Exhibit 10.16


 


CITY NATIONAL CORPORATION


AMENDED AND RESTATED 1999 VARIABLE BONUS PLAN


 


1.                                       Purpose.


 


The purpose of the City
National Corporation Amended and Restated 1999 Variable Bonus Plan (the “Plan”)
is to provide annual cash awards to top management that recognize and reward
the achievement of corporate performance goals.


 


2.                                       Effective Date
of Plan.


 


The Plan shall be effective
as of January 1, 2004, upon approval of the Plan by the shareholders of
City National Corporation (the “Corporation”).


 


3.                                       Plan
Administration.


 


The Plan shall be
administered by the Compensation, Nominating & Governance Committee (“Committee”)
of the Board of Directors, which shall consist of members appointed from time
to time by the Board of Directors. Each member of the Committee shall be an “outside
director” within the meaning of Section 162(m) of the Internal
Revenue Code of 1986, as amended (“the Code”). The Committee shall have full
power and authority, subject to the provisions of the Plan and applicable law,
to (a) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it deems necessary or advisable for the proper
administration of the Plan, (b) construe, interpret and administer the
Plan and any instrument or agreement relating to the Plan, and (c) make
all other determinations and take all other actions necessary or advisable for
the administration of the Plan, except that the Committee (but not the Board of
Directors) shall have no authority to take any action that would cause any Award
to any Participant to fail to qualify as “performance-based compensation” under
Section 162(m) of the Code. Unless otherwise expressly provided in
the Plan, each determination made and each action taken by the Committee
pursuant to the Plan or any instrument or agreement relating to the Plan (a) shall
be within the sole discretion of the Committee, (b) may be made at any
time, and (c) shall be final, binding and conclusive for all purposes on
all persons, including, but not limited to, Participants in the Plan, their
legal representatives and beneficiaries and employees of the Corporation and
its subsidiaries.


 


4.                                       Eligibility.


 


The Chief Executive Officer
and all other officers of the Corporation and its subsidiaries are eligible to
participate in the Plan, if designated by the Committee.


 


5.                                       Awards.


 


Prior to or within
90 days after the commencement of each calendar year (the “Plan Year”),
the Committee shall designate the following:


 


5.1.                              The officers
who will participate (the “Participants”) in the Plan for the Plan Year.


 


5.2.                              The Corporate
Financial Criteria, as defined herein, which will apply to awards for the Plan
Year.


 


5.3.                              The Performance
Goals, as defined herein, to be met by the Corporation for Participants to earn
awards for the Plan Year and a payout matrix or formula for such Corporate
Financial Criteria and Performance Goals.


 


5.4.                              The award will
be a bonus payment in an amount obtained by multiplying the following amounts: (1) a
Participant’s annualized base salary, as determined by the Committee, as of the
last day of the Plan Year and (2) a specified percentage (expressed as a
decimal or fixed by a formula which will determine such percentage) determined
by the Committee to apply to the


 


1

















 


Participant for the Plan
Year based on the payout matrix or formula for the Corporate Financial Criteria
and Performance Goals established for the Plan Year.


 


The Committee may, after the
90th day of the Plan Year, designate additional officers to participate in the
Plan for the Plan Year (also “Participants” for purposes hereof); provided,
however, that: (i) any awards earned by any such Participant for
participation for such partial Plan Year will be pro-rated based on the number
of days during the Plan Year in which the Participant participated in the Plan,
and (ii) the Performance Goals for such additional Participants will be
established prior to or before the expiration of 25% of the days remaining in
such partial Plan Year.


 


A Participant (other than one
who is party to an employment agreement with the Corporation providing for a
partial year bonus) who terminates employment, either voluntarily or
involuntarily, before the payment date for awards for the Plan Year is thereby
ineligible for an award under the Plan.


 


5.5.                              Anything in
this Plan to the contrary notwithstanding, no provisions of this Plan may be
used to reduce any amounts due to any Participant who is a party to an
employment agreement with the Corporation which provides for the payment of cash
or other benefit in the event of the Participant’s death, disability,
retirement or loss of employment because of a reduction in the workforce, below
the amounts so provided in the employment agreement.


 


Awards under the Plan shall
be paid to the Participants in cash.


 


6.                                       Corporate
Financial Criteria.


 


For each Plan year, the
Committee shall designate one or more of the corporate financial criteria (the “Corporate
Financial Criteria”) set forth in this Section 6 for use in determining an
award for a Participant for such Plan Year. Corporate Financial Criteria shall
consist of one or more, or a combination of, the following financial measures:
net income; net operating income; earnings per share; net profit; net profit
before extraordinary items; return on assets; return on equity; assets; assets
under management and administration; risk adjusted return on capital; Economic
Value Added; total shareholder return and efficiency ratio; provided, however,
that the Committee retains the discretion to determine whether an award will be
paid under any one or more of such Corporate Financial Criteria.


 


7.                                       Performance
Goals.


 


For each Plan Year, the
Committee shall establish one or more specific, objective performance goals
(the “Performance Goals”), the outcome of which are substantially uncertain at
the time so established, for each of the Corporate Financial Criteria
designated by the Committee for the Plan Year, against which actual performance
is to be measured to determine the amount of awards. Performance Goals
established by the Committee may be described by means of a matrix or formula,
providing for goals resulting in the payment of awards under the Plan.


 


8.                                       Determination &
Payment of Awards


 


8.1.                              As soon as
practicable after the end of the Plan Year, the Committee will determine the
amount of the award earned by each Participant, based on the application of the
criteria specified in Section 6; provided however that, except for
Participants who have entered into an employment agreement with the
Corporation, the Committee may, in its sole discretion, reduce the amount which
would otherwise be payable under the Plan. As to those Participants who have
entered into employment agreements with the Corporation, the Committee will not
have the discretion to reduce any bonus below any minimum amount provided in
such agreement. Payments will be made promptly after determination of the
awards by the Committee, unless payment of an award has been deferred pursuant
to Section 10.6 hereof. Such Committee determination must include a
certification in writing that the Performance 


 


2

















 


Goals and any other material
terms of the award were in fact satisfied; provided that minutes of the
Committee meeting (or any action by written consent) shall satisfy the written
certification requirement.


 


8.2.                              Notwithstanding
anything herein to the contrary, the maximum dollar amount that may be awarded
under this Plan for any Plan Year to any Participant may not exceed
$3 million.


 


9.                                       Termination,
Suspension or Modification of the Plan.


 


The Board of Directors may
at any time, with or without notice, terminate, suspend, or modify the Plan in
whole or in part, except that the Board of Directors shall not amend the Plan
in violation of the law or in contravention of Treasury Regulation Section 1.162-27,
promulgated under the Code, unless the Board of Directors finds that such
amendment is in the best interest of the Corporation. The Committee is
expressly permitted to make any amendments to the Plan, which are not in
violation of the law, that are required to conform the Plan to the requirements
of Section 162(m). The Committee may also correct any defect, supply any
omission or reconcile any inconsistency in the Plan in the manner and to the
extent it shall deem desirable to carry the Plan into effect.


 


10.                                 Miscellaneous.


 


10.1.                        No
Assignments.  No award under this Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any such liability which is
for alimony or other payments for the support of a spouse or former spouse, or
for any other relative of a Participant prior to actually being received by the
Participant or his/her designated beneficiary, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge encumber, charge, or otherwise dispose
of any right to such award shall be void.


 


10.2.                        No Right of
Employment.  Neither the adoption of the
Plan, the determination of eligibility to participate in the Plan, nor the
granting of an award under the Plan shall confer upon any Participant any right
to continue in the employ of the Corporation or any of its subsidiaries or to
interfere in any way with the right of the Corporation or the subsidiary to
terminate such employment at any time.


 


10.3.                        Tax
Withholding.  The Corporation shall have
the right to withhold the amount of any tax attributable to amounts payable
under the Plan.


 


10.4.                        Governing
Law.  The Plan and all determinations
under the Plan shall be governed by and construed in accordance with the laws
of the State of California.


 


10.5.                        Other
Plans.  Nothing in this Plan shall be
construed as limiting the authority of the Committee, Board of Directors, the
Corporation or any subsidiary of the Corporation to establish any other
compensation plan, or as in any way limiting its or their authority to pay
bonuses or supplemental compensation to any persons employed by the Corporation
or a subsidiary of the Corporation, whether or not such person is a Participant
in this Plan and regardless of how the amount of such compensation or bonuses
is determined.


 


10.6.                        Deferrals of
Awards.  A Participant may elect to defer
payment of his/her cash award under the Plan if deferral of an award under the
Plan is permitted pursuant to the terms of a deferred compensation program of
the Corporation existing at the time the election to defer is permitted to be
made, and the Participant complies with the terms of such program.


 


10.7.                        Section 162(m).  It is the intention of the Corporation that
all payments made under the Plan shall fall within the “performance-based
compensation” exception contained in Section 162(m) of the Code.
Thus, unless the Board of Directors expressly determines otherwise, if any Plan
provision is found not to be in compliance with such exception, that provision
shall be deemed to be amended so that the provision does comply to the extent
permitted by law, and in every event, the Plan shall be construed in favor of
its meeting the “performance-based compensation” exception contained in Section 162(m) of
the Code.


 


3