Document:

Exhibit 10.13

 

CITY NATIONAL CORPORATION

AMENDED AND RESTATED

2002 OMNIBUS PLAN

 

I. THE PLAN

 

1.1.  Purpose.
The purpose of this amended and restated 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, and to motivate and reward Non-Employee Directors with grants of
Director Stock Options.

 

1.2.  Definitions

 

(a)  “Award” shall mean
an award of any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Share Award, Dividend Equivalent, or any combination thereof
(including, but not limited to restricted units or other deferred Awards),
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 or pursuant to a designation of a beneficiary on a
form acceptable to the Committee, 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)  “Cash Only Award”
shall mean Stock Appreciation Rights, Performance Share Awards or restricted
units which are paid in cash.

 

(h)  “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 Event: (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 maintained 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 (h), or (v) any acquisition by
the Goldsmith Family or any director or partnership for the benefit of any
member of the Goldsmith Family; or

 

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(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 Common Stock and Outstanding 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 Business
Combination, of the Outstanding Common Stock and Outstanding 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.

 

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

 

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

 

(k)  “Committee” shall
mean the Compensation, Nominating & Governance 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 shall be a Disinterested and Outside director.

 

(l)  “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 5.2
of this Plan.

 

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

 

(n)  “Director Stock
Option” means a Nonqualified Stock Option granted to a Non-Employee Director
pursuant to Section 2.8 of this Plan.

 

(o)  “Disinterested and
Outside” shall mean a “Non-Employee Director” within the meaning of Rule 16b-3,
and “outside” within the meaning of Section 162(m) of the Code.

 

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(p)  “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.

 

(q)  “DRO” shall mean a
valid domestic relations order under applicable state law, acceptable to the
Corporation.

 

(r)  “Eligible Employee”
shall mean an officer at a level of Vice President or the equivalent (whether
or not a director) of the Corporation, any other officer of the Corporation who
performs substantial services for the Corporation, selected to participate in
the Plan by the Committee, or any Other Eligible Person, as determined by the
Committee in its discretion.

 

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

 

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

 

(u)  “Fair Market Value”
shall mean, with respect to Common Stock, the price at which the Common 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 New York Stock
Exchange.

 

(v)  “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.

 

(w)  “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.

 

(x)  “Non-Employee
Director” shall mean a member of the Board who is not an officer or employee of
the Corporation, including, but not limited to, a member of the Board who
qualifies as a “Non-Employee Director” within the meaning of Rule 16b-3.

 

(y)  “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.

 

(z)  “Other Eligible
Person” shall mean any other person (including significant agents and
consultants) who performs or agrees to perform 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.

 

(aa)  “Participant” shall mean an Eligible Employee
who has been granted an Award under this Plan or Non-Employee Director who has
been granted a Director Stock Option under this Plan.

 

(bb)  “Performance Share Award” shall mean a Cash
Only Award in the form of performance shares made pursuant to the provisions,
and subject to the terms and conditions, of Article IV of the Plan.

 

(cc)  “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.

 

(dd)  “Plan” shall mean this Amended and Restated
2002 Omnibus Plan.

 

(ee)  “Restricted Stock” shall mean Shares awarded
to a Participant subject to payment of such consideration, if any, and such
conditions on vesting and transfer and other restrictions as are established

 

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in or pursuant to this Plan, for so long as
such shares remain unvested under the terms of the applicable Award Agreement.

 

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

 

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

 

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

 

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

 

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

 

(kk)  “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.

 

(ll)  “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.

 

(mm)  “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 6.6;

 

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

 

  (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.

 

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(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 6.2,
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 and grants of Director Stock Options to
Non-Employee Directors under this Plan made after the action taken at the April 28,
2004 shareholder meeting, or any adjournment or postponement thereof, (other than
Cash Only Awards) shall not exceed 3,904,438 Shares, subject to the
reissue of Awards pursuant to Sections 1.5(d), 6.13(b), 6.14(b), 6.15(b) and
the adjustments contemplated by Section 6.2. For every Share of Restricted
Stock issued under this Plan, the maximum number of Shares that may be
delivered pursuant to Awards hereunder shall be reduced by 2.8 shares
(including the one (1) share of Restricted Stock issued). The maximum
number of Options, Restricted Stock (including restricted units) 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 Shares, subject to adjustment as contemplated in Section 6.2.

 

(b)  Reservation of
Shares. Common Stock subject to outstanding Awards (other than Cash Only
Awards) shall be reserved for issuance. If a Stock Appreciation Right is
exercised and paid in Shares, the number of Shares to which such exercise
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
6.5, 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.

 

(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 under the Plan shall
not exceed 1,500,000 Shares, subject to adjustments under Section 6.2. The
maximum dollar amount of Cash Only Awards for any calendar year to any eligible
employee shall not exceed $3 million. 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).

 

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(d)  Reissue of Awards.
Subject to any restrictions under Rule 16b-3, the Shares which are subject
to any unexercised, 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 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 6.5 to be
available for reissuance under the Plan. Only Shares which were originally
awarded as Restricted Stock (including restricted units which are payable in
Shares) or Director Stock Options may be reissued as Restricted Stock
(including restricted units which are payable in Shares) or Director Stock
Options.

 

(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-3.

 

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 or, in its discretion, any other Awards, in addition
to matters addressed in Section 1.3(b), the specific objectives, goals and
performance criteria (which 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 and any other criteria approved by the Committee) that further
define the terms of the Performance Share Award or other 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.

 

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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 to be equal to a “market rate” of interest on the
date of such exercise or receipt.

 

(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.

 

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 upon death or pursuant to a DRO 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 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.

 

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II. 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 Sections 2.4 and 2.8, 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.

 

(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
Corporation; (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
which have been held for at least six months, 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.

 

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.

 

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2.5.  No Option
Repricing. Subject to Section 6.2 and Section 6.6 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 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 Agreement, 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 Options. Such right shall be
made available only in the event of an Offer (as defined in the following
paragraph).

 

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.

 

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

 

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

 

(d)  Other Terms of
Director Stock Options. Each Director Stock Option shall become exercisable six
(6) months after the date of the grant. Unless otherwise determined by the
Committee, if the holder of a Director Stock Option ceases to serve as a
director of the Corporation for any reason other than for

 

9

 

cause, the Director Stock Options shall
expire at the earlier of 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.

 

(b)  Effect on
Available Shares. In the event that a Stock Appreciation Right related to
another Award 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:

 

(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. Stock certificates
evidencing shares of Restricted Stock

 

10

 

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.

 

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)  Conditions of
Release or Lapse of Restrictions. The restrictions imposed on Restricted Stock
as provided for in the Restricted Stock Award Agreements shall meet the
following required standards: (1) the restrictions may not lapse with
respect to any Award of Restricted Stock over a period of less than five (5) years
following the date of the Award; and, (2) with respect to any particular
Award the percentage of the total number of shares of Restricted Stock of such
Award as to which restrictions may lapse on any anniversary date of the Award
may not cause the percentage of restrictions which have lapsed in the aggregate
with respect to such grant to exceed the rate of twenty percent (20%) of the
original Award per year. Notwithstanding the foregoing, the Committee may grant
Restricted Stock at or in connection with the commencement of employment, in
which case the minimum vesting must be not less than 3 years, with pro
rata lapse of restrictions annually on the anniversary date of the Award.

 

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.

 

4.4  Restricted
Units. The Committee may, in its discretion, grant to any Eligible
Employee an Award (including, but not limited to, restricted units or other
deferred awards) which will be payable in Shares of Common Stock (a “Share
Award”) and/or in Cash Only Awards on such terms as the Committee may determine
in its sole discretion, but subject to the vesting restrictions contained in Section 4.2(d) in
the case of restricted units which will be payable in Shares. Such Awards may
be made as additional compensation for services or may be in lieu of other
compensation which the Eligible Employee is entitled to receive from the
Corporation. All such Share Awards and Cash Only Awards shall constitute Awards
for all purposes of the Plan, and shall be subject to the limits on Awards
which are payable in Shares and in cash which are contained in the Plan. The
Committee may also grant Dividend Equivalents in connection with any Award
which is made under the Plan on such terms as the Committee may determine in
its sole discretion.

 

V. PERFORMANCE SHARE CASH ONLY AWARDS

 

5.1.  Grants of
Performance Share Cash Only Awards. The Committee may, in its
discretion, grant Cash Only Awards in the form of Performance Share Awards to
any Eligible Employee based upon such

 

11

 

factors 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 duration of the Award and the conditions upon which payment of the
Award to the Participant shall be based. The cash amount that may be
deliverable pursuant to such Award shall be based upon the fair market value of
the number of Shares of Common Stock specified in the Award, subject to any maximum
determined by the Committee, and 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 6.10(c)(ii), if applicable, may determine.

 

5.2.  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.

 

VI. OTHER PROVISIONS

 

6.1.  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.

 

6.2.  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

 

12

 

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 any such change
and the prices, 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 benefits 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. Upon the occurrence of a Change in Control Event
(i) each Option and Stock Appreciation Right shall become immediately
exercisable, (ii) Restricted Stock (including restricted units) shall
immediately vest free of restrictions, and (iii) each Performance Share
Award shall become payable to the Participant. 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 Options and Awards 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 6.2(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 or cash under this Plan has not been exercised prior to (i) a
dissolution of the Corporation, (ii) a reorganization event described in Section 6.2(a) that
the Corporation does not survive, or (iii) the consummation of a
reorganization event described in Section 6.2(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.

 

6.3.  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.

 

13

 

6.4.  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. The
administration of the Plan and all determinations and discretionary actions by
the Committee shall comply with all applicable federal and state laws, rules and
regulations (including, but not limited to, the Sarbanes-Oxley Act of 2002) and
with the New York Stock Exchange Corporate Governance Rules and other
applicable listing standards.

 

6.5.  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 the minimum 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 “market 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.

 

6.6.  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 6.9.

 

(b)  Shareholder
Approval. If any amendment would materially increase the aggregate number of
Shares or other securities that may be issued under this Plan or materially
modify the requirements as to eligibility for participation in this Plan or
would otherwise require shareholder approval to comply with any applicable
federal or state law or applicable New York Stock Exchange listing standard,
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 New York Stock Exchange listing standard, 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

 

14

 

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 6.2 shall not be deemed to
constitute changes or amendments for purposes of this Section 6.6.

 

6.7.  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.

 

6.8.  Effective
Date of the Plan This amended and restated Plan shall be effective
as of March 10, 2004, the date of Board approval, subject to shareholder
approval within 12 months thereafter. If shareholder approval for this
amended and restated Plan is not obtained prior to March 10, 2005, this
amended and restated Plan shall have no force or effect, and the original Plan
shall continue in effect under the terms which were previously approved by the
shareholders and which were in effect prior to this amendment and restatement
of the Plan.

 

6.9.  Term of
the Plan No Award shall be granted more than ten years after the
effective date of this amended and restated Plan (the “termination date”).
Unless otherwise expressly provided in this Plan or in an applicable Award
Agreement, any Award theretofore 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.

 

6.10.  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.

 

15

 

6.11.  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.

 

6.12.  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, except as provided in Sections 6.13, 6.14 and 6.15.

 

6.13.  Relation
to 1999 Omnibus Plan

 

(a)  No New Awards.
Notwithstanding any other provisions to the contrary in this Plan, no new
awards of Shares will be granted under the Corporation’s 1999 Omnibus Plan.

 

(b)  Reissue of Awards.
Any unexercised, unvested or undistributed portion of any expired, cancelled,
terminated or forfeited awards under the Corporation’s 1999 Omnibus Plan, with
respect to any such expirations, cancellations, terminations or forfeitures
which occur after the action taken at the April 28, 2004 shareholder
meeting, or any adjournment or postponement thereof, shall be added to the
number of Shares available and shall be available for Awards under this Plan,
in the same manner and to the same extent as provided for reissue of Awards
under this Plan pursuant to Section 1.5(d).

 

6.14.  Relation
to 1995 Omnibus Plan

 

(a)  No New Awards.
Notwithstanding any other provisions to the contrary in this amended and
restated Plan, upon shareholder approval of this amended and restated Plan
pursuant to Section 6.8, and filing a Form S-8 registration statement
with the Securities and Exchange Commission for this amended and restated Plan,
no new awards of Shares will be granted under the Corporation’s 1995 Omnibus
Plan.

 

(b)  Reissue of Awards.
Any unexercised, unvested or undistributed portion of any expired, cancelled,
terminated or forfeited awards under the Corporation’s 1995 Omnibus Plan, with
respect to any such expirations, cancellations, terminations or forfeitures
which occur after the action taken at the April 28, 2004 shareholder
meeting, or any adjournment or postponement thereof, shall be added to the
number of Shares available and shall be available for Awards under this Plan,
in the same manner and to the same extent as provided for reissue of Awards
under this Plan pursuant to Section 1.5(d).

 

6.15.  Relation
to 2001 Stock Option Plan

 

(a)  No New Awards.
Notwithstanding any other provisions to the contrary in this amended and
restated Plan, upon shareholder approval of this amended and restated Plan
pursuant to Section 6.8, and filing a Form S-8 registration statement
with the Securities and Exchange Commission for this amended and restated Plan,
no new awards of Shares will be granted under the Corporation’s 2001 Stock
Option Plan.

 

(b)  Reissue of Awards.
Any unexercised, unvested or undistributed portion of any expired, cancelled,
terminated or forfeited awards under the Corporation’s 2001 Stock Option Plan,
with respect to any such expirations, cancellations, terminations or
forfeitures which occur after the action taken at the April 28, 2004
shareholder meeting, or any adjournment or postponement thereof, shall be added
to the number of Shares available and shall be available for Awards under this
Plan, in the same manner and to the same extent as provided for reissue of
Awards under this Plan pursuant to Section 1.5(d).

 

16Exhibit 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

 

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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.

 

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