Exhibit 4(j)


 


RIGHTS AGREEMENT


 


dated as of February 26, 1997


 


by and between


 


CITY NATIONAL CORPORATION


 


and


 


CONTINENTAL STOCK TRANSFER & TRUST COMPANY


 


as Rights Agent


 


TABLE OF CONTENTS 


 


	
  Section 1.

  	
  Certain Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Appointment of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Issuance of Right Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Form of Right Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Countersignature and Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6. 

  	
  Transfer, Split Up, Combination and Exchange
  of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
  Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Exercise of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Cancellation and Destruction of Right
  Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Reservation and Availability of Capital
  Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Securities Record
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11. 

  	
  Adjustment of
  Exercise Price, Number of Shares Issuable Upon Exercise of Rights or Number
  of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12. 

  	
  Certificate of
  Adjusted Exercise Price or Number of Shares Issuable Upon Exercise of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13. 

  	
  Consolidation,
  Merger or Sale or Transfer of Assets or Earning Power

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Fractional
  Rights and Fractional Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Rights of Action

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Agreement of
  Right Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 17. 

  	
  Right Holder and
  Right Certificate Holder Not Deemed a Stockholder

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Concerning the
  Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Merger or
  Consolidation or Change of Name of Rights Agent

  	
   

  



 


i





















 


	
  Section 20.

  	
  Duties of Rights
  Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Change of Rights
  Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Issuance of New
  Right Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Redemption of
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Exchange of
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Notice of Certain
  Events

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Supplements and Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Certain Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Benefits of this
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Descriptive
  Headings

  	
   

  



 


ii





















 


TABLE OF EXHIBITS


 


Exhibit A —
Form of Right Certificate


 


TABLE OF DEFINED TERMS 


 


	
  Term Defined

  	
   

  	
  Page

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjustment Shares

  	
   

  	
   

  	
  13

  	
   

  	
  11(a)(ii)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Affiliate

  	
   

  	
   

  	
  1

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
   

  	
  1

  	
   

  	
  Introduction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Associate

  	
   

  	
   

  	
  1

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Beneficial Owner

  	
   

  	
   

  	
  1

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Beneficially Own

  	
   

  	
   

  	
  1

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Day

  	
   

  	
   

  	
  2

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Close of Business

  	
   

  	
   

  	
  3

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing Price

  	
   

  	
   

  	
  3

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Common Share

  	
   

  	
   

  	
  1

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Common Share Equivalent

  	
   

  	
   

  	
  3

  	
   

  	
  11(a)(iii)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company (City National
  Corporation)

  	
   

  	
   

  	
  1

  	
   

  	
  Introduction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company (following a Section 13(a)
  Event)

  	
   

  	
   

  	
  18

  	
   

  	
  13(a)(iii)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Current Market Price

  	
   

  	
   

  	
  3

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distribution Date

  	
   

  	
   

  	
  4

  	
   

  	
  3(a)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exchange Act

  	
   

  	
   

  	
  4

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exchange Ratio

  	
   

  	
   

  	
  25

  	
   

  	
  24(a)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exempt Person

  	
   

  	
   

  	
  4

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price

  	
   

  	
   

  	
  4

  	
   

  	
  7(c)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date

  	
   

  	
   

  	
  4

  	
   

  	
  1

  	
   

  



 


iii





















 


TABLE OF DEFINED TERMS


(continued)


 


	
  Term Defined

  	
   

  	
  Page

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10% Ownership Date

  	
   

  	
   

  	
  4

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10% Stockholder

  	
   

  	
   

  	
  4

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NASDAQ

  	
   

  	
   

  	
  3

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Person

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Share

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Share Equivalent

  	
   

  	
   

  	
  5

  	
   

  	
  11(b)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Record Date

  	
   

  	
   

  	
  5

  	
   

  	
  Recital

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Redemption Date

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Redemption Price

  	
   

  	
   

  	
  5

  	
   

  	
  23(a)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Right

  	
   

  	
   

  	
  1

  	
   

  	
  Recital

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Right Certificate

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rights Expiration Date

  	
   

  	
   

  	
  5

  	
   

  	
  Introduction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rights Agent

  	
   

  	
   

  	
  1

  	
   

  	
  Introduction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11(a)(ii)
  Event

  	
   

  	
   

  	
  5

  	
   

  	
  11(a)(ii)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13(a) Event

  	
   

  	
   

  	
  5

  	
   

  	
  13(a)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Securities Act

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subsidiary

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surviving Person

  	
   

  	
   

  	
  17

  	
   

  	
  13(a)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trading Day

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unavailable Adjustment
  Shares

  	
   

  	
   

  	
  13

  	
   

  	
  11(a)(iii)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unavailable Exchange
  Shares

  	
   

  	
   

  	
  26

  	
   

  	
  24(c)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Voting Share

  	
   

  	
   

  	
  5

  	
   

  	
  1

  	
   

  



 


iv





















 


RIGHTS AGREEMENT


 


This Rights Agreement (the “Agreement”)
is made and entered into as of the 26th day of February, 1997 by and between
CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (the “Rights
Agent”).


 


WHEREAS, the Board of
Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each Common Share (as
hereinafter defined) of the Company outstanding on March 13, 1997 (the “Record
Date”), each Right representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions set forth herein, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Expiration Date (as such terms are hereinafter
defined).


 


NOW, THEREFORE, in
consideration of the premises and the mutual agreements set forth herein, the
parties hereto hereby agree as follows:


 


Section 1.
CERTAIN DEFINITIONS. For purposes of this Agreement, the following terms have
the meanings indicated:


 


“Affiliate” and “Associate”
shall have the respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act, as in effect on the date hereof.


 


A Person shall be deemed the
“Beneficial Owner” of and shall be deemed to “Beneficially Own” any securities:


 


(i) which such Person or any
of such Person’s Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of


Section 13(d) of the
Exchange Act and Rule 13d-3 promulgated under the Exchange Act, in each case as
in effect on the date hereof;


 


(ii) which such Person or
any of such Person’s Affiliates or Associates has the right to acquire (whether
such right is exercisable immediately, or only after the passage of time,
compliance with regulatory requirements, the fulfillment of a condition or
otherwise) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights (other than these Rights),
rights, warrants or options, or otherwise, PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities
tendered pursuant to a tender offer or exchange offer made by or on behalf of
such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange;


 


(iii) which such Person or
any such Person’s Affiliates or Associates has the right to vote, whether alone
or in concert with others, pursuant to any agreement, arrangement or
understanding, PROVIDED, HOWEVER, that a Person shall not be deemed the


 


Beneficial Owner of, or to
Beneficially Own, any security if the agreement, arrangement or understanding
to vote such security (A) arises solely from a revocable proxy given to such
Person or any of such Person’s Affiliates or Associates in response to a public
proxy solicitation made pursuant to and in accordance with the applicable rules
and regulations promulgated under the Exchange Act, and (B) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report);


 


(iv) which are Beneficially
Owned, directly or indirectly, by any other Person with which such Person or
any of such Person’s Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (other than voting
pursuant to a revocable proxy as described in the proviso to clause (iii) of
this definition of “Beneficial Owner”) or disposing of any securities of the
Company; and


 


(v) which, on any day on or
after the Distribution Date, evidence Rights that prior to such date were represented
by certificates for Common Shares that such Person Beneficially Owns on such
day.


 


Notwithstanding anything to
the contrary in this Section l(b), a Person engaged in business as an
underwriter of securities shall not be deemed to be the Beneficial Owner of, or
to Beneficially Own, any securities acquired through such Person’s
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.


 


“Business Day” shall mean
any day other than a Saturday, a Sunday or a day on which banking institutions
in the States of New York are authorized or obligated by law or executive order
to close.


 


“Close of Business” on any
given date shall mean 5:00 p.m., New York time, on such date; PROVIDED, HOWEVER,
that if such date is not a Business Day, it shall mean 5:00 p.m., New York
time, on the next succeeding Business Day.


 


“Closing Price” of a stock
or other security on any day shall be the last sale price, regular way, per
share of such stock or unit of such other security on such day or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such stock or other security is
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such stock or
other security is listed or admitted to trading or, if such stock or other
security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System (“NASDAQ”)
or such other system then in use or, if on any such date such stock or other
security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker that makes a
market in such stock or other security and that is selected by the Board of
Directors of the Company.


 


2





















 


“Common Share” shall mean
one share of the Common Stock, par value $1.00 per share, of the Company,
unless used with reference to a Person other than the Company, in which case it
shall mean one share of each class of stock of such Person having the right to
vote generally in the election of directors or, if such Person is a Subsidiary
of another Person, one Common Share of the Person that ultimately controls such
Person.


 


“Common Share Equivalent”
shall have the meaning ascribed to it in


Section 11(a)(iii)
hereof.


 


“Current Market Price” per
share of a stock or unit of any other security on any date shall mean the
average of the daily Closing Prices of such stock or other security for the 30
consecutive Trading Days through and including the Trading Day immediately
preceding the date in question; PROVIDED, HOWEVER, that if any event shall have
caused the Closing Price on any Trading Day during such 30-day period not to be
fully comparable with the Closing Price on the date in question (or, if no
Closing Price is available on the date in question, on the Trading Day
immediately preceding the date in question), then each such non-comparable
Closing Price so used shall be appropriately adjusted by the Board of Directors
in order to make the Closing Price on each Trading Day during the period used
for the determination of the Current Market Price fully comparable with the
Closing Price on such date in question (or, if applicable, the immediately
preceding Trading Day). “Current Market Price” per share of any stock or unit
of such other security that is not publicly held or so listed or traded, and “Current
Market Price” of any other property, shall mean the fair value per share of
such stock or unit of such other security, or the fair value of such other
property, respectively, as determined in good faith by the Board of Directors
of the Company based upon such appraisals or valuation reports of such
independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.


 


“Distribution Date” shall
have the meaning ascribed to it in Section 3 hereof.


 


“Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended.


 


“Exempt Person” shall mean
the Company, any wholly-owned Subsidiary of the Company, any employee benefit
plan of the Company or of a Subsidiary of the Company, and any Person holding
Voting Shares for or pursuant to the terms of any such employee benefit plan.


 


“Exercise Price” shall have
the meaning ascribed to it in Section 7(c) hereof.


 


“Expiration Date” shall mean
March 13, 2007.


 


“10% Ownership Date” shall
mean the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or a 10% Stockholder containing the facts
by virtue of which a Person has become a 10% Stockholder.


 


“10% Stockholder” shall mean
any Person that Beneficially Owns 10% or more of the Voting Shares of the
Company then outstanding; PROVIDED, HOWEVER, that the term “10% Stockholder”
shall not include: (i) an Exempt Person; (ii) any Person that would not


 


3





















 


otherwise be a 10%
Stockholder but for a reduction in the number of outstanding Voting Shares
resulting from a stock repurchase program or other similar plan of the Company
or from a self tender offer of the Company, which plan or tender offer
commenced on or after the date hereof; PROVIDED, HOWEVER, that the term “10%
Stockholder” shall include such Person from and after the first date upon which
(A) such Person, since the date of the commencement of such plan or tender
offer, shall have acquired Beneficial Ownership of, in the aggregate, a number
of Voting Shares of the Company equal to 1% or more of the Voting Shares of the
Company then outstanding and (B) such Person, together with all Affiliates and
Associates of such Person, shall Beneficially Own 10% or more of the Voting
Shares of the Company then outstanding; (iii) any Person that would not
otherwise be a 10% Stockholder but for its Beneficial Ownership of Rights or
(iv) any Person that is the Beneficial Owner of 10% or more of the outstanding
Common Shares as of February 26, 1997 unless or until such person shall
acquire, without the prior approval of the Board of Directors, Beneficial
Ownership of additional Common Shares and, following such acquisition, is the
Beneficial Owner of more than 24.9% of the Voting Shares of the Company then
outstanding. No Person shall be deemed to be a 10% Stockholder by reason of
clause (iv) of the preceding sentence solely because of an acquisition of
Beneficial Ownership of Common Shares: (i) by gift; (ii) as the result of the
death of a Person, pursuant to a will or the laws of descent, or as the result
of the provisions of any trust or partnership agreement; or (iii) upon the
exercise of any stock option granted by the Company to an employee, officer or
director. In calculating the percentage of the outstanding Voting Shares that
are Beneficially Owned by a Person for purposes of this definition, Voting
Shares that are Beneficially Owned by such Person shall be deemed outstanding,
and Voting Shares that are not Beneficially Owned by such Person and that are
subject to issuance upon the exercise or conversion of outstanding conversion
rights, exchange rights, rights, warrants or options shall not be deemed outstanding.
Any determination made by the Board of Directors of the Company as to whether
any Person is or is not a 10% Stockholder shall be conclusive and binding upon
all holders of Rights.


 


“Person” shall mean any
individual, firm, partnership, corporation, association, group (as such term is
used in Rule 13d-5 promulgated under the Exchange Act as in effect on the date
hereof) or other entity, and shall include any successor (by merger or
otherwise) of such entity.


 


“Preferred Share” shall mean
one share of the Series A Junior Participating Cumulative Preferred Stock, par
value $1.00 per share, of the Company, which shall have the rights and
preferences set forth in the form of Certificate of Designations attached to
the Agreement.


 


“Preferred Share Equivalent”
shall have the meaning ascribed to it in


Section 11(b) hereof.


 


“Record Date” shall have the
meaning ascribed to it in the recitals hereto.


 


“Redemption Date” shall mean
the date of the action of the Board of Directors of the Company authorizing and
directing the redemption of the Rights pursuant to Section 23(a) hereof or
the exchange of the Rights pursuant to Section 24(a) hereof.


 


“Redemption Price” shall
have the meaning ascribed to it in Section 23(a) hereof.


 


4





















 


“Right Certificate”, as that
term is used with respect to any period prior to the Distribution Date, shall
have the meaning ascribed to it in


Section 3(b) hereof,
and, as that term is used with respect to any period on or after the
Distribution Date, shall have the meaning ascribed to it in


Section 3(c) hereof.


 


“Rights Expiration Date”
shall mean the Expiration Date, except if there has been a Distribution Date,
then it shall mean the tenth anniversary of the Distribution Date.


 


“Section 11(a)(ii)
Event” shall have the meaning ascribed to it in


Section 11(a)(ii)
hereof.


 


“Section 13(a) Event”
shall have the meaning ascribed to it in Section 13(a) hereof.


 


“Securities Act” shall mean
the Securities Act of 1933, as amended.


 


“Subsidiary” of any Person
shall mean any corporation or other Person of which equity securities or equity
interests representing a majority of the voting power are owned, directly or
indirectly, or which is effectively controlled, by such Person.


 


“Trading Day” shall mean, as
to any stock or other security, a day on which the principal national
securities exchange on which such stock or other security is listed or admitted
to trading is open for the transaction of business or, if such stock or other
security is not listed or admitted to trading on any national securities
exchange, a Business Day.


 


“Voting Share” shall mean
(i) a Common Share of the Company and (ii) any other share of capital stock of
the Company entitled to vote generally in the election of directors or entitled
to vote together with the Common Shares in respect of any merger,
consolidation, sale of all or substantially all of the Company’s assets,
liquidation, dissolution or winding up. References in this Agreement to a
percentage or portion of the outstanding Voting Shares shall be deemed a
reference to the percentage or portion of the total votes entitled to be cast
by the holders of the outstanding Voting Shares.


 


Section 2.
APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights Agent to
act as agent for the Company and the holders of Rights in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.


 


Section 3.
ISSUANCE OF RIGHT CERTIFICATES.


 


(a) “Distribution Date”
shall mean the date, after the date hereof, that is the earliest of (i) the
tenth Business Day (or such later day as shall be designated by the Board of
Directors of the Company) following the date of the commencement of, or the
first public announcement of the intent of any Person, other than an Exempt
Person, to commence a tender offer or exchange offer, the consummation of which
would cause any Person to become a 10% Stockholder, (ii) the date of the first Section 11(a)(ii)
Event or (iii) the date of the first Section 13(a) Event.


 


(b) Until the Distribution
Date, (i) the Rights shall be represented by certificates for Common Shares
(all of which certificates for Common Shares shall be deemed to be Right
Certificates) and not by separate Right Certificates, (ii) the record holder of
the Common Shares


 


5





















 


represented by each of such
certificates shall be the record holder of the Rights represented thereby and
(iii) the Rights shall be transferable only in connection with the transfer of
Common Shares. Until the earliest of the Distribution Date, the Redemption Date
or the Expiration Date, the surrender for transfer of such certificates for Common
Shares shall also constitute the surrender for transfer of the Rights
represented thereby.


 


(c) As soon as practicable
after the Distribution Date, and after notification by the Company, the Rights
Agent shall send by first-class, postage-prepaid mail to each record holder of
Common Shares, as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate
substantially in the form of EXHIBIT A hereto representing one Right for each
Common Share so held. From and after the Distribution Date, the Rights shall be
represented solely by such Right Certificates and may only be transferred by
the transfer of such Right Certificates, and the holders of such Right
Certificates, as listed in the records of the Company or any transfer agent or
registrar for such Rights, shall be the record holders of such Rights.


 


(d) Certificates for Common
Shares issued at any time after the Record Date and prior to the earliest of
the Distribution Date, the Redemption Date or the Expiration Date, shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:


 


This certificate also
evidences and entitles the holder hereof to certain Rights as set forth in a
Rights Agreement dated as of February 26, 1997 by and between City
National Corporation and Continental Stock Transfer & Trust Company, as
Rights Agent (the “Rights Agreement”), as amended to date, the terms and
conditions of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of City National
Corporation. Under certain circumstances specified in the Rights Agreement,
such Rights will be represented by separate certificates and will no longer be
represented by this certificate. Under certain circumstances specified in the
Rights Agreement, Rights beneficially owned by certain persons may become null
and void. City National Corporation will mail to the record holder of this
certificate a copy of the Rights Agreement without charge promptly following
receipt of a written request therefor. As described in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) shall become null and void.


 


(e) Certificates for Common
Shares issued at any time on or after the Distribution Date and prior to the
earlier of the Redemption Date or the Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:


 


This certificate does not
represent any Right issued pursuant to the terms of a Rights Agreement dated as
of February 26, 1997 by and between the Corporation and Continental Stock
Transfer & Trust Company, as Rights Agent.


 


(f) In the event that at any
time on or after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section


13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the Company shall issue
any Common Shares pursuant


 


6





















 


to the exercise of
conversion rights, exchange rights, rights (other than Rights), warrants or
options that shall have been issued or granted prior to the earlier of the date
of the first Section 11(a)(ii) Event or the date of the first Section 13(a)
Event, then, unless the Board of Directors of the Company shall have provided
otherwise at the time of the issuance or grant of such conversion rights,
exchange rights, rights (other than Rights), warrants or options, the Rights
Agent shall, as soon as practicable after the date of such event, send by
first-class, postage-prepaid mail to the record holder of such Common Shares,
at the address of such holder as shown on the records of the Company, a Right
Certificate substantially in the form of EXHIBIT A hereto representing one
Right for each Common Share so issued.


 


(h) Notwithstanding the
foregoing provisions of this Section 3, the Rights Agent shall not send
any Right Certificate to any 10% Stockholder or any of its Affiliates or Associates
or to any Person if the Rights held by such Person are Beneficially Owned by a
10% Stockholder or any of its Affiliates or Associates. Any determination made
by the Board of Directors of the Company as to whether any Common Shares are or
were Beneficially Owned at any time by a 10% Stockholder or an Affiliate or
Associate of a 10% Stockholder shall be conclusive and binding upon all holders
of Rights.


 


Section 4.
FORM OF RIGHT CERTIFICATES. The Right Certificates and the form of assignment,
including certificate, and the form of election to purchase, including
certificate, printed on the reverse thereof, when, as and if issued, shall be
substantially the same as EXHIBIT A hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange upon which the Rights or the
securities of the Company issuable upon exercise of the Rights may from time to
time be listed, or to conform to usage. Subject to Section 22 hereof,
Right Certificates, whenever issued, that are issued in respect of Common
Shares that were issued and outstanding as of the Close of Business on the
Distribution Date, shall be dated as of the Distribution Date.


 


Section 5.
COUNTERSIGNATURE AND REGISTRATION.


 


(a) The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and may have affixed thereto the Company’s
seal or a facsimile thereof attested by its Secretary or any Assistant
Secretary, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates may nevertheless be countersigned
by the Rights Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be signed
on behalf of the Company by any person who at the actual date of such execution
shall be a proper officer of the Company to sign such Right Certificate, even
though such person was not such an officer at the date of the execution of this
Agreement.


 


7





















 


(b) Following the
Distribution Date, the Rights Agent shall keep or cause to be kept at its
principal offices books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of Right Certificates, the number of Rights represented on
its face by each Right Certificate and the date of each Right Certificate.


 


Section 6.
TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.


 


(a) Subject to the
provisions of Sections 6(c), 7(d) and 14 hereof, at any time after the Close of
Business on the Distribution Date, and so long as the Rights represented
thereby remain outstanding, any one or more Right Certificates may be
transferred, split-up, combined or exchanged for one or more Right Certificates
representing the same aggregate number of Rights as the Right Certificates
surrendered. Any registered holder desiring to transfer, split up, combine or
exchange one or more Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
with the form of assignment, including certificate, on the reverse side thereof
completed and duly executed, with signature guaranteed. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled thereto one or more
Right Certificates, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.


 


(b) Upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
them and, at the Company’s request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of such Right Certificate if mutilated, the
Company shall issue and deliver to the Rights Agent for delivery to the record
holder of such Right Certificate a new Right Certificate of like tenor in lieu
of such lost, stolen, destroyed or mutilated Right Certificate.


 


(c) Notwithstanding anything
to the contrary in this Section 6, the Rights Agent shall not countersign
and deliver a Right Certificate to any Person if such Right Certificate
represents, or would represent when held by such Person, Rights that had become
or would become null and void pursuant to  Section 7(d) hereof.


 


Section 7.
EXERCISE OF RIGHTS.


 


(a) Until the Distribution
Date, no Right may be exercised.


 


(b) Subject to Section 7(d)
and (g) hereof and the other provisions of this Agreement, at any time after
the Close of Business on the Distribution Date and prior to the Close of
Business on the earlier of the Redemption Date or the Rights Expiration Date,
the registered holder of any Right Certificate may exercise the Rights
represented thereby in whole or in part upon surrender of such Right
Certificate, with the form of election to purchase, including certificate, on
the reverse side thereof completed and duly executed, with signature
guaranteed,


 


8





















 


to the Rights Agent at the
office of the Rights Agent at 2 Broadway, 19th Floor, New York, New York,
10004, together with payment of the Exercise Price for each Right exercised.
Upon the exercise of an exercisable Right and payment of the Exercise Price in
accordance with the provisions of this Agreement, the holder of such Right
shall be entitled to receive, subject to adjustment as provided herein, one
one-hundredth of a Preferred Share (or, following the occurrence of a Section 11(a)(ii)
Event or a Section 13(a) Event, Common Shares and/or other securities).


 


(c) The “Exercise Price” for
the exercise of each Right shall initially be $90.00 and shall be payable in
lawful money of the United States of America in accordance with Section 7(f)
hereof. The Exercise Price and the number of Preferred Shares (or, following
the occurrence of a Section


 


11(a)(ii) Event or a Section 13(a)
Event, Common Shares and/or other securities) to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as provided in Sections
7(e), 11 and 13 hereof and the other provisions of this Agreement.


 


(d) Notwithstanding anything
in this Agreement to the contrary, from and after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a)
Event, any Rights that are or were Beneficially Owned by a 10% Stockholder or
any Affiliate or Associate of a 10% Stockholder at any time on or after the
Distribution Date shall be null and void, and for all purposes of this
Agreement such Rights shall thereafter be deemed not to be outstanding, and any
holder of such Rights (whether or not such holder is a 10% Stockholder or an
Affiliate or Associate of a 10% Stockholder) shall thereafter have no right to
exercise such Rights.


 


(e) Prior to the
Distribution Date, if the Board of Directors of the Company shall have
determined that such action adequately protects the interests of the holders of
Rights, the Company may, in its discretion, substitute for all or any portion
of the Preferred Shares that would otherwise be issuable (after the Close of
Business on the Distribution Date) upon the exercise of each Right and payment
of the Exercise Price (i) cash,


(ii) other equity securities
of the Company, (iii) debt securities of the Company, (iv) other property or
(v) any combination of the foregoing, in each case having an aggregate Current
Market Price equal to the aggregate Current Market Price of the Preferred
Shares for which substitution is made. Subject to Section 7(d) hereof, in
the event that the Company takes any action pursuant to this Section 7(e),
such action shall apply uniformly to all outstanding Rights.


 


(f) Upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase, including certificate, completed and duly executed, with signature
guaranteed, accompanied by payment of the Exercise Price for each Right to be
exercised and an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with Section 9
hereof by certified check or cashier’s check payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) requisition from the
transfer agent of the Preferred Shares (or, following the occurrence of a Section 11(a)(ii)
Event or a Section 13(a) Event, Common Shares and/or securities)
certificates for the number of Preferred Shares (or such other securities) to
be purchased, and the Company hereby irrevocably authorizes such transfer agent
to comply with all such requests, and/or, as provided in Section 14
hereof, requisition from the depositary agent described therein depositary
receipts representing such number of one-hundredths of a Preferred Share (or
such other securities) as are to be


 


9





















 


purchased (in which case
certificates for the Preferred Shares (or such other securities) represented by
such receipts shall be deposited by the transfer agent with such depositary
agent) and the Company hereby directs such depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional Preferred Shares (or such other
securities) in accordance with Section 14 hereof, (iii) after receipt of
such certificates, depositary receipts or cash, cause the same to be delivered
to or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (iv)
when appropriate, after receipt thereof, deliver such cash to or upon the order
of the registered holder of such Right Certificate.


 


(g) Notwithstanding the
foregoing provisions of this Section 7, the exercisability of the Rights
shall be suspended for such period as shall reasonably be necessary for the
Company to register and qualify under the Securities Act and any applicable
securities law of any jurisdiction the Preferred Shares to be issued pursuant
to the exercise of the Rights; PROVIDED, HOWEVER, that nothing contained in
this Section 7 shall relieve the Company of its obligations under Section 9(c)
hereof.


 


(h) In case the registered
holder of any Right Certificate shall exercise less than all of the Rights
represented thereby, a new Right Certificate representing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to such holder’s duly authorized assigns,
subject to the provisions of Section 14 hereof.


 


Section 8.
CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.


 


Section 9.
RESERVATION AND AVAILABILITY OF CAPITAL STOCK.


 


(a) Subject to Sections 7(e)
and 9(f) hereof, the Company shall cause to be reserved and kept available out
of its authorized and unissued equity securities (or out of its authorized and
issued equity securities held in its treasury), the number of such equity
securities that will from time to time be sufficient to permit the exercise in
full of all outstanding Rights.


 


(b) In the event that any
securities issuable upon exercise of the Rights are listed on any national
securities exchange, the Company shall use its best efforts, from and after
such time as the Rights become exercisable, to cause all such securities issued
or reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.


 


10





















 


(c) If necessary to permit
the issuance of securities upon exercise of the Rights, the Company shall use
its best efforts, from and after the Distribution Date, to register and qualify
such securities under the Securities Act, the Exchange Act and any other
applicable securities laws and to keep such registration effective until the
earlier of the Redemption Date or the Expiration Date.


 


(d) The Company shall take
all such action as may be necessary to ensure that all securities delivered
upon exercise of the Rights shall, at the time of delivery of the certificates
for such securities (subject to payment of the Exercise Price), be duly and
validly authorized and issued and fully paid and nonassessable securities.


 


(e) The Company shall pay
when due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the issuance or delivery of the Right
Certificates or of any securities upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of a certificate for securities in respect of
a name other than that of, the registered holder of the Right Certificate
representing Rights surrendered for exercise, or to issue or deliver any
certificate for securities upon the exercise of any Right until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company’s satisfaction that no such tax is due.


 


(f) With respect to the
Common Shares and/or other securities issuable pursuant to Section 11(a)(ii)
and (iii) hereof, the foregoing covenants shall be applicable only upon and
following the occurrence of a  Section 11(a)(ii) Event.


 


Section 10.
SECURITIES RECORD DATE. Each Person in whose name any certificate for
securities of the Company is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the securities
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate representing such Rights was duly surrendered and
payment of the Exercise Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date
upon which the securities transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such securities on, and
such certificate shall be dated, the next succeeding Business Day on which the
securities transfer books of the Company are open.


 


Section 11.
ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES ISSUABLE UPON EXERCISE OF RIGHTS
OR NUMBER OF RIGHTS. The Exercise Price, the number and kind of securities that
may be purchased upon exercise of a Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.


 


(a)(i) In the event that the
Company shall at any time after the Close of Business on the Record Date and
prior to the Close of Business on the earlier of the Redemption Date or the
Expiration Date (A) declare or pay any dividend on the Preferred Shares payable
in Preferred Shares or Voting Shares, (B) subdivide the outstanding Preferred
Shares,


(C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue
Preferred Shares or other securities of the Company (other than those


 


11





















 


for which an adjustment is
required under Section 11(b) hereof) in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation) or in a reorganization of the Company, then, and upon each such
event, the number and kind of Preferred Shares or other securities issuable
upon the exercise of a Right on the date of such event shall be proportionately
adjusted so that the holder of any Right exercised on or after such date shall
be entitled to receive, upon the exercise thereof and payment of the Exercise
Price, the aggregate number and kind of Preferred Shares or other securities or
other property, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when such Right was exercisable
and the transfer books of the Company were open, such holder would have owned
upon such exercise and would have been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs that
would require an adjustment under both this Section 11(a)(i) and  Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.


 


(ii) In the event that a 10%
Ownership Date shall have occurred and neither the Redemption Date nor the
Expiration Date shall have occurred prior to the tenth Business Day following
such 10% Ownership Date (a “Section 11(a)(ii) Event”), then, and upon each
such


Section 11(a)(ii)
Event, proper provision shall be made so that, except as provided in Section 7(d)
hereof, each holder of a Right shall thereafter have the right to receive, upon
the exercise thereof in accordance with the terms of this Agreement and payment
of the then current Exercise Price, such number of Common Shares of the Company
as shall equal the result obtained by (A) multiplying the then current Exercise
Price by the then number of one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such


Section 11(a)(ii) Event
(or, if the Distribution Date shall not have occurred prior to the date of such
Section 11(a)(ii) Event, the number of one-hundredths of a Preferred Share
for which a Right would have been exercisable if the Distribution Date had
occurred on the Business Day immediately preceding the date of such Section 11(a)(ii)
Event), and (B) dividing that product by 50% of the Current Market Price of a
Common Share on the date of occurrence of the relevant Section 11(a)(ii)
Event (such number of shares being hereinafter referred to as the “Adjustment
Shares”). Successive adjustments shall be made pursuant to this paragraph each
time a Section 11(a)(ii) Event occurs.


 


(iii) In the event that on
the date of a Section 11(a)(ii) Event the aggregate number of Common
Shares that are authorized by the Company’s Certificate of Incorporation, as
amended from time to time, but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is less than the aggregate
number of Adjustment Shares thereafter issuable upon the exercise in full of
the Rights in accordance with Section 11(a)(ii) hereof (the excess of such
number of Adjustment Shares over and above such number of Common Shares being
hereinafter referred to as the “Unavailable Adjustment Shares”), then, and upon
each such event, the Company shall substitute for the pro rata portion of the
Unavailable Adjustment Shares that would otherwise be issuable thereafter upon
the exercise of each Right and payment of the Exercise Price (A) cash, (B)
other equity securities of the Company (including, without


 


12





















 


limitation, shares of
preferred stock of the Company or units of such shares having the same Current
Market Price as one Common Share (a “Common Share Equivalent”)), (C) debt
securities of the Company, (D) other property or (E) any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Adjustment Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that
the Company takes any action pursuant to this Section 11(a)(iii), such
action shall apply uniformly to all outstanding Rights.


 


(b) In the event that the
Company shall, at any time after the Close of Business on the Record Date and
prior to the Close of Business on the earlier of the Redemption Date or the
Expiration Date, fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them initially to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares (“Preferred Share
Equivalents”)) or securities convertible into Preferred Shares or Preferred
Share Equivalents, at a price per Preferred Share or Preferred Share Equivalent
(or having a conversion price per share, if a security convertible into
Preferred Shares or Preferred Share Equivalents) less than the Current Market
Price per Preferred Share on such record date, then, and upon each such event,
the Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be equal to the sum of the number
of Preferred Shares outstanding on such record date plus the number of
Preferred Shares that the aggregate offering price of the total number of
Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or
the aggregate initial conversion price of the convertible securities to be so
offered) would purchase at such Current Market Price, and the denominator of
which shall be equal to the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or Preferred
Share Equivalents to be offered for subscription or purchase (or into which the
convertible securities to be so offered are initially convertible); PROVIDED,
HOWEVER, that if such rights, options or warrants are not exercisable
immediately upon issuance but become exercisable only upon the occurrence of a
specified event or the passage of a specified period of time, then the
adjustment to the Exercise Price shall be made and become effective only upon
the occurrence of such event or such passage of time, and such adjustment shall
be made as if the record date for the issuance of such rights, options or
warrants had been the business day immediately preceding the date upon which
such rights, options or warrants became exercisable. Preferred Shares owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment to the Exercise Price shall be
made successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Exercise Price shall be adjusted
to be the Exercise Price that would then be in effect if such record date had
not been fixed.


 


(c) In the event that the
Company shall, at any time after the Close of Business on the Record Date and
prior to the Close of Business on the earlier of the Redemption Date or the
Expiration Date, fix a record date for the making of a distribution to all holders
of the Preferred Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) of assets (other than a distribution for which an adjustment is
required under Section 11(a)(i) or (b) hereof or a regular quarterly cash
dividend), then the Exercise Price to be in effect after such record date shall
be determined by multiplying


 


13





















 


the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be equal to the excess of the Current Market Price per Preferred Share on
such record date over and above the fair market value of the portion of the
securities or assets to be so distributed with respect to one Preferred Share,
and the denominator of which shall be equal to such Current Market Price per
Preferred Share. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such a distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price that would then
be in effect if such record date had not been fixed.


 


(d) For the purpose of any
computation under this Section 11, if the Preferred Shares are not
publicly held or traded, the “Current Market Price” per Preferred Share shall
be conclusively deemed to be the Current Market Price per Common Share
multiplied by 100.


 


(e) No adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the then current Exercise Price;
PROVIDED, HOWEVER, that any adjustments that by reason of this Section 11(e)
are not required to be made shall be cumulated and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one-thousandth of a Common Share or
other share or one-millionth of a Preferred Share, as the case may be.


 


(f) If, as a result of an
adjustment made pursuant to Section 11(a) hereof, the holder of any Right
shall, upon exercise thereof, be entitled to receive any securities of the
Company other than Preferred Shares, and if an event occurs in respect of such
securities that, if it were to occur in respect of Preferred Shares, would
require an adjustment under this Section 11 in respect of Preferred
Shares, then the number of such other securities so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Preferred Shares contained in this Section 11, and the other provisions of
this Agreement with respect to Preferred Shares shall apply on like terms to
any such other securities.


 


(g) All Rights originally issued
by the Company subsequent to any adjustment made to the Exercise Price
hereunder shall represent the right to purchase, at the adjusted Exercise
Price, the number of one-hundredths of a Preferred Share purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.


 


(h) Unless the Company shall
have exercised its election as provided in Section 11(i) below, upon each
adjustment of the Exercise Price as a result of the calculations made in Sections
11(b) and (c) hereof, each Right outstanding immediately prior to the making of
such adjustment shall thereafter represent the right to purchase, at the
adjusted Exercise Price, that number of one-hundredths of a Preferred Share
(calculated to the nearest one-millionth of a Preferred Share) obtained by
multiplying (i) the number of one-hundredths of a Preferred Share purchasable
upon the exercise of one Right immediately prior to such adjustment of the
Exercise Price by (ii) the Exercise Price in effect immediately prior to such
adjustment, and dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.


 


(i) The Company may elect,
on or after the date of any adjustment of the Exercise Price, to adjust the
number of Rights instead of making any adjustment in the number of


 


14





















 


Preferred Shares purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights (calculated
to the nearest one one-thousandth of a Right) obtained by dividing the Exercise
Price in effect immediately prior to the adjustment of the Exercise Price by
the Exercise Price in effect immediately after such adjustment of the Exercise
Price. The Company shall make a public announcement of its election to adjust
the number of Rights pursuant to this


Section 11(i),
indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. Such record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if separate Right
Certificates have been issued, it shall be at least 10 days after the date of
such public announcement. If separate Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i),
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
representing, subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment or, at the option
of the Company, cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of such adjustment, and upon surrender thereof if required by
the Company, new Right Certificates representing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.


 


(j) Irrespective of any
adjustment or change in the Exercise Price or the number of one-hundredths of a
Preferred Share issuable upon the exercise of one Right, the Right Certificates
theretofore and thereafter issued may continue to express the Exercise Price
per one one-hundredth of a Preferred Share and the number of Preferred Shares
issuable upon the exercise of one Right that were expressed in the initial
Right Certificates issued hereunder.


 


(k) Before taking any action
that would cause an adjustment reducing the Exercise Price below one
one-hundredth of the then par value, if any, of the Preferred Shares issuable
upon exercise of the Rights, the Company shall take any corporate action that
may, in the advice or opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable one
one-hundredths of a Preferred Share at such adjusted Exercise Price.


 


(l) In any case in which
this Section 11 shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, the issuance to the holder of any
Right exercised after such record date of the number of one-hundredths of a
Preferred Share and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of one-hundredths of a
Preferred Share and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due bill or


 


15





















 


other appropriate instrument
representing such holder’s right to receive such additional shares upon the
occurrence of the event requiring such adjustment.


 


(m) Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
further adjustments in the number of one-hundredths of a Preferred Share that
may be purchased upon exercise of one Right, and such further adjustments in
the Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Company in its sole discretion
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of any
Preferred Shares at less than the Current Market Price thereof, (iii) issuance
wholly for cash of Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, (iv) dividends on
Preferred Shares payable in Preferred Shares or (v) issuance of rights, options
or warrants referred to in Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.


 


(n) In the event that the
Company shall, at any time after the Close of Business on the Record Date and
prior to the Close of Business on the earliest of the date of the first Section 11(a)(ii)
Event, the date of the first Section 13(a) Event, the Redemption Date or
the Expiration Date,


 


(i) pay any dividend on the
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number of
Common Shares or (iv) issue Common Shares in a reclassification of the Common
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
then, and upon each such event, the Exercise Price to be in effect after such
event shall be determined by multiplying the Exercise Price in effect
immediately prior to such event by a fraction, the numerator of which shall be
equal to the number of Common Shares outstanding immediately prior to such
event and the denominator of which shall be equal to the number of Common
Shares outstanding immediately after such event. Successive adjustments shall
be made pursuant to this


Section 11(n) each time
such a dividend is paid or such a subdivision, combination or reclassification
is effected. If an event occurs that would require an adjustment under both
this Section 11(n) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(n) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to  Section 11(a)(ii) hereof.


 


Section 12.
CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES ISSUABLE UPON EXERCISE
OF RIGHTS. Whenever an adjustment is made as provided in Section 11
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts giving rise to such adjustment,
(b) file with the Rights Agent and with each transfer agent for the securities
issuable upon exercise of the Rights a copy of such certificate and (c) mail a
brief summary thereof to each holder of Rights in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
make such certification or to give such notice shall not affect the validity or
the force and effect of such adjustment. Any adjustment to be made pursuant to
Sections 11 or 13 hereof shall be effective as of the date of the event giving
rise to such adjustment.


 


16





















 


Section 13.
CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.


 


(a) In the event (a “Section 13(a)
Event”) that, at any time on or after the 10% Ownership Date and prior to the
earlier of the Redemption Date or the Expiration Date, (1) the Company shall,
directly or indirectly, consolidate with or merge with and into any other
Person and the Company shall not be the continuing or surviving corporation in
such consolidation or merger, (2) any Person shall, directly or indirectly,
consolidate with or merge with and into the Company and the Company shall be
the continuing or surviving corporation in such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any Person or cash or any other
property, or (3) the Company and/or any one or more of its Subsidiaries shall,
directly or indirectly, sell or otherwise transfer, in one or more transactions
(other than transactions in the ordinary course of business), assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons other than the
Company or one or more of its wholly-owned Subsidiaries (such Persons, together
with the Persons described in clauses (1) and (2) above shall be collectively
referred to in this Section as the “Surviving Person”), then, and in each
such case, proper provision shall be made so that:


 


(i) except as provided in Section 7(d)
hereof, each holder of a Right shall thereafter have the right to receive, upon
the exercise thereof in accordance with the terms of this Agreement and payment
of the then current Exercise Price, in lieu of the securities or other property
otherwise purchasable upon such exercise, such number of validly authorized and
issued, fully paid and nonassessable Common Shares of the Surviving Person (and
if such Surviving Person has more than one class or series of Common Shares,
such number of validly authorized and issued, fully paid and nonassessable
Common Shares of each series or class) as shall be equal to a fraction, the
numerator of which is the product of the then current Exercise Price multiplied
by the number of one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to the first Section (a) Event
(or, if the Distribution Date shall not have occurred prior to the date of such
Section 13(a) Event, the number of one-hundredths of a Preferred Share
that would have been so purchasable if the Distribution Date had occurred on
the Business Day immediately preceding the date of such Section 13(a)
Event, or, if a Section 11(a)(ii) Event has occurred prior to such Section 13(a)
Event, the product of the number of one-hundredths of a Preferred Share
purchasable upon the exercise of a Right (or, if the Distribution Date shall
not have occurred prior to the date of such  Section 11(a)(ii) Event, the number of
one-hundredths of a Preferred Share that would have been so purchasable if the
Distribution Date had occurred on the Business Day immediately preceding the
date of such Section 11(a)(ii)
Event) immediately prior to such Section 11(a)(ii) Event, multiplied by
the Exercise Price in effect immediately prior to such Section 11(a)(ii)
Event), and the denominator of which is 50% of the Current Market Price per
Common Share of the Surviving Person on the date of consummation of such Section 13(a)
Event;


 


(ii) the Surviving Person
shall thereafter be liable for and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement;


 


17





















 


(iii) the term “Company”
shall thereafter be deemed to refer to the Surviving Person; and


 


(iv) the Surviving Person
shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to ensure that
the provisions hereof shall thereafter be applicable to its Common Shares
thereafter deliverable upon the exercise of Rights.


 


(b) Notwithstanding the
foregoing, if the Section 13(a) Event is the sale or transfer in one or
more transactions of assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole),
but less than 100% thereof, then each Person acquiring all or a portion thereof
shall assume the obligations of the Company as to a fraction of each of the
Rights equal to the fraction of the assets of the Company and its Subsidiaries
(taken as a whole) acquired by such Person, and the obligations of the Company
as to the remaining fraction of each of the Rights shall continue to be the
obligations of the Company.


 


(c) The Company shall not
consummate a Section 13(a) Event unless prior thereto the Company and the
Surviving Person shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Surviving Person shall, upon
consummation of such Section 13(a) Event, assume this Agreement in
accordance with Section 13 hereof, that all rights of first refusal or
preemptive rights in respect of the issuance of Common Shares of such Surviving
Person upon exercise of outstanding Rights have been waived and that such Section 13(a)
Event shall not result in a default by such Surviving Person under this
Agreement, and further providing that, as soon as practicable after the date of
consummation of such Section 13(a) Event, such Surviving Person shall:


 


(i) prepare and file a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
use its best efforts to cause such registration statement to become effective
as soon as practicable after such filing, use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date, and
similarly comply with all applicable state securities laws;


 


(ii) use its best efforts to
list (or continue the listing of) the Rights and the Common Shares of the
Surviving Person purchasable upon exercise of the Rights on a national
securities exchange, or use its best efforts to cause the Rights and such
Common Shares to meet the eligibility requirements for quotation on NASDAQ; and


 


(iii) deliver to holders of
the Rights historical financial statements for such Surviving Person that
comply in all respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act.


 


(d) In the event that at any
time after the occurrence of a Section  11(a)(ii) Event some or all of the Rights shall not have been exercised
pursuant to Section 11 hereof prior to the date


 


18





















 


of a Section 13(a)
Event, such Rights shall thereafter be exercisable only in the manner described
in Section 13(a) hereof. In the event that a Section  11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.


 


(e) The provisions of this Section 13
shall apply to each successive merger, consolidation, sale or other transfer
constituting a


Section 13(a) Event.


 


Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.


 


(a) The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates that
represent fractional Rights. If the Company shall determine not to issue such
fractional Rights, the Company shall pay to the registered holders of the Right
Certificates with respect to which such fractional Rights would otherwise be
issuable, at the time such fractional Rights would otherwise have been issued
as provided herein, an amount in cash equal to the same fraction of the Current
Market Price of a whole Right on the Business Day immediately prior to the date
upon which such fractional Rights would otherwise have been issuable.


 


(b) The Company shall not be
required to issue fractions of Common Shares or Preferred Shares (other than
fractions that are integral multiples of one one-hundredth of a Preferred
Share) upon exercise of Rights, or to distribute certificates that represent
fractional Common Shares or Preferred Shares (other than fractions that are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be represented by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of Preferred
Shares. If the Company shall determine not to issue fractional Common Shares or
Preferred Shares (or depositary receipts in lieu of Preferred Shares), the
Company shall pay to the registered holders of Right Certificates with respect
to which such fractional Common Shares or Preferred Shares would otherwise be
issuable, at the time such Rights are exercised as provided herein, an amount
in cash equal to the same fraction of the Current Market Price of a whole
Common Share or Preferred Share, as the case may be. For purposes of this
Section


14(b), the Current Market
Price of a whole Common Share or Preferred Share shall be the Closing Price per
share for the Trading Day immediately prior to the date of such exercise.


 


(c) The holder of a Right,
by the acceptance of such Right, expressly waives such holder’s right to
receive any fractional Rights or any fractional Common Shares or Preferred
Shares upon exercise of such Right, except as permitted by this Section 14.


 


Section 15.
RIGHTS OF ACTION. All rights of action in respect of this Agreement, except the
rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders
of the Right Certificates and certificates for Common Shares representing
Rights, and any registered holder of any Right Certificate or of such
certificate for Common Shares, without the consent of the Rights Agent or of
the holder of any other Right


 


19





















 


Certificate or any other
certificate for Common Shares may, in such holder’s own behalf and for such
holder’s own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
such holder’s right to exercise the Rights represented by such Right
Certificate or by such certificate for Common Shares in the manner provided in
such Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance, and
injunctive relief against actual or threatened violations, of the obligations
of any Person under this Agreement.


 


Section 16.
AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights Agent and every other
holder of a Right that:


 


(a) prior to the
Distribution Date, the Rights shall be represented by certificates for Common
Shares registered in the name of the holders of such Common Shares (which
certificates for Common Shares shall also constitute Right Certificates), and
each such Right shall be transferable only in connection with the transfer of
such Common Shares;


 


(b) after the Distribution
Date, the Right Certificates shall only be transferable on the registry books
of the Rights Agent if surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer; and


 


(c) the Company and the
Rights Agent may deem and treat the person in whose name the Right Certificate
is registered as the absolute owner thereof and of the Rights represented
thereby (notwithstanding any notations of ownership or writing on the Right
Certificate by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.


 


Section 17.
RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Right or Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the securities of the
Company that may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, in each case until such Right
or the Rights represented by such Right Certificate shall have been exercised
in accordance with the provisions hereof.


 


Section 18.
CONCERNING THE RIGHTS AGENT.


 


(a) The Company agrees to
pay to the Rights Agent as compensation for all services rendered by it
hereunder reasonable and customary fees and expenses. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for


 


20





















 


anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability.


 


(b) The Rights Agent shall
be protected and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate for Preferred
Shares or Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons, or otherwise upon
the advice of its counsel as set forth in Section 20 hereof.


 


Section 19.
MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.


 


(a) Any corporation into
which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be
a party, or any corporation succeeding to the corporate trust or stock transfer
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. If, at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and if at that time any of the Right Certificates shall not have
been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in such Right Certificate and in this
Agreement.


 


(b) If at any time the name
of the Rights Agent shall be changed, and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in such Right Certificate and in this Agreement.


 


Section 20.
DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by their acceptance of
the Rights, shall be bound:


 


(a) The Rights Agent may
consult with legal counsel (who may be legal counsel for the Company), and the
advice or opinion of such counsel shall be full and complete authorization


 


21





















 


and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such advice or opinion.


 


(b) Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed
by any one of the Chairman of the Board, the Vice Chairman of the Board, the
President, any Vice President, the Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.


 


(c) The Rights Agent shall
be liable hereunder to the Company and any other Person only for its own
negligence, bad faith or willful misconduct.


 


(d) The Rights Agent shall
not be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement, or in the Right Certificates (except its
countersignature thereof), or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Company only.


 


(e) The Rights Agent shall
not be under any responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including any
Rights becoming null and void pursuant to Section 7(d) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 7, 11, 13 and 23 hereof, or the ascertaining
of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights represented by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares or other securities to be issued pursuant to this Agreement or
any Right Certificate, or as to whether any Preferred Shares or Common Shares
or other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.


 


(f) The Company agrees that
it will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent
for the carrying out or performing by the Rights Agent of the provisions of
this Agreement.


 


(g) The Rights Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the Board,
the Vice Chairman, the President, any Vice President, the Secretary, any
Assistant Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in


 


22





















 


connection with its duties,
and it shall not be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such officer.


 


(h) The Rights Agent and any
stockholder, director, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.


 


(i) The Rights Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
that reasonable care was exercised in the selection and continued employment
thereof.


 


Section 21.
CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon 30-days’
notice in writing mailed to the Company and to each transfer agent of the
Common Shares and Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30-days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares and Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting as such, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit such holder’s Right Certificate for inspection by the
Company), then the Company shall become the Rights Agent and the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the States of New York or California (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the States of New York or California), in good standing, having
a principal office in New York or California, that is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose of
this Agreement and so that the successor Rights Agent may appropriately act as
Rights Agent hereunder. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing


 


23





















 


with the predecessor Rights
Agent and each transfer agent of the Common Shares and Preferred Shares, and
mail a notice thereof in writing to the registered holders of the Riht
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.


 


Section 22.
ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the provisions of
this Agreement or of the Right Certificates to the contrary, the Company may,
at its option, issue new Right Certificates in such form as may be approved by
the Board of Directors in order to reflect any adjustment or change in the
Exercise Price and the number or kind or class of shares or other securities or
property purchasable upon exercise of the Rights in accordance with the
provisions of this Agreement.


 


Section 23.
REDEMPTION OF RIGHTS.


 


(a) Until the earliest of
(i) the date of the first Section  11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or
(iii) the Expiration Date, the Board of Directors of the Company may, at its
option, authorize and direct the redemption of all, but not less than all, of
the then outstanding Rights at a redemption price of $.001 per Right, as such
redemption price shall be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (the “Redemption
Price”), and the Company shall so redeem the Rights.


 


(b) Immediately upon the
action of the Board of Directors of the Company authorizing and directing the
redemption of the Rights pursuant to subsection (a) of this Section 23,
or at such time and date thereafter as it may specify, and without any further
action and without any notice, the right to exercise Rights shall terminate and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) Business Days after the date of such action,
the Company shall give notice of such redemption to the holders of Rights by
mailing such notice to all holders of Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, if prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives such notice, but neither the failure
to give any such notice nor any defect therein shall affect the legality or
validity of such redemption. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may, directly or indirectly,
redeem, acquire or purchase for value any Rights in any manner other than that
specifically set forth in Section 24 hereof or in this Section 23, or
in connection with the purchase of Common Shares prior to the earlier of the
date of the first Section 11(a)(ii) Event or the date of the first Section
13(a) Event.


 


(c) The Company may, at its
option, pay the Redemption Price in cash, Common Shares, Preferred Shares,
other equity securities of the Company, debt securities of the Company, other
property or any combination of the foregoing, in each case having an aggregate
Current Market Price on the Redemption Date equal to the Redemption Price.


 


24





















 


Section 24.
EXCHANGE OF RIGHTS.


 


(a) At any time during the
period of 180 days after a Section  11(a)(ii) Event, the Board of Directors of the Company may, at its
option, authorize and direct the exchange of all, but not less than all, of the
then outstanding Rights for Common Shares, one one-hundredths of Preferred
Shares, debt securities of the Company, other property, or any combination of
the foregoing, in each case having an aggregate Current Market Price equal to
the result obtained by (i) multiplying the Current Market Price per Common
Share on the record date for such exchange by the number of Common Shares for
which a Right is exercisable on such record date or (ii) subtracting from such
product the Exercise Price on such Record Date (the “Exchange Ratio”), and the
Company shall so exchange the Rights.


 


(b) Immediately upon the
action of the Board of Directors of the Company authorizing and directing the
exchange of the Rights pursuant to subsection (a) of this Section 24,
or at such time and date thereafter as it may specify, and without any further
action and without any notice, the right to exercise Rights shall terminate and
the only right thereafter of the holders of Rights shall be to receive a number
of Common Shares in accordance with the Exchange Ratio. Within ten (10)
Business Days after the date of such action, the Company shall give notice of
such exchange to the holders of Rights by mailing such notice to all holders of
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, if prior to the Distribution Date, on the registry books of
the transfer agent for the Common Shares. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives such notice, but neither the failure to give any such notice nor any
defect therein shall affect the legality or validity of such exchange. Each
such notice of exchange shall state the method by which the Rights will be exchanged
for Common Shares.


 


(c) Notwithstanding the
foregoing, in the event that the aggregate number of Common Shares that are
authorized by the Company’s Certificate of Incorporation, as amended from time
to time, but not outstanding or reserved for issuance for purposes other than
upon exercise or exchange of the Rights is less than the aggregate number of
Common Shares issuable upon the exchange of the Rights in accordance with this Section 24
(the excess of such number of authorized Common Shares over and above such
number of issuable Common Shares being hereinafter referred to as the “Unavailable
Exchange Shares”), then the Company shall substitute for the pro rata portion
of the Unavailable Exchange Shares that would otherwise be issuable upon the exchange
of the Rights in accordance with this Section 24 (i) cash, (ii) other
equity securities of the Company (including, without limitation, Common Share
Equivalents), (iii) debt securities of the Company, (iv) other property or
(v) any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Exchange Shares for which
substitution is made. Subject to Section 7(d)
hereof, in the event that the Company takes any action pursuant to this Section 24,
such action shall apply uniformly to all outstanding Rights.


 


Section 25.
NOTICE OF CERTAIN EVENTS.


 


(a) In the event that the
Company shall propose (i) to declare or pay any dividend on or make any
distribution with respect to its Common Shares or Preferred Shares (other than
a regular quarterly cash dividend),  (ii) to offer to the holders of its Common Shares or Preferred


 


25





















 


Shares options, rights or
warrants to subscribe for or to purchase any additional shares thereof or
shares of stock of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Common Shares or Preferred Shares (other
than a reclassification involving only the subdivision of outstanding shares),
(iv) to effect any consolidation or merger with or into, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the Company, then and in each such case, the Company shall
give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action that shall specify the record date for
the purpose of such dividend or distribution, or the date upon which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of record of the Common Shares or Preferred Shares, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the Common Shares or Preferred Shares
for purposes of such action, and in the case of any such other action, at least
20 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares or Preferred Shares,
whichever date shall be the earlier. The failure to give the notice required by
this Section 25 or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.


 


(b) Upon the occurrence of
each Section 11(a)(ii) Event and each


Section 13(a) Event,
the Company shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, specifying the event and the consequences of the
event to holders of Rights under Sections 11 and 13 hereof.


 


Section 26.
NOTICES. Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:


 


City National Corporation
400 North Roxbury Drive Beverly Hills, California 90210 Attention: Secretary


 


Subject to the provisions of
Section 21 hereof, any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any Right Certificate to or on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Company) to the principal office of the Rights Agent as follows:


 


Continental Stock Transfer
& Trust Company 2 Broadway, 19th Floor New York, New York 10004 Attn:
Compliance Department


 


26





















 


Notices or demands authorized
by this Agreement to be given or made by the Company or the Rights Agent to the
holder of any Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.


 


Section 27.
SUPPLEMENTS AND AMENDMENTS.


 


(a) The Board of Directors
of the Company may, from time to time, without the approval of any holders of
Rights, supplement or amend any provision of this Agreement in any manner,
whether or not such supplement or amendment is adverse to any holder of Rights,
and direct the Rights Agent so to supplement or amend such provision, and the
Rights Agent shall so supplement or amend such provision; PROVIDED, HOWEVER,
that from and after the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event, (iii) the
Redemption Date or (iv) the Expiration Date, this Agreement shall not be
supplemented or amended in any manner that would materially and adversely
affect any holder of outstanding Rights other than a 10% Stockholder or a
Surviving Person.


 


(b) From and after the
earlier of the date of the first Section  11(a)(ii) Event or the date of the first Section 13(a) Event and
prior to the Rights Expiration Date, the Company shall not effect any amendment
to the Certificate of Designations for the Preferred Shares that would
materially and adversely affect the rights, privileges or preferences of the
Preferred Shares without the prior approval of the holders of two-thirds or
more of the then outstanding Rights.


 


Section 28.
CERTAIN COVENANTS. Subject to Section 27 hereof and the other provisions
of this Agreement, from and after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the Company shall not
(a) issue or sell, or permit any Subsidiary to issue or sell, to a 10%
Stockholder or a Surviving Person, or any Affiliate or Associate of a 10%
Stockholder or a Surviving Person, or any Person holding Voting Shares of the
Company that are Beneficially Owned by a 10% Stockholder or a Surviving Person,
(i) any rights, options, warrants or convertible securities on terms similar
to, or that materially adversely affect the value of, the Rights or (ii)
Preferred Shares, Common Shares or shares of any other class of capital stock,
if such sale is intended to or would materially adversely affect the value of
the Rights, or (b) take any other action that is intended to or would
materially adversely affect the value of the Rights.


 


Section 29.
SUCCESSORS. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.


 


Section 30.
BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to
give to any Person other than the Company, the Rights Agent and the registered
holders of the Right Certificates (other than those representing Rights that
have become null and void) and the certificates for Common Shares representing
Rights (other than those Rights that have become null and void) any legal or
equitable right, remedy or claim under this Agreement, and this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and such
registered holders of Right Certificates and certificates for Common Shares
representing Rights.


 


27





















 


Section 31.
SEVERABILITY. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.


 


Section 32.
GOVERNING LAW. This Agreement and each Right Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and for
all purposes shall be governed by and construed in accordance with the laws of
such state applicable to contracts made and performed entirely within such
state.


 


Section 33.
COUNTERPARTS. This Agreement may be executed in any number of counterparts and
each such counterpart shall for all purposes be deemed to be an original and
all such counterparts shall together constitute but one and the same
instrument.


 


Section 34.
DESCRIPTIVE HEADINGS. Descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.


 


28





















 


IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year
first above written.


 


CITY NATIONAL CORPORATION


 


Attest:


 


 


	
  By

  	
  /s/
  Arthur G. Spence

  	
   

  	
   

  	
  By

  	
  /s/
  Richard H. Sheehan, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Arthur
  G. Spence

  	
   

  	
   

  	
  Name:

  	
  Richard
  H. Sheehan, Jr.

  
	
   

  	
  Title:

  	
  Assistant
  Secretary

  	
   

  	
   

  	
  Title:

  	
  S.V.P.
  and General Counsel

  
									



 


 


CONTINENTAL STOCK TRANSFER & TRUST

COMPANY


 


Attest:


 


 


	
  By

  	
  /s/
  Thomas Jennings

  	
   

  	
   

  	
  By 

  	
  /s/
  William F. Seegraber

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  Jennings

  	
   

  	
   

  	
  Name:

  	
  William
  F. Seegraber

  
	
   

  	
  Title:

  	
  Assistant
  Secretary

  	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
									



 


29





















 


EXHIBIT A


 


Form of Right Certificate


 


Certificate
No.                                      
Rights


 


NOT EXERCISABLE AFTER THE
LATER OF MARCH 13, 2007 OR THE TENTH ANNIVERSARY OF THE DISTRIBUTION DATE
(AS THAT TERM IS DEFINED IN THE RIGHTS AGREEMENT) OR EARLIER IF REDEEMED. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS THAT TERM IS DEFINED IN SECTION 1(a) OF THE RIGHTS
AGREEMENT AND AS THOSE CIRCUMSTANCES ARE SPECIFIED IN SECTION 7(f) OF THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON
WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING
PERSON. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(f) OF THE RIGHTS
AGREEMENT.](*)


 


Right Certificate


 


CITY NATIONAL CORPORATION


 


This certifies that                                      ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of February 26,
1997 (the “Rights Agreement”) between City National Corporation, a Delaware
corporation (the “Company”), and Continental Stock Transfer & Trust Company,
a New York corporation (the “Rights Agent”), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York time) on the later of March 13,
2007 or the tenth anniversary of the Distribution Date at the office or agency
of the Rights Agent at 2 Broadway, 19th Floor, New York, New York, 10004, or at
the office of its successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series A


 










* That portion of the legend
in brackets shall be inserted only if applicable and shall replace the
preceding sentence.


 


Junior Participating
Cumulative Preferred Stock, $1.00 par value (the “Preferred Shares”), of the
Company, at a purchase price of $90.00 per one one-hundredth of a Preferred
Share (the “Purchase Price”), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per one one-hundredths of a
Preferred Share set forth above, are the number and Purchase Price as of                        ,
            , based
on the Preferred Shares as constituted at such date.


 


As provided in the Rights
Agreement, the Purchase Price and the number of Preferred Shares which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the occurrence of certain
events. This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.


 


This Right Certificate, with
or without other Right Certificates, upon surrender at the office or agency of
the Rights Agent at 2 Broadway, 19th Floor, New York, New York, 10004, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights evidenced by this Certificate may, but are not
required to, be redeemed by the Company at a redemption price of $.001 per
Right.


 


No fractional Preferred
Shares will be issued upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof, a cash payment will be made, as
provided in the Rights Agreement.


 


No holder of this Right
Certificate shall be entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.


 


2





















 


This Right Certificate shall
not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent.


 


WITNESS the facsimile
signature of the proper officers of the Company and its corporate seal. Dated
as of                             ,
           .


 


	
  ATTEST:

  	
  CITY NATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								



 


 


Countersigned:


 


CONTINENTAL
STOCK TRANSFER

& TRUST COMPANY


 


By: 


 


Authorized Officer


 


3





















 


Form of Reverse Side of Right Certificate


 


FORM OF ASSIGNMENT


 


(To be executed by the
registered holder if such holder desires to transfer the Right Certificates.)


 


FOR VALUE RECEIVED                                                                                                                    
hereby sells, assigns and transfers unto


(Please print name and address of transferee)


 


this Right Certificate,
together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                                                                                                
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.


 


Dated:                                                ,
             


 


Signature


 


Signature
Guaranteed:


 


(To be completed if applicable)


 


The undersigned hereby
certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).


 


Signature


 


4





















 


FORM OF ELECTION TO PURCHASE


 


(To be executed if holder desires to

exercise the Right Certificate.)


 


TO CITY
NATIONAL CORPORATION


 


The undersigned hereby
irrevocably elects to exercise                                        
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:


 


Please insert social
security

or other identifying number


 


(Please print name and address)


 


If such number of Rights
shall not be all the Rights evidenced by this Right Certificate, a new Right
Certificate for the balance remaining of such Rights shall be registered in the
name of and delivered to:


 


Please insert social
security

or other identifying number


 


(Please print name and address)


 


Dated:
                                               ,
             


 


Signature


 


(Signature must conform in all

respects to name of holder as

specified on the face of this Right

Certificate in every particular,

without alteration or enlargement or

any change whatsoever)


 


5





















 


Signature
Guaranteed:


 


(To be completed if applicable)


 


The undersigned hereby
certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).


 


Signature


 


NOTICE


 


The signature in the
foregoing Forms of Assignment and Election must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.


 


In the event the
certification set forth above in the Forms of Assignment and Election is not
completed, the Company will deem the beneficial owner of the Rights evidenced
by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Right Certificates issued
in exchange for this Right Certificate.


 


6