<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1995 Commission File Number 1-10521
CITY NATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2568550
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 North Roxbury Drive, Beverly Hills, California 90210
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 888-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO
--------- ----------
Number of shares of common stock outstanding at April 28, 1995: 45,349,252
This Form 10-Q contains 50 pages.
<PAGE>
CITY NATIONAL CORPORATION
Consolidated Balance Sheet
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
--------- ------------ ---------
(Dollars in thousands)
<S> <C> <C> <C>
Cash and due from banks...................................... $ 240,609 $ 298,715 $ 238,255
Interest-bearing deposits in other banks..................... 686 674 637
Federal funds sold and securities purchased under
resale agreements.......................................... 135,000 296,966 215,000
Investment securities (market values $609,684, $625,425
and $765,593 at March 31, 1995, December 31, 1994 and
March 31, 1994, respectively).............................. 628,872 659,013 781,356
Securities available for sale (cost $104,512, $96,124 and
$92,814 at March 31, 1995, December 31, 1994 and
March 31, 1994, respectively).............................. 101,238 90,422 92,186
Trading account securities................................... 26,716 25,531 15,881
Loans........................................................ 1,625,569 1,643,918 1,532,865
Less allowance for credit losses............................. 108,358 105,343 111,461
---------- ---------- ----------
Net Loans.................................................. 1,517,211 1,538,575 1,421,404
Leveraged leases............................................. 9,204 9,856 10,059
Premises and equipment, net.................................. 20,677 19,231 18,947
Customers' acceptance liability.............................. 2,706 5,104 4,279
Other real estate............................................ 5,042 4,726 195
Deferred tax asset........................................... 29,925 28,250 21,345
Assets held for accelerated disposition...................... -- -- 2,779
Other assets................................................. 30,171 35,712 53,360
---------- ---------- ----------
Total assets............................................... $2,748,057 $3,012,775 $2,875,683
========== ========== ==========
</TABLE>
LIABILITIES
<TABLE>
<S> <C> <C> <C>
Demand deposits.............................................. $ 910,903 $1,151,709 $ 935,604
Interest checking deposits................................... 264,033 305,659 287,508
Money market accounts........................................ 614,603 669,940 745,298
Savings deposits............................................. 84,258 88,027 101,079
Time deposits - under $100,000............................... 74,295 77,657 92,824
Time deposits - $100,000 and over............................ 124,251 124,770 152,369
---------- ---------- ----------
Total deposits............................................. 2,072,343 2,417,762 2,314,682
Federal funds purchased and securities sold
Under repurchase agreements................................ 278,581 182,120 194,248
Other short-term borrowings.................................. 17,706 50,000 15,000
Mortgages payable............................................ -- -- 7,284
Other liabilities............................................ 34,914 27,068 33,614
Acceptances outstanding...................................... 2,706 5,104 4,279
---------- ---------- ----------
Total liabilities.......................................... 2,406,250 2,682,054 2,569,107
---------- ---------- ----------
Commitments and contingencies
</TABLE>
SHAREHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C>
Preferred Stock authorized - 5,000,000, none outstanding..... -- -- --
Common stock - par value - $1.00; authorized - 75,000,000
Outstanding - 45,342,370, 45,192,678 and 45,065,730 at
March 31, 1995, December 31, 1994 and March 31, 1994,
respectively............................................... 45,342 45,193 45,066
Surplus...................................................... 264,675 263,609 262,681
Unrealized losses on securities available for sale........... (2,048) (3,564) (407)
Retained earnings (deficit).................................. 33,838 25,483 (764)
---------- ---------- ----------
Total shareholders' equity................................. 341,807 330,721 306,576
---------- ---------- ----------
Total liabilities and shareholders' equity................. $2,748,057 $3,012,775 $2,875,683
========== ========== ==========
</TABLE>
See accompanying Notes to the Unaudited Consolidated Financial Statements
2
<PAGE>
City National Corporation
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1995 1994
------- ------
(Dollars in thousands)
<S> <C> <C>
Interest income:
Interest and fees on loans ............................. $37,702 $29,499
Interest on federal funds sold and securities purchased
under resale agreements .............................. 1,201 1,653
Interest on investment securities:
U.S. Treasury and federal agency securities .......... 7,439 8,841
Municipal securities ................................. 287 158
Other securities ..................................... 543 243
Interest on securities available for sale............... 1,742 130
Interest on trading account securities.................. 456 214
------- -------
Total ................................................ 49,370 40,738
------- -------
Interest expense:
Interest on deposits ................................... 7,218 7,167
Interest on federal funds purchased and securities sold
under repurchase agreements .......................... 3,133 1,479
Interest on other short-term borrowings ................ 506 103
------- -------
Total ................................................ 10,857 8,749
------- -------
Net interest income .................................... 38,513 31,989
Provision for credit losses ............................ -- 3,000
------- -------
Net interest income after provision for credit losses .. 38,513 28,989
------- -------
Noninterest income:
Service charges on deposit accounts .................... 1,839 2,771
Trust fees ............................................. 1,638 1,810
Investment services income ............................ 1,984 1,459
Gain on sale of leverage leases ........................ -- 1,331
Gain (loss) on sales of securities .................... 344 --
All other income ....................................... 2,761 2,950
------- -------
Total noninterest income.............................. 8,566 10,321
------- -------
Noninterest expense:
Salaries and other employee benefits ................... 16,593 16,733
Net occupancy of premises .............................. 1,994 2,641
Data processing ........................................ 1,772 1,744
Professional ........................................... 1,737 1,586
FDIC insurance ......................................... 1,233 1,500
Office supplies ........................................ 1,070 1,196
Depreciation ........................................... 1,002 1,061
Promotion .............................................. 1,128 811
Equipment .............................................. 417 536
Other operating ........................................ 2,679 2,826
Other real estate expense (income)...................... 152 (4,526)
------- -------
Total noninterest expense............................. 29,777 26,108
------- -------
Income before taxes....................................... 17,302 13,202
Income taxes ............................................. 6,685 4,542
------- -------
Net income ............................................... $10,617 $8,660
======= =======
Net Income per share ..................................... $0.23 $0.19
======= =======
Shares used to compute net income per share .............. 45,843 45,292
======= =======
</TABLE>
See accompanying Notes to the Unaudited Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
City National Corporation
Consolidated Statement of Cash Flows
(Unaudited)
For the three months
ended March 31,
----------------------
1995 1994
----------------------
(Dollars in thousands)
<S> <C> <C>
Operating Activities
Net income $10,617 $ 8,660
Adjustment to net income:
Provision for credit losses -- 3,000
Gain on sales of ORE and Disposition Program -- (4,591)
Depreciation 1,002 1,061
Net (increase) decrease in trading securities (1,185) 23,884
Net increase in deferred tax benefits (1,675) (3,295)
Income tax refund 4,500 --
Other, net 6,766 7,510
--------- ---------
Net cash provided by operating activites 20,025 36,229
--------- ---------
Investing Activities
Net (increase) decrease in short-term investments (12) 12
Purchase of securities available for sale (10,552) (90,813)
Sales and maturities of securities available for sale 2,224 --
Maturities of investment securities 29,588 308,562
Purchase of investment securities -- (187,752)
Purchase of residential mortgage loans (43,210) --
Other loan originations and principal collections, net 58,594 86,824
Proceeds from sales of ORE and Disposition Program assets -- 7,368
Other, net 4,054 13,368
--------- --------
Net cash provided by investing activities 40,686 137,569
--------- --------
Financing Activities
Net increase (decrease) in federal funds purchased
and securities sold under repurchase agreements 96,461 (8,211)
Net decrease in deposits (345,419) (212,085)
Net decrease in short term borrowings (32,294) --
Proceeds from issuance of stock 1,216 229
Cash dividends paid (2,263) --
Other, net 1,516 20
--------- ---------
Net cash provided by (used in) financing activities (280,783) (220,047)
--------- ---------
Net increase (decrease) in cash and cash equivalents (220,072) (46,249)
Cash and cash equivalents at beginning of year 595,681 499,504
--------- ---------
Cash and cash equivalents at end of year $ 375,609 $ 453,255
--------- ---------
Supplemental disclosures of cash flow information:
Cash paid (received) during the quarter for:
Interest 10,709 8,852
Income taxes (4,500) --
</TABLE>
See accompanying Notes to the Unaudited Consolidated Financial Statements
4
<PAGE>
CITY NATIONAL CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
--------------------------
1995 1994
----------- -----------
(Dollars in thousands)
<S> <C> <C>
Common Stock
Balance, beginning of period........................ $ 45,193 $ 45,027
Stock options exercised............................. 149 39
-------- --------
Balance, end of period.............................. 45,342 45,066
-------- --------
Surplus
Balance, beginning of period........................ 263,609 262,471
Stock options exercised............................. 921 190
Tax benefit from stock options...................... 145 20
-------- --------
Balance, end of period.............................. 264,675 262,681
-------- --------
Unrealized net losses on securities available for sale
Balance, beginning of period........................ (3,564) --
Change during period................................ 1,516 (407)
-------- --------
Balance, end of period.............................. (2,048) (407)
-------- --------
Retained earnings
Balance, beginning of period........................ 25,483 (9,424)
Net income.......................................... 10,617 8,660
Dividends paid...................................... (2,262) --
-------- --------
Balance, end of period.............................. 33,838 (764)
-------- --------
Total shareholders' equity............................ $341,807 $306,576
======== ========
</TABLE>
See accompanying Notes to the Unaudited Consolidated Financial Statements
5
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF THE REGISTRANT
1. The results of operations reflect the interim adjustments, all of which
are of a normal recurring nature and which, in the opinion of management,
are necessary for a fair presentation of the results for such interim
periods. These unaudited consolidated financial statements should be
read in conjunction with the audited consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. Securities held for investment are classified as investment securities.
Because the Company has the ability and management has the intent to hold
investment securities until maturity, investment securities are stated at
cost, adjusted for amortization of premiums and accretion of discounts.
Trading account securities are stated at market value. Investments not
classified as trading securities nor as investment securities are
classified as securities available for sale and recorded at fair value.
Unrealized gains or losses on securities available for sale are excluded
from earnings and reported as a net amount after taxes, in a separate
component of shareholders' equity, until realized.
3. For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, federal funds sold and securities
purchased under resale agreements, and do not include items with original
maturities of over 90 days.
4. The Company adopted Statements of Financial Accounting Standards No. 114
"Accounting by Creditors for Impairment of a Loan" and No. 118
"Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosures" on January 1, 1995. The impact of the adoption was
immaterial to the results of operations and financial condition of the
Company. Certain loans previously recorded as in-substance foreclosures
included in other real estate and other assets have been reclassified as
nonaccrual loans. At March 31, 1995 the Company had identified impaired
loans that were carried at a net investment amount of $41.8 million. An
allowance for credit losses in the amount of $234 thousand was allocated
to these loans. The Company's policy is to record cash receipts received
on impaired loans first as reductions to principal and then to interest
income.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OVERVIEW
City National Corporation (the Corporation) is the holding company for
City National Bank (the Bank). Because the Bank constitutes substantially all
of the business of the Corporation, references to the Company in this Item 2
reflect the consolidated activities of the Corporation and the Bank.
RESULTS OF OPERATIONS
The Company recorded consolidated net income of $10.6 million, or $.23
per share, in the first quarter of 1995, compared to net income of $8.7 million,
or $.19 per share, in the first quarter of 1994, and net income of $9.9 million,
or $.21 per share, in the fourth quarter of 1994. Most of the change between
first quarters resulted from an increase in net interest income in the first
quarter of 1995 of $6.5 million and a decrease in the provision for credit
losses of $3.0 million. Returns on average assets and on average equity for the
first quarter of 1995 were 1.60% and 12.83%, respectively, compared with 1.23%
and 11.65% in the first quarter of 1994.
Taxable equivalent net interest income was $39.0 million in the first
quarter of 1995, up 21.0% from the year-ago quarter. The increase resulted
primarily from the increase in the net interest spread from 4.19% to 5.10%. The
net interest spread improved because the increases in the prime interest rate
during the last twelve months resulted in higher yields on loans, while rates
paid on interest bearing liabilities increased only slightly between quarters.
The net interest margin increased from 5.04% in 1994 to 6.36% in 1995. Due to an
anticipated leveling or decrease in the general interest rate environment during
the remainder of 1995 and a relatively constant level of earning assets,
management does not expect significant increases in quarterly net interest
income for the remainder of 1995 from first quarter 1995 levels.
Throughout the remainder of 1995 management expects interest earning
assets to increase slightly from the $2.458 billion average level for the first
quarter of 1995. Average loans increased $47.6 million (3.0%) between the first
quarters of 1995 and 1994 to $1.620 billion primarily due to purchases of
residential first mortgage loans. Total average taxable investment and
available for sale securities decreased $62.6 million (8.1%) between first
quarters because maturities of securities were used to meet the decrease in
deposits during the last twelve months. Total deposits decreased $224.8 million
(9.8%) between first quarters. The Company believes that
7
<PAGE>
much of the decrease is due to disintermediation in the general market place
typical of a higher interest rate environment.
The provision for credit losses was zero for the quarter ended March
31, 1995, compared with $3.0 million for the corresponding quarter in 1994.
Loans charged off in the first quarter of 1995 were $2.9 million, compared to
$8.9 million in the first quarter of 1994. Recoveries were $6.0 million in the
first quarter of 1995, compared to $6.9 million in the first quarter of 1994.
The provision for credit losses is expected to remain at reduced levels in 1995,
compared with those of the recent past, provided a deterioration of economic
conditions does not occur.
Non-interest income, excluding gains and losses on the sale of
securities and assets, totaled $8.2 million for the first quarter of 1995,
down $.8 million (8.5%) from a year earlier. Service charges on deposit
accounts decreased $.9 million (33.6%) for the quarter ended March 31, 1995 as
customers paid for services with higher earnings on deposit balances as a
result of increased interest rates. Investment services income increased $.5
million (36.0%) for the quarter ended March 31, 1995 due to higher fees and
new investment products offered to customers. Other income in 1994 included a
pre- tax gain of $1.3 million from the sale of two leveraged leases. All other
income decreased $.2 million (6.4%) for the quarter ended March 31, 1995,
because of lower foreign exchange, letter of credit and proof of deposit fees.
Management does not expect significant changes in non-interest income from
first quarter 1995 level during the remaining quarters of 1995.
Excluding net ORE results, non-interest expense totaled $29.6 million
in the first quarter of 1995, a decrease of $1.0 million (3.3%) from the first
quarter of 1994. Net occupancy of premises expenses decreased $.6 million
(24.5%) from the first quarter of 1994 due to the impact of the branch
consolidation program completed in the second quarter of 1994. Salaries and
other employee benefits decreased $.1 million (.8%) for the quarter ended March
31, 1995 from the first quarter of 1994. Higher costs associated with
performance incentives and contributions to the profit sharing plan were largely
offset by a decrease in salary expense due to the branch consolidation program.
Net ORE results in the first quarter of 1995 were an expense of $.2
million, compared to income of $4.5 million in the prior year, $3.5 million of
which was due to the completion of the Company's Accelerated Asset Disposition
Program.
8
<PAGE>
The first quarter 1995 effective tax rate increased to 38.6%, compared
to 34.4% for the first quarter of 1994 as California net operating loss
carryforwards were fully utilized in 1994.
9
<PAGE>
Net Interest Income Summary
The following table presents the components of net interest income for the
quarters ended March 31, 1995 and 1994.
<TABLE>
<CAPTION>
3-31-95 3-31-94
----------------------------- ------------------------------
Interest Average Interest Average
Average income/ interest Average income/ interest
Dollars in thousands - Balance expense (1) rate Balance expense (1) rate
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets (2)
Earning assets
Loans: (3)
Commercial loans $867,346 $20,479 9.58% $ 902,365 $16,482 7.41%
Real estate - construction 35,856 1,131 12.79 12,154 247 8.24
Real estate - mortgage 450,409 11,317 10.19 603,894 11,741 7.88
Residential first mortgages 230,973 4,129 7.25 10,473 143 5.54
Installment loans 34,929 894 10.38 43,047 1,008 9.50
---------- ------- ----- ---------- ------- -----
Total loans 1,619,513 37,950 9.40 1,571,933 29,621 7.64
---------- ------- ----- ---------- ------- -----
Due from banks-interest bearing 683 3 1.78 650 5 3.12
State and municipal investment securities 25,723 446 7.03 11,117 246 8.97
Taxable investment securities 616,944 7,979 5.25 759,141 9,084 4.85
Securities available for sale 92,813 1,742 7.61 13,220 130 3.99
Federal funds sold and securities
purchased under resale agreements 74,376 1,201 6.55 208,419 1,648 3.21
Trading account securities 28,243 502 7.21 26,160 230 3.55
---------- ------- ----- ---------- ------- -----
Total earning assets 2,458,295 49,823 8.15 2,590,640 40,964 6.41
---------- ------- ----- ---------- ------- -----
Reserve for credit losses (107,432) (113,508)
Cash and due from banks 241,182 252,889
Other nonearning assets 95,930 126,092
---------- ----------
Total assets $2,687,975 $2,856,113
========== ==========
Liabilities and Shareholders' Equity
Noninterest-bearing deposits $ 879,699 -- -- $ 907,342 -- --
Interest-bearing deposits:
Interest checking accounts 274,232 654 0.97 292,246 696 0.97
Money market accounts 627,067 4,080 2.64 733,504 3,930 2.17
Savings deposits 85,188 413 1.97 102,350 493 1.95
Time deposits - under $100,00 76,188 762 4.06 95,372 847 3.60
Time deposits - $100,000 and over 121,732 1,309 4.36 158,052 1,201 3.08
---------- ------- ----- ---------- ------- -----
Total interest - bearing deposits 1,184,407 7,218 2.47 1,381,524 7,167 2.10
---------- ------- ----- ---------- ------- -----
Total deposits 2,064,106 2,288,866
Federal funds purchased and securities
sold under repurchase agreements 221,544 3,133 5.74 198,955 1,479 3.01
Other short-term borrowings 34,570 506 5.94 14,245 103 2.93
---------- ------- ----- ---------- ------- -----
Total interest - bearing liabilities 1,440,521 10,857 3.05 1,594,724 8,749 2.22
---------- ------- ----- ---------- ------- -----
Other liabilities 32,173 52,509
Shareholders' equity 335,582 301,538
---------- ----------
Total liabilities and shareholders'
equity $2,687,975 $2,856,113
========== ==========
Net interest spread 5.10 4.19
==== ====
Fully taxable equivalent net
interest income $38,966 $32,215
======= =======
and margin 6.36% 5.04%
</TABLE>
(1) Fully taxable equivalent basis
(2) Includes average nonaccrual loans of $61,503 and $65,452 for 1995 and
1994, respectively.
(3) Loan income includes loan fees of $1,742 and $1,085 for 1995 and 1994,
respectively.
10
<PAGE>
The following tables set forth, for the periods indicated, the changes in
interest earned and interest paid resulting from changes in volume and changes
in rates. Average balances in all categories in each reported period were
used in the volume computations. Average yields and rates in each reported
period were used in rate computations.
<TABLE>
<CAPTION>
Quarter Ended March 31 Quarter Ended March 31
1995 vs 1994 1994 vs 1993
------------------------------------- -------------------------------
Increase Increase
Dollars in thousands - (decrease) (decrease)
Fully taxable equivalent basis due to (1): Net due to (1): Net
---------------- increase --------------- increase
Volume Rate (decrease) Volume Rate (decrease)
------ ---- ---------- ------ ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Interest earned on:
Interest-bearing deposits
in other banks $ 0 $ (2) $ (2) $ (7) $ 2 $ (5)
Loans 921 7,408 8,329 (7,708) 952 (6,756)
Taxable investment securities (1,807) 702 (1,105) 4,773 (1,608) 3,165
Non-taxable investment securities 263 (63) 200 (337) 130 (207)
Securities available for sale 1,401 211 1,612 (178) (136) (314)
Trading account securities 19 253 272 (44) (2) (46)
Federal funds sold and
securities purchased
under resale agreements (1,482) 1,035 (447) (46) 92 46
------- ------ ------- ------- ------- -------
Total interest-earning
assets (685) 9,544 8,859 (3,547) (570) (4,117)
------- ------ ------- ------- ------- -------
Interest paid on:
Interest checking (42) 0 (42) 11 (333) (322)
Money market deposits (622) 772 150 (196) (625) (821)
Savings deposits (85) 5 (80) (18) (123) (141)
Other time deposits (504) 527 23 (808) (110) (918)
Short-term borrowings 372 1,685 2,057 (1,253) 82 (1,171)
------- ------ ------- ------- ------- -------
Total interest-bearing
liabilities (881) 2,989 2,108 (2,264) (1,109) (3,373)
------- ------ ------- ------- ------- -------
$ 196 $ 6,555 $ 6,751 $(1,283) $ 539 $ (744)
======= ====== ======== ======= ======= =======
</TABLE>
(1) The change in interest due to both rate and volume has been allocated to
change due to volume and rate in proportion to the relationship of the
absolute dollar amounts of the change in each.
11
<PAGE>
BALANCE SHEET ANALYSIS
LOAN PORTFOLIO
A comparative period-end loan table is presented below:
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
----------- ------------- -----------
(Dollars in thousands)
<S> <C> <C> <C>
Commercial $ 826,642 $ 906,417 $ 881,246
Real estate - construction 44,030 31,201 12,651
Real estate - mortgage 459,308 457,030 583,207
Residential first mortgage 260,502 212,595 13,655
Installment 35,087 36,675 42,106
---------- ---------- ----------
Total loans, gross 1,625,569 1,643,918 1,532,865
Less: Allowance for credit losses (108,358) (105,343) (111,461)
---------- ---------- ----------
Total loans, net $1,517,211 $1,538,575 $1,421,404
========== ========== ==========
</TABLE>
Gross loans at March 31, 1995 amounted to $1,626 million, up $93 million
(6.0%) from March 31, 1994. The decrease in commercial loans and real estate
mortgage resulted from loan payoffs in excess of new loans funded. However,
residential first mortgage loans increased $246.8 million between March 31, 1994
and 1995, primarily as a result of purchases of residential mortgages originated
by third parties.
12
<PAGE>
The following table presents information concerning nonaccrual loans and
ORE.
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
---------- ------------- ----------
(Dollars in thousands)
<S> <C> <C> <C>
Nonaccrual loans:
Real estate - mortgages $30,961 $35,534 $50,815
Real estate - construction - - -
Commercial 28,958 23,267 22,337
Installment - - -
------- ------- -------
Total 59,919 58,801 73,152
ORE 5,042 4,726 195
------- ------- -------
Total nonaccrual loans
and ORE $64,961 $63,527 $73,347
======= ======= =======
Restructured loans:
On accrual status $ 2,004 $ 2,061 $ 1,907
On nonaccrual status 7,041 7,043 -
------- ------- -------
Total $ 9,045 $ 9,104 $ 1,907
======= ======= =======
Ratio of nonaccrual loans
to total loans 3.69% 3.57% 4.77%
Ratio of nonaccrual loans and
ORE to total loans and ORE 3.98 3.85 4.78
Ratio of allowance for credit
losses to nonaccrual loans 180.84 179.15 152.37
</TABLE>
The adoption of SFAS No. 114, "Accounting by Creditors for Impairment of
a Loan," upon its January 1, 1995, effective date did not have a material impact
on the Company's results of operations or financial condition. The reduction in
nonperforming assets levels between March 31, 1994 and 1995 reflects the
Company's commitment to improving credit quality through initial credit review
and approval policies, and aggressive collection efforts when loans become
questionable.
13
<PAGE>
The table below summarizes the approximate changes in nonaccrual loans for the
quarters ended March 31, 1995 and March 31, 1994.
<TABLE>
<CAPTION>
Quarter ended
----------------------
March 31, March 31,
1995 1994
---------- ----------
(Dollars in millions)
<S> <C> <C>
Balance, beginning of period $58.8 $ 79.4
Loans placed on nonaccrual 11.5 19.0
Charge offs (1.2) (6.7)
Loans returned to accrual (0.5) (6.4)
Repayments (including interest
applied to principal) (8.7) (12.1)
----- ------
Balance, end of period $59.9 $ 73.2
===== ======
</TABLE>
At March 31, 1995, in addition to loans disclosed above as past due or
nonaccrual, management had also identified $4.0 million of potential problem
loans about which the ability of the borrowers to comply with the present loan
repayment terms in the future is questionable.
14
<PAGE>
The following table summarizes average loans outstanding and changes in
the allowance for credit losses for the periods presented:
<TABLE>
<CAPTION>
Quarter ended
-----------------------
March 31, March 31,
1995 1994
----------- ----------
(Dollars in millions)
<S> <C> <C>
Average amount of loans outstanding $1,619.5 $1,571.9
======== ========
Balance of allowance for credit losses,
beginning of period $ 105.3 $ 110.5
Loans charged off:
Commercial 2.3 5.3
Real estate loans - construction - -
Real estate loans - mortgage 0.6 3.4
Installment - 0.2
-------- --------
Total loans charged off 2.9 8.9
-------- --------
Less recoveries of loans previously
charged off:
Commercial 5.2 6.7
Real estate loans - construction - 0.1
Real estate loans - mortgage 0.6 -
Installment 0.2 0.1
-------- --------
Total recoveries 6.0 6.9
-------- --------
Net loans charged off (recovered) (3.1) 2.0
Provisions charged to operating
expense - 3.0
-------- --------
Balance, end of period $ 108.4 $ 111.5
======== ========
Ratio of net charge-offs to
average loans NM .51%
======== ========
Ratio of allowance for credit 6.67% 7.27%
losses to total loans ======== ========
</TABLE>
CONSOLIDATION CHARGE RESERVE
In March 1993, the Bank announced a consolidation plan to improve
efficiency and operational productivity in its branch network. To cover the
costs associated with this action, the Bank recorded a consolidation charge of
$12.0 million in the fourth quarter of 1993. At March 31, 1995, the balance
remaining in the consolidation reserve was $6.7 million. The Bank is continuing
to negotiate settlements of lease commitments and believes the reserve balance
at March 31, 1995 is adequate to cover these lease liabilities and the remaining
expenses expected to be incurred as part of the consolidation program.
15
<PAGE>
CAPITAL ADEQUACY REQUIREMENTS
As of March 31, 1995, the Company had a ratio of Tier 1 capital to risk-
weighted assets (Tier 1 risk-based capital ratio) of 19.32%, a ratio of total
capital to risk weighted assets (total risk-based capital ratio) of 20.63%, and
a ratio of Tier 1 capital to average adjusted total assets (Tier 1 leverage
ratio) of 12.82%, while the Bank had a Tier 1 risk-based capital ratio of
18.22%, a total risk-based capital ratio of 19.53% and a Tier 1 leverage ratio
of 12.08%.
The Corporation paid its first dividend of $.05 per share of common stock
in the fourth quarter of 1994 since suspending payment of dividends in August,
1991. A dividend of $.05 per share for the first quarter of 1995 was paid on
February 16, 1995. On April 18, 1995, the Board of Directors of City National
Corporation approved an increase in the Company's quarterly common stock
dividend by 40% to $.07 per share payable on May 9, 1995 to shareholders of
record on April 28, 1995.
On May 3, 1995, the Corporation announced that the Board of Directors has
authorized the purchase of up to 5%, or 2.28 million shares, of the
Corporation's common stock from time to time in open market transactions.
LIQUIDITY
The Company's liquidity continues to be strong. Average core deposits
comprised 83.7% of total funding in the first quarter of 1995, compared to 85.2%
in the first quarter of 1994.
At March 31, 1995, investment securities maturing within one year
amounted to $125.0 million, and securities available for sale amounted to $101.2
million. Maturing loans also provide liquidity, and $.7 billion of the Bank's
loans are scheduled to mature in the next twelve months.
The following table shows that the Company's positive interest rate
sensitivity gap increased slightly from $962.4 million at March 31, 1994 to
$998.9 million at March 31, 1995. The Company's asset sensitive position in the
period of rising interest rates has had a positive effect on net interest
income. If interest rates decline or interest paid on liabilities increases
faster than rates earned on assets, net interest income could be negatively
impacted. The Company, through the use of either on balance sheet or off
balance sheet financial instruments, has the ability to manage the risk to net
interest income posed by certain changes in market interest rates.
Consequently, while the interest rate sensitivity gap is a useful measure and
contributes towards effective asset and liability management, it is difficult to
predict the net interest margin based solely on that measure.
16
<PAGE>
Interest Rate Sensitivity Management
At March 31, 1995 and 1994, the Company's distribution of rate-sensitive
assets and liabilities was as follows:
<TABLE>
<CAPTION>
Maturing or repricing in
---------------------------------------------------------
After 3 After 1 year
3 months months but but within After
or less within 1 year 5 years 5 years Total
-------- ------------- ---------- ------- -----
March 31, 1995 (Dollars in millions)
<S> <C> <C> <C> <C> <C>
Rate-sensitive assets:
Interest-bearing deposits in other banks........ $ 0.7 $ -- $ -- $ -- $ 0.7
Loans........................................... 914.9 378.5 163.2 107.5 1,564.1
Investment securities........................... 94.6 144.7 160.4 229.2 628.9
Securities available for sale................... -- -- 65.8 35.4 101.2
Trading account................................. 26.7 -- -- -- 26.7
Federal funds sold and securities
purchased with agreement to resell........... 135.0 -- -- -- 135.0
-------- ------ ------ ------ --------
Total rate-sensitive assets.................. 1,171.9 523.2 389.4 372.1 2,456.6
-------- ------ ------ ------ --------
Rate-sensitive liabilities: (1)
Interest checking.............................. 264.0 -- -- -- 264.0
Money market deposits.......................... 614.6 -- -- -- 614.6
Savings deposits............................... 84.2 -- -- -- 84.2
Other time deposits............................ 94.4 70.7 33.5 -- 198.6
Short-term borrowings.......................... 296.3 -- -- -- 296.3
-------- ------ ------ ------ --------
Total rate-sensitive liabilities............ 1,353.5 70.7 33.5 -- 1,457.7
-------- ------ ------ ------ --------
Interest rate sensitivity gap..................... $ (181.6) $452.5 $355.9 $372.1 $ 998.9
======== ====== ====== ====== ========
Cumulative interest rate sensitivity gap.......... $ (181.6) $270.9 $626.8 $998.9
======== ====== ====== ======
Cumulative ratio of rate-sensitive assets to
rate sensitive liabilities...................... 87% 119% 143% 169% 169%
======== ====== ====== ====== ========
</TABLE>
<TABLE>
<CAPTION>
Maturing or repricing in
---------------------------------------------------------
After 3 After 1 year
3 months months but but within After
or less within 1 year 5 years 5 years Total
-------- ------------- ---------- ------- -----
March 31, 1994 (Dollars in millions)
<S> <C> <C> <C> <C> <C>
Rate-sensitive assets:
Interest-bearing deposits in other banks........ $ 0.6 $ -- $ -- $ -- $ 0.6
Loans........................................... 1,194.6 92.6 149.3 23.4 1,459.9
Investment securities........................... 119.9 84.9 318.9 243.4 767.1
Securities available for sale................... -- -- 56.3 35.9 92.2
Trading account................................. 15.9 -- -- -- 15.9
Federal funds sold and securities
purchased with agreement to resell........... 215.0 -- -- -- 215.0
-------- ------ ------ ------ --------
Total rate-sensitive assets.................. 1,546.0 177.5 524.5 302.7 2,550.7
-------- ------ ------ ------ --------
Rate-sensitive liabilities: (1)
Interest checking.............................. 287.5 -- -- -- 287.5
Money market deposits.......................... 745.3 -- -- -- 745.3
Savings deposits............................... 101.1 -- -- -- 101.1
Other time deposits............................ 143.1 63.5 38.6 -- 245.2
Short-term borrowings.......................... 209.2 -- -- -- 209.2
-------- ------ ------ ------ --------
Total rate-sensitive liabilities............ 1,486.2 63.5 38.6 -- 1,588.3
-------- ------ ------ ------ --------
Interest rate sensitivity gap..................... $ 59.8 $114.0 $485.9 $302.7 $ 962.4
======== ====== ====== ====== ========
Cumulative interest rate sensitivity gap.......... $ 59.8 $173.8 $659.7 $962.4
======== ====== ====== ======
Cumulative ratio of rate-sensitive assets to
rate sensitive liabilities...................... 104% 111% 142% 161% 161%
======== ====== ====== ====== ========
(1) Customer deposits which are subject to immediate withdrawal are
presented as repricing within 3 months or less. The distribution of
other time deposits is based on scheduled maturities.
</TABLE>
17
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.2.2 Employment Agreement made as of March 21, 1995 by and between
Bram Goldsmith and City National Bank (Exhibit A to Employment
Agreement is incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991 and by reference to Exhibit 10.3.1 to this
Quarterly Report on Form 10-Q).
10.3.1 Fifth Amendment to Split Dollar Life Insurance Agreement
Collateral Assignment Plan dated as of May 5, 1995.
10.20 Purchase and Sale Agreement and Escrow Instructions dated
March 1995 by and between Weddington Investment Partnership
and City National Bank for purchase of the property located
at 12515 Ventura Boulevard, Studio City, California.
27. Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITY NATIONAL CORPORATION
-------------------------
(Registrant)
DATE: May 12, 1995 /s/ Frank P. Pekny
------------------- -------------------
FRANK P. PEKNY
Executive Vice President
and Treasurer
18
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
- ----------- ------- --------
10.2.2 Employment Agreement made as of March 21, 1995, by and
between Bram Goldsmith and City National Bank..................20
10.3.1 Fifth Amendment to Split Dollar Life Insurance Agreement
Collateral Assignment Plan dated as of May 15, 1995 between
The Goldsmith 1980 Insurance Trust and City National Bank......31
10.20 Purchase and Sale Agreement and Escrow Instructions dated
March 2, 1995, by and between Weddington Investment Partnership
and City National Bank for purchase of property located at
12515 Ventura Boulevard, Studio City, California...............33
27 Financial Data Schedule (EDGAR Only)
19
<PAGE>
EXHIBIT 10.2.2
Employment Agreement made as of March 21, 1995, by and
between Bram Goldsmith and City National Bank
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is made as of the 21st day of March, 1995 by
---- -----
and between BRAM GOLDSMITH ("Goldsmith") and CITY NATIONAL BANK, a National
Bank ("CNB").
I. Employment. CNB hereby employs Goldsmith, and Goldsmith hereby
----------
accepts employment, under the terms and conditions hereafter set forth.
II. Duties. Goldsmith shall be employed as the Chairman of the Board
------
and Chief Executive Officer of CNB and his duties shall be consistent with
such office and position. Substantially all of Goldsmith's duties shall be
performed in Los Angeles and Beverly Hills, California and unless mutually
agreed upon by Goldsmith and CNB, Goldsmith shall be headquartered in Beverly
Hills, California.
III. Term. Subject to the provisions for termination as hereinafter
----
provided, the term of this Agreement shall be deemed to have commenced on May
15, 1995 and shall terminate three (3) years thereafter.
IV. Annual Compensation. In addition to fringe benefits and
-------------------
reimbursement of expenses consistent with Goldsmith's duties and position, CNB
shall pay Goldsmith as annual compensation, payable in equal semimonthly
payments, the sum of Five Hundred Forty Thousand Dollars ($540,000) during the
term hereof.
V. Incentive Bonus. Goldsmith shall be paid an annual incentive bonus,
---------------
provided however, that the amount of such incentive bonus for any year in
terms of a percentage of
1
<PAGE>
Goldsmith's then annual salary shall be no less than the percentage of annual
salary paid as a bonus to any other member of executive management of CNB.
For the purpose of determining the amount of bonus to be paid Goldsmith for
any calendar year, his then annual salary shall be an amount equal to twenty-
four times the semimonthly salary paid to Goldsmith (exclusive of any
incentive bonus) for the calendar year in question.
VI. Life Insurance. CNB has provided Goldsmith with a whole life
--------------
insurance policy on the joint lives of Goldsmith and Mrs. Elaine Goldsmith in
an initial insured amount of Seven Million Dollars ($7,000,000), the premium
for which was fully paid in 1990. Such life insurance policy is owned by the
Goldsmith l980 Life Insurance Trust ("Trust"). Such life insurance policy or
the proceeds thereof, and possession of the policy and all rights therein,
including the right to designate the beneficiary, shall be vested completely
in the Trust; provided however, that CNB shall be entitled to receive from the
proceeds of such policy a sum equal to the aggregate amount of premiums,
without interest, paid by CNB on account of such policy pursuant to the terms
of the Split Dollar Life Insurance Agreement, as amended, and attached hereto
marked Exhibit A.
VII. Extent of Service. Goldsmith shall devote his time, attention and
-----------------
energies to the business of CNB and shall not, during the term of this
Agreement, be engaged in any other activity which will interfere with the
performance of his duties hereunder. Time expended by Goldsmith on
philanthropic activities and in connection with real estate investments shall
be
2
<PAGE>
deemed not to interfere with the performance of his duties hereunder; provided
however, that during the term thereof, Goldsmith shall not become an active
participant (as opposed to a passive investor or consultant) in any real
estate investment or venture in which he does not presently have a direct or
indirect interest.
VIII. Termination of Employment.
-------------------------
A. Termination by CNB for Good Cause. CNB may terminate the
---------------------------------
employment of Goldsmith for "good cause" by written notice to Goldsmith. 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 CNB, or (iv) breach of any material provision of
this Agreement. In the event the employment of Goldsmith is terminated
pursuant to this subparagraph 8(a), CNB shall have no further liability to
Goldsmith other than for compensation accrued but not yet paid.
In the event CNB contends that it has good cause to terminate
Goldsmith pursuant to clause (iii) or (iv) of this subparagraph 8(a), CNB
shall provide Goldsmith with written notice specifying in reasonable detail
the services or matters which it contends Goldsmith has not been adequately
performing, or the material provisions of this Agreement of which Goldsmith is
in violation, why CNB has good cause to terminate this Agreement, and what
Goldsmith should do to adequately perform his obligations hereunder. If
within thirty (30) days of receipt of
3
<PAGE>
the notice Goldsmith performs the required services or modifies his
performance to correct the matters complained of, Goldsmith's breach will be
deemed cured, and Goldsmith's employment shall not be terminated. However, if
the nature of the service not performed by Goldsmith or the 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 Goldsmith 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, CNB shall have the right to terminate this Agreement at the end of
the thirty (30) day period or extension thereof. It is understood that
Goldsmith's performance hereunder shall not be deemed unsatisfactory solely on
the basis of any economic performance of CNB because this performance will
depend in part on a variety of factors over which Goldsmith has little
control.
B. Termination by CNB Without Good Cause. CNB may terminate the
-------------------------------------
employment of Goldsmith without "good cause" (as defined in subparagraph 8(a)
above) at any time by written notice to Goldsmith. In the event the
employment of Goldsmith is terminated pursuant to this subparagraph 8(b), CNB
shall continue to be obligated to pay to and compensate Goldsmith pursuant to
paragraphs 4 and 5 of this Agreement for the full term of this Agreement.
Goldsmith shall have no duty to mitigate and CNB
4
<PAGE>
shall have no right to offset any other compensation paid to Goldsmith during
the applicable time period.
C. Termination by Death or Disability. CNB may terminate the
----------------------------------
employment of Goldsmith by written notice to Goldsmith if, during the term of
this Agreement, Goldsmith 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. The death of Goldsmith during the term of this Agreement shall
likewise operate to terminate the Agreement, except that Goldsmith's base
salary shall continue in effect and be paid to his wife, if she is then
living, and if she is not then living, to his Revocable Living Trust for a
period equal to the lesser of two years or the remaining term of this
Agreement. In the event the employment of Goldsmith is terminated by CNB
pursuant to this subparagraph 8(c) because of injury, physical or mental
illness, CNB shall continue to be obligated to pay Goldsmith while he is alive
his base salary and Incentive Bonus which Goldsmith would otherwise have been
entitled to receive pursuant to Paragraph 5 to the same extent and in the same
manner as if Goldsmith had remained employed by CNB for the full term of this
Agreement less any amount Goldsmith receives in lieu of salary while he is
alive during the term of this Agreement from private or government insurance
programs, exclusive of reimbursement of medical costs.
5
<PAGE>
D. Optional Termination by Goldsmith. Goldsmith may terminate
---------------------------------
this Agreement by written notice to CNB at any time after a change in control
of CNB should occur. A change of control shall be deemed to have occurred if
any "person" (as that term is used in Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934), other than Goldsmith or City National
Bank, Trustee of the Profit Sharing Retirement Plan of City National Bank
Employees, is or becomes the "beneficial owner" (as that term is defined by
the Securities and Exchange Commission for purposes of Section 13(d) of the
Securities and Exchange Act of 1934), directly or indirectly, of securities
of City National Corporation or its successors representing more than twenty
percent (20%) of the combined voting power of the outstanding securities of
City National Corporation, excluding any securities purchased directly from
Goldsmith. In the event the employment of Goldsmith is terminated pursuant to
the provisions of this subparagraph 8(d), CNB shall continue to be obligated
to pay to and compensate Goldsmith pursuant to paragraphs 4 and 5 of this
Agreement for the full term of this Agreement. Goldsmith shall have no duty
to mitigate and CNB shall have no right to offset other compensation paid to
Goldsmith during the applicable time period. Notwithstanding anything in this
subparagraph 8(d) to the contrary, in no event shall Goldsmith be paid in any
year any amount pursuant to this Agreement that constitutes an "excess
parachute payment" and is not deductible by CNB under Section 280G of the
Internal Revenue Code of 1986 (the "Code"), or any amendment thereto or any
subsequently enacted legislation of
6
<PAGE>
similar effect, and any amounts payable to Goldsmith pursuant to this
subparagraph 8(d) shall not exceed a sum equal to the product of 299% times an
amount equal to Goldsmith's "base amount" as defined in Section 280G of the
Code for the period consisting of the most recent five taxable years ending
before the date on which the change of control occurs.
IX. Entire Agreement; Modification; Waiver. This Agreement and the
--------------------------------------
agreements referred to in the Exhibits attached hereto constitute 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.
X. Separability Clause. The invalidity or unenforceability of any
-------------------
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof.
XI. 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.
XII. Notices. Any notice, request, or other communication required to be
-------
given pursuant to the provisions of this Agreement
7
<PAGE>
shall be in writing and shall be deemed to be duly given if delivered in
person or mailed by registered or certified United States mail, postage
prepaid, and mailed to the parties at the following addresses:
CITY NATIONAL BANK BRAM GOLDSMITH
------------------ --------------
City National Bank Mr. Bram Goldsmith
400 No. Roxbury Drive City National Bank
Beverly Hills, CA 90210 400 No. Roxbury Drive
Attn: Richard H. Sheehan, Jr. Beverly Hills, CA 90210
The parties hereto may change the above addresses from time to time by
giving notice thereof to each other in conformity with this Paragraph 12.
XIII. Non-Competition. Goldsmith agrees not to compete with CNB in
---------------
any form whatsoever. Without limiting the generality of the foregoing,
Goldsmith covenants and agrees with CNB that Goldsmith shall not, during or
after the term of this Agreement, disclose to anyone any confidential
information concerning the business or operations of CNB which Goldsmith 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 CNB in its business or
operations.
Goldsmith covenants and agrees that he shall not, during the term of
this Agreement, directly or indirectly (whether for compensation or
otherwise), alone or as an agent, principal, partner, shareholder or in any
other capacity, own, manage, operate, join, control or participate in the
ownership, manage-
8
<PAGE>
ment, operation or control of or furnish any capital to or be connected in
any manner with or provide any services for any business, operation or entity
which competes with the business or operations of CNB.
XIV. Construction. This Agreement shall be governed by, and construed
------------
in accordance with, the laws of the State of California.
XV. 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.
XVI. 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.
XVII. 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.
XVIII. Mandatory Arbitration. At the request of Goldsmith or City
---------------------
National Bank, 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 arbitrator in Los Angeles or Beverly Hills, California, and administered
by the American Arbitration
9
<PAGE>
Association ("AAA") in accordance with the Federal Arbitration Act, 9 U.S.C.
(S)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 as of the date first above written at Beverly Hills, California.
CITY NATIONAL BANK
By: /s/ Richard H. Sheehan, Jr.
-----------------------------
Richard H. Sheehan, Jr.,
Senior Vice President
/s/ Bram Goldsmith
--------------------
BRAM GOLDSMITH
10
<PAGE>
EXHIBIT 10.3.1
Fifth Amendment to Split Dollar Life Insurance Agreement
Collateral Assignment Plan dated as of May 15, 1995 between
The Goldsmith 1980 Insurance Trust and City National Bank
<PAGE>
FIFTH AMENDMENT TO SPLIT DOLLAR LIFE INSURANCE AGREEMENT
COLLATERAL ASSIGNMENT PLAN
This Amendment relates to that certain Split Dollar Life Insurance
Agreement made as of the 13th day of June, 1980 between CITY NATIONAL BANK and
THE GOLDSMITH 1980 INSURANCE TRUST (the "Agreement") and shall hereby amend
paragraph 7 thereof to provide that the Agreement shall terminate on May 15,
1998.
Except as amended by the foregoing, the Agreement shall remain in full
force and effect and without any other change.
This Agreement is made and agreed to as of this 15th day of May, 1995.
THE GOLDSMITH 1980 INSURANCE TRUST CITY NATIONAL BANK
By /s/ Bruce Leigh Goldsmith By /s/ Richard H. Sheehan, Jr.
------------------------------------------- -----------------------------
BRUCE LEIGH GOLDSMITH
Trustee Its Senior Vice President
-----------------------
By /s/ Russell D. Goldsmith
---------------------------------------------
RUSSELL DAVID GOLDSMITH
Trustee
CITY NATIONAL BANK
By /s/ Greg Custer
------------------------------------------------
GREG CUSTER Assistant Trust Officer
Trustee
<PAGE>
EXHIBIT 10.20
Purchase and Sale Agreement and Escrow Instructions dated March
2, 1995, by and between Weddington Investment Partnership and
City National Bank for purchase of property located at 12515
Ventura Boulevard, Studio City, California
<PAGE>
PURCHASE AND SALE AGREEMENT
AND
ESCROW INSTRUCTIONS
This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS is made and
entered into this 2nd day of March , 1995, by and between WEDDINGTON
------- ---------
INVESTMENT PARTNERSHIP, a California general partnership, ("Seller"), and CITY
NATIONAL BANK, a national banking association, ("Purchaser").
DECLARATIONS
1. Description of Property.
-----------------------
The property to be purchased by Purchaser from Seller is that certain
real property located at 12515 Ventura Boulevard, Studio City, California, as
more particularly described on Exhibit "A" attached hereto and incorporated
herein by this reference, hereinafter referred to as the "Property".
2. Purchase Price.
--------------
The purchase price (the "Purchase Price") for the Property shall be Five
Hundred Twenty-Five Thousand Dollars ($525,000.00), which purchase price shall
be payable in cash or other immediately available funds.
3. Payment of Purchase Price.
-------------------------
The Purchase Price shall be paid by Purchaser to Seller as follows:
(a) Deposit. Concurrent with the execution of this Agreement,
-------
Purchaser shall pay the sum of One Hundred Fifty Thousand Dollars
($150,000.00) to Seller outside of escrow, hereinafter referred to as the
"Deposit". The Deposit shall be invested in an interest-bearing account with
any interest accruing thereon to be credited toward the Purchase Price.
Escrow Holder shall not be concerned with the payment of the Deposit, however,
Escrow Holder shall credit the Deposit against the Purchase Price at the close
of escrow. Notwithstanding the foregoing, if the subject escrow does not
close, the Deposit shall be subject to the liquidated damages provisions of
Paragraph 12 of this Agreement.
(b) Final Deposit to Escrow. On or before the close of escrow,
-----------------------
Purchaser shall deposit in escrow the entire remaining balance of the Purchase
Price, plus all amounts due by Purchaser as closing costs pursuant to
Paragraph 6, and as otherwise required of Purchaser to close this transaction
made the subject of this Agreement.
<PAGE>
4. Escrow.
------
The transaction made the subject of this Agreement shall be consummated
through an escrow at Stewart Title, 505 North Brand Boulevard, Suite 1200,
Glendale, California 91203, which shall act as "Escrow Holder". Within three
(3) days after the date of execution of this Agreement by Purchaser and
Seller, Purchaser and Seller shall each deliver one (1) duly executed
counterpart of this Agreement to Escrow Holder with instructions that Escrow
Holder shall open the subject escrow. Escrow shall be deemed to be opened on
that date on which Escrow Holder first holds a fully-executed copy (or
counterparts) of this Agreement. This Agreement shall constitute escrow
instructions for Escrow Holder. Escrow Holder may, but shall not be obligated
to, prepare such additional or supplemental instructions as it deems
appropriate, including, but not limited to, provisions for its own benefit and
protection, and which Purchaser and Seller shall be obligated to execute, but
in no event shall any such instructions contradict or amend the terms of this
Agreement which shall govern and prevail. The close of escrow shall mean the
date when the grant deed is recorded conveying the Property from Seller to
Purchaser as provided herein, and the close of escrow shall occur thirty (30)
days from the date hereof, or earlier, upon the mutual written agreement of
Purchaser and Seller (hereinafter referred to as the "Closing Date").
5. Title to Property.
-----------------
(a) Title. Purchaser shall have the right to approve the status of
-----
title to the Property. Escrow Holder shall obtain and deliver to Purchaser
and Seller, at Seller's expense, a preliminary title report, (hereinafter
referred to as the "Preliminary Title Report"), dated not earlier than the
opening of escrow, from Stewart Title, (hereinafter referred to as the "Title
Company"), describing the Property, together with full copies of all documents
referred to in such Preliminary Title Report. Within ten (10) business days
following receipt of the Preliminary Title Report, including copies of all
documents referred to therein, Purchaser shall give written notice to Seller
(hereinafter referred to as the "Notice of Defect") specifying the matters
shown therein, if any, which are reasonably disapproved by Purchaser (each
such matter referred to herein as a "Disapproved Exception"). The failure of
Purchaser to give written notice of approval or disapproval of the Preliminary
Title Report or of any matter or matters shown therein within the ten (10) day
period of time provided therefore shall be deemed to constitute Purchaser's
approval of the Preliminary Title Report and of each of the matters shown
therein. If any Disapproved Exception cannot be cured prior to the close of
escrow, Purchaser shall have the election of (i) terminating the escrow or
(ii) accepting the Property subject to any such matter(s). If Purchaser so
elects to terminate the escrow, this Agreement shall be considered null and
void and Purchaser's Deposit shall be returned to Purchaser, without offset
2
<PAGE>
or deduction, except that Purchaser shall pay the cancellation charges
required to be paid to the Escrow Holder and Title Company and such amount may
be deducted from the Deposit. A Disapproved Exception specified in the Notice
of Defect shall be considered to have been cured if such defect shall be
removed from the record of the title of the Property or the Title Company
shall agree to issue its title insurance policy without the matter being
reflected as an exception therein.
(b) Title Policy. The Title Company must commit to issue, at the
------------
close of escrow, an ALTA policy of title insurance insuring fee ownership of
the Property in the name of Purchaser in the amount of the Purchase Price,
without deletions or exceptions other than current and non-delinquent taxes
and assessments, and those other items which have been approved or deemed
approved by Purchaser pursuant to subparagraph (a) of this Paragraph 5
(although it is understood that the title insurance policy will be delivered
after the close of escrow.)
6. Costs and Prorations.
--------------------
(a) Costs. Seller and Purchaser shall each pay their own attorneys'
-----
fees and costs incurred in this transaction and one-half (1/2) of all
recording charges, the escrow fees, the cost of the title report and title
insurance policy, and all miscellaneous charges and expenses; provided,
however, Purchaser shall pay the premium for the ALTA portion of the title
policy and the survey in connection therewith.
(b) Prorations. Escrow Holder shall prorate lease rental to close
----------
of escrow. Property taxes, premiums on insurance accepted by Purchaser, and
all other customary costs subject to proration between Seller and Purchaser as
of the close of escrow shall be the responsibility of Purchaser, pursuant to
Purchaser's existing obligation as Lessee of the Property pursuant to that
certain Lease, dated April 5, 1960, between Seller, as successor-in-interest
to Weddington Investment Company, Inc., and Purchaser, as successor-in-
interest to Studio City Bank (hereinafter, the "Lease").
7. Purchaser's Acknowledgements.
----------------------------
Purchaser acknowledges, represents and agrees that Purchaser is acquiring
the Property "as is" and that Seller is making absolutely no warranties or
representations, either express or implied, as to or with respect to the
Property, other than warranties of title resulting from the grant deed.
Purchaser acknowledges, represents and agrees that Purchaser has been leasing
the subject Property for several years and that Purchaser is fully acquainted
and familiar with the Property, including, but not limited to, the physical
and geological condition thereof and the fact that several gas and/or fuel
storage tanks were previously
3
<PAGE>
located at an adjacent site to the Property and that the ground water and soil
located on the Property was, and still remains, contaminated as a result
thereof. Seller makes absolutely no warranties, either expressed or implied,
with respect to the ground water and soil located on the Property.
8. Indemnification.
---------------
Purchaser hereby agrees to indemnify, defend and protect Seller, and to
hold Seller harmless, from and against, all claims, causes of action,
liabilities, losses, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and costs, (collectively, "Claims"),
incurred or suffered at any time by Seller relating to or in any way connected
with the physical condition of the Property and the improvements thereon,
including, but not limited to, (a) the presence on the Property of any
substance, materials or products which may be an environmental hazard or may
be determined to be a hazardous waste or substance, including, but not limited
to, asbestos, petroleum, polychlorinated biphenyls, flammable explosives,
radioactive materials, formaldehyde, radon gas, lead-based paint, or any
material containing or constituting the foregoing; and (b) any past, present
or future violation(s) of Environmental Laws (as hereinafter defined).
"Environmental Laws" shall mean any federal, state, or local law, statute,
ordinance, or regulation which imposes any liability or disability on any
owner, occupant, lender, mortgagee, or party in interest or which places any
restriction on the ownership, occupancy, transferability, or use of any real
property by reason of any presence or use of or occurrence regarding any
hazardous waste or substance, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") 42
U.S.C. Section 9601 et seq., as amended by Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), Pub. L. 99-499, 100 Stat. 1613, the
Resource, Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section
6901 et seq., the Clean Air Act ("CAA"), P.L. 84-159, as amended by Pub. L.
98-213, 42 U.S.C. Section 7401 et seq., The Federal Water Pollution Control
Act (as amended by the Clean Water Act of 1977 ("CWA")), 33 U.S.C. Section
1251 et seq., the Toxic Substances Control Act of 1976 ("TSCA") 15 U.S.C.
Section 2601 et seq., and any modifications, amendments, and successors to any
of the foregoing. Purchaser's indemnification of Seller shall encompass any
and all Claims incurred by Seller, whether made directly against Seller, or
otherwise, and notwithstanding that any such Claims may be related to events
which occurred prior to the Closing Date. The indemnification pursuant to this
Section 8 shall be continuing and shall survive the close of escrow.
4
<PAGE>
9. Representations and Warranties.
------------------------------
(a) Representations and Warranties of Seller.
----------------------------------------
Seller makes the following representations and warranties to
Purchaser:
(i) Seller has the legal power, right and authority to enter
into this Agreement and to consummate the transactions contemplated hereby;
and
(ii) This Agreement is valid and binding on Seller in
accordance with the terms hereof, and, to the best of Seller's knowledge, the
performance by Seller hereunder shall not cause a breach or violation of or a
default under, any statute, regulation, agreement, order, instrument, rule or
regulation by which Seller is bound or constrained.
(b) Representations and Warranties of Purchaser.
-------------------------------------------
Purchaser makes the following representations and warranties to
Seller:
(i) Purchaser has the legal power, right and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby; and
(ii) This Agreement is valid and binding on Purchaser in
accordance with the terms hereof, and, to the best of Purchaser's knowledge,
the performance by Purchaser hereunder shall not cause a breach or violation
of or a default under, any statute, regulation, agreement, order, instrument,
rule or regulation by which Purchaser is bound or constrained.
10. Deliveries Through Escrow.
-------------------------
(a) Seller's Deliveries. Seller shall deliver to Escrow Holder,
-------------------
prior to the Closing Date, the following documents and items, each of which
shall be fully executed and acknowledged where appropriate:
(i) Grant Deed. A grant deed in recordable form conveying fee
----------
title to the Property to Purchaser; and
(ii) Other Documents. All other documents reasonably
---------------
required by this Agreement or Escrow Holder to complete this transaction.
5
<PAGE>
(b) Purchaser's Deliveries. Purchaser shall deliver to Escrow
----------------------
Holder, prior to the Closing Date, the following payments, documents and
items, each of which shall be fully executed and acknowledged where
appropriate:
(i) Cash Payment. The cash payment provided for in Paragraph
------------
3(b); and
(ii) Closing Costs. An additional cash payment equal to
-------------
Purchaser's share of the costs incurred in connection with this escrow and
any net prorations charged to Purchaser; and
(iii) Other Documents. All other payments and documents
---------------
reasonably required by this Agreement or Escrow Holder to complete this
transaction.
11. Closing of Escrow.
-----------------
(a) Conditions to Close Escrow. Escrow Holder shall close the
--------------------------
escrow on he Closing Date provided that:
(i) Neither Seller nor Purchaser has previously notified
Escrow Holder in writing that the other party hereto is in breach under this
Agreement; and
(ii) Escrow Holder is in possession of all documents,
monies and other items which it needs to close the transaction contemplated
hereunder; and
(iii) Title Company has committed to issue its standard
ALTA Policy of Title Insurance, with liability in the amount of the Purchase
Price, insuring title to the Property vested in Purchaser, subject only to:
(A) General and special taxes and assessments not
then delinquent; and
(B) Those matters, conditions and exceptions set
forth in the Preliminary Title Report referred to in Paragraph 5, except as to
any of those matters, conditions and exceptions which are properly disapproved
of by Purchaser as provided in said Paragraph 5.
(b) Closing of Escrow. Escrow Holder shall close the escrow by
-----------------
taking the following actions on the Closing Date:
(i) Dating all undated documents as of the Closing Date; and
(ii) Recording the grant deed to the Property; and
6
<PAGE>
(iii) Delivering to Seller the cash portion of the Purchase
Price, after taking into account any charges attributable to Seller; and
(iv) Recording such other documents and taking such other
actions as may be necessary to close this escrow.
As soon as is practical after the Closing Date, Escrow Holder shall
deliver the title insurance policy to Purchaser.
12. Liquidated Damages.
------------------
THE PARTIES ACKNOWLEDGE THAT IT WOULD BE EXTREMELY DIFFICULT AND
IMPRACTICABLE, IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY
PRIOR TO SIGNING THIS AGREEMENT, THE AMOUNT OF DAMAGES WHICH WOULD BE SUFFERED
BY SELLER IN THE EVENT OF PURCHASER'S BREACH OR DEFAULT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT. ACCORDINGLY, IF PURCHASER BREACHES THIS AGREEMENT, OR
IF PURCHASER DEFAULTS IN ANY OF ITS OBLIGATIONS HEREUNDER, SELLER SHALL BE
ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF THE DEPOSIT, INCLUDING ALL
INTEREST ACCRUED THEREON. UPON PAYMENT OR TENDER OF SAID SUMS TO SELLER, THE
SAME SHALL CONSTITUTE THE FULL AND FINAL SATISFACTION OF ALL OF SELLER'S
RIGHTS AGAINST PURCHASER UNDER THIS AGREEMENT. AS USED IN THIS PROVISION THE
TERM "SELLER" MEANS WEDDINGTON INVESTMENT PARTNERSHIP AND THE TERM "PURCHASER"
MEANS CITY NATIONAL BANK, A NATIONAL BANKING ASSOCIATION.
Initial here:
/s/BWB
----------------
Seller: /s/GWMcC Purchaser: /s/RS
---------------- -------------
13. Tax Deferred Exchange.
---------------------
Purchaser shall accommodate Seller in a tax-deferred IRC Section 1031
exchange, provided that said exchange is at no cost (and no liability) to
Purchaser.
Instead of the sale of the Property by Seller to Purchaser, Seller shall
have the right (a) to locate one or more parcels of other real property for
the purpose of effecting a tax-deferred exchange under Section 1031 of the
Internal Revenue Code of the Property, and (b) to arrange for the terms of the
acquisition of such other real property from the owner(s) thereof.
7
<PAGE>
If Seller does locate such other real property or enters into an exchange
agreement with the owner(s) thereof or other third parties and notifies
Purchaser in writing of the same, then, at Seller's option:
(a) Purchaser shall enter into one or more written contracts with
the owner(s) of such other real property to purchase the same and to transfer
the ownership thereof to Seller in consideration of, and concurrent with, the
transfer of the Property to Purchaser; or
(b) Purchaser shall enter into one or more exchange agreements with
the owner(s) of such other real property or other third parties and, on the
acquisition of that other real property, or as otherwise therein provided,
those parties shall transfer the ownership of the Property to Purchaser in
accordance with the terms and provisions of sale set forth in this Agreement.
Purchaser agrees to accept title to the Property from such owner(s) or other
third parties.
In no event shall Purchaser be required to make a total payment for the
exchange property, including all costs and expenses of Purchaser with respect
thereto, in excess of the payment that would otherwise have been made by
Purchaser hereunder had Purchaser completed the purchase of the Property from
Seller without participating in an exchange.
Purchaser shall make a good faith diligent effort to acquire the exchange
property (the "Exchange Property") when Seller has located it and negotiated
its purchase and prepared all necessary documents, or to accept title to the
Property from the owner(s) of the exchange real property or other third
party(ies).
Seller shall be required to sell the Property to Purchaser and Purchaser
shall be required to purchase the Property from Seller for the price and upon
the terms set forth in this Agreement only if Seller is unable to locate
exchange property and Purchaser is unable to acquire it, or Seller is unable
to make arrangements for title to the Property to be transferred to Purchaser
through a third party, within the time period provided for in this Agreement
for the Close of Escrow as set forth above. If through no fault or lack of
performance by Purchaser the intended exchange is not completed on or before
the final close of escrow otherwise provided for in this Agreement, Seller
agrees to transfer title to the Property to Purchaser on that date under the
terms and provisions of sale otherwise set forth in this Agreement.
Purchaser shall execute such instruments and documents and take such
actions as may be deemed reasonably necessary to effect the exchange
transactions contemplated hereby. In the event of an exchange being made
instead of a purchase, Purchaser shall pay to Seller a sum equal to the
difference, if any, between the total
8
<PAGE>
payment that would otherwise be made to Seller for a purchase hereunder and
the total payment made to the owner(s) or third party(ies), including all of
Purchaser's costs, including, but not limited to, costs of escrow, title
insurance premiums, documentary transfer taxes, prorations and real estate
brokerage commissions, spent to acquire the other exchange properties, all of
which payments shall be approved by Seller before Purchaser enters into any
agreement or agreements of purchase with the owner(s) of the exchange
properties or any third party(ies). Seller shall prepare all documents
necessary for said exchange.
Seller agrees to hold Purchaser harmless from and against any and all
liability, damages or costs, including reasonable attorneys' fees, that may
arise from Purchaser's participation in the exchange. Without limiting the
generality of the foregoing, Seller hereby agrees to indemnify, defend and
protect Purchaser, and to hold Purchaser harmless, from and against, all
claims, causes of action, liabilities, losses, damages, costs and expenses,
including, without limitation, reasonable attorneys' fees and costs,
(collectively, "Claims"), incurred or suffered at any time by Purchaser
relating to or in any way connected with the Exchange Property, including, but
not limited to, (a) the presence on the Exchange Property of any substance,
materials or products which may be an environmental hazard or may be
determined to be a hazardous waste or substance, including, but not limited
to, asbestos, petroleum, polychlorinated biphenyls, flammable explosives,
radioactive materials, formaldehyde, radon gas, lead-based paint, or any
material containing or constituting the foregoing; and (b) any past, present
or future violation(s) of Environmental Laws (as defined in Paragraph 8) in
connection with the Exchange Property. The indemnification pursuant to this
Section 13 shall be continuing and shall survive the close of escrow.
14. Notices.
-------
No notice, request, demand, instruction or other document to be given
hereunder to any party shall be effective for any purpose unless personally
delivered to the party at the appropriate address set forth below (in which
event such notice shall be deemed effective only upon such delivery) or when
delivered by mail, sent by registered or certified mail, postage prepaid,
return receipt requested, as follows:
(a) If to Purchaser: CITY NATIONAL BANK
9696 Wilshire Boulevard
Beverly Hills, California 90210
Attn:Roberta Swan, Executive Vice
President & Senior Operations
Officer
9
<PAGE>
with a copy to: CITY NATIONAL BANK
Legal Department
400 North Roxbury Drive, 5th Floor
Beverly Hills, California 90210
Attn: General Counsel
(b) If to Seller: WEDDINGTON INVESTMENT PARTNERSHIP
11222 Weddington Street
North Hollywood, CA 91601
Attn: Guy Weddington McCreary
with a copy to: Anderson, Ablon, Lewis & Gale
Suite 2000
3435 Wilshire Blvd.
Los Angeles, CA 90010
Attn: Robert E. Lewis, Esq.
A copy of any notice given prior to the close of escrow shall also be
given to Escrow Holder at its address as set forth in Paragraph 4, and shall
refer to Escrow Holder's subject escrow number.
Notices mailed as hereinabove provided shall be deemed to have been given
forty-eight (48) hours after the deposit of same in any United States Post
Office mailbox in the state to which the notice is addressed, or seventy-two
(72) hours after deposit in any such post office box other than in the state
to which the notice is addressed. Notice shall not be deemed given unless and
until notice shall be deemed given to all addressees to whom notice must be
sent. The address and addressees, for the purpose of this Paragraph 14, may
be changed by the giving of written notice of such change in the manner herein
provided for the giving of notice. Unless and until such written notice is
deemed received, the last addresses and addressees stated by written notice,
or provided herein if no written notice of change has been sent or received,
shall be deemed to continue in effect for all purposes hereunder.
15. DOT Application.
---------------
Concurrent with the execution of this Agreement by Seller and Purchaser,
Seller shall execute and deliver to Purchaser that certain Los Angeles
Department of Transportation Application (the "DOT Application") regarding
the Ventura/Cahuenga Boulevard Corridor Specific Plan Ordinance Number
166,560, a copy of which is attached hereto as Exhibit "B". Notwithstanding
the foregoing, in the event that the transaction made the subject of this
Agreement should not close for any reason whatsoever by the Closing Date, then
the parties hereto agree that Seller may take any or all
10
<PAGE>
actions that it may so desire in order to rescind and cancel the DOT
Application, and that at Seller's request, Purchaser shall also take any and
all actions as reasonably requested by Seller in order to cancel or rescind
said DOT Application. The parties hereto further acknowledge and agree that,
provided escrow has not closed, Seller's execution of the DOT Application
shall not constitute a waiver by Seller of Seller's right to assert that
Purchaser has breached the above-referenced Lease, dated April 5, 1960,
between Seller, as successor-in-interest to Weddington Investment Company,
Inc., and Purchaser, as successor-in-interest to Studio City Bank. If escrow
shall close, the parties hereby agree that each party hereby releases and
forever discharges the other party for any claim or liability in connection
with the above-referenced Lease, and all issues related thereto.
16. Assignment.
----------
City National Bank shall have the right to assign its rights and
obligations under this Agreement to any wholly-owned subsidiary thereof;
provided, however, City National Bank shall continue to be and shall remain
fully liable for its obligations under this Agreement. References in this
Agreement to Purchaser shall be deemed to include any such subsidiary of
Purchaser to which Purchaser may have assigned its rights and obligations
hereunder.
17. Commissions.
-----------
Each party hereto expressly represents and warrants to each other party
hereto, that no broker, salesman, finder or other person or entity has been
engaged by it in connection with the transactions contemplated by this
Agreement, or to its knowledge is in any way connected with this transaction;
and, in the event of any claim for any broker's, salesman's or finder's fee or
other such fees or commissions in connection with the negotiation, execution
or consummation of this Agreement, or of any of the transactions contemplated
hereby, each party hereto shall indemnify, save harmless and defend each and
every other party to this Agreement from and against any such claim if it
shall be based on any statement, representation or agreement shown to have
been made by such party.
18. Miscellaneous Provisions.
------------------------
(a) Time. It is agreed that time is of the essence in this
----
Agreement.
11
<PAGE>
(b) Attorneys' Fees. If legal action is commenced to enforce or to
---------------
declare the effect of any provision of this Agreement, the court as part of
its judgment shall award reasonable attorneys' fees (including reasonable
attorneys' fees for in-house counsel) and costs to the prevailing party.
(c) No Waiver. The waiver by one party of the performance of any
---------
covenant, condition or promise of the other party shall not invalidate this
Agreement nor shall it be considered to be a waiver by such party of any other
covenant, condition or promise hereunder of such other party. The waiver by
one party of the time for the other party to perform any act shall not
constitute a waiver of the time for such other party to perform any other act
or an identical act required to be performed at a later time.
(d) Construction. As used in this Agreement, the masculine, feminine or
------------
neuter genders and the singular or plural numbers shall each be deemed to
include the other(s) whenever the context so indicates. This Agreement shall
be construed as a whole and in accordance with its fair meaning, the captions
being for the convenience of the parties only and not intended to describe or
define the provisions in the portions of the Agreement to which they pertain.
(e) Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties respecting the matters herein set forth and supersedes all
prior offers, negotiations and agreements between the parties hereto with
respect to such matters.
(f) Survival. Each of the agreements, warranties, and representations
--------
contained herein shall survive the close of escrow and the recording of the
grant deed conveying Seller's interest in the Property to Purchaser.
(g) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of the parties hereto.
(h) Computation of Periods. All periods of time referred to in this
----------------------
Agreement shall include all Saturdays, Sundays and state or national holidays,
unless the period of time specifies business days, provided that, if the date
or last date to perform any act or give any notice with respect to this
Agreement shall fall on a Saturday, Sunday or state or national holiday, such
act or notice may be timely performed or given on the next succeeding day
which is not a Saturday, Sunday or state or national holiday.
(i) Amendment. This Agreement may only be modified if the modification
---------
is in writing and is signed by the party against whom enforcement is sought.
12
<PAGE>
(j) Partial Invalidity. The invalidity or unenforceability of any
------------------
particular provision of this Agreement shall not affect the validity or
enforceability of the other provisions.
(k) Governing Law. This Agreement is to be governed by, and construed in
-------------
accordance with, the laws of the State of California.
(l) Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned have each executed this Agreement in
Los Angeles County, California, on the day and year first set forth above.
CITY NATIONAL BANK, WEDDINGTON INVESTMENT PARTNERSHIP,
a national banking a California general partnership
association
By: /s/ Guy Weddington McCreary
----------------------------
By: /s/ Roberta Swan GUY WEDDINGTON McCREARY,
-----------------
Name: Roberta Swan Managing General Partner
------------
Title: Exec Vice Pres
--------------
By: /s/ Barry Becker
-----------------
BARRY BECKER, General Partner
By:
Name:
Title:
AGREED AND ACCEPTED:
STEWART TITLE
By: /s/ Frances Butler
-------------------
Name: Frances Butler
--------------
Title: Vice President
--------------
Date: March 3, 1995
-------------
AIc:\docs\rms\wedcnb.psa(02/28/95)
13
<PAGE>
EXHIBIT "A"
REAL PROPERTY LEGAL DESCRIPTION
<PAGE>
EXHIBIT "A"
DESCRIPTION: THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
THOSE PORTIONS OF LOT 1 OF TRACT NO. 1368 AS PER MAP RECORDED IN BOOK 18 PAGE
76 OF MAPS AND LOT 214 OF TRACT NO. 1000 AS PER MAP RECORDED IN BOOK 19 PAGE
3, ET. SEQ., OF MAPS, IN THE CITY OF LOS ANGELES, BOTH RECORDED IN THE OFFICE
OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE WESTERLY LINE OF SAID LOT 1 AND THE
SOUTHWESTERLY LINE OF VALLEYHEART DRIVE AS DESCRIBED IN A DEED TO THE LOS
ANGELES FLOOD CONTROL DISTRICT IN BOOK D-35565 PAGE 321, OFFICIAL RECORDS OF
SAID COUNTY; THENCE SOUTH 0 DEGREES 02' 20" WEST ALONG SAID WESTERLY LINE
210.46 FEET TO THE CURVED NORTHERLY LINE OF VENTURA BOULEVARD AS SHOWN IN LOS
ANGELES CITY ENGINEER FIELD BOOK 14037 PAGE 4, A RADIAL LINE TO SAID POINT
BEARS SOUTH 19 DEGREES 06' 12" WEST, SAID CURVE IS CONCAVE SOUTHWESTERLY
HAVING A RADIUS OF 889.67 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH
A CENTRAL ANGLE OF 24 DEGREES 35' 01" AN ARC LENGTH OF 381.73 FEET TO THE
EASTERLY TERMINUS THEREOF; THENCE CONTINUING ALONG SAID NORTHERLY LINE AND
TANGENT TO LAST MENTIONED CURVE SOUTH 46 DEGREES 18' 47" EAST 291.72 FEET TO
THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF
1085.00 FEET; THENCE CONTINUING ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 25
DEGREES 23' 19" AN ARC LENGTH OF 480.78 FEET TO THE TRUE POINT OF BEGINNING
FOR THIS DESCRIPTION; THENCE CONTINUING ALONG SAID CURVE THROUGH A CENTRAL
ANGLE OF 14 DEGREES 37' 39" AN ARC LENGTH OF 277.00 FEET TO THE BEGINNING OF A
COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 20.00 FEET, SAID
CURVE IS ALSO TANGENT AT ITS NORTHERLY TERMINUS WITH A LINE THAT IS PARALLEL
WITH AND DISTANT 40.00 FEET WESTERLY FROM THE CENTER LINE OF WHITSETT AVENUE
AS IT NOW EXISTS; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL
ANGLE OF 93 DEGREES 41' 52" AN ARC LENGTH OF 32.70 FEET TO THE NORTHERLY
TERMINUS IN SAID PARALLEL LINE; THENCE NORTH 0 DEGREES 01' 37" WEST ALONG SAID
PARALLEL LINE 92.10 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ALONG SAID
CURVE THROUGH A CENTRAL ANGLE OF 82 DEGREES 23' 05" AN ARC LENGTH OF 28.77
FEET TO TERMINATE AT A POINT IN THE SAID SOUTHWESTERLY LINE OF VALLEYHEART
DRIVE, SAID POINT BEING THE BEGINNING OF A REVERSE CURVE, CONCAVE NORTHERLY
HAVING A RADIUS OF 501.55 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE AND
SOUTHWESTERLY LINE THROUGH A CENTRAL ANGLE OF 23 DEGREES 23' 48" AN ARC LENGTH
OF 204.81 FEET; THENCE SOUTH 29 DEGREES 34' 31" WEST 168.28 FEET TO THE TRUE
POINT OF BEGINNING.
<PAGE>
EXHIBIT "B"
DOT APPLICATION
<PAGE>
Los Angeles Department of Transportation
19040 Vanowen St.
Reseda, CA 91335
______________________________________________
Ventura/Cahuenga Boulevard Corridor Specific Plan
Ordinance Number 166,560
1. DOT Case Number ___________________ Application Fee $400.--
-------
2. Property Address 12515 VENTURA BLVD
------------------------
Community STUDIO CITY LOS ANGELES
------------------------
3. BUSINESS OWNER INFORMATION
Name & Company CITY NATIONAL BANK
------------------
Address 400 NORTH ROXBURY DRIVE BEVERLY HILLS CA 90210
----------------------------------------------
Phone # (310) 888-6454 ?
-------------------
4. PROJECT DESCRIPTION
Current use and square footage: ONE STORY BANK BUILDING
SUSTAINED MAJOR STRUCTURAL DAMAGE AND WAS REMOVED
Proposed use and square footage: REMOTE TRANSACTION FACILITY
WALK/UP DRIVE-UP STATION & ATM STATION 455 SQ. FT.
ANY FUTURE BUILDING PLAN ARE UNKNOWN AT THIS TIME.
5. SIGNATURE OF APPLICANT _____________________________________________
Date _____________________
By signing applicant hereby declares that the information presented is
true and accurate.
6. DOT USE ONLY - TRIP FEE CALCULATIONS, IF APPLICABLE
Exempt _____________ Fees due before signoff _______________
Received at DOT by _________________________________ Date __________________
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> MAR-31-1995
<CASH> 240,609
<INT-BEARING-DEPOSITS> 686
<FED-FUNDS-SOLD> 135,000
<TRADING-ASSETS> 26,716
<INVESTMENTS-HELD-FOR-SALE> 101,238
<INVESTMENTS-CARRYING> 628,872
<INVESTMENTS-MARKET> 609,684
<LOANS> 1,625,569
<ALLOWANCE> 108,358
<TOTAL-ASSETS> 2,748,057
<DEPOSITS> 2,072,343
<SHORT-TERM> 296,287
<LIABILITIES-OTHER> 37,620
<LONG-TERM> 0
<COMMON> 45,342
0
0
<OTHER-SE> 296,465
<TOTAL-LIABILITIES-AND-EQUITY> 2,748,057
<INTEREST-LOAN> 37,702
<INTEREST-INVEST> 10,011
<INTEREST-OTHER> 1,657
<INTEREST-TOTAL> 49,370
<INTEREST-DEPOSIT> 7,218
<INTEREST-EXPENSE> 10,857
<INTEREST-INCOME-NET> 38,513
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 344
<EXPENSE-OTHER> 29,777
<INCOME-PRETAX> 17,302
<INCOME-PRE-EXTRAORDINARY> 17,302
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,617
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
<YIELD-ACTUAL> 8.15%
<LOANS-NON> 59,919
<LOANS-PAST> 5,648
<LOANS-TROUBLED> 9,045
<LOANS-PROBLEM> 4,053
<ALLOWANCE-OPEN> 105,343
<CHARGE-OFFS> (2,966)
<RECOVERIES> 5,981
<ALLOWANCE-CLOSE> 108,358
<ALLOWANCE-DOMESTIC> 108,358
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
