information concerning the business or operations of
Employer which ▇▇▇▇▇▇▇▇▇ may acquire in the course of or incident to the
performance of his duties hereunder, including, without limitation,
processes, customer lists, business or trade secrets, or methods or
techniques used by Employer in its business or operations.
16. CONSTRUCTION. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
17. CAPTIONS. The paragraph headings and captions contained herein are
for reference purposes and convenience only and shall not in any way affect
the meaning or interpretation of this Agreement.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. AMENDMENTS. This Agreement shall not be modified, amended, or in
any way altered except by an instrument in writing and signed by both of the
parties hereto.
20. MANDATORY ARBITRATION. At the request of ▇▇▇▇▇▇▇▇▇ or Employer, any
dispute, claim, controversy of any kind (whether in contract or tort,
statutory or common law, legal or equitable) now existing or hereafter
arising out of, pertaining to or in connection with this Agreement and/or any
renewals, extensions, or amendments thereto, shall be resolved through final
and binding arbitration conducted at a location determined by the
-9-
arbitrator in Los Angeles or Beverly Hills, California, and administered by
the American Arbitration Association ("AAA") in accordance with the Federal
Arbitration Act, 9 U.S.C. SECTION 1, et seq., and the then existing
Commercial Arbitration Rules of the AAA. Judgment upon any award rendered by
the arbitrator(s) may be entered in any State or Federal courts having
jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement of the date first above written at Beverly Hills, California,
CITY NATIONAL BANK
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------- -------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CITY NATIONAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------
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ANNEX A
EMPLOYMENT AGREEMENT
AGREEMENT by and between City National Corporation, a Delaware
corporation (the "Company") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Executive"), dated as
of the 31st day of March, 1997.
The Board of Directors of the Company (the "Board"), has determined that
it is in the best interest of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened Change of
Control and to encourage the Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS. (a) The "Effective Date" shall mean the first
date during the Change of Control Period (as defined in Section 1(b)) on
which a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs and
if the Executive's employment with the Company is terminated prior to the
date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment (i) was at
the request of a third party who has taken steps reasonably calculated to
effect a Change of Control or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this Agreement
the "Effective Date" shall mean the date immediately prior to the date of
such termination of employment.
(b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the second anniversary of the date hereof;
provided, however that commencing on the date one year after the hereof, and
on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate two years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give
notice to the Executive that the Change of Control Period shall not be so
extended.
2. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d) (3) or 14(d) (2) or the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
of more of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company,
(iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of this Section
2, or (v) any acquisition by the ▇▇▇▇▇▇▇▇▇ family or any trust or partnership
for the benefit of any member of the ▇▇▇▇▇▇▇▇▇ family; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease or any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company
(a "Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company of all or substantially all of the Company's assets either directly
or through one or more
2
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
3. EMPLOYMENT PERIOD. The Company hereby agrees to continue the
Executive in its employ, and the executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the third
anniversary of such date (the "Employment Period").
4. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at
any time during the 120-day period immediately preceding the Effective Date
and (B) the Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or any office
or location less than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with
the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement.
3
It is expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
(b) COMPENSATION. (i) BASE SALARY. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the
month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date and
thereafter at least annually. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by, controlling
or under common control with the Company.
(ii) ANNUAL BONUS. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
Executive's highest bonus under the Company's annual incentive plans for the
last three full fiscal years prior to the Effective Date (annualized in the
event that the Executive was not employed by the Company for the whole of
such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall
be paid no later that the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
During the Employment Period, the Executive shall be entitled to participate
in all incentive, savings and retirement plans, practices, policies and
programs applicable generally to other peer executive of the Company and its
affiliated companies, but in no event shall such plans, practice, policies
and programs provide the Executive with incentive opportunities (measured
with respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices, policies
and programs as in effect at any time during the 120-day period immediately
preceding the Effective Date or if more favorable to the Executive, those
provided generally at
4
any time after the Effective Date to other peer executives of the Company and
its affiliated companies.
(iv) WELFARE BENEFIT PLANS. During the employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies
and programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
the other peer executive of the Company and its affiliated companies.
(v) EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.
(vi) FRINGE BENEFITS. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and if applicable,
automobile allowance and/or use of an automobile and payment of related
expenses, in a accordance with the most favorable plans, practices, programs
and policies of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Company
and it's affiliated companies.
(vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
5
(viii) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its affiliated
companies as in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
5. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY.
The Executive's employment shall terminated automatically upon the
Executive's death during the Employment Period. If the Company determines in
good faith that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set forth below),
it may give to the Executive written notice in accordance with Section 12(b)
of this Agreement of its intention to terminate the Executive's employment.
In such event, the Executive's employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement, "Disability" shall
mean the absence of the Executive from the Executive's duties with the
Company on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company of its insurers and
acceptable to the Executive or the Executive's legal representative.
(b) CAUSE. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one
of its affiliated (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand
for substantial performance is delivered to the Executive by the
Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer
believes that the Executive has not substantially performed the
Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct
or gross misconduct which is materially and demonstrably injurious
to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive
6
in bad faith or without reasonable belief that the Executive's action or
omission was in the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof in
detail.
(c) GOOD REASON. The Executive's employment may be terminated By
the Executive for Good Reason. For purpose of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of any duties inconsistent in
any respect with the Executive's position (including status, offices, titles
and reporting requirement), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than in isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a) (i) (B) hereof or
the Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11 (c) of this Agreement.
7
For purposes of this Section 5 (c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive. Anything in the Agreement
to the Contrary notwithstanding, a termination by the Executive for any
reason during the 30-day period immediately following the first anniversary
of the Effective Date shall be deemed to be a termination for Good Reason for
all purposes of this Agreement.
(d) NOTICE OF TERMINATION. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section
12(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies
that termination date (which date shall be not more than thirty days after
the giving of such notice). The failure by the Executive or the Company to
set forth in the notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be, (ii) if the
Executive employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) GOOD REASON;
OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment Period,
the Company shall terminate the Executive's employment other than for Cause
or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the product of
(x) the higher of
8
(i) the Recent Annual Bonus and (ii) the Annual Bonus paid or payable,
including any bonus or portion thereof which has been earned but deferred
(and annualized for any fiscal year consisting of less than twelve full
months or during which the Executive was employed for less than twelve full
months), for the most recently completed fiscal year during the Employment
Period, if any (such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the number of days in
the current fiscal year through the Date of Termination, and the denominator
of which is 365 and (3) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2), and (3) shall be hereinafter referred
to as the "Accrued Obligations"); and
B. the amount equal to the product of (1) three and (2) the sum of (x)
the Executive's Annual Base Salary and (y) the Highest Annual Bonus; and
C. an amount equal to the contributions to the Executive's account in
the Company's Profit Sharing Plan which the Executive would receive if the
Executive's employment continued for three years after the Date of
Termination assuming for this purpose that all such contributions are fully
vested, and, and assuming that the Company's contribution to the Profit
Sharing Plan in each such year is in an amount equal to the greatest amount
contributed by the Company in any of the three years ending prior to the
Effective Date.
(ii) for three years after the Executive's Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would
have been provided to them in accordance with the plans, programs, practices
and policies described in Section 4 (b) (iv) of the Agreement if the
Executive's employment has not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies and their
families, provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility.
(iii) the Company shall, at its sole expense as incurred, provide
the Executive with out placement services the scope and provider of which
shall be selected by the Executive in his sole discretion; and
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be
9
paid or provided or which the Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
(b) DEATH. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum
in cash within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this
Section 6 (b) shall include, without limitation, and the Executive's estate
and/or beneficiaries shall be entitled to receive, benefits at least equal to
the most favorable benefits provided by the Company and affiliated companies
to the estates and beneficiaries of peer executives of the Company and such
affiliated companies under such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other peer
executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of Executive's death with respect to other peer executive of the Company
and its affiliated companies and their beneficiaries.
(c) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision
of Other Benefits. Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and
its affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
generally with respect to other peer executives of the Company and its
affiliated companies and their families.
(d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay
10
to the Executive (x) his Annual Base Salary through the Date of Termination,
(y) the amount of any compensation previously deferred by the Executive, and
(z) Other Benefits, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates employment during the Employment Period,
excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits. In such
case, timely payment or provision of Other Benefits. In such case, all
Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor, subject to
Section 12 (f), shall anything herein limit or otherwise affect such rights
as the Executive may have under any contract or agreement with the Company or
any of its affiliated companies. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any
of its affiliated companies at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
8. FULL SETTLEMENT. The Company's obligation to make the payment
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
the Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and
such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f) (2) (A) of the Internal Revenue Code of 1986,
as amended (the "Code").
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or
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otherwise, but determined without regard to any additional payments required
under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred
to as the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto)
and Excise tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Notwithstanding the foregoing provisions of this Section 9 (a), if
it shall be determined that the Executive is entitled to a Gross-Up Payment,
but that the Payments do not exceed 110% of the greatest amount (the "Reduced
Amount") that could be paid to the Executive such that the receipt of
Payments would not give rise to any Excise Tax, then no Gross-Up Payment
shall be made to the Executive and the Payments, in the aggregate, shall be
reduced to the Reduced Amount.
(b) Subject to the provisions of Section 9 (c), all determinations
required to be made under this Section 9, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by KPMG Peat Marwick or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9 (c) and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive.
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(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company.
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 9 (c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax claimed and ▇▇▇
for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim and ▇▇▇ for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest
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or penalties with respect thereto) imposed with respect to such advance or
with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9 (c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
the Company's complying with the requirements of Section 9 (c) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 9 (c),
a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
10. CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representative of the
Executive in violation of this Agreement). After termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 10 constitute a
basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
11. SUCCESSORS. (a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representative.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
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(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
12. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO THE EXECUTIVE: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IF TO THE COMPANY: City National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5 (c)
15
(l)-(v) of this Agreement, shall not be deemed to be a waiver of such
provision or right or any other provision or right of the Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which
case the Executive shall have no further rights under this Agreement. From
and after the Effective Date this Agreement shall supersede any other
agreement between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CITY NATIONAL CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
SVP and General Counsel
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