EXHIBIT 10.22.2
                                       
                             EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is made as of the 15th day of July, 1998 by 
and between RUSSELL GOLDSMITH ("Goldsmith"), on the one hand, and CITY 
NATIONAL BANK, a National Bank ("CNB") and CITY NATIONAL CORPORATION ("Parent 
Corporation"), on the other hand.

     1.  EMPLOYMENT.  CNB and Parent Corporation (collectively the 
"Employer") hereby employ Goldsmith, and Goldsmith hereby accepts employment, 
under the terms and conditions hereafter set forth. The Employment Agreement 
dated as of the 16th of October, 1995 by and between Goldsmith, CNB and 
Parent Corporation, as amended, is terminated effective upon the execution 
and delivery of this Employment Agreement.

     2.  DUTIES.  Goldsmith shall be employed as the Chairman of the Board of 
Directors and Chief Executive Officer of CNB and Vice-Chairman of the Board 
of Directors and Chief Executive Officer of the Parent Corporation and his 
powers and duties shall be consistent with such offices and positions. As 
Chief Executive Officer of Employer, Goldsmith shall supervise, control and 
be responsible for all aspects of the business and affairs of Employer and 
their subsidiaries.

     3.  PLACE OF SERVICE.  Substantially all of Goldsmith's duties shall be 
performed in Los Angeles and Beverly Hills, California and unless mutually 
agreed upon by Goldsmith and Employer, Goldsmith shall be headquartered in 
Beverly Hills, California.

     4.  TERM.  Subject to the provisions for termination as hereinafter 
provided, the term of this Agreement shall commence on July 15, 1998 (the 
"Start Date") and shall terminate four (4) years thereafter.

     5.  ANNUAL BASE COMPENSATION.  Employer shall pay Goldsmith as annual 
base compensation (the "Annual Base Compensation"), payable in equal 
semimonthly payments, the sum of Six  Hundred Seventy Five Thousand Dollars 
($675,000) during the first year of the term hereof. On each July 15 during 
the term hereof, the then Annual Base Compensation shall be increased by the 
lesser of (i) that percentage equal to five percent (5%) plus the percentage 
increase (but not decrease) in the Consumer Price Index for all Urban 
Consumers for Los Angeles and Riverside-Orange Counties (or if no 
longer being published, a comparable index) between the month of May of the 
prior year and the month of May immediately preceding the July 15 date and 
(ii) ten percent (10%).

     6.  BONUS COMPENSATION.  Goldsmith shall participate in CNB's Executive 
Management Bonus Plan and any other cash bonus or incentive compensation plan 
of Employer established for corporate executive officers of Employer, 
including corporate officers who 




are members of the Executive Committee and the Strategy and Planning 
Committee.  The amount of annual bonus or incentive compensation (the "Annual 
Bonus") paid to Goldsmith pursuant to the Executive Management Bonus Plan for 
any year (including the fiscal year ending December 31, 1998 and the fiscal 
year during which his employment is terminated) shall not be less than one 
hundred twenty five percent (125%) of his Annual Base Compensation as of 
December 31 of the year for which the bonus is being paid if plan goals for 
the year are achieved, scaled up ratably to two hundred percent (200%) if one 
hundred thirty percent (130%) of plan goals are achieved and scaled down 
ratably to thirty five percent (35%) if eighty five percent (85%) of plan 
goals are achieved.  In determining the Annual Bonus payable to Goldsmith for 
any year in which he was not employed by Employer for the entire year, the 
Annual Bonus for the portion of such fiscal year preceding the termination of 
his employment shall be an amount equal to (i) the amount which the Annual 
Bonus would have been had the plan goals achieved through the month ending 
immediately following the date of termination of his employment been the plan 
goals for the entire fiscal year, the fiscal year had ended at the end of 
such month and Goldsmith's Annual Base Compensation had been the Annual Base 
Compensation payable to him as of the following December 31 had his 
employment continued through the following December 31, (ii) multiplied by a 
fraction, the numerator of which is the number of months in the fiscal year 
through the end of the month immediately following the date of termination of 
Goldsmith's employment and the denominator of which is 12.  Unless Goldsmith 
elects to defer receipt thereof, each Annual Bonus shall be paid no later 
than the end of the third month of the fiscal year following the fiscal year 
for which the bonus is being paid; provided, however, that if the employment 
of Goldsmith is terminated prior to the end of the fiscal year for which the 
bonus is being paid, the Annual Bonus for the partial year preceding the 
termination of his employment shall be paid no later than the end of the 
third month following the termination of his employment and any amounts 
payable under any subparagraphs of Paragraph 10 as an Annual Bonus applicable 
to any portion of a fiscal year of less than twelve months shall be paid no 
later than the end of the third month following the end of the period for 
which such amount is payable.

     7.  Stock Options.  Prior to October 16, 1998, Goldsmith will be granted 
by the Board of Directors of Parent Corporation, non-qualified stock options 
to  purchase an aggregate of three hundred fifty thousand (350,000) shares of 
Common Stock of Parent Corporation at a purchase price equal to the fair 
market value of the Common Stock on the date of grant.  Said options will be 
granted pursuant to the provisions of the 1995 Omnibus Plan of Parent 
Corporation and be represented by an agreement executed by the Parent 
Corporation. Such options will have a term of ten years and, subject to 
subparagraphs 10(b), (c), (d) and (e) hereof, will be exercisable as to one 
hundred sixteen thousand six hundred sixty seven (116,667) shares of Common 
Stock from and after the date of grant, as to an additional one hundred 
sixteen thousand six hundred sixty seven (116,667) shares of Common Stock

                                     -2-



from and after one year from the date of grant and in full from and after the 
second year from the date of grant.

     8.  FRINGE BENEFITS AND REIMBURSEMENT OF EXPENSES.  Employer shall 
provide Goldsmith with such medical and other health, dental, accidental life 
and disability insurance, and he shall be entitled to all employee and fringe 
benefits and reimbursement of expenses and to participate in all benefit 
plans (including stock option plans) as are consistent with his position and 
duties and those previously provided to the Chief Executive Officer of 
Employer; provided, however, that during the first two years of the term 
hereof Employer shall not be required to grant any additional employee stock 
options to Goldsmith.

    9.  EXTENT OF SERVICE.  Goldsmith shall devote his time, attention and 
energies to the business of Employer and shall not, during the term of this 
Agreement, be engaged in any other activity which  will materially interfere 
with the performance of his duties hereunder.  Time expended by Goldsmith on 
philanthropic activities, as a general partner of Sunbar Properties, as a 
passive investor in real estate ventures and other investments, or in 
managing the existing properties of Goldsmith Entertainment Corporation shall 
be deemed not to interfere with the performance of his duties hereunder.

     10.  TERMINATION OF EMPLOYMENT.

          (a)  TERMINATION BY EMPLOYER FOR GOOD CAUSE.  Employer may 
terminate the employment of Goldsmith for "good cause" by written notice to 
Goldsmith.  For purposes of this Agreement, "good cause" shall mean only (i) 
conviction of a crime directly related to his employment hereunder, (ii) 
conviction of a felony involving moral turpitude, (iii) willful and gross 
mismanagement of the business and affairs of Employer, or (iv) breach of any 
material provision of this Agreement.  In the event the employment of 
Goldsmith is terminated pursuant to this subparagraph 10(a), Employer shall 
have no further liability to Goldsmith other than for compensation accrued 
through the date of termination but not yet paid.

     In the event Employer contends that it has good cause to terminate 
Goldsmith pursuant to clause (iii) or (iv) of the second sentence of this 
subparagraph 10(a), Employer shall provide Goldsmith with written notice 
specifying in reasonable detail the services or matters which it contends 
Goldsmith has not been adequately performing, or the material provisions of 
this Agreement of which Goldsmith is in violation and the acts constituting 
such violation, why Employer has good cause to terminate this Agreement, and 
what Goldsmith should do to adequately perform his obligations hereunder.  If 
within thirty (30) days of receipt of the notice Goldsmith performs the 
required services or modifies his performance to correct the matters 
complained of, Goldsmith's breach will be deemed cured, and Goldsmith's 
employment shall not be terminated.  However, if the nature of the service 
not performed by Goldsmith or the 

                                      -3-



matters complained of are such that more than thirty (30) days are reasonably 
required to perform the required service or to correct the matters complained 
of, then his breach will be deemed cured if he commences to perform such 
service or to correct such matters within the thirty (30) day period and 
thereafter diligently prosecutes such performance or correction to 
completion. If Goldsmith does not perform the required services or modify his 
performance to correct the matter complained of within the thirty (30) day 
period or the extension thereof, Employer shall have the right to terminate 
this Agreement at the end of the thirty (30) day period or extension thereof. 
It is understood that Goldsmith's performance hereunder shall not be deemed 
unsatisfactory solely on the basis of any economic performance of Employer 
because this performance will depend in  part on a variety of factors over 
which Goldsmith has little control.

          (b)  TERMINATION BY EMPLOYER WITHOUT GOOD CAUSE.  Employer may 
terminate the employment of Goldsmith without "good cause" (as defined in 
subparagraph 10(a) above) at any time during the term hereof by giving 
written notice to Goldsmith specifying therein the effective date of 
termination.  Upon such notice being given, if not then exercisable in full, 
the options described in Paragraph 7 hereof shall become exercisable in full. 
In the event the employment of Goldsmith is terminated pursuant to this 
subparagraph 10(b) without good cause, Employer shall be obligated to pay to 
Goldsmith (which shall be in lieu of any other amounts which would be payable 
to Goldsmith on account of such termination pursuant to any separation pay 
plan or policy of Employer) (i) the Annual Base Compensation and Annual Bonus 
he would have been paid had he remained in the employ of the Employer 
hereunder, and had the term hereof extended, for a period of three years 
from the effective date of termination, provided that (x) the Annual Bonus for 
any fiscal year ending after the date of termination (including the fiscal 
year during which the termination of employment occurs and any portion of a 
fiscal year for which he is entitled to an Annual Bonus under this 
subparagraph) shall be computed by multiplying Goldsmith's Annual Base 
Compensation (in case of an Annual Bonus for a partial year, the amount which 
the Annual Base Compensation would have been as of the following December 31 
had his employment continued through such December 31) by (in lieu of 
percentages of Annual Compensation set forth in paragraph 6) the highest 
percentage of Annual Base Compensation previously used in determining any 
prior Annual Bonus paid or payable to Goldsmith, (y) the Annual Bonus 
applicable to any portion of a  fiscal year of less than twelve months shall be 
an amount determined as provided in the preceding subclause (x) multiplied by 
a fraction, the numerator of which is the number of months of the fiscal year 
with respect to which Goldsmith is entitled to the Annual Bonus pursuant to 
this subparagraph (with each partial month being deemed a whole month) and the 
denominator of which is 12, and (z) the penultimate sentence of paragraph 6 
shall be disregarded and have no force or effect, and (ii) all other employee 
benefits he would have received hereunder had he remained in the employ of 

                                      -4-



the Employer for such three-year period (and, if required, the term hereof 
would have been appropriately extended), including reimbursement of Goldsmith 
for all expenses and costs incurred by him during such three-year period in 
obtaining and maintaining medical and health insurance (through COBRA or 
otherwise) for him, his spouse and dependents for such three-year period 
which is equivalent to that provided to him by Employer at the time of 
termination of his employment. Notwithstanding the foregoing clause (ii) of 
the immediately preceding sentence, if long-term disability insurance 
coverage is an employee benefit which Goldsmith would have received had he 
remained in the employ of Employer, Employer's obligation to provide 
Goldsmith with comparable long-term disability insurance coverage for such 
three-year period shall be subject to Goldsmith being insurable at the 
effective date of termination of his employment. Goldsmith shall have no duty 
to mitigate and during the first eighteen months following the effective date 
of termination of his employment, Employer shall have no right to offset any 
other compensation paid to Goldsmith during such time period. Any 
compensation paid to Goldsmith for services rendered as an employee of a 
third party during the last eighteen months during which he is entitled to 
compensation under this subparagraph 10(b) shall reduce (not below zero) the 
compensation payable to Goldsmith by Employer during such period pursuant to 
this subparagraph 10(b).

          (c)  TERMINATION BY DISABILITY.  Employer may terminate the 
employment of Goldsmith during the term hereof or the term of the Amended 
Employment Agreement (as hereinafter defined) by written notice to Goldsmith 
if Goldsmith shall become incapable of fulfilling his obligations hereunder 
because of injury or physical or mental illness which shall exist or may 
reasonably be anticipated to exist for a period of twelve (12) consecutive 
months or for an aggregate of twelve (12) months during any twenty-four (24) 
month period. In the event the employment of Goldsmith is terminated by 
Employer pursuant to this subparagraph 10(c) because of injury, physical or 
mental illness, Employer shall be obligated to pay Goldsmith (or his 
personal representatives) from and after the termination of his employment 
the same amounts and provide him with the same benefits for the same periods 
it would have paid or provided him had his employment been terminated without 
cause pursuant to subparagraph 10(b) as of the date his employment is 
terminated pursuant to this subparagraph 10(c). If the employment of 
Goldsmith is terminated pursuant to this subparagraph 10(c), the options 
described in Paragraph 7 shall, if not then fully exercisable, upon such 
termination become exercisable in full.

          (d)  TERMINATION BY DEATH.  Except for compensation accrued but not 
paid at the date of death and as provided in this subparagraph 10(d), the 
death of Goldsmith during the term of this Agreement shall terminate this 
Agreement and the Amended Employment Agreement (as hereinafter defined). In 
the event of the death of Goldsmith during the term hereof or the term of the 
Amended Employment Agreement (as hereinafter defined), Employer

                                      -5-



shall be obligated to pay to whomever he shall have designated in writing to 
Employer, or if no designation has been made by him, to Goldsmith's wife, if 
she is then living, or if she is not then living, to his estate, the same 
amounts and provide the same benefits Employer would have paid or provided 
Goldsmith pursuant to subparagraph 10(b) had his employment been terminated 
without cause on the date of his death. If not then fully exercisable, the 
options described in Paragraph 7 shall upon Goldsmith's death become 
exercisable in full.

          (e)  CHANGE OF CONTROL. Attached to this Agreement as Annex A is a 
copy of the Employment Agreement dated as of March 31, 1997 between Parent 
Corporation and Goldsmith (the "Amended Employment Agreement"). Upon the 
Effective Date (as defined in the Amended Employment Agreement) during the 
term of Goldsmith's employment with Employer, the Amended Employment 
Agreement shall become effective with (notwithstanding the provisions of the 
Amended Employment Agreement to the contrary) the following modifications: 
(i) the "Change of Control Period" as defined in the Amended Employment 
Agreement shall not terminate prior to the end of the term of this Agreement; 
(ii) the term thereof (referred to therein as the "Employment Period") shall 
be the greater of three years, as provided therein, or the then remaining 
term of this Agreement: (iii) Paragraphs 3 and 5 and subparagraph 10(g) of 
this Agreement shall remain in full force and effect: (iv) clause (B) of 
Section 4(a)(i) and all of Section 4(b)(i) (except for the last sentence 
thereof) of the Amended Employment Agreement shall be of no force or effect, 
all direct or indirect references in the Amended Employment Agreement to 
Annual Base Salary or base salary (including, without limitation, references 
to Section 4(b) in clause (ii) of Section 5(c) of the Amended Employment 
Agreement) shall be deemed to refer to the Annual Base Compensation described 
and determined and computed in accordance with Paragraph 5 hereof and the 
reference in clause (iii) of Section 5(c) of the Amended Employment Agreement 
shall be deemed a reference to Section 3 hereof; and (v) termination of 
employment on account of the death or disability of Goldsmith as provided in 
subparagraphs 10(c) and 10(d) hereof, respectively, shall remain in full 
force and effect and the provisions of the Amended Employment Agreement 
dealing with termination of employment on account of Goldsmith's death or 
disability and the effects thereof shall be of no force and effect. In all 
other respects the terms of the Amended Employment Agreement will thereafter 
govern the employment of Goldsmith, and subparagraphs 10(a), 10(b), 10(c) and 
10(f) hereof shall be of no further force or effect (except to the extent 
subparagraph 10(b), is incorporated into subparagraph 10(c) and 10(d) for 
determining amounts payable or benefits to be provided pursuant to 
subparagraph 10(c) and 10(d)).

          (f)  TERMINATION UPON EXPIRATION. At least six (6) months prior to 
the end of the term hereof, a person designated by the Board of Directors of 
Parent Corporation shall meet with Goldsmith for purposes of negotiating an 
extension of the term of this Agreement. If by the ninetieth (90th) day prior
to the end

                                      -6-



of the term hereof Employer and Goldsmith have not agreed in writing to an 
extension of the term hereof or renewal of this Agreement and during such 
negotiations Employer offered Goldsmith an extension of this Agreement with a 
term of at least three years and compensation at least equivalent to the 
eightieth percentile for chief executive officers of Employer's peer group, 
Goldsmith's employment shall terminate as of the end of the term hereof and 
Employer shall be obligated to pay and provide Goldsmith with, from and after 
the expiration of the term hereof, (i) the Annual Base Compensation as in 
effect under Paragraph 5 of this Agreement immediately prior to the 
expiration of the term hereof (increased as of the end of the term hereof as 
if the term of this agreement were extended for twelve months) for a period 
of twelve (12) months from the end of the term of this Agreement, (ii) the 
Annual Bonus he would have been paid hereunder if the term of this Agreement 
was extended for twelve months, provided that (x) the Annual Bonus shall be 
computed by multiplying Goldsmith's Annual Compensation (in case of an Annual 
Bonus for a partial year, the amount which the Annual Base Compensation would 
have been as of the following December 31 had his employment continued 
through such December 31) by (in lieu of the percentage of Annual 
Compensation set forth in paragraph 6) the highest percentage of Annual Base 
Compensation previously used in determining any prior Annual Bonus paid to 
Goldsmith, (y) the Annual Bonus applicable to any portion of a fiscal year of 
less than twelve months shall be an amount determined as provided in the 
preceding subclause (x) multiplied by a fraction, the numerator of which is 
the number of months of the fiscal year with respect to which Goldsmith is 
entitled to the Annual Bonus pursuant to this subparagraph (with each partial 
month being deemed a whole month) and the denominator of which is 12, (z) and 
the penultimate sentence of paragraph 6 shall be disregarded and have no 
force or effect, and (iii) all other employee benefits he would have received 
hereunder if the term of this Agreement and Goldsmith's employment had been 
extended twelve months, including reimbursement of Goldsmith for all expenses 
and costs incurred by him during such twelve (12) month period in obtaining 
and maintaining medical and health insurance (through COBRA or otherwise) for 
him, his spouse and dependents for such twelve (12) month period which is 
equivalent to that provided to him by Employer at the time of termination of 
his employment. If by the ninetieth (90th) day prior to the end of the term 
hereof Employer and Goldsmith have not agreed in writing to an extension of 
this Agreement with the term hereof or a renewal of this agreement and during 
such negotiations the Employer did not offer Goldsmith an extension of the 
term hereof of at least three years and compensation at least equivalent to 
the eightieth percentile for chief executive officers of Employee's peer 
group, Goldsmith's employment shall terminate as of the end of the term 
hereof and Employer shall pay Goldsmith from and after the expiration of the 
term hereof, the same amounts and provide him with the same benefits for the 
same period it would have paid and provided him pursuant to subparagraph 
10(b) had his employment been terminated without cause immediately prior to 
the end of the term hereof. For purposes of this subparagraph 10(f), the 
"Employer's peer

                                       -7-



group" shall consist of ten banks comparable to CNB as to size and 
performance and as agreed to by Employer and Goldsmith and the compensation 
which shall be employed in determining whether the compensation offered 
Goldsmith was at least equivalent to the eightieth percentile for chief 
executive officers of Employer's peer group compensation shall mean the total 
compensation (all forms of pay disclosed in the proxy statements). If 
Goldsmith and Employer shall be unable to agree by the ninetieth (90th) day 
prior to the end of the term hereof as to the identity of the banks 
constituting the "Employer's peer group", the ten companies constituting 
Employer's peer group shall be determined by Sibson and Company or any 
similar firm agreed to by Employer and Goldsmith.

          (g)  OFFICE SPACE AND SECRETARIAL SUPPORT. From and after the 
expiration of the term of this Agreement or the Amended Employment Agreement 
or if Goldsmith's employment is terminated other than pursuant to 
subparagraph 10(a) (or section 5(a) of the Amended Employment Agreement if 
it is then in effect) for cause or other than pursuant to subparagraph 10(d) 
on account of his death, Employer shall provide Goldsmith (at no cost or 
expense to Goldsmith) for a period of three years with an office in his 
current office site or nearby of size, furnishings and other appointments and 
exclusive personal secretarial support comparable to that provided Goldsmith 
at any time during the one hundred twenty (120) day period prior to the 
expiration of the term or termination of his employment.

     11.  ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes 
the entire agreement between the parties pertaining to the subject matter 
contained therein and supersedes all prior and contemporaneous agreements, 
representations and understandings of the parties. No supplement, 
modification or amendment of this Agreement shall be binding unless executed 
in writing by both parties. No waiver of any of the provisions of this 
Agreement shall be deemed, or shall constitute, a waiver of any other 
provisions, whether or not similar, nor shall any waiver constitute a 
continuing waiver. No waiver shall be binding unless executed in writing by 
the party making the waiver.

     12.  SEPARABILITY CLAUSE. The invalidity or unenforceability of any 
provision hereof shall in no way affect the validity or enforceability of any 
other provision hereof.

     13.  BENEFIT. Except as herein and otherwise specifically provided, this 
Agreement shall be binding upon and inure to the benefit of the parties, their 
personal representatives, heirs, administrators, executors, successors, and 
permitted assigns.

     14.  NOTICES.  Any notice, request, or other communication required to 
be given pursuant to the provisions of this Agreement shall be in writing and 
shall be deemed to be duly given if delivered in person or mailed by 
registered or certified United

                                       -8-



States mail, postage prepaid, and mailed to the parties at the following 
addresses:

          EMPLOYER                          RUSSELL GOLDSMITH
          --------                          -----------------
          City National Bank                Mr. Russell Goldsmith
          400 No. Roxbury Drive             400 N. Roxbury Drive
          Beverly Hills, CA 90210           Beverly Hills, CA
          Attn: Richard H. Sheehan, Jr.
                General Counsel                with copy to:

                                            Irwin G. Barnet
                                            Sanders, Barnet, Goldman,
                                            Simons & Mosk
                                            Suite 850
                                            1901 Avenue of the Stars
                                            Los Angeles, CA 90067

     The parties hereto may change the above addresses from time to time by 
giving notice thereof to each other in conformity with this Paragraph 14.

     15.  CONFIDENTIALITY. Goldsmith covenants and agrees with Employer that 
Goldsmith shall not, during or after the term of this Agreement, disclose to 
anyone any confidential information concerning the business or operations of 
Employer which Goldsmith may acquire in the course of or incident to the 
performance of his duties hereunder, including, without limitation, 
processes, customer lists, business or trade secrets, or methods or 
techniques used by Employer in its business or operations.

     16.  CONSTRUCTION. This Agreement shall be governed by, and construed in 
accordance with, the laws of the State of California.

     17.  CAPTIONS. The paragraph headings and captions contained herein are 
for reference purposes and convenience only and shall not in any way affect 
the meaning or interpretation of this Agreement.

     18. COUNTERPARTS. This Agreement may be executed in one or more 
counterparts, each of which shall be deemed an original, but all of which 
together shall constitute one and the same instrument.

     19.  AMENDMENTS. This Agreement shall not be modified, amended, or in 
any way altered except by an instrument in writing and signed by both of the 
parties hereto.

     20.  MANDATORY ARBITRATION. At the request of Goldsmith or Employer, any 
dispute, claim, controversy of any kind (whether in contract or tort, 
statutory or common law, legal or equitable) now existing or hereafter 
arising out of, pertaining to or in connection with this Agreement and/or any 
renewals, extensions, or amendments thereto, shall be resolved through final 
and binding arbitration conducted at a location determined by the

                                       -9-



arbitrator in Los Angeles or Beverly Hills, California, and administered by 
the American Arbitration Association ("AAA") in accordance with the Federal 
Arbitration Act, 9 U.S.C. SECTION 1, et seq., and the then existing 
Commercial Arbitration Rules of the AAA. Judgment upon any award rendered by 
the arbitrator(s) may be entered in any State or Federal courts having 
jurisdiction thereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Employment 
Agreement of the date first above written at Beverly Hills, California,

                                           CITY NATIONAL BANK



/s/ RUSSELL GOLDSMITH                      By: /s/ RICHARD H. SHEEHAN, JR.
- ---------------------                      -------------------------------
RUSSELL GOLDSMITH

                                           CITY NATIONAL CORPORATION


                                           By: /s/ RICHARD H. SHEEHAN, JR.
                                           -------------------------------

                                       -10-


                                       
                                    ANNEX A

                              EMPLOYMENT AGREEMENT


     AGREEMENT by and between City National Corporation, a Delaware 
corporation (the "Company") and Russell Goldsmith (the "Executive"), dated as 
of the 31st day of March, 1997.

     The Board of Directors of the Company (the "Board"), has determined that 
it is in the best interest of the Company and its shareholders to assure that 
the Company will have the continued dedication of the Executive, 
notwithstanding the possibility, threat or occurrence of a Change of Control 
(as defined below) of the Company. The Board believes it is imperative to 
diminish the inevitable distraction of the Executive by virtue of the 
personal uncertainties and risks created by a pending or threatened Change of 
Control and to encourage the Executive's full attention and dedication to the 
Company currently and in the event of any threatened or pending Change of 
Control, and to provide the Executive with compensation and benefits 
arrangements upon a Change of Control which ensure that the compensation and 
benefits expectations of the Executive will be satisfied and which are 
competitive with those of other corporations. Therefore, in order to 
accomplish these objectives, the Board has caused the Company to enter into 
this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1.  CERTAIN DEFINITIONS. (a) The "Effective Date" shall mean the first 
date during the Change of Control Period (as defined in Section 1(b)) on 
which a Change of Control (as defined in Section 2) occurs. Anything in this 
Agreement to the contrary notwithstanding, if a Change of Control occurs and 
if the Executive's employment with the Company is terminated prior to the 
date on which the Change of Control occurs, and if it is reasonably 
demonstrated by the Executive that such termination of employment (i) was at 
the request of a third party who has taken steps reasonably calculated to 
effect a Change of Control or (ii) otherwise arose in connection with or 
anticipation of a Change of Control, then for all purposes of this Agreement 
the "Effective Date" shall mean the date immediately prior to the date of 
such termination of employment.

     (b)  The "Change of Control Period" shall mean the period commencing on 
the date hereof and ending on the second anniversary of the date hereof; 
provided, however that commencing on the date one year after the hereof, and 
on each annual anniversary of such date (such date and each annual 
anniversary thereof shall be hereinafter referred to as the "Renewal Date"), 
unless previously terminated, the Change of Control Period shall be 
automatically extended so as to terminate two years from such Renewal Date, 
unless at least 60 days prior to the Renewal Date the Company shall give 
notice to the Executive that the Change of Control Period shall not be so 
extended.




     2.  CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of 
Control" shall mean:

     (a) The acquisition by any individual, entity or group (within the 
meaning of Section 13(d) (3) or 14(d) (2) or the Securities Exchange Act of 
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership 
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% 
of more of either (i) the then outstanding shares of common stock of the 
Company (the "Outstanding Company Common Stock") or (ii) the combined voting 
power of the then outstanding voting securities of the Company entitled to 
vote generally in the election of directors (the "Outstanding Company Voting 
Securities"); provided, however, that for purposes of this subsection (a), 
the following acquisitions shall not constitute a Change of Control: (i) any 
acquisition directly from the Company, (ii) any acquisition by the Company, 
(iii) any acquisition by any employee benefit plan (or related trust) sponsored 
or maintained by the Company or any corporation controlled by the Company, 
(iv) any acquisition by any corporation pursuant to a transaction which 
complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 
2, or (v) any acquisition by the Goldsmith family or any trust or partnership 
for the benefit of any member of the Goldsmith family; or

     (b)  Individuals who, as of the date hereof, constitute the Board (the 
"Incumbent Board") cease or 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 Company'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 an actual or threatened election contest with respect 
to the election or removal of directors or other actual or threatened 
solicitation of proxies or consents by or on behalf of a Person other than 
the Board; or

     (c) Consummation of a reorganization, merger or consolidation or sale or 
other disposition of all or substantially all of the assets of the Company 
(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 Company Common 
Stock and Outstanding Company Voting Securities immediately prior to such 
Business Combination beneficially own, 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 
Company of all or substantially all of the Company's assets either directly 
or through one or more

                                       2



subsidiaries) in substantially the same proportions as their ownership, 
immediately prior to such Business Combination of the Outstanding Company 
Common Stock and Outstanding Company 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 Company 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

     (d) Approval by the shareholders of the Company of a complete 
liquidation or dissolution of the Company.

     3. EMPLOYMENT PERIOD. The Company hereby agrees to continue the 
Executive in its employ, and the executive hereby agrees to remain in the 
employ of the Company subject to the terms and conditions of this Agreement, 
for the period commencing on the Effective Date and ending on the third 
anniversary of such date (the "Employment Period").

     4.  TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES.
          (i) During the Employment Period, (A) the Executive's position 
(including status, offices, titles and reporting requirements), authority, 
duties and responsibilities shall be at least commensurate in all material 
respects with the most significant of those held, exercised and assigned at 
any time during the 120-day period immediately preceding the Effective Date 
and (B) the Executive's services shall be performed at the location where the 
Executive was employed immediately preceding the Effective Date or any office 
or location less than 35 miles from such location.

          (ii) During the Employment Period, and excluding any periods of 
vacation and sick leave to which the Executive is entitled, the Executive 
agrees to devote reasonable attention and time during normal business hours 
to the business and affairs of the Company and, to the extent necessary to 
discharge the responsibilities assigned to the Executive hereunder, to use the 
Executive's reasonable best efforts to perform faithfully and efficiently such 
responsibilities. During the Employment Period it shall not be a violation of 
this Agreement for the Executive to (A) serve on corporate, civic or 
charitable boards or committees, (B) deliver lectures, fulfill speaking 
engagements or teach at educational institutions and (C) manage personal 
investments, so long as such activities do not significantly interfere with 
the performance of the Executive's responsibilities as an employee of the 
Company in accordance with this Agreement.

                                       3



It is expressly understood and agreed that to the extent that any such 
activities have been conducted by the Executive prior to the Effective Date, 
the continued conduct of such activities (or the conduct of activities 
similar in nature and scope thereto) subsequent to the Effective Date shall 
not thereafter be deemed to interfere with the performance of the Executive's 
responsibilities to the Company.

     (b)  COMPENSATION. (i)  BASE SALARY. During the Employment Period, the 
Executive shall receive an annual base salary ("Annual Base Salary"), which 
shall be paid at a monthly rate, at least equal to twelve times the highest 
monthly base salary paid or payable, including any base salary which has been 
earned but deferred, to the Executive by the Company and its affiliated 
companies in respect of the twelve-month period immediately preceding the 
month in which the Effective Date occurs. During the Employment Period, the 
Annual Base Salary shall be reviewed no more than 12 months after the last 
salary increase awarded to the Executive prior to the Effective Date and 
thereafter at least annually. Any increase in Annual Base Salary shall not 
serve to limit or reduce any other obligation to the Executive under this 
Agreement. Annual Base Salary shall not be reduced after any such increase 
and the term Annual Base Salary as utilized in this Agreement shall refer to 
Annual Base Salary as so increased. As used in this Agreement, the term 
"affiliated companies" shall include any company controlled by, controlling 
or under common control with the Company.

          (ii)  ANNUAL BONUS. In addition to Annual Base Salary, the 
Executive shall be awarded, for each fiscal year ending during the Employment 
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the 
Executive's highest bonus under the Company's annual incentive plans for the 
last three full fiscal years prior to the Effective Date (annualized in the 
event that the Executive was not employed by the Company for the whole of 
such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall 
be paid no later that the end of the third month of the fiscal year next 
following the fiscal year for which the Annual Bonus is awarded, unless the 
Executive shall elect to defer the receipt of such Annual Bonus.

          (iii)  INCENTIVE, SAVINGS AND RETIREMENT PLANS.

During the Employment Period, the Executive shall be entitled to participate 
in all incentive, savings and retirement plans, practices, policies and 
programs applicable generally to other peer executive of the Company and its 
affiliated companies, but in no event shall such plans, practice, policies 
and programs provide the Executive with incentive opportunities (measured 
with respect to both regular and special incentive opportunities, to the 
extent, if any, that such distinction is applicable), savings opportunities 
and retirement benefit opportunities, in each case, less favorable, in the 
aggregate, than the most favorable of those provided by the Company and its 
affiliated companies for the Executive under such plans, practices, policies 
and programs as in effect at any time during the 120-day period immediately 
preceding the Effective Date or if more favorable to the Executive, those 
provided generally at

                                       4



any time after the Effective Date to other peer executives of the Company and 
its affiliated companies.

          (iv)  WELFARE BENEFIT PLANS. During the employment Period, the 
Executive and/or the Executive's family, as the case may be, shall be 
eligible for participation in and shall receive all benefits under welfare 
benefit plans, practices, policies and programs provided by the Company and 
its affiliated companies (including, without limitation, medical, 
prescription, dental, disability, employee life, group life, accidental death 
and travel accident insurance plans and programs) to the extent applicable 
generally to other peer executives of the Company and its affiliated 
companies, but in no event shall such plans, practices, policies and programs 
provide the Executive with benefits which are less favorable, in the 
aggregate, than the most favorable of such plans, practices, policies 
and programs in effect for the Executive at any time during the 120-day period 
immediately preceding the Effective Date or, if more favorable to the 
Executive, those provided generally at any time after the Effective Date to 
the other peer executive of the Company and its affiliated companies.

          (v)  EXPENSES.  During the Employment Period, the Executive shall 
be entitled to receive prompt reimbursement for all reasonable expenses 
incurred by the Executive in accordance with the most favorable policies, 
practices and procedures of the Company and its affiliated companies in 
effect for the Executive at any time during the 120-day period immediately 
preceding the Effective Date or, if more favorable to the Executive, as in 
effect generally at any time thereafter with respect to other peer executives 
of the Company and its affiliated companies.

          (vi)  FRINGE BENEFITS.  During the Employment Period, the Executive 
shall be entitled to fringe benefits, including, without limitation, tax and 
financial planning services, payment of club dues, and if applicable, 
automobile allowance and/or use of an automobile and payment of related 
expenses, in a accordance with the most favorable plans, practices, programs 
and policies of the Company and its affiliated companies in effect for the 
Executive at any time during the 120-day period immediately preceding the 
Effective Date or, if more favorable to the Executive, as in effect generally 
at any time thereafter with respect to other peer executives of the Company 
and it's affiliated companies.

          (vii)  OFFICE AND SUPPORT STAFF.  During the Employment Period, the 
Executive shall be entitled to an office or offices of a size and with 
furnishings and other appointments, and to exclusive personal secretarial and 
other assistance, at least equal to the most favorable of the foregoing 
provided to the Executive by the Company and its affiliated companies at any 
time during the 120-day period immediately preceding the Effective Date or, 
if more favorable to the Executive, as provided generally at any time 
thereafter with respect to other peer executives of the Company and its 
affiliated companies.

                                       5




          (viii)  VACATION.  During the Employment Period, the Executive 
shall be entitled to paid vacation in accordance with the most favorable 
plans, policies, programs and practices of the Company and its affiliated 
companies as in effect for the Executive at any time during the 120-day 
period immediately preceding the Effective Date or, if more favorable to the 
Executive, as in effect generally at any time thereafter with respect to 
other peer executives of the Company and its affiliated companies.

     5.  TERMINATION OF EMPLOYMENT.  (a)  DEATH OR DISABILITY. 
The Executive's employment shall terminated automatically upon the 
Executive's death during the Employment Period. If the Company determines in 
good faith that the Disability of the Executive has occurred during the 
Employment Period (pursuant to the definition of Disability set forth below), 
it may give to the Executive written notice in accordance with Section 12(b) 
of this Agreement of its intention to terminate the Executive's employment. 
In such event, the Executive's employment with the Company shall terminate 
effective on the 30th day after receipt of such notice by the Executive (the 
"Disability Effective Date"), provided that, within the 30 days after such 
receipt, the Executive shall not have returned to full-time performance of 
the Executive's duties. For purposes of this Agreement, "Disability" shall 
mean the absence of the Executive from the Executive's duties with the 
Company on a full-time basis for 180 consecutive business days as a result of 
incapacity due to mental or physical illness which is determined to be total 
and permanent by a physician selected by the Company of its insurers and 
acceptable to the Executive or the Executive's legal representative.

        (b)  CAUSE.  The Company may terminate the Executive's employment 
during the Employment Period for Cause. For purposes of this Agreement, 
"Cause" shall mean:

              (i)  the willful and continued failure of the Executive to 
          perform substantially the Executive's duties with the Company or one 
          of its affiliated (other than any such failure resulting from 
          incapacity due to physical or mental illness), after a written demand
          for substantial performance is delivered to the Executive by the 
          Board or the Chief Executive Officer of the Company which specifically
          identifies the manner in which the Board or Chief Executive Officer 
          believes that the Executive has not substantially performed the 
          Executive's duties, or

              (ii)  the willful engaging by the Executive in illegal conduct 
          or gross misconduct which is materially and demonstrably injurious 
          to the Company.

For purposes of this provision, no act or failure to act, on the part of the 
Executive, shall be considered "willful" unless it is done, or omitted to be 
done, by the Executive 

                                      6



in bad faith or without reasonable belief that the Executive's action or 
omission was in the best interests of the Company. Any act, or failure to 
act, based upon authority given pursuant to a resolution duly adopted by the 
Board or upon the instructions of the Chief Executive Officer or a senior 
officer of the Company or based upon the advice of counsel for the Company 
shall be conclusively presumed to be done, or omitted to be done, by the 
Executive in good faith and in the best interests of the Company. The 
cessation of employment of the Executive shall not be deemed to be for Cause 
unless and until there shall have been delivered to the Executive a copy of a 
resolution duly adopted by the affirmative vote of not less than 
three-quarters of the entire membership of the Board at a meeting of the 
Board called and held for such purpose (after reasonable notice is provided 
to the Executive and the Executive is given an opportunity, together with 
counsel, to be heard before the Board), finding that, in the good faith 
opinion of the Board, the Executive is guilty of the conduct described in 
subparagraph (i) or (ii) above, and specifying the particulars thereof in 
detail.

          (c)  GOOD REASON.  The Executive's employment may be terminated By 
the Executive for Good Reason. For purpose of this Agreement, "Good Reason" 
shall mean:

          (i)  the assignment to the Executive of any duties inconsistent in 
any respect with the Executive's position (including status, offices, titles 
and reporting requirement), authority, duties or responsibilities as 
contemplated by Section 4(a) of this Agreement, or any other action by the 
Company which results in a diminution in such position, authority, duties or 
responsibilities, excluding for this purpose an isolated, insubstantial and 
inadvertent action not taken in bad faith and which is remedied by the 
Company promptly after receipt of notice thereof given by the Executive;

          (ii)  any failure by the Company to comply with any of the 
provisions of Section 4(b) of this Agreement, other than in isolated, 
insubstantial and inadvertent failure not occurring in bad faith and which is 
remedied by the Company promptly after receipt of notice thereof given by the 
Executive;

          (iii)  the Company's requiring the Executive to be based at any 
office or location other than as provided in Section 4(a) (i) (B) hereof or 
the Company's requiring the Executive to travel on Company business to a 
substantially greater extent than required immediately prior to the Effective 
Date;

          (iv)  any purported termination by the Company of the Executive's 
employment otherwise than as expressly permitted by this Agreement; or

          (v)  any failure by the Company to comply with and satisfy Section 
11 (c) of this Agreement.

                                      7




For purposes of this Section 5 (c), any good faith determination of "Good 
Reason" made by the Executive shall be conclusive. Anything in the Agreement 
to the Contrary notwithstanding, a termination by the Executive for any 
reason during the 30-day period immediately following the first anniversary 
of the Effective Date shall be deemed to be a termination for Good Reason for 
all purposes of this Agreement.

          (d)  NOTICE OF TERMINATION.  Any termination by the Company for 
Cause, or by the Executive for Good Reason, shall be communicated by Notice 
of Termination to the other party hereto given in accordance with Section 
12(b) of this Agreement. For purposes of this Agreement, a "Notice of 
Termination" means a written notice which (i) indicates the specific 
termination provision in this Agreement relied upon, (ii) to the extent 
applicable, sets forth in reasonable detail the facts and circumstances 
claimed to provide a basis for termination of the Executive's employment 
under the provision so indicated and (iii) if the Date of Termination (as 
defined below) is other than the date of receipt of such notice, specifies 
that termination date (which date shall be not more than thirty days after 
the giving of such notice). The failure by the Executive or the Company to 
set forth in the notice of Termination any fact or circumstance which 
contributes to a showing of Good Reason or Cause shall not waive any right of 
the Executive or the Company, respectively, hereunder or preclude the 
Executive or the Company, respectively, from asserting such fact or 
circumstance in enforcing the Executive's or the Company's rights hereunder.

          (e)  DATE OF TERMINATION.  "Date of Termination" means (i) if the 
Executive's employment is terminated by the Company for Cause, or by the 
Executive for Good Reason, the date of receipt of the Notice of Termination 
or any later date specified therein, as the case may be, (ii) if the 
Executive employment is terminated by the Company other than for Cause or 
Disability, the Date of Termination shall be the date on which the Company 
notifies the Executive of such termination and (iii) if the Executive's 
employment is terminated by reason of death or Disability, the Date of 
Termination shall be the date of death of the Executive or the Disability 
Effective Date, as the case may be.

          6.  OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) GOOD REASON; 
OTHER THAN FOR CAUSE, DEATH OR DISABILITY.  If, during the Employment Period, 
the Company shall terminate the Executive's employment other than for Cause 
or Disability or the Executive shall terminate employment for Good Reason:

          (i)  the Company shall pay to the Executive in a lump sum in cash 
within 30 days after the Date of Termination the aggregate of the following 
amounts:

          A.  the sum of (1) the Executive's Annual Base Salary through the 
Date of Termination to the extent not theretofore paid, (2) the product of 
(x) the higher of

                                       8



(i) the Recent Annual Bonus and (ii) the Annual Bonus paid or payable, 
including any bonus or portion thereof which has been earned but deferred 
(and annualized for any fiscal year consisting of less than twelve full 
months or during which the Executive was employed for less than twelve full 
months), for the most recently completed fiscal year during the Employment 
Period, if any (such higher amount being referred to as the "Highest Annual 
Bonus") and (y) a fraction, the numerator of which is the number of days in 
the current fiscal year through the Date of Termination, and the denominator 
of which is 365 and (3) any compensation previously deferred by the Executive 
(together with any accrued interest or earnings thereon) and any accrued 
vacation pay, in each case to the extent not theretofore paid (the sum of the 
amounts described in clauses (1), (2), and (3) shall be hereinafter referred 
to as the "Accrued Obligations"); and

     B.  the amount equal to the product of (1) three and (2) the sum of (x) 
the Executive's Annual Base Salary and (y) the Highest Annual Bonus; and

     C.  an amount equal to the contributions to the Executive's account in 
the Company's Profit Sharing Plan which the Executive would receive if the 
Executive's employment continued for three years after the Date of 
Termination assuming for this purpose that all such contributions are fully 
vested, and, and assuming that the Company's contribution to the Profit 
Sharing Plan in each such year is in an amount equal to the greatest amount 
contributed by the Company in any of the three years ending prior to the 
Effective Date.

     (ii)  for three years after the Executive's Date of Termination, or such 
longer period as may be provided by the terms of the appropriate plan, 
program, practice or policy, the Company shall continue benefits to the 
Executive and/or the Executive's family at least equal to those which would 
have been provided to them in accordance with the plans, programs, practices 
and policies described in Section 4 (b) (iv) of the Agreement if the 
Executive's employment has not been terminated or, if more favorable to the 
Executive, as in effect generally at any time thereafter with respect to 
other peer executives of the Company and its affiliated companies and their 
families, provided, however, that if the Executive becomes reemployed with 
another employer and is eligible to receive medical or other welfare benefits 
under another employer provided plan, the medical and other welfare benefits 
described herein shall be secondary to those provided under such other plan 
during such applicable period of eligibility.

          (iii)  the Company shall, at its sole expense as incurred, provide 
the Executive with out placement services the scope and provider of which 
shall be selected by the Executive in his sole discretion; and

          (iv)  to the extent not theretofore paid or provided, the Company 
shall timely pay or provide to the Executive any other amounts or benefits 
required to be

                                      9



paid or provided or which the Executive is eligible to receive under any plan, 
program, policy or practice or contract or agreement of the Company and its 
affiliated companies (such other amounts and benefits shall be hereinafter 
referred to as the "Other Benefits").

          (b)  DEATH.  If the Executive's employment is terminated by reason 
of the Executive's death during the Employment Period, this Agreement shall 
terminate without further obligations to the Executive's legal representatives 
under this Agreement, other than for payment of Accrued Obligations and the 
timely payment or provision of Other Benefits. Accrued Obligations shall be 
paid to the Executive's estate or beneficiary, as applicable, in a lump sum 
in cash within 30 days of the Date of Termination. With respect to the 
provision of Other Benefits, the term Other Benefits as utilized in this 
Section 6 (b) shall include, without limitation, and the Executive's estate 
and/or beneficiaries shall be entitled to receive, benefits at least equal to 
the most favorable benefits provided by the Company and affiliated companies 
to the estates and beneficiaries of peer executives of the Company and such 
affiliated companies under such plans, programs, practices and policies 
relating to death benefits, if any, as in effect with respect to other peer 
executives and their beneficiaries at any time during the 120-day period 
immediately preceding the Effective Date or, if more favorable to the 
Executive's estate and/or the Executive's beneficiaries, as in effect on the 
date of Executive's death with respect to other peer executive of the Company 
and its affiliated companies and their beneficiaries.

          (c)  DISABILITY.  If the Executive's employment is terminated by 
reason of the Executive's Disability during the Employment Period, this 
Agreement shall terminate without further obligations to the Executive, other 
than for payment of Accrued Obligations and the timely payment or provision 
of Other Benefits. Accrued Obligations shall be paid to the Executive in a 
lump sum in cash within 30 days of the Date of Termination. With respect to 
the provision of Other Benefits, the term Other Benefits as utilized in this 
Section 6(c) shall include, and the Executive shall be entitled after the 
Disability Effective Date to receive, disability and other benefits at least 
equal to the most favorable of those generally provided by the Company and 
its affiliated companies to disabled executives and/or their families in 
accordance with such plans, programs, practices and policies relating to 
disability, if any, as in effect generally with respect to other peer 
executives and their families at any time during the 120-day period 
immediately preceding the Effective Date or, if more favorable to the 
Executive and/or the Executive's family, as in effect at any time thereafter 
generally with respect to other peer executives of the Company and its 
affiliated companies and their families.

          (d)  CAUSE; OTHER THAN FOR GOOD REASON.  If the Executive's 
employment shall be terminated for Cause during the Employment Period, this 
Agreement shall terminate without further obligations to the Executive other 
than the obligation to pay


                                     10




to the Executive (x) his Annual Base Salary through the Date of Termination, 
(y) the amount of any compensation previously deferred by the Executive, and 
(z) Other Benefits, in each case to the extent theretofore unpaid. If the 
Executive voluntarily terminates employment during the Employment Period, 
excluding a termination for Good Reason, this Agreement shall terminate 
without further obligations to the Executive, other than for Accrued 
Obligations and the timely payment or provision of Other Benefits. In such 
case, timely payment or provision of Other Benefits. In such case, all 
Accrued Obligations shall be paid to the Executive in a lump sum in cash 
within 30 days of the Date of Termination.

          7.  NON-EXCLUSIVITY OF RIGHTS.  Nothing in this Agreement shall 
prevent or limit the Executive's continuing or future participation in any 
plan, program, policy or practice provided by the Company or any of its 
affiliated companies and for which the Executive may qualify, nor, subject to 
Section 12 (f), shall anything herein limit or otherwise affect such rights 
as the Executive may have under any contract or agreement with the Company or 
any of its affiliated companies. Amounts which are vested benefits or which 
the Executive is otherwise entitled to receive under any plan, policy, 
practice or program of or any contract or agreement with the Company or any 
of its affiliated companies at or subsequent to the Date of Termination shall 
be payable in accordance with such plan, policy, practice or program or 
contract or agreement except as explicitly modified by this Agreement.

          8.  FULL SETTLEMENT.  The Company's obligation to make the payment 
provided for in this Agreement and otherwise to perform its obligations 
hereunder shall not be affected by any set-off, counterclaim, recoupment, 
defense or other claim, right or action which the Company may have against 
the Executive or others. In no event shall the Executive be obligated to seek 
other employment or take any other action by way of mitigation of the amounts 
payable to the Executive under any of the provisions of this Agreement and 
such amounts shall not be reduced whether or not the Executive obtains other 
employment. The Company agrees to pay as incurred, to the full extent 
permitted by law, all legal fees and expenses which the Executive may 
reasonably incur as a result of any contest (regardless of the outcome 
thereof) by the Company, the Executive or others of the validity or 
enforceability of, or liability under, any provision of this Agreement or any 
guarantee of performance thereof (including as a result of any contest by the 
Executive about the amount of any payment pursuant to this Agreement), plus 
in each case interest on any delayed payment at the applicable Federal rate 
provided for in Section 7872(f) (2) (A) of the Internal Revenue Code of 1986, 
as amended (the "Code").

          9.  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
          (a)  Anything in this Agreement to the contrary notwithstanding and 
except as set forth below, in the event it shall be determined that any 
payment or distribution by the Company to or for the benefit of the Executive 
(whether paid or payable or distributed or distributable pursuant to the 
terms of this Agreement or


                                     11



otherwise, but determined without regard to any additional payments required 
under this Section 9) (a "Payment") would be subject to the excise tax 
imposed by Section 4999 of the Code or any interest or penalties are incurred 
by the Executive with respect to such excise tax (such excise tax, together 
with any such interest and penalties, are hereinafter collectively referred 
to as the "Excise Tax"), then the Executive shall be entitled to receive an 
additional payment (a "Gross-Up Payment") in an amount such that after 
payment by the Executive of all taxes (including any interest or penalties 
imposed with respect to such taxes), including, without limitation, any 
income taxes (and any interest and penalties imposed with respect thereto) 
and Excise tax imposed upon the Gross-Up Payment, the Executive retains an 
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the 
Payments. Notwithstanding the foregoing provisions of this Section 9 (a), if 
it shall be determined that the Executive is entitled to a Gross-Up Payment, 
but that the Payments do not exceed 110% of the greatest amount (the "Reduced 
Amount") that could be paid to the Executive such that the receipt of 
Payments would not give rise to any Excise Tax, then no Gross-Up Payment 
shall be made to the Executive and the Payments, in the aggregate, shall be 
reduced to the Reduced Amount.

          (b)  Subject to the provisions of Section 9 (c), all determinations 
required to be made under this Section 9, including whether and when a 
Gross-Up Payment is required and the amount of such Gross-Up Payment and the 
assumptions to be utilized in arriving at such determination, shall be made 
by KPMG Peat Marwick or such other certified public accounting firm as may be 
designated by the Executive (the "Accounting Firm") which shall provide 
detailed supporting calculations both to the Company and the Executive within 
15 business days of the receipt of notice from the Executive that there has 
been a Payment, or such earlier time as is requested by the Company. In the 
event that the Accounting Firm is serving as accountant or auditor for the 
individual, entity or group effecting the Change of Control, the Executive 
shall appoint another nationally recognized accounting firm to make the 
determinations required hereunder (which accounting firm shall then be 
referred to as the Accounting Firm hereunder). All fees and expenses of the 
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, 
as determined pursuant to this Section 9, shall be paid by the Company to the 
Executive within five days of the receipt of the Accounting Firm's 
determination. Any determination by the Accounting Firm shall be binding upon 
the Company and the Executive. As a result of the uncertainty in the 
application of Section 4999 of the Code at the time of the initial 
determination by the Accounting firm hereunder, it is possible that Gross-Up 
Payments which will not have been made by the Company should have been made 
("Underpayment"), consistent with the calculations required to be made 
hereunder. In the event that the Company exhausts its remedies pursuant to 
Section 9 (c) and the Executive thereafter is required to make a payment of 
any Excise Tax, the Accounting Firm shall determine the amount of the 
Underpayment that has occurred and any such Underpayment shall be promptly 
paid by the Company to or for the benefit of the Executive.

                                      12



          (c)  The Executive shall notify the Company in writing of any claim 
by the Internal Revenue Service that, if successful, would require the 
payment by the Company of the Gross-Up Payment. Such notification shall be 
given as soon as practicable but no later than ten business days after the 
Executive is informed in writing of such claim and shall apprise the Company 
of the nature of such claim and the date on which such claim is requested to 
be paid. The Executive shall not pay such claim prior to the expiration of the 
30-day period following the date on which it gives such notice to the Company 
(or such shorter period ending on the date that any payment of taxes with 
respect to such claim is due). If the Company notifies the Executive in 
writing prior to the expiration of such period that it desires to contest 
such claim, the Executive shall:

          (i)  give the Company any information reasonably requested by the 
Company relating to such claim,

          (ii)  take such action in connection with contesting such claim as 
the Company shall reasonably request in writing from time to time, including, 
without limitation, accepting legal representation with respect to such claim 
by an attorney reasonably selected by the Company.

          (iii)  cooperate with the Company in good faith in order 
effectively to contest such claim, and

          (iv)  permit the Company to participate in any proceedings relating 
to such claim;

provided, however, that the Company shall bear and pay directly all costs and 
expenses (including additional interest and penalties) incurred in connection 
with such contest and shall indemnify and hold the Executive harmless, on an 
after-tax basis, for any Excise Tax or income tax (including interest and 
penalties with respect thereto) imposed as a result of such representation 
and payment of costs and expenses. Without limitation on the foregoing 
provisions of this Section 9 (c), the Company shall control all proceedings 
taken in connection with such contest and, at its sole option, may pursue or 
forgo any and all administrative appeals, proceedings, hearings and 
conferences with the taxing authority in respect of such claim and may, at 
its sole option, either direct the Executive to pay the tax claimed and sue 
for a refund or contest the claim in any permissible manner, and the 
Executive agrees to prosecute such contest to a determination before any 
administrative tribunal, in a court of initial jurisdiction and in one or 
more appellate courts, as the Company shall determine; provided, however, 
that if the Company directs the Executive to pay such claim and sue for a 
refund, the Company shall advance the amount of such payment to the 
Executive, on an interest-free basis and shall indemnify and hold the 
Executive harmless, on an after-tax basis, from any Excise Tax or income tax 
(including interest


                                     13



or penalties with respect thereto) imposed with respect to such advance or 
with respect to any imputed income with respect to such advance; and further 
provided that any extension of the statute of limitations relating to payment 
of taxes for the taxable year of the Executive with respect to which such 
contested amount is claimed to be due is limited solely to such contested 
amount. Furthermore, the Company's control of the contest shall be limited to 
issues with respect to which a Gross-Up Payment would be payable hereunder 
and the Executive shall be entitled to settle or contest, as the case may be, 
any other issue raised by the Internal Revenue Service or any other taxing 
authority.

          (d)  If, after the receipt by the Executive of an amount advanced 
by the Company pursuant to Section 9 (c), the Executive becomes entitled to 
receive any refund with respect to such claim, the Executive shall (subject 
the Company's complying with the requirements of Section 9 (c) promptly pay 
to the Company the amount of such refund (together with any interest paid or 
credited thereon after taxes applicable thereto). If, after the receipt by 
the Executive of an amount advanced by the Company pursuant to Section 9 (c), 
a determination is made that the Executive shall not be entitled to any 
refund with respect to such claim and the Company does not notify the 
Executive in writing of its intent to contest such denial of refund prior to 
the expiration of 30 days after such determination, then such advance shall 
be forgiven and shall not be required to be repaid and the amount of such 
advance shall offset, to the extent thereof, the amount of Gross-Up Payment 
required to be paid.

          10.  CONFIDENTIAL INFORMATION.  The Executive shall hold in a 
fiduciary capacity for the benefit of the Company all secret or confidential 
information, knowledge or data relating to the Company or any of its 
affiliated companies, and their respective businesses, which shall have been 
obtained by the Executive during the Executive's employment by the Company or 
any of its affiliated companies and which shall not be or become public 
knowledge (other than by acts by the Executive or representative of the 
Executive in violation of this Agreement). After termination of the 
Executive's employment with the Company, the Executive shall not, without the 
prior written consent of the Company or as may otherwise be required by law 
or legal process, communicate or divulge any such information, knowledge or 
data to anyone other than the Company and those designated by it. In no event 
shall an asserted violation of the provisions of this Section 10 constitute a 
basis for deferring or withholding any amounts otherwise payable to the 
Executive under this Agreement.

          11.  SUCCESSORS.  (a)  This Agreement is personal to the Executive 
and without the prior written consent of the Company shall not be assignable 
by the Executive otherwise than by will or the laws of descent and 
distribution. This Agreement shall inure to the benefit of and be enforceable 
by the Executive's legal representative.

          (b)  This Agreement shall inure to the benefit of and be binding 
upon the Company and its successors and assigns.

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          (c)  The Company will require any successor (whether direct or 
indirect, by purchase, merger, consolidation or otherwise) to all or 
substantially all of the business and/or assets of the Company to assume 
expressly and agree to perform this Agreement in the same manner and to the 
same extent that the Company would be required to perform it if no such 
succession had taken place. As used in this Agreement, "Company" shall mean 
the Company as hereinbefore defined and any successor to its business and/or 
assets as aforesaid which assumes and agrees to perform this Agreement by 
operation of law, or otherwise.

          12.  MISCELLANEOUS.  (a)  This Agreement shall be governed by and 
construed in accordance with the laws of the State of Delaware, without 
reference to principles of conflict of laws. The captions of this Agreement 
are not part of the provisions hereof and shall have no force or effect. This 
Agreement may not be amended or modified otherwise than by a written 
agreement executed by the parties hereto or their respective successors and 
legal representatives.

          (b)  All notices and other communications hereunder shall be in 
writing and shall be given by hand delivery to the other party or by 
registered or certified mail, return receipt requested, postage prepaid, 
addressed as follows:

IF TO THE EXECUTIVE:   Russell Goldsmith
                       400 North Roxbury Drive
                       Beverly Hills, CA 90210

IF TO THE COMPANY:     City National Bank
                       400 North Roxbury Drive
                       Beverly Hills, CA 90210
                       Attention: General Counsel

or to such other address as either party shall have furnished to the other in 
writing in accordance herewith. Notice and communications shall be effective 
when actually received by the addressee.

          (c)  The invalidity or unenforceability of any provision of this 
Agreement shall not affect the validity or enforceability of any other 
provision of this Agreement.

          (d)  The Company may withhold from any amounts payable under this 
Agreement such Federal, state, local or foreign taxes as shall be required to 
be withheld pursuant to any applicable law or regulation.

          (e)  The Executive's or the Company's failure to insist upon strict 
compliance with any provision of this Agreement or the failure to assert any 
right the Executive or the Company may have hereunder, including, without 
limitation, the right of the Executive to terminate employment for Good 
Reason pursuant to Section 5 (c)

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(l)-(v) of this Agreement, shall not be deemed to be a waiver of such 
provision or right or any other provision or right of the Agreement.

          (f)  The Executive and the Company acknowledge that, except as may 
otherwise be provided under any other written agreement between the Executive 
and the Company, the employment of the Executive by the Company is "at will" 
and, subject to Section 1(a) hereof, prior to the Effective Date, the 
Executive's employment and/or this Agreement may be terminated by either the 
Executive or the Company at any time prior to the Effective Date, in which 
case the Executive shall have no further rights under this Agreement. From 
and after the Effective Date this Agreement shall supersede any other 
agreement between the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, 
pursuant to the authorization from its Board of Directors, the Company has 
caused these presents to be executed in its name on its behalf, all as of the 
day and year first above written.



                                          /s/ RUSSELL GOLDSMITH
                                          ----------------------------
                                          Russell Goldsmith


                                          CITY NATIONAL CORPORATION


                                          By /s/ RICHARD H. SHEEHAN, JR.
                                          ------------------------------
                                          Richard H. Sheehan, Jr.
                                          SVP and General Counsel

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