LOS ANGELES, Jul 15, 2003 (BUSINESS WIRE) - City NationalCorporation (NYSE:CYN) today announced that the majority of itscolleagues who are eligible for stock incentive grants will nowreceive a combination of stock options and restricted shares.
In a move intended to better align the interests of colleagues andshareholders, City National's board of directors has approved a planto replace one-half of its stock option grants to senior officers withrestricted shares - at a ratio of one share for every four stockoptions. So, for example, someone who would have been given 1,000options under City National's former program instead received 500options and 125 restricted shares under the new plan. A small numberof colleagues received restricted stock, but not options.
"Our stock incentive plan has been and continues to be veryimportant to City National's long-term success," said Chief ExecutiveOfficer Russell Goldsmith. "It is a key element of our strategy toattract, retain and reward this company's talented team of bankers andinvestment professionals. The newly amended plan strikes a verypositive balance: It strengthens stock ownership requirements andgives colleagues a continuing stake in our company's performance,while also reducing the number of shares earmarked for incentiveawards."
Unlike options, which give employees the right to purchase stockat a set price on a future date, restricted shares convey immediateownership. However, the company's restricted stock awards will vestover five years in equal installments, starting after the second year.Options will continue to vest at 25 percent annually over four years.
As part of its newly amended stock incentive plan, City National'sboard also has approved the expansion of company stock ownershiprequirements. These requirements now extend below the executive vicepresident level to colleagues who report directly to the company's 20Executive Committee members. All of these colleagues will be requiredto achieve a meaningful level of company stock ownership over time inorder to better align their economic interests with those of CityNational's shareholders.
Restricted stock must be expensed as it vests. As noted today inCity National's second-quarter earnings release, the company recorded$129,000 in expense for restricted stock awards in the second quarter,and going forward expects to expense $387,000 quarterly for this stockaward. The company continues to treat stock options in accordance withAPB Opinion No. 25.
About City National
City National Corporation is a financial services company. Itswholly owned subsidiary, City National Bank, is the second largestindependent bank headquartered in California. As California's PremierPrivate and Business Bank(R), City National provides banking,investment and trust services through 54 offices, including 12full-service regional centers, in Southern California and the SanFrancisco Bay Area. The company also has an office in New York City.
City National is ranked among America's top companies in Forbesmagazine's "Super 500" list and included by Barron's magazine in itsannual survey of the nation's top wealth managers. For moreinformation about City National, visit the company's Web site atwww.cnb.com.
SOURCE: City National Corporation
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