Document:

Exhibit (m)

 

CITY NATIONAL CORPORATION

1999 OMNIBUS PLAN

 

(AS APPROVED BY CITY
NATIONAL CORPORATION SHAREHOLDERS AT ANNUAL MEETING OF

APRIL 21,
1999; AS AMENDED BY CITY NATIONAL CORPORATION BOARD OF DIRECTORS, APRIL 21,
1999)

 

CITY NATIONAL CORPORATION

1999 OMNIBUS PLAN

 

TABLE OF CONTENTS

 

	
  I.

  	
   

  	
  THE PLAN

  	
   

  
	
   

  	
   

  	
  1.1.

  	
  PURPOSE

  	
   

  
	
   

  	
   

  	
  1.2.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
  1.3.

  	
  ADMINISTRATION
  AND AUTHORIZATION; POWER AND PROCEDURE

  	
   

  
	
   

  	
   

  	
  1.4.

  	
  PARTICIPATION

  	
   

  
	
   

  	
   

  	
  1.5.

  	
  SHARES AVAILABLE FOR
  AWARDS

  	
   

  
	
   

  	
   

  	
  1.6.

  	
  GRANT
  OF AWARDS

  	
   

  
	
   

  	
   

  	
  1.7.

  	
  AWARD
  PERIOD

  	
   

  
	
   

  	
   

  	
  1.8.

  	
  LIMITATIONS
  ON EXERCISE AND VESTING OF AWARDS

  	
   

  
	
   

  	
   

  	
  1.9.

  	
  ACCEPTANCE
  OF NOTES TO FINANCE EXERCISE

  	
   

  
	
   

  	
   

  	
  1.10.

  	
  NO TRANSFERABILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  EMPLOYEE
  OPTIONS

  	
   

  
	
   

  	
   

  	
  2.1.

  	
  GRANTS

  	
   

  
	
   

  	
   

  	
  2.2.

  	
  OPTION
  PRICE

  	
   

  
	
   

  	
   

  	
  2.3.

  	
  LIMITATIONS
  ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS

  	
   

  
	
   

  	
   

  	
  2.4.

  	
  LIMITS ON 10% HOLDERS

  	
   

  
	
   

  	
   

  	
  2.5.

  	
  NO OPTION REPRICING

  	
   

  
	
   

  	
   

  	
  2.6.

  	
  DIVIDEND EQUIVALENTS

  	
   

  
	
   

  	
   

  	
  2.7.

  	
  SURRENDER OF STOCK
  OPTIONS

  	
   

  
	
   

  	
   

  	
  2.8.

  	
  SPECIAL
  REQUIREMENTS FOR DIRECTOR STOCK OPTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  STOCK APPRECIATION
  RIGHTS

  	
   

  
	
   

  	
   

  	
  3.1.

  	
  GRANTS

  	
   

  
	
   

  	
   

  	
  3.2.

  	
  EXERCISE OF
  STOCK APPRECIATION RIGHTS

  	
   

  
	
   

  	
   

  	
  3.3.

  	
  PAYMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  RESTRICTED STOCK AWARDS

  	
   

  
	
   

  	
   

  	
  4.1.

  	
  GRANTS

  	
   

  
	
   

  	
   

  	
  4.2.

  	
  RESTRICTIONS

  	
   

  
	
   

  	
   

  	
  4.3.

  	
  RETURN TO THE COMPANY

  	
   

  

 

(AS APPROVED BY CITY
NATIONAL CORPORATION SHAREHOLDERS AT ANNUAL MEETING OF

APRIL 21,
1999; AS AMENDED BY CITY NATIONAL CORPORATION BOARD OF DIRECTORS, APRIL 21,
1999)

 

 

	
  V.

  	
   

  	
  PERFORMANCE
  SHARE AWARDS AND STOCK BONUSES

  	
   

  
	
   

  	
   

  	
  5.1.

  	
  GRANTS OF
  PERFORMANCE SHARE AWARDS

  	
   

  
	
   

  	
   

  	
  5.2.

  	
  GRANTS OF STOCK BONUSES

  	
   

  
	
   

  	
   

  	
  5.3.

  	
  DEFERRED PAYMENTS

  	
   

  
	
   

  	
   

  	
  5.4.

  	
  RESTRICTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  TAX OFFSET BONUS RIGHTS

  	
   

  
	
   

  	
   

  	
  6.1.

  	
  GRANTS

  	
   

  
	
   

  	
   

  	
  6.2.

  	
  TAX OFFSET BONUS
  RIGHTS PERIOD

  	
   

  
	
   

  	
   

  	
  6.3.

  	
  EXERCISE OF RIGHTS

  	
   

  
	
   

  	
   

  	
  6.4.

  	
  PAYMENTS

  	
   

  
	
   

  	
   

  	
  6.5.

  	
  TERMINATION OF
  EMPLOYMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  OTHER
  PROVISIONS

  	
   

  
	
   

  	
   

  	
  7.1.

  	
  RIGHTS
  OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES

  	
   

  
	
   

  	
   

  	
  7.2.

  	
  ADJUSTMENTS;
  ACCELERATIONS

  	
   

  
	
   

  	
   

  	
  7.3.

  	
  EFFECT OF
  TERMINATION OF EMPLOYMENT

  	
   

  
	
   

  	
   

  	
  7.4.

  	
  COMPLIANCE WITH LAWS

  	
   

  
	
   

  	
   

  	
  7.5.

  	
  TAX
  WITHHOLDING

  	
   

  
	
   

  	
   

  	
  7.6.

  	
  PLAN
  AMENDMENT; TERMINATION AND SUSPENSION

  	
   

  
	
   

  	
   

  	
  7.7.

  	
  PRIVILEGES OF STOCK
  OWNERSHIP

  	
   

  
	
   

  	
   

  	
  7.8.

  	
  EFFECTIVE DATE OF THE
  PLAN

  	
   

  
	
   

  	
   

  	
  7.9.

  	
  TERM
  OF THE PLAN

  	
   

  
	
   

  	
   

  	
  7.10.

  	
  GOVERNING
  LAW; CONSTRUCTION; SEVERABILITY

  	
   

  
	
   

  	
   

  	
  7.11.

  	
  CAPTIONS

  	
   

  
	
   

  	
   

  	
  7.12.

  	
  NON-EXCLUSIVITY OF PLAN

  	
   

  

 

 

(AS APPROVED BY CITY
NATIONAL CORPORATION SHAREHOLDERS AT ANNUAL MEETING OF

APRIL 21,
1999; AS AMENDED BY CITY NATIONAL CORPORATION BOARD OF DIRECTORS, APRIL 21,
1999)

 

CITY NATIONAL CORPORATION

1999 OMNIBUS PLAN

 

I. THE PLAN

 

1.1. PURPOSE

 

The purpose of this Plan is
to promote the success of the Corporation by providing an additional means
through the grant of Awards to attract, motivate, retain and reward key employees,
including officers, whether or not directors, of the Corporation with awards
and incentives for high levels of individual performance and improved financial
performance of the Corporation.

 

1.2. DEFINITIONS

 

(a) “Award” shall mean an
award of any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Share Award, Stock Bonus, Dividend Equivalent, Tax Offset Bonus or
other right or security that would constitute a “derivative security” under
Rule 16a-l(c) of the Exchange Act, or any combination thereof, whether
alternative or cumulative, authorized by and granted under this Plan.

 

 

(b) “Award Agreement” shall
mean any writing setting forth the terms of an Award that has been authorized
by the Committee.

 

(c) “Award Date” shall mean
the date upon which the Committee took the action granting an Award or such
later date as the Committee designates as the Award Date at the time of the
Award.

 

(d) “Award Period” shall
mean the period beginning on an Award Date and ending on the expiration date of
such Award.

 

(e) “Beneficiary” shall mean
the person, persons, trust or trusts entitled by will or the laws of descent
and distribution to receive the benefits specified in the Award Agreement and
under this Plan in the event of a Participant’s death, and shall mean the
Participant’s executor or administrator if no other Beneficiary is identified
and able to act under the circumstances.

 

(f) “Board” shall mean the
Board of Directors of the Corporation.

 

(g) “Change in Control Event”
shall mean:

 

(1) The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of Common Stock of the Corporation (the “Outstanding
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); provided, however, that for
purposes of this sub-section (1), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the
Corporation; (ii) any acquisition by the Corporation; (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintain by the
Corporation or any corporation controlled by the Corporation, (iv) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i),

(ii) and (iii) of subsection (3)
of this section (g), or (v) any acquisition by the Goldsmith Family or any
director or partnership for the benefit of any member of the Goldsmith Family;
or

 

(2) Individuals who, as of
the date hereof, constitute the Board of Directors (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Corporation’s shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or contest by
or on behalf of a person other than the board; or

 

(3) Consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation (a “Business Combination”),
in each case, unless, following such Business Combination (i) all or
substantially all of the individuals and entities who were the beneficial
owners respectively, of the Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially owned, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns
the Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such

 

2

 

Business Combination, of the
Outstanding Corporation Common Stock and outstanding Corporation voting
securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan or
related trust of the Corporation or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board, providing for such Business Combination; or

 

(4) Approval by the
shareholders of the Corporation of a complete liquidation or dissolution of the
Corporation.

 

(h) “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time.

 

(i) “Commission” shall mean
the Securities and Exchange Commission.

 

(j) “Committee” shall mean
the Compensation and Directors Nominating Committee of the Board, or other
Committee, regardless of name, that acts on matters of compensation for
eligible employees, which Committee shall be comprised only of two or more
directors or such greater number of directors as may be required under
applicable law, each of whom, during such time as one or more Participants may
be subject to Section 16 of the Exchange Act, shall be a Disinterested and
Outside director.

 

(k) “Common Stock” shall
mean the common stock of the Corporation, $1.00 par value per share, and such
other securities or property as may become the subject of Awards, or become
subject to Awards, pursuant to an adjustment made under Section 6.2 of
this Plan.

 

(l) “Corporation” shall mean
City National Corporation and its Subsidiaries.

 

(m) “Disinterested and
Outside” shall mean “disinterested” within the meaning of any applicable
regulatory requirements, including Rule 16b-3, and “outside” within the meaning
of Section 162(m) of the Code.

 

(n) “Dividend Equivalent”
shall mean an amount equal to the amount of cash dividends or other cash
distributions paid (or such portion of such dividend or other distribution as
may be designated by the Committee) with respect to each Share after the date
of an Award of a Dividend Equivalent.

 

3

 

(o) “Eligible Employee”
shall mean an officer at a level of Vice President or the equivalent (whether
or not a director) of the Corporation, or any Other Eligible Person, as
determined by the Committee in its discretion. In no event may any member of
the Committee or a committee administering any other stock option, stock
appreciation, stock bonus or other stock plan of the Corporation be an Eligible
Employee.

 

(p) “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended.

 

(q) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to time.

 

(r) “Fair Market Value”
shall mean, with respect to Common Stock, the price at which the Stock sold on
the last normal transaction of the trading day on a specified date, or if no
trading occurs on such specified date, on the most recent preceding business
day on which trading occurred, as quoted on the National Market System of the
National Association of Securities Dealers or on any exchange upon which the
stock may be traded.

 

(s) “Incentive Stock Option”
shall mean an Option which is designated as an incentive stock option within
the meaning of Section 422 of the Code and which contains such provisions
as are necessary to comply with that section.

 

(t) “Nonqualified Stock
Option” shall mean an Option that is designated as a Nonqualified Stock Option
and shall include any Option intended as an Incentive Stock Option that fails
to meet the applicable legal requirements thereof. Any Option granted hereunder
that is not designated as an incentive stock option shall be deemed to be
designated a nonqualified stock option under this Plan and not an incentive
stock option under the Code.

 

(u) “Non-Employee Director”
shall mean a member of the Board who is not an officer or employee of the
Corporation.

 

(v) “Option” shall mean an
option to purchase Shares under this Plan. The Committee shall designate any
Option granted to an Eligible Employee as a Nonqualified Stock Option or an
Incentive Stock Option.

 

(w) “Other Eligible Person”
shall mean any other person (including significant agents and consultants) who
performs substantial services for the Corporation of a nature similar to those
performed by key employees, selected to participate in this Plan by the
Committee from time to time; provided that in no event shall a Non-Employee
Director be selected as an Other Eligible Person.

 

4

 

(x) “Participant” shall mean
an Eligible Employee who has been granted an Award under this Plan.

 

(y) “Performance Share Award”
shall mean an Award made pursuant to the provisions, and subject to the terms
and conditions, of Article V of the Plan.

 

(z) “Personal Representative”
shall mean the person or persons who, upon the Total Disability or incompetence
of a Participant, shall have acquired on behalf of the Participant, by legal
proceeding or otherwise, the power to exercise the rights or receive benefits
under this Plan and who shall have become the legal representative of the
Participant.

 

(aa) “Plan” shall mean this
1999 Omnibus Plan.

 

(bb) “QDRO” shall mean a
qualified domestic relations order as defined in Section 414 (p) of the
Code or Title I, Section 206(d) (3) of ERISA (to the same extent as if
this Plan were subject thereto), or the applicable rules thereunder.

 

(cc) “Restricted Stock”
shall mean Shares awarded to a Participant subject to payment of such
consideration, if any, and such conditions on vesting and such transfer and
other restrictions as are established in or pursuant to this Plan, for so long
as such shares remain unvested under the terms of the applicable Award
Agreement.

 

(dd) “Retirement” shall mean
retirement from active service as an employee or officer of the Corporation on
or after attaining age 65.

 

(ee) “Rule 16b-3” shall mean
Rule 16b-3, as amended from time to time, as promulgated by the Commission
pursuant to the Exchange Act.

 

(ff) “Section 16 Person”
shall mean a person subject to Section 16(a) of the Exchange Act.

 

(gg) “Securities Act” shall
mean the Securities Act of 1933, as amended from time to time.

 

(hh) “Shares” shall mean
shares of Common Stock of the Corporation.

 

(ii) “Stock Appreciation
Right” shall mean a right to receive a number of Shares or an amount of cash,
or a combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Shares that
is authorized under this Plan.

 

(jj) “Subsidiary” shall mean
any corporation or other entity a majority of whose outstanding voting stock or
voting power is beneficially owned directly or indirectly by the Corporation.

 

5

 

(kk) “Total Disability”
shall mean a “permanent and total disability” within the meaning of Section 22(e)
(3) of the Code and such other disabilities, infirmities, afflictions or
conditions as the Committee by rule may include.

 

1.3.
ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE

 

(a) Committee. This Plan
shall be administered by, and all Awards to Eligible Employees shall be
authorized by, the Committee. Action of the Committee with respect to the
administration of this Plan shall be taken pursuant to a majority vote or by
unanimous written consent of its members.

 

(b) Plan Awards;
Interpretation; Powers of Committee. Subject to the express provisions of this
Plan, the Committee shall have the authority:

 

(i) To determine, from among
those persons eligible, the particular Eligible Employees who will receive any
Awards;

 

(ii) To grant Awards to
Eligible Employees, determine the price at which securities will be offered or
awarded and the amount of securities to be offered or awarded to any of such
persons, and determine the other specific terms and conditions of such Awards
consistent with the express limits of this Plan, and establish the installments
(if any) in which such Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is required, and establish
the events of termination or reversion (if any) of such Awards;

 

(iii) To approve the forms
of Award Agreements (which need not be identical either as to type of Award or
among Participants);

 

(iv) To construe and
interpret this Plan and any agreements defining the rights and obligations of
the Corporation and Participants under this Plan, further define the terms used
in this Plan, and prescribe, amend and rescind rules and regulations relating
to the administration of this Plan;

 

(v) To cancel, modify, or
waive the Corporation’s rights with respect to, or modify, discontinue,
suspend, or terminate, any or all outstanding Awards held by Participants,
subject to any required consent under Section 7.6;

 

(vi) To accelerate or extend
the exercisability or vesting extend the term of any or all such outstanding
Awards within the maximum ten-year term of Awards under Section 1.7; and

 

6

 

(vii) To make all other
determinations and take such other action as contemplated by this Plan or as
may be necessary or advisable for the administration of this Plan and the
effectuation of its purposes.

 

(c) Binding Determinations.
Any action taken by, or inaction of, the Corporation, the Board or the
Committee relating or pursuant to this Plan shall be within the absolute
discretion of that entity or body and shall be conclusive and binding upon all
persons. No member of the Board or Committee, or officer of the Corporation,
shall be liable for any such action or inaction of the entity or body, of
another person or, except in circumstances involving bad faith, of himself or
herself. Subject only to compliance with the express provisions hereof, the
Board and Committee may act in their absolute discretion in matters within
their authority related to this Plan.

 

(d) Reliance on Experts. In
making any determination or in taking or not taking any action under this Plan,
the Committee or the Board, as the case may be, may obtain and may rely upon
the advice of experts, including professional advisors to the Corporation. No
director, officer or agent of the Corporation shall be liable for any such
action or determination taken or made or omitted in good faith.

 

(e) Delegation. The
Committee may delegate ministerial, non-discretionary functions to individuals
who are officers or employees of the Corporation.

 

1 .4. PARTICIPATION

 

Awards may be granted by the
Committee only to those persons that the Committee determines to be Eligible
Employees. An Eligible Employee who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee shall so determine.
Non-Employee Directors shall be eligible to receive Awards under this Plan only
as specified in Section 2.8.

 

1.5. SHARES AVAILABLE FOR
AWARDS

 

Subject to the provisions of
Section 7.2, the capital stock that may be delivered under this Plan shall
be shares of the Corporation’s authorized but unissued Common Stock. The shares
may be delivered for any lawful consideration.

 

(a) Number of Shares. The
maximum number of shares of Common Stock that may be delivered pursuant to
Awards granted to Eligible Employees under this Plan shall not exceed 3,500,000
Shares subject to subsection (c) below and the adjustments contemplated by
Section 7.2. The maximum number of Options and Stock Appreciation Rights
(whether payable in Shares, cash or any combination thereof) that may be
granted to an Eligible Employee during any one-year period shall not exceed
500,000, subject to adjustment as contemplated in Section 7.2. The
aggregate number of shares designated under the Plan as Restricted Stock, stock
subject to Performance Share Awards and Stock Bonuses, shall never exceed
1,000,000.

 

7

 

(b) Reservation of Shares.
Common Stock subject to outstanding Awards of derivative securities (as defined
in Rule 16a-l(c) under the Exchange Act) shall be reserved for issuance. If a
Stock Appreciation Right or similar right based on the increased market value
of a specified number of Shares is exercised or a Performance Share Award is
paid, the number of Shares to which such exercise or payment relates under the
applicable Award shall be charged against the maximum amount of Shares that may
be delivered pursuant to Awards under this Plan and, if applicable, such Award.
If the Corporation withholds Shares pursuant to Section 2.2(b) or 7.5, the
number of shares that would have been deliverable with respect to an Award
shall be reduced by the number of shares withheld and such shares shall not be
available for additional Awards under this Plan. To the extent a Performance
Share Award constitutes an equity security (as this phrase is defined in Rule
16a-1 under the Exchange Act) issued by the Corporation and is paid in Shares
the number of Shares (if any) subject to such Performance Share Award shall be
charged (but in the case of tandem or substituted Awards, without duplication)
against the maximum number of Shares that may be delivered pursuant to Awards
under this Plan.

 

(c) Cash Only Award Limit.
Awards payable solely in cash under the Plan and Awards payable either in cash
or shares that are actually paid in cash shall constitute and be referred to as
“Cash Only Awards”. The number of Cash Only Awards shall be determined by
reference to the number of Shares by which the Award is measured. The maximum
number of Cash Only Awards that may be paid shall not, together with the aggregate
number of Shares that may be delivered under subsection (a), exceed
5,000,000, subject to adjustments under Section 7.2. Awards payable either
in cash or shares shall not be counted against the Cash Only Award limit if
charged against the share limit in subsection (a). Notwithstanding the
foregoing, if an Award paid or payable solely in cash satisfies the
requirements for the exclusion from the definition of a derivative security in
Rule 16a-l(c) that does not require that the award be made under a Rule 16b-3
plan, the Award shall not be counted against any of the limits of this Section.

 

(d) Reissue of Awards.
Subject to any restrictions under Rule 16b-3, the shares which are subject to
any unexercised, unconverted, unvested or undistributed portion of any expired,
canceled, terminated or forfeited Award, or any alternative form of
consideration under an Award that is not paid in connection with the settlement
of an Award or any portion of an Award shall again be available for Award under
subsection (a) or (c) above, as applicable, provided the Participant has
not received dividends or Dividend Equivalents during the period in which the
Participant’s ownership was restricted or otherwise not vested. Shares that are
issued pursuant to Awards and subsequently reacquired by the Corporation
pursuant to the terms and conditions of the Awards also shall be available for
reissuance under the Plan. Nothing in this paragraph shall be interpreted to
allow shares which are in the possession of the Corporation pursuant to either Section 2.2(b)
or 7.5 to be available for reissuance under the Plan.

 

8

 

(e) Interpretive Issues.
Additional rules for determining the number of shares or Cash Only Awards
authorized under the Plan may be adopted by the Committee as it deems necessary
or appropriate; provided that such rules are consistent with Rule 16b.

 

1.6. GRANT OF AWARDS

 

Subject to the express
provisions of this Plan, the Committee shall determine the number of Shares
subject to each Award, and the price (if any) to be paid for the Shares or the
Award and, in the case of Performance Share Awards, in addition to matters
addressed in Section 1.3(b), the specific objectives, goals and
performance criteria (such as an increase in revenues, market value, earnings
or book value over a base period, the years of service before vesting, the
relevant job classification or level of responsibility or other factors) that
further define the terms of the Performance Share Award. Each Award shall be
evidenced by an Award Agreement signed by the Corporation and, if required by
the Committee, by the Participant.

 

1.7. AWARD PERIOD

 

Each Award and all executory
rights or obligations under the related Award Agreement shall expire on such
date (if any) as shall be determined by the Committee, but, in the case of
Options or other rights to acquire Shares, not later than ten (10) years after
the Award Date.

 

1.8.
LIMITATIONS ON EXERCISE AND VESTING OF AWARDS

 

(a) Provisions for Exercise.
Except as may otherwise be provided in an Award Agreement or herein, no Award
shall be exercisable or shall vest until at least six months after the initial
Award Date. Once exercisable an Award shall remain exercisable until the
expiration or earlier termination of the Award, unless the Committee otherwise
provides.

 

(b) Procedure. Any
exercisable Award shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from the Participant,
together with any required payment made in accordance with Section 2.2(b).

 

(c) Fractional
Shares/Minimum Issue. Fractional share interests shall be disregarded, but may
be accumulated. The Committee, however, may determine that cash, other
securities or other property will be paid or transferred in lieu of any
fractional share interests. No fewer than 100 Shares may be purchased on
exercise of any Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.

 

9

 

1.9.
ACCEPTANCE OF NOTES TO FINANCE EXERCISE

 

The Corporation may, with
the Committee’s approval, accept one or more notes from any Participant in
connection with the exercise or receipt of any outstanding Award; provided that
any such note shall be subject to the following terms and conditions:

 

(a) The principal of the
note shall not exceed the amount required to be paid to the Corporation upon
the exercise or receipt of one or more Awards under the Plan and the note shall
be delivered directly to the Corporation in consideration of such exercise or
receipt.

 

(b) The initial term of the
note shall be determined by the Committee; provided that the term of the note,
including extensions, shall not exceed a period of 10 years.

 

(c) The note shall provide
for full recourse to the Participant and shall bear interest at a rate
determined by the Committee but not less than the applicable imputed interest
rate specified by the Code.

 

(d) Except as otherwise
provided by the Committee, if the employment of the Participant terminates, the
unpaid principal balance of the note shall become due and payable on the 10th
business day after such termination; provided, however, that if a sale of any
Shares acquired by the Participant in connection with an Award to which the
note relates would cause such Participant to incur liability under Section 16(b)
of the Exchange Act, the unpaid balance shall become due and payable on the
10th business day after the first day on which a sale of such shares could have
been made without incurring such liability assuming for these purposes that
there are no other transactions by the Participant subsequent to such
termination.

 

(e) If required by the
Committee or by applicable law, the note shall be secured by a pledge of any
shares or rights financed thereby or any other collateral determined by the
Committee in compliance with applicable law.

 

(f) The terms, repayment
provisions, and collateral release provisions of the note and the pledge
securing the note shall conform with applicable rules and regulations of the
Federal Reserve Board as then in effect and any other applicable banking rules
and regulations.

 

10

 

1.10. NO TRANSFERABILITY

 

(a) Awards may be exercised
only by the Participant or, if the Participant has died, the Participant’s
Beneficiary or, if the Participant has suffered a Total Disability, the
Participant’s Personal Representative, if any, or if there is none, the
Participant, or (to the extent permitted by applicable law and Rule 16b-3) a
third party pursuant to such conditions and procedures as the Committee may
establish. Other than by will or the laws of descent and distribution or
pursuant to a QDRO or other exception to transfer restrictions under Rule 16b-3
(except to the extent not permitted in the case of an Incentive Stock Option),
no right or benefit under this Plan or any Award, including, without
limitation, any Option or shares of Restricted Stock, that has not vested shall
be transferable by the Participant or shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge (other than to the Corporation) and any such attempted action shall be
void. The Corporation shall disregard any attempt at transfer, assignment or
other alienation prohibited by the preceding sentences and shall pay or deliver
such cash or Shares in accordance with the provisions of this Plan.

 

(b) The restrictions on
exercise and transfer above shall not be deemed to prohibit the authorization
by the Committee of “cashless exercise” procedures with unaffiliated third
parties who provide financing for the purpose of (or who otherwise facilitate)
the exercise of Awards consistent with applicable legal restrictions and Rule
16b-3, nor, to the extent permitted by the Committee, transfers for estate and
financial planning purposes, notwithstanding that the inclusion of such
features may render the particular Awards ineligible for the benefits of Rule
16b-3, nor, in the case of Participants who are not Section 16 Persons,
transfers to such other persons or in such other circumstances as the Committee
may in the Award Agreement or other writing expressly permit.

 

II. EMPLOYEE OPTIONS

 

2.1. GRANTS

 

One or more Options may be
granted under this Article to any Eligible Employee, subject to the
provisions of Section 1.5. Each Option granted may be either an Option
intended to be an Incentive Stock Option or an Option not so intended, and such
intent shall be indicated in the applicable Award Agreement.

 

2.2. OPTION PRICE

 

(a) Pricing Limits. Subject
to Section 2.4, the purchase price per share of the Common Stock covered
by each Option shall be determined by the Committee at the time the Option is
granted, but shall not be less than 100% of the Fair Market Value of the Common
Stock on the date of grant.

 

11

 

(b) Payment Provisions. The
purchase price of any shares purchased on exercise of an Option granted under
this Article shall be paid in full at the time of each purchase in one or
a combination of the following methods: (i) in cash or by electronic funds
transfer;

(ii) by check payable to the
order of the Company; (iii) if authorized by the Committee or specified in the
applicable Award Agreement, in cash in an amount equal to the par value of the
shares being purchased, and, in the form of a promissory note (consistent with
the requirements of Section 1.9) of the Participant in an amount equal to
the difference between said cash amount and the purchase price of such shares;
(iv) by notice and third party payment in such manner as may be authorized by
the Committee; (v) by the delivery of Shares already owned by the Participant,
provided, however, that the Committee may in its absolute discretion limit the
Participant’s ability to exercise an Award by delivering such Shares; or (vi)
if authorized by the Committee or specified in the applicable Award Agreement,
by reduction in the number of Shares otherwise deliverable upon exercise by that
number of Shares which have a then Fair Market Value equal to such purchase
price. Previously owned Shares used to satisfy the exercise price of an Option
under clause (v) shall be valued at their Fair Market Value on the date of
exercise.

 

2.3.
LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS

 

(a) $100,000 Limit. To the
extent that the aggregate “fair market value” of Common Stock with respect to
which Incentive Stock Options first become exercisable by a Participant in any
calendar year exceeds $100,000, taking into account both Common Stock subject
to Incentive Stock Options under this Plan and stock subject to incentive stock
options under all other plans of the Corporation, such options shall be treated
as Nonqualified Stock Options. For this purpose, the “fair market value” of the
Common Stock subject to Options shall be determined as of the date the Options
were awarded. In reducing the number of Options treated as Incentive Stock
Options to meet the $100,000 limit, the most recently granted Options shall be
reduced first. To the extent a reduction of simultaneously granted Options is
necessary to meet the $100,000 limit, the Committee may, in the manner and to
the extent permitted by law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an Incentive Stock
Option.

 

(b) Option Period. Subject
to Section 2.4, each Option and all rights thereunder shall expire no
later than ten years after the Award Date.

 

(c) Other Code Limits. There
shall be imposed in any Award Agreement relating to Incentive Stock Options
such terms and conditions as from time to time are required in order that the
Option be an “incentive stock option” as that term is defined in Section 422
of the Code.

 

12

 

2.4. LIMITS ON 10% HOLDERS

 

No Incentive Stock Option
may be granted to any person who, at the time the Option is granted, owns (or
is deemed to own under Section 424(d) of the Code) shares of outstanding
Common Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation, unless the exercise price of such Option
with respect to the Common Stock covered by the Option is at least 110% of the
Fair Market Value of the Common Stock subject to the Option and such Option by
its terms is not exercisable after the expiration of five years from the date
such Option is granted.

 

2.5. NO OPTION REPRICING

 

Subject to Section 7.2
and Section 7.6 and the specific limitations on Awards granted in this
Plan, the Committee may not reduce the exercise price of any Option or Stock
Appreciation Right granted pursuant to the Plan following the date of the Award
or to accept the surrender of outstanding Options or Stock Appreciation Rights
as consideration for the grant of a new Award with a lower per-share exercise
price.

 

2.6. DIVIDEND EQUIVALENTS

 

The Committee may, at the
time of granting an Option, grant Dividend Equivalents attributable to Shares
subject to the Option. Dividend Equivalents shall be paid in cash only to the
extent the Option is unexercised as of the dividend record date, as specified
in the Award Agreement, as follows: the Dividend Equivalent per Share shall be
multiplied by the number of Shares subject to Option and an amount equal to the
product so derived shall be paid in cash to the Participant on the dividend
payment date. The Committee may, in the Award, specify that Dividend
Equivalents shall be paid only for a specified time period or only as to that
portion of the Option that has vested.

 

2.7. SURRENDER OF STOCK
OPTIONS

 

The Committee, in its sole
discretion, shall have the authority under the circumstances set forth herein
to agree mutually with a Participant to grant such Participant the right on
such terms and conditions as the Committee may prescribe, to surrender such
Participant’s Options to the Corporation for cancellation and to receive upon
such surrender a cash payment equal to the Spread applicable to such
surrendered Option. Such right shall be made available only in the event of an
Offer (as defined in the following paragraph).

 

13

 

The term “Offer” as used in
this Section means any tender offer or exchange offer for Shares, other
than one made by the Corporation, provided that the corporation, person or
other entity making the offer acquires Shares pursuant to such offer.

 

The term “Offer Price per
Share” as used in this Section means the highest price per share paid on
any Offer which is in effect at any time during the period beginning on the
sixtieth day prior to the date on which the Option is surrendered pursuant to
this Section and ending on such date of surrender. Any securities or
property which are part or all of the consideration paid for shares in the Offer
shall be valued in determining the Offer Price per Share at the higher of (a)
the valuation placed on such securities or property by any other corporation,
person or entity making the Offer or (b) the valuation placed on such
securities or property by the Committee.

 

The term “Spread” as used in
this Section means with respect to any surrendered Option and associated
right, if any, an amount equal to the product computed by multiplying (i) the
excess of (A) the Offer Price per Share or the highest market price per share
of the Corporation’s Common Stock during the period beginning on the sixtieth
day prior to the date on which the Stock Option is surrendered pursuant to this
Section and ending on such date of surrender over (B) the purchase price
per share at which the surrendered Option is then exercisable, by (ii) the
number of shares subject to such Option with respect to which it has not
theretofore been exercised.

 

2.8.
SPECIAL REQUIREMENTS FOR DIRECTOR STOCK OPTIONS

 

(a) Eligibility. All
directors of the Corporation who are not employees of the Corporation shall be
eligible to receive Director Stock Options, as set forth in this Section 2.8.
Notwithstanding the foregoing, any director who is, or who during the preceding
calendar year was, a member of the Committee or any committee administering any
other stock option, stock appreciation, stock bonus or other stock plan of the
Corporation or any Subsidiary will not be eligible to receive Director Stock
Options hereunder if, in the opinion of counsel for the Corporation, the
receipt of Director Stock Options will cause such director to be a “disinterested
person” with respect to the Plan or any other stock option, stock appreciation,
stock bonus or other stock plan of the Corporation or any subsidiary pursuant
to Rule 16b-3 of the Securities and Exchange Commission, or will otherwise
disqualify the Plan or any other such Plan from compliance with said rule.

 

(b) Grant of Director
Options. Every eligible director will receive five hundred (500) Director Stock
Options on the date of each annual meeting of shareholders. Director Stock
Options shall be granted automatically to each such eligible director on the
business day following such annual meeting of stockholders, without further
action of the Committee or the Board.

 

(c) Stock Option Price. The
purchase price of the stock pursuant to a Director Stock Option shall be $1.00
per share.

 

14

 

(d) Other Terms of Director
Stock Options. Each Director Stock Option shall become exercisable six (6)
months after the date of grant. Unless otherwise determined by the Committee,
if the holder of Director Stock Options ceases to serve as a director of the
Corporation for any reason other than for cause, the Director Stock Options
shall expire at the end of their fixed term or three months after the date of
such termination, and until then shall be exercisable in full, regardless of
any vesting schedule otherwise applicable. Except as set forth in this Section 2.8,
all terms and provisions of the Director Stock Options shall be as set forth in
the Plan with respect to options which are not Director Stock Options.

 

III. STOCK APPRECIATION
RIGHTS

 

3.1. GRANTS

 

In its discretion, the
Committee may grant to any Eligible Employee Stock Appreciation Rights either
concurrently with the grant of another Award or in respect of an outstanding
Award, in whole or in part, or independently of any other Award. Any Stock
Appreciation Right granted in connection with an Incentive Stock Option shall
contain such terms as may be required to comply with the provisions of Section 422
of the Code and the regulations promulgated thereunder.

 

3.2.
EXERCISE OF STOCK APPRECIATION RIGHTS

 

(a) Exercisability. A Stock
Appreciation Right related to another Award shall be exercisable at such time
or times, and to the extent, that the related Award shall be exercisable,
provided, however, that any exercise of any Stock Appreciation Right hereunder
shall be made beginning on the third business day following the date of release
of the financial data specified in paragraph (e)(1)(ii) of Rule 16b-3 of the
regulations promulgated under the Securities Exchange Act of 1934 and ending on
the twelfth business day following such date or at such other time as may be
permitted under an agreement or successor rule.

 

(b) Effect on Available
Shares. In the event that a Stock Appreciation Right is exercised, the number
of Shares subject to the Award shall be charged against the number of Shares
subject to the Stock Appreciation Right and the related Option of the
Participant.

 

(c) Stand-Alone SARs. A
Stock Appreciation Right granted independently of any other Award shall be
exercisable pursuant to the terms of the Award Agreement but, unless the
Committee determines otherwise, in no event earlier than six months after the
Award Date.

 

3.3. PAYMENT

 

(a) Amount. Unless the
Committee otherwise provides, upon exercise of a Stock Appreciation Right, the
Participant shall be entitled to receive payment of an amount determined by
multiplying

 

15

 

(i) The difference obtained
by subtracting the exercise price per Share under the related Award (if
applicable) or the initial share value specified in the Award from the Fair
Market Value of a Share on the date of exercise of the Stock Appreciation
Right, by

 

(ii) The number of Shares
with respect to which the Stock Appreciation Right shall have been exercised.

 

Notwithstanding the above,
the Committee may place a maximum limitation on the amount payable upon
exercise of a Stock Appreciation Right. Such limitation, however, must be
determined as of the date of the grant and noted on the instrument evidencing
the Stock Appreciation Right granted hereunder.

 

(b) Form of Payment. The
Committee, in its sole discretion, shall determine the form in which payment
shall be made of the amount determined under paragraph (a) above, either solely
in cash, solely in Shares (valued at Fair Market Value on the date of exercise
of the Stock Appreciation Right), or partly in such Shares and partly in cash,
provided that the Committee shall have determined that such exercise and
payment are consistent with applicable law. If the Committee permits the
Participant to elect to receive cash or Shares (or a combination thereof) on
such exercise, any such election shall be subject to such conditions as the
Committee may impose and, in the case of any Section 16 Person, any
election to receive cash shall be subject to any applicable limitations under
Rule 16b-3.

 

IV. RESTRICTED STOCK AWARDS

 

4.1. GRANTS

 

The Committee may, in its
discretion, grant one or more Restricted Stock Awards to any Eligible Employee.
Each Restricted Stock Award Agreement shall specify the number of Shares to be
issued, the date of such issuance, the consideration for such Shares (but not
less than the minimum lawful consideration) to be paid, if any, by the
Participant and the restrictions imposed on such Shares and the conditions of
release or lapse of such restrictions. Such restrictions shall not lapse
earlier than six months after the Award Date, except to the extent the
Committee may otherwise provide. Stock certificates evidencing shares of
Restricted Stock pending the lapse of the restrictions (“restricted shares”)
shall bear a legend making appropriate reference to the restrictions imposed
hereunder and shall be held by the Corporation or by a third party designated
by the Committee until the restrictions on such shares shall have lapsed and
the shares shall have vested in accordance with the provisions of the Award and
Section 1.8. Upon issuance of the Restricted Stock Award, the Participant
may be required to provide such further assurance and documents as the
Committee may require to enforce the restrictions.

 

16

 

4.2. RESTRICTIONS

 

(a) Pre-Vesting Restraints.
Except as provided in Section 1.10 and 4.1, restricted shares comprising
any Restricted Stock Award may not be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered either voluntarily or involuntarily, until
such shares have vested.

 

(b) Dividend and Voting
Rights. Unless otherwise provided in the applicable Award Agreement, a
Participant receiving a Restricted Stock Award shall be entitled to cash
dividend and voting rights for all shares issued even though they are not
vested, provided that such rights shall terminate immediately as to any
restricted shares which cease to be eligible for vesting.

 

(c) Cash Payments. If the
Participant shall have paid or received cash (including any dividends) in
connection with the Restricted Stock Award, the Award Agreement shall specify
whether and to what extent such cash shall be returned (with or without an
earnings factor) as to any restricted shares which cease to be eligible for vesting.

 

(d) The maximum number of
shares issued in the form of Restricted Stock Awards, when added to the number
of shares reserved for issuance pursuant to Performance Share Awards and the
number of shares awarded in the form of Stock Bonuses, may never exceed
1,000,000.

 

4.3. RETURN TO THE
CORPORATION

 

Unless the Committee
otherwise expressly provides, shares of Restricted Stock that are subject to
restrictions at the time of termination of employment or are subject to other
conditions to vest that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be returned to the
Corporation in such manner and on such terms as the Committee shall therein
provide.

 

V.
PERFORMANCE SHARE AWARDS AND STOCK BONUSES

 

5.1.
GRANTS OF PERFORMANCE SHARE AWARDS

 

The Committee may, in its
discretion, grant one or more Performance Share Awards to any Eligible Employee
based upon such factors, which in the case of any Award to a Section 16
Person shall include but not be limited to the contributions, responsibilities
and other compensation of the person, as the Committee shall deem relevant in
light of the specific type and terms of the Award. An Award Agreement shall
specify the maximum number of Shares (if any) subject to the Performance Share
Award, the consideration (but not less than the minimum lawful consideration)
to be paid for any such Shares as may be issuable to the Participant, the
duration of the Award and the conditions upon which delivery of any Shares or
cash to the Participant shall be based. The amount of Shares that may be
deliverable pursuant to such Award shall

 

17

 

be based upon the degree of
attainment over a specified period (a “performance cycle”) as may be established
by the Committee of such measure(s) of the performance of the Corporation (or
any part thereof) or the Participant as may be established by the Committee.
The Committee may provide for full or partial credit, prior to completion of
such performance cycle or the attainment of the performance achievement
specified in the Award, in the event of the Participant’s death, Retirement, or
Total Disability, a Change in Control Event or in such other circumstances as
the Committee, consistent with Section 7.10(c)(2), if applicable, may
determine.

 

5.2. GRANTS OF STOCK BONUSES

 

The Committee may grant a
stock bonus to any Eligible Employee to reward exceptional or special services,
contributions or achievements in the manner and on such terms and conditions
(including any restrictions on such shares) as determined from time to time by
the Committee.

 

The number of Shares so
awarded shall be determined by the Committee. The stock bonus may be granted
independently or in lieu of a cash bonus.

 

5.3. DEFERRED PAYMENTS

 

The Committee may authorize
for the benefit of any Eligible Employee the deferral of any payment of cash or
Shares that may become due or of cash otherwise payable under this Plan, and
provide for accreted benefits thereon based upon such deferment, at the
election or at the request of such Participant, subject to the other terms of
this Plan. Such deferral shall be subject to such further conditions,
restrictions or requirements as the Committee may impose, subject to any then
vested rights of Participants.

 

5.4 RESTRICTIONS

 

The maximum number of shares
reserved for issuance pursuant to Performance Share Awards, and the number of
shares awarded as Stock Bonuses, when aggregated with the number of shares
issued in the form of Restricted Stock may never exceed 1,000,000.

 

VI. TAX OFFSET BONUS RIGHTS

 

6.1. GRANTS

 

The Committee may, in its
discretion, grant Tax Offset Bonus Rights to selected Participants. Such rights
shall be evidenced by Tax Offset Bonus Rights agreements on the terms and
conditions set forth in the Plan, which agreements shall specify the amount or
method of calculating the amount of the rights being granted and may contain
such other terms and conditions as are not inconsistent with the purposes and
provisions of the Plan. Each Tax Offset Bonus Right must relate to a specific
Nonqualified Stock Option granted under Section II of the Plan. Tax Offset
Bonus Rights granted in relation to a specific Nonqualified Stock Option shall
be granted either concurrently or at such later time as determined by the
Committee. The amount of any Tax Offset Bonus Right may be, but is not required
to be, calculated as a specified percentage of the excess of the Fair Market
Value of a share of the Corporation’s Common Stock on the date when the right
is exercised over the price per share under the Option exercised concurrently
with the exercise of such right.

 

18

 

6.2.
TAX OFFSET BONUS RIGHTS PERIOD

 

Each Tax Offset Bonus Right
and all rights or obligations thereunder shall expire upon the expiration of
the related Nonqualified Stock Option. In no event may a Tax Offset Bonus Right
be exercised later than the tenth anniversary of the date on which the Tax
Offset Bonus Right is granted, and shall be subject to earlier termination as
hereinafter provided.

 

6.3. EXERCISE OF RIGHTS

 

Tax Offset Bonus Rights
shall be exercisable to the extent, and only to the extent, the related
Nonqualified Stock Option is exercisable. Tax Offset Bonus Rights shall only be
exercisable concurrently with the exercise of the related Nonqualified Stock
Option; any exercise of the Nonqualified Stock Option shall also be deemed an
exercise of the equivalent number of Tax Offset Bonus Rights.

 

Each holder of a Tax Offset
Bonus Right shall agree to give the Committee prompt written notice of an
election made by such holder to exercise said Tax Offset Bonus Rights subject
to the approval of the Committee.

 

Despite any other provision
of the Plan, the Committee may impose such conditions on exercise of Tax Offset
Bonus Rights as may be required to satisfy the requirements of Rule 16b-3 (or
any successor rule), promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.

 

Any exercise of a Tax Offset
Bonus Right hereunder shall be made beginning on the third business day
following the date of release of the financial data specified in paragraph
(e)(1)(ii) of Rule 16b-3 of the regulations promulgated under the Securities
Exchange Act of 1934 and ending on the twelfth business day following such date
or at such other time as may be permitted under an amendment or successor rule.

 

6.4. PAYMENTS

 

Upon the exercise of a Tax
Offset Bonus Right, the Corporation shall deliver to the person exercising such
right the amount of the right being exercised, calculated as specified in the
Tax Offset Bonus Right agreement with respect thereto. Payment shall be in
either cash, Common Stock or a combination thereof, as the Committees shall
determine. No fractional shares will be issued.

 

6.5. TERMINATION OF
EMPLOYMENT

 

Unless otherwise determined
by the Committee, in the event a Participant ceases to be an employee of the
Corporation for any reason, any Tax Offset Bonus Right will be exercisable only
to the extent that any related Nonqualified Stock Option is exercisable under
the applicable provisions of the Plan and related Award Agreement.

 

19

 

VII. OTHER PROVISIONS

 

7.1.
RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES

 

(a) Employment Status.
Status as an Eligible Employee shall not be construed as a commitment that any
Award will be made under this Plan to an Eligible Employee or to Eligible
Employees generally.

 

(b) No Employment Contract.
Nothing contained in this Plan (or in any other documents related to this Plan
or to any Award) shall confer upon any Eligible Employee or Participant any
right to continue in the employ or other service of the Corporation or
constitute any contract or agreement of employment or other service, nor shall
interfere in any way with the right of the Corporation to change such person’s
compensation or other benefits or to terminate the employment of such person,
with or without cause, but nothing contained in this Plan or any document
related hereto shall adversely affect any independent contractual right of such
person without his or her consent thereto.

 

(c) Plan Not Funded. Awards
payable under this Plan shall be payable in Shares or from the general assets
of the Corporation, and no special or separate reserve, fund or deposit shall
be made to assure payment of such Awards. No Participant, Beneficiary or other
person shall have any right, title or interest in any fund or in any specific
asset (including shares of Common Stock except as expressly otherwise provided)
of the Corporation by reason of any Award hereunder. Neither the provisions of
this Plan (or of any related documents), nor the creation or adoption of this
Plan, nor any action taken pursuant to the provisions of this Plan shall
create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Corporation and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person acquires
a right to receive payment pursuant to any Award hereunder, such right shall be
no greater than the right of any unsecured general creditor of the Corporation.

 

7.2. ADJUSTMENTS;
ACCELERATIONS

 

(a) Adjustments. If the
outstanding shares of Common Stock are changed into or exchanged for cash,
other property or a different number or kind of shares or securities of the
Corporation, or if additional shares or new or different securities are
distributed with respect to the outstanding shares of Common Stock, through a
reorganization or merger in which the Corporation is the surviving entity, or
through a combination, consolidation, recapitalization, reclassification, stock
split, stock dividend, reverse stock split, stock consolidation, dividend or
distribution of cash or property to the shareholders of the Corporation or if
there shall occur any other extraordinary corporate transaction or event in
respect of the Common Stock or a sale of substantially all the assets of the
Corporation as an entirety which in the judgment of the Committee materially
affects the Common Stock, then the Committee shall, in such manner and to such
extent (if any) as it deems appropriate and equitable (1) proportionately
adjust any or all terms of outstanding Awards including, but not limited to (A)
the number and kind of shares of Common Stock or other consideration that is
subject to or may be delivered under this Plan and pursuant to outstanding
Awards, (B) the consideration payable with respect to Awards granted prior to

 

20

 

any such change and the
price, if any, paid in connection with Restricted Stock Awards or (C) the
performance standards appropriate to any outstanding Awards; or (2) in the case
of an extraordinary dividend or other distribution, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange, or spin off,
make provision for a cash payment or for the substitution or exchange of any or
all outstanding Awards or the cash, securities or property deliverable to the
holder of any or all outstanding Awards based upon the distribution or
consideration payable to holders of Common Stock upon or in respect of such
event; provided, however, in each case, that with respect to Awards of
Incentive Stock Options, no such adjustment shall be made which would cause the
Plan to violate Section 422 or 424(a) of the Code or any successor
provisions thereto. Corresponding adjustments shall be made with respect to any
Stock Appreciation Rights based upon the adjustments made to the Options to
which they are related. In any of such events, the Committee may take such
action sufficiently prior to such event if necessary to permit the Participant
to realize the benefts intended to be conveyed with respect to the underlying
shares in the same manner as is available to shareholders generally.

 

(b) Acceleration of Awards
Upon Change in Control. As to any or all Participants, upon the occurrence of a
Change in Control Event (i) each Option and Stock Appreciation Right shall
become immediately exercisable, (ii) Restricted Stock shall immediately vest
free of restrictions, and (iii) each Performance Share Award shall become
payable to the Participant; provided, however, that in no event shall any Award
be accelerated as to any Section 16 Person to a date less than six months
after the Award Date of such Award. Notwithstanding the foregoing, prior to a
Change in Control Event, the Committee may determine that, upon its occurrence,
there shall be no acceleration of benefits under Awards or determine that only
certain or limited benefits under Awards shall be accelerated and the extent to
which they shall be accelerated, and/or establish a different time in respect
of such event for such acceleration. In that event, the Committee will make
provision in connection with such transaction for continuance of the Plan and
the assumption of Options and Awards theretofore granted, or the substitution
for such with new Options and Awards covering the stock of a successor employer
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to number and kind of shares and prices. In addition, the Committee may
override the limitations on acceleration in this Section 7.2(b) by express
provision in the Award Agreement and may accord any Participant a right to
refuse any acceleration, whether pursuant to the Award Agreement or otherwise,
in such circumstances as the Committee may approve. Any acceleration of Awards
shall comply with applicable regulatory requirements. including without
limitation Section 422 of the Code.

 

(c) Possible Early
Termination of Accelerated Awards. If any Option or other right to acquire
Shares under this Plan has not been exercised prior to (i) a dissolution of the
Corporation, (ii) a reorganization event described in Section 7.2(a) that
the Corporation does not survive, or (iii) the consummation of a reorganization
event described in Section 7.2(a) that results in a Change in Control
Event approved by the Board and no provision has been made for the survival,
substitution, exchange or other settlement of such Option or right, such Option
or right shall thereupon terminate.

 

21

 

7.3.
EFFECT OF TERMINATION OF EMPLOYMENT

 

The Committee shall
establish in respect of each Award granted to an Eligible Employee the effect
of a termination of employment on the rights and benefits thereunder and in so
doing may make distinctions based upon the cause of termination, e.g.,
retirement, early retirement, termination for cause, disability or death.
Notwithstanding any terms to the contrary in an Award Agreement or this Plan,
the Committee may decide in its complete discretion to extend the exercise
period of an Award (although not beyond the period described in Section 2.3(b))
and the number of shares covered by the Award with respect to which the Award
is exercisable or vested.

 

7.4. COMPLIANCE WITH LAWS

 

This Plan, the granting and
vesting of Awards under this Plan and the offer, issuance and delivery of
Shares and/or the payment of money under this Plan or under Awards granted
hereunder are subject to compliance with all applicable federal and state laws,
rules and regulations (including, but not limited to, state and federal
securities laws and federal margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of counsel
for the Corporation, be necessary or advisable in connection therewith. Any
securities delivered under this Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Corporation,
provide such assurances and representations to the Corporation as the
Corporation may deem necessary or desirable to assure compliance with all
applicable legal requirements.

 

7.5. TAX WITHHOLDING

 

(a) Cash or Shares. Upon any
exercise, vesting, or payment of any Award, the Corporation shall have the
right at its option to (i) require the Participant (or Personal Representative
or Beneficiary, as the case may be) to pay or provide for payment of the amount
of any taxes which the Corporation may be required to withhold with respect to
such transaction or (ii) deduct from any amount payable in cash the amount of
any taxes which the Corporation may be required to withhold with respect to
such cash amount. In any case where a tax is required to be withheld in
connection with the delivery of Shares under this Plan, the Committee may grant
(either at the time of the Award or thereafter) to the Participant the right to
elect, or the Committee may require (either at the time of the Award or
thereafter), pursuant to such rules and subject to such conditions as the
Committee may establish, to have the Corporation reduce the number of shares to
be delivered by the appropriate number of shares valued at their then Fair
Market Value, to satisfy such withholding obligation.

 

(b) Tax Loans. The Committee
may, in its discretion, authorize a loan to an Eligible Employee in the amount
of any taxes which the Corporation may be required to withhold with respect to
Shares received (or disposed of, as the case may be) pursuant to a transaction
described in subsection (a) above. Such a loan shall be for a term, at a
rate of interest and pursuant to such other terms and conditions as the
Committee, under applicable law, may establish and such loan need not comply
with the provisions of Section 1.9.

 

22

 

7.6.
PLAN AMENDMENT, TERMINATION AND SUSPENSION

 

(a) Board Authorization. The
Board may, at any time, terminate or, from time to time, amend, modify or
suspend this Plan, in whole or in part. No Awards may be granted during any
suspension of this Plan or after termination of this Plan, but the Committee
shall retain jurisdiction as to Awards then outstanding in accordance with the
terms of this Plan. Any suspension will not affect the expiration of the Plan
set forth in Section 7.9.

 

(b) Shareholder Approval. If
any amendment would materially increase the aggregate number of securities that
may be issued under this Plan or materially modify the requirements as to
eligibility for participation in this Plan, then to the extent then required by
Rule 16b-3 to secure benefits thereunder or to avoid liability under Section 16
of the Exchange Act (and Rules thereunder) or required under Section 424
of the Code or any other applicable law, or deemed necessary or advisable by
the Board, such amendment shall be subject to shareholder approval.

 

(c) Amendments to Awards.
Without limiting any other express authority of the Committee under, but subject
to the express limits of, this Plan, the Committee by agreement or resolution
may waive conditions of or limitations on Awards that the Committee in the
prior exercise of its discretion has imposed, without the consent of the
Participant, and may make other changes to the terms and conditions of Awards
that do not affect in any manner materially adverse to the Participant his or
her rights and benefits under an Award.

 

(d) Limitations on
Amendments to Plan and Awards. No amendment, suspension or termination of the
Plan or change of or affecting any outstanding Award shall, without written
consent of the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or obligations of the
Corporation under any Award granted under this Plan prior to the effective date
of such change. Changes contemplated by Section 7.2 shall not be deemed to
constitute changes or amendments for purposes of this Section 7.6.

 

7.7.
PRIVILEGES OF STOCK OWNERSHIP

 

Except as otherwise
expressly authorized by the Committee or this Plan, a Participant shall not be
entitled to any privilege of stock ownership as to any Shares not actually
delivered to and held of record by him or her. No adjustment will be made for
dividends or other rights as a shareholder for which a record date is prior to
such date of delivery.

 

7.8. EFFECTIVE DATE OF THE
PLAN

 

This Plan shall be effective
as of January 26, 1999, the date of Board approval, subject to shareholder
approval within 12 months thereafter.

 

23

 

7.9. TERM OF THE PLAN

 

No Award shall be granted
more than ten years after the effective date of this Plan (the “termination
date”). Unless otherwise expressly provided in this Plan or in an applicable
Award Agreement, any Award thereto granted may extend beyond such date, and all
authority of the Committee with respect to Awards hereunder shall continue
during any suspension of this Plan and in respect of outstanding Awards on such
termination date.

 

7.10.
GOVERNING LAW; CONSTRUCTION; SEVERABILITY

 

(a) Choice of Law. This
Plan, the Awards, all documents evidencing Awards and all other related
documents shall be governed by, and construed in accordance with the laws of
the State of California applicable to contracts made and performed within such
State, except as such laws may be supplanted by the laws of the United States
of America, which laws shall then govern its effect and its construction to the
extent they supplant California law.

 

(b) Severability. If any
provision shall be held by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall continue in effect.

 

(c) Plan Construction.

 

(i) It is the intent of the
Corporation that this Plan and Awards hereunder satisfy and be interpreted in a
manner that in the case of Participants who are or may be subject to Section 16
of the Exchange Act satisfies the applicable requirements of Rule 16b-3 so that
such persons will be entitled to the benefits of Rule 16b-3 or other exemptive
rules under Section 16 of the Exchange Act and will not be subjected to
avoidable liability thereunder. If any provision of this Plan or of any Award
or any prior action by the Committee would otherwise frustrate or conflict with
the intent expressed above, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict, but to the extent
of any remaining irreconcilable conflict with such intent as to such persons in
the circumstances, such provision shall be deemed void.

 

(ii) It is the further
intent of the Corporation that options or Stock Appreciation Rights with an
exercise or base price not less than Fair Market Value on the date of grant,
that are granted to or held by a Section 16 Person, shall qualify as
performance-based compensation under Section 162(m) of the Code, and this
Plan shall be interpreted consistent with such intent.

 

24

 

7.11. CAPTIONS

 

Captions and headings are given
to the sections and subsections of this Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision
thereof.

 

7.12. NON-EXCLUSIVITY OF
PLAN

 

Nothing in this Plan shall
limit or be deemed to limit the authority of the Board or the Committee to
grant awards or authorize any other compensation, with or without reference to
the Common Stock under any other plan or authority.

 

25Exhibit
10(p)

CITY
NATIONAL CORPORATION

 

SUMMARY
SHEET OF DIRECTOR COMPENSATION

 

Set forth below is a summary of the
compensation paid by City National Corporation (the “Corporation”) and City
National Bank (the “Bank”), a wholly-owned subsidiary of the Corporation
(collectively, the “Company”), to the Board of Directors of the Corporation and
the Bank, as of the date of filing of the Corporation’s Annual Report on Form
10-K for the year ended December 31, 2004 (“Form 10-K”).  Each of the current directors of the
Corporation is also a director of the Bank.

 

1.  Employee-Directors:  Directors who are employees of the Company receive
no compensation for service as Directors.

 

2.  Non-Employee Directors.

 

• Fees.  The Company pays the following cash fees to
its non-employee directors for attendance at Board and Committee meetings and
for serving as Committee Chairs:

 

	
  Board of Director Meeting Fees

  	
   

  	
  $

  	
  2,000

  	
   

  
	
  Committee Meeting Fees

  	
   

  	
  $

  	
  1,500

  	
   

  
	
  Annual Retainer for Chair of Board Committees(1)

  	
   

  	
  $

  	
  3,000
  - $10,000

  	
   

  

(1) Effective October 27, 2004, upon the
recommendation of the Compensation, Nominating & Governance Committee (“CN&G
Committee”) and with advice of an independent consulting firm, the Board
increased the annual retainers of the Audit Committee Chair from $5,000 per
year to $10,000 per year and the CN&G Committee Chair from $3,000 per year
to $5,000 per year.  The chairs of the
Directors Trust Committee and the Community Reinvestment Act Committee each
receive an annual fee of $3,000.  The
retainers are paid bi-annually in January and July.

 

In addition, the Company reimburses non-employee
directors for travel expenses incurred in connection with attending Board,
Committee and shareholder meetings, and for other Company-business related
expenses (including the travel expenses of spouses if they are specifically
invited to attend the event for appropriate business purposes).

 

• Director
Stock Options.  Pursuant
to the Corporation’s Amended and Restated 2002 Omnibus Plan (the “Amended 2002
Plan”), an automatic annual grant of 500 discounted stock options (“DSOs”) was
made to each non-employee director on the date of the 2004 annual stockholders meeting
(“DSOs “) at an exercise price of $1.00 per share.  The DSOs vested six months after grant and
expire ten years after grant.  In order
to conform the grant of equity compensation awarded to non-employee directors
to the requirements of Section 409A of the Internal Revenue Code, enacted as
part of the American Jobs Creation Act of 2004 (“Section 409A”), after
consultation with an independent consulting group, the CN&G Committee has
recommended to the Board that the automatic annual grants of DSOs be
discontinued effective as of the 2005 annual stockholders meeting and the
provision of the Amended 2002 Plan permitting such grants be deleted.  On March 9, 2005, the Board approved that
recommendation.  In place of the DSO
grants, the Board has approved the payment of an “Annual Award” to each
non-employee director as described below.

 

• Annual Award.  On the date of each annual stockholders
meeting, each non-employee director will be entitled to receive an “Annual
Award” in cash in an amount equivalent to the value of 500 shares of the
Corporation’s common stock based on the closing price reported on the NYSE the
prior business day.  This cash payment
will not be eligible for deferral under the Director Deferred Compensation
Plan.  In order to align the directors’
compensation with stockholders’ interests, each director will be required to
use 50% percent of the gross amount of the Annual Award to purchase shares of
the Corporation’s stock on the open market within six months from the date of
the annual meeting. This stock purchase requirement for non-employee directors will
be included in the Company’s Corporate Governance Guidelines.

 

1

 

• 2000 City National Bank
Director Deferred Compensation Plan.  The Bank’s 2000 Director Deferred
Compensation Plan allows non-employee directors to elect each year to defer up
to 100% of their director meeting fees and annual committee chair retainers. (See
Exhibit  10(s) to Form 10-K for more
information.)

• Director Stock Ownership
 It is the policy of the Board that each
non-employee director, to enhance his or her ownership in the Corporation and
to better align the Board with the interests of the stockholders, is required
over three years to accumulate and own at least $100,000 worth of  the Corporation’s stock.  There are additional stock ownership
requirements for employee-directors based on multiples of their salary, which
requirements range from ownership of stock in an amount equal to 5x salary for
the CEO to 3.5x salary for the other employee-directors.  For more information about the stock
ownership requirements for both directors and officers, see Appendix A to the
Guidelines on the CNC Corporate Governance Web Page.

 

2

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