CITY NATIONAL CORP, DEF 14A, 1995-03-16

CITY NATIONAL CORP
DEF 14A, 1995-03-16
NATIONAL COMMERCIAL BANKS

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<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

CITY NATIONAL CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

<PAGE>

CITY NATIONAL CORPORATION
400 NORTH ROXBURY DRIVE
BEVERLY HILLS, CALIFORNIA 90210
TELEPHONE (310) 888-6000

Bram Goldsmith
Chairman of the Board and
Chief Executive Officer

March 17, 1995

Dear Shareholder:

Your Company cordially invites you to attend its 1995 Annual Meeting of
Shareholders, which will be held at 4:00 P.M., on Tuesday, April 18, 1995, at
the offices of City National Bank, 400 North Roxbury Drive, Beverly Hills,
California.

The Notice of Annual Meeting and Proxy Statement accompanying this letter
describe the business to be transacted at the meeting.

WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT, WE URGE YOU TO SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED, IN ORDER
THAT AS MANY SHARES AS POSSIBLE MAY BE REPRESENTED AT THE MEETING. THE VOTE OF
EVERY SHAREHOLDER IS IMPORTANT AND YOUR COOPERATION IN RETURNING YOUR EXECUTED
PROXY PROMPTLY WILL BE APPRECIATED. EACH PROXY IS REVOCABLE AND WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.

Sincerely,

/s/ Bram Goldsmith
<PAGE>

CITY NATIONAL CORPORATION
400 NORTH ROXBURY DRIVE
BEVERLY HILLS, CALIFORNIA 90210
TELEPHONE (310) 888-6000

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To The Shareholders:

NOTICE IS HEREBY GIVEN that, pursuant to call of its Board of Directors, the
Annual Meeting of Shareholders of CITY NATIONAL CORPORATION will be held on
Tuesday, the 18th day of April, 1995, at 4:00 P.M., at the offices of City
National Bank, 400 N. Roxbury Drive, Beverly Hills, California, for the
purpose of considering and voting upon the following matters:

1. Election of Directors. The election of the 12 persons listed in the
enclosed Proxy Statement;

2. Approval of City National Corporation 1995 Omnibus Plan. The approval
of the City National Corporation 1995 Omnibus Plan, as previously approved
by the Board of Directors, and the reservation of 3,000,000 shares of
common stock for issuance or delivery pursuant to awards under the Plan;
and

3. Other Business. The transaction of such other business as may properly
come before such meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on March 1, 1995, as
the record date for the determination of shareholders entitled to notice of
the Annual Meeting and to vote at the meeting or any adjournments thereof.

By Order of the Board of Directors

RICHARD H. SHEEHAN, JR.
Secretary

March 17, 1995
<PAGE>

CITY NATIONAL CORPORATION
400 NORTH ROXBURY DRIVE
BEVERLY HILLS, CALIFORNIA 90210
TELEPHONE (310) 888-6000

ANNUAL MEETING OF SHAREHOLDERS ON APRIL 18, 1995

----------------

PROXY STATEMENT

To the Shareholders:

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of CITY NATIONAL CORPORATION
(herein called the "Corporation") to be voted at the Annual Meeting of
Shareholders of the Corporation to be held on Tuesday, April 18, 1995, at 4:00
P.M. as set forth in the foregoing Notice of Annual Meeting. This Proxy
Statement and proxy are first being mailed to shareholders on approximately
March 16, 1995.

All proxies on the enclosed form which are properly executed and returned to
the Corporation will be voted as provided therein at the Annual Meeting or any
adjournments thereof. A shareholder executing and returning a proxy may revoke
it at any time before it has been exercised by filing with the Secretary of the
Corporation a written revocation or a duly executed proxy bearing a later date,
or by voting in person at the Annual Meeting.

The Corporation's management does not know of any matters to be brought
before the meeting other than the election of directors and the approval of the
City National Corporation 1995 Omnibus Plan. If any other matters are properly
presented to the meeting for action, it is intended that the persons named in
the enclosed form of proxy and acting thereunder will vote in accordance with
their judgment on such matters.

Officers and employees of the Corporation may request the return of proxies
by mail, telephone, telegraph or in person, for which they will receive no
special compensation. The Corporation will bear all expenses of the
preparation, printing and use of proxy soliciting materials. Banks, brokerage
houses and other institutions, nominees or fiduciaries will be requested to
forward the soliciting material to beneficial owners and to obtain
authorizations for the execution of proxies. The Corporation will, upon
request, reimburse banks, brokerage houses and other institutions, nominees and
fiduciaries for their reasonable expenses in forwarding proxy materials to
beneficial owners. The Corporation may, in its discretion, retain the services
of Corporate Investor Communications, Inc., to assist in soliciting proxies
from brokers, banks and other institutions, nominees and fiduciaries for a fee
estimated to be $5,500, in addition to out-of-pocket expenses.

The Corporation's Annual Report for its fiscal year ended December 31, 1994,
is being distributed to shareholders concurrently herewith but is not to be
deemed any part of the materials for the solicitation of proxies.

1
<PAGE>

RECORD DATE AND NUMBER OF SHARES OUTSTANDING;
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The securities of the Corporation entitled to be voted at the meeting consist
of common stock, $1.00 par value, of which 45,268,764 shares were outstanding
as of March 1, 1995. Only holders of common stock of record at the close of
business on that date will be entitled to vote at the meeting. Each shareholder
is entitled to one vote for each share held, and shareholders may not cumulate
their votes.

The following table sets forth information as of March 1, 1995, concerning
the only beneficial owners of record or known to management of more than 5% of
the Corporation's outstanding shares of common stock, $1.00 par value:

<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
----------------------------
Name and Address of Amount Nature of Percent
Beneficial Owner Held Holdings of Class
------------------- ------------- ----------- --------
<S> <C> <C> <C>
Bram and Elaine Goldsmith Group 6,789,352 15%
400 North Roxbury Drive
Beverly Hills, CA 90210

Bram and Elaine Goldsmith, Trustees 6,011,030 BD
of the Bram and Elaine Goldsmith
Family Trust

Elaine and Bram Goldsmith, Trustees 567,989 BD
of the Elaine Goldsmith Revocable
Trust

Bram Goldsmith 40,613(1) BDE

Goldsmith Family Foundation 169,720(2) BDE

The Capital Group Companies, Inc./ 3,793,870(3) CE(3) 8%
Capital Guardian Trust Company/
Capital Research and Management
Company
333 South Hope Street
Los Angeles, California 90071
</TABLE>
- - --------
(A) Possesses sole voting power.

(B) Possesses shared voting power.

(D) Possesses shared investment power.

(E) Disclaims beneficial ownership.

(F) Shares as to which the listed beneficial owner has the right to acquire
beneficial ownership, as specified in Rule 13d-3(d)(1)(i) of the Securities
and Exchange Commission.

(1) Represents Mr. Goldsmith's proportionate interest, according to his account
balance, in shares held in the Company Stock Fund under the City National
Corporation Profit Sharing Plan at the most recent valuation date, December
31, 1994. Fund investments are not allocated to individual participant
accounts, and Mr. Goldsmith disclaims beneficial ownership thereof.

(2) Mr. Goldsmith disclaims beneficial ownership of the shares held by the
Goldsmith Family Foundation, a tax-exempt charitable foundation of which
Mr. Goldsmith is a director.

(3) According to information contained in Schedule 13G provided to the
Corporation by this shareholder, all of the shares shown were held at
December 31, 1994, on behalf of various institutional investors for which
the shareholder serves as investment manager, none of which beneficially
owns more than 5% of the Corporation's outstanding shares of common stock.
Of the number shown, Capital Guardian Trust Company had sole voting power
with respect to 2,138,220 shares.

2
<PAGE>

ELECTION OF DIRECTORS

Each member of the present Board of 12 directors is also a director of City
National Bank (the "Bank"), a wholly owned subsidiary of City National
Corporation. The By-Laws provide that the Board shall be composed of not less
than 5 nor more than 25 directors (the exact number to be determined by
resolution of the Board of Directors or by the shareholders as provided in
Article III, Section 1(b) of the By-Laws, which Section is discussed below),
and the Board by its resolution has fixed the number of directors to be elected
at this Annual Meeting at 12.

Article III, Section 1(b) of the Corporation's By-Laws states that
nominations for the election of directors may be made by the Board of Directors
or by any shareholder entitled to vote for the election of directors.
Nominations other than by the Board of Directors must be made by notice in
writing, delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Corporation not less than 60 days prior to the
first anniversary of the date of the last meeting of shareholders of the
Corporation called for the election of directors. The notice must set forth (i)
the name, age, business address and, if known, the residence address of each
nominee proposed in such notice; (ii) the principal occupation or employment of
each such nominee; (iii) the number of shares of stock of the Corporation that
are beneficially owned by such nominee; and (iv) such other information as
would be required by the federal securities law and regulations with respect to
an individual nominated by the Board of Directors.

To comply with the above By-Law provision, nominations for the 1995 Annual
Shareholders Meeting by persons other than the Board of Directors should have
been received on or before February 21, 1995. The Corporation did not receive
any such nominations and deems such nominations to be closed.

The persons named below will be nominated for election to serve until the
1996 Annual Meeting of Shareholders and until their respective successors are
elected and qualified, and management does not intend to nominate any other
persons as directors at this Annual Meeting. Accordingly, the proxies solicited
hereby cannot be voted for a greater number of persons than the number of
nominees named below. If one or more of such nominees should unexpectedly
become unavailable for election, votes will be cast pursuant to the
accompanying proxy for the election of one or more substitutes to be named by
the present Board of Directors. It is the intention of the persons named in the
proxy to vote for the election of the following nominees:

3
<PAGE>

<TABLE>
<CAPTION>
Present Principal
Occupation and Director Director of
Principal Occupation of Bank Corporation
Name Age During the Past Five Years Since Since
---- --- -------------------------- -------- -----------
<C> <C> <S> <C> <C>
STEVEN D. BROIDY 57 Vice Chairman, City National 1992 1993
Corporation, 1993 to present;
Vice Chairman and Chief
Administrative Officer, City
National Bank, 1992 to
present; Partner, Loeb and
Loeb, law firm, 1989 to 1992.
STUART D. BUCHALTER(1) 57 Of counsel, Buchalter, Nemer, 1981 1981
Fields & Younger, a
Professional Corporation, law
firm; Chief Executive Officer
(1990 to January 1995),
Chairman of the Board (1990
to present), The Art Stores,
art materials retailer;
Chairman of the Board and
Chief Executive Officer,
Standard Brands Paint
Company, manufacturer and
retailer of paint, until
1993; Director, Nationwide
Cellular Systems, Inc.;
Director, Authentic Fitness
Corp.
BRAM GOLDSMITH(2) 72 Chairman of the Board and 1964 1969
Chief Executive Officer, City
National Corporation and City
National Bank.
RUSSELL GOLDSMITH(2) 45 President, Goldsmith 1978 1979
Entertainment Company,
production and media company,
1994 to present; Consultant,
Spelling Entertainment Group,
Inc., television and home
video company, 1994 to
present; Chairman of the
Board and Chief Executive
Officer, Republic Pictures
Corporation, television and
video production and
distribution, until 1994.
BURTON S. HORWITCH 69 President and Chief Executive 1978 1979
Officer, Deena, Inc.,
manufacturer of women's
apparel.
CHARLES E.
RICKERSHAUSER, JR. 66 Attorney; Chairman of the 1982 1982
Board, PS Group, Inc., since
1991; Partner, Fried, Frank,
Harris, Shriver & Jacobson,
law firm, until 1990;
Director, Vons Companies,
Inc.; Director, Lee
Enterprises, Inc.
EDWARD SANDERS 72 Principal, Sanders, Barnet, 1985 1985
Goldman, Simons & Mosk, a
Professional Corporation, law
firm; Director, Wyle
Electronics.
ANDREA L. VAN DE KAMP 51 Senior Vice President and 1994 1994
Managing Director of West
Coast Operations, Sotheby's,
appraisals and auctions;
Director, Jenny Craig, Inc.
KENNETH ZIFFREN 54 Senior partner, Ziffren, 1989 1989
Brittenham, Branca & Fischer,
law firm; Director, Spectra
Vision, Inc.; Director,
Marvel Entertainment Group,
Inc.
</TABLE>
- - --------
(1) Member of, or of counsel to, law firm retained by the Corporation or its
subsidiaries during the last two full fiscal years or which may be
retained in the current fiscal year. During the Corporation's 1994 fiscal
year, payments by the Corporation and its subsidiaries for legal services
rendered by each such law firm did not exceed 5% of such law firm's gross
revenues for such period.

(2) Mr. Russell Goldsmith is the son of Mr. Bram Goldsmith.

4
<PAGE>

On February 11, 1992, Standard Brands Paint Company ("Standard Brands Paint")
and certain direct and indirect subsidiaries filed petitions in the United
States District Court for the Central District of California for protection
from creditors pursuant to Chapter 11 of the United States Bankruptcy Code. The
plan of reorganization for Standard Brands Paint was confirmed by the
Bankruptcy Court on May 14, 1993 and became effective June 15, 1993. Mr. Stuart
D. Buchalter, a director of the Corporation, was Chief Executive Officer and a
director of Standard Brands Paint prior to June 15, 1993. In addition, the Bank
serves as trustee of certain benefit plans for the employees of Standard Brands
Paint and its subsidiaries.

The Boards of Directors of the Corporation and the Bank each have a
Compensation and Directors Nominating Committee, which were formed in 1994 by
combining the former Compensation and Nominating Committees, and each of which
is composed of Messrs. Stuart D. Buchalter, Russell Goldsmith and Charles E.
Rickershauser, Jr. The Committees, which met jointly 8 times in 1994, act upon
matters of compensation and select and nominate candidates for positions on the
Corporation's and Bank's Boards of Directors.

The Audit Committee of the Corporation and the Audit and Examining Committee
of the Bank are each composed of Messrs. Stuart D. Buchalter, Richard L. Bloch
and Kenneth Ziffren, all of whom are directors of the Bank and the Corporation.
The Audit Committee of the Corporation monitors significant accounting
policies, approves services rendered by the auditors, reviews audit and
management reports and makes recommendations regarding the appointment of
independent auditors and the fees payable for their services. The Audit and
Examining Committee of the Bank periodically reviews asset quality, credit loss
reserves, regulatory compliance and internal audit functions of the Bank. These
committees met jointly 15 times in 1994.

During 1994, the Corporation's Board of Directors held 13 meetings. With the
exception of Mr. Richard L. Bloch, none of the directors was present at fewer
than 75% of the aggregate of the total number of meetings of the Board of
Directors and the total number of meetings held by all committees of the Board
on which he or she served (during the periods he or she served).

5
<PAGE>

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

No direct compensation was paid by the Corporation to any of its executive
officers in 1994, except pursuant to the Profit Sharing Plan and the 1985 Stock
Option Plan. Instead, the executive officers of the Corporation, all of whom
are employees of the Bank, were compensated by the Bank and receive benefits
under various employee benefit plans of the Bank.

The following information is furnished with respect to (i) the chief
executive officer of the Corporation, and (ii) each of the other 4 most highly
compensated executive officers of the Corporation (including officers of the
Bank who may be deemed to be executive officers of the Corporation), in each
case at December 31, 1994 (the "Named Officers"):

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term
Compensation(1)
Annual Compensation Awards
----------------------------------------------------- ---------------
Securities
Other Underlying
Name and Annual Options/ All Other
Principal Position Year Salary Bonus Comp. SARs(2) Comp.
------------------ ---- -------- -------- ------ --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bram Goldsmith 1994 $540,000 $270,000 (3) -0- $14,176(4)
Chairman of the Board &
Chief Executive 1993 $540,000 -0- (3) -0- $ 899(4)
Officer, City National 1992 $780,000 -0- (3) -0- $ 872(4)
Corporation and
City National Bank

Steven D. Broidy 1994 $300,000 $150,000 (3) -0-(5) $14,003(4)
Vice Chairman, City
National Corporation; 1993 $300,000 -0- (3) 75,000 $ 600(4)
Vice Chairman & Chief 1992(6) $200,000 -0- (3) 81,765 -0-
Administrative
Officer, City National
Bank

George H. Benter, Jr. 1994 $300,000 $150,000 (3) -0-(5) $14,003(4)
President, City National
Corporation; 1993 $300,000 -0- (3) 75,000 $ 600(4)
President & Chief 1992(6) $200,000 -0- (3) 81,765 -0-
Operating Officer,
City National Bank

Frank P. Pekny 1994 $240,000 $120,000 (3) -0-(5) $13,543(4)
Executive Vice
President, 1993 $240,000 -0- (3) 56,393 $ 240(4)
Chief Financial Officer 1992(7) $ 45,538 -0- (3) 16,353 -0-
& Treasurer,
City National
Corporation &
City National Bank

Robert A. Moore 1994 $160,000 $ 48,000 (3) -0-(5) $13,477(4)
Executive Vice
President, 1993 $160,000 -0- (3) 45,902 $ 320(4)
Credit Services, City
National Bank 1992(8) $110,359 -0- (3) 10,901 -0-
</TABLE>
- - --------
(1) The Corporation did not award restricted stock or pay out amounts pursuant
to any long-term incentive plan, as defined in the federal proxy rules,
during the period shown.

(2) As adjusted pursuant to anti-dilution provisions of the Corporation's 1985
Stock Option Plan for the Corporation's rights offering in May 1993, where
applicable.

(3) Aggregate amount of perquisites and other personal benefits did not exceed
the lesser of $50,000 or 10% of total salary and bonus reported in
preceding columns.

(4) Bank contribution to Profit Sharing Plan allocable to the Named Officer,
including any matching contribution to deferred compensation feature of
the Plan under Section 401(k) of the Internal Revenue Code.

(5) The Corporation did not grant stock options in 1994. However, stock
options were granted in February 1995.

(6) Employment commenced on May 1, 1992.

(7) Employment commenced on October 23, 1992.

(8) Employment commenced on April 23, 1992.

6
<PAGE>

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

On January 31, 1990, the Bank entered into an Employment Agreement (the
"1990 Agreement") with Mr. Bram Goldsmith pursuant to which he has served and
will continue to serve as Chairman of the Board and Chief Executive Officer of
the Bank from May 15, 1990, to May 14, 1995. Mr. Goldsmith had previously been
employed by the Bank as its Chairman of the Board and Chief Executive Officer
for consecutive five-year periods which commenced in 1975. The 1990 Agreement
provides for annual salary of $1,000,000 during the first year of its term,
with $100,000 increases in each successive year thereafter. Based on the
Bank's operating results, Mr. Goldsmith subsequently agreed to forego the
increase for the second year of the 1990 Agreement, beginning May 1, 1991, and
further agreed to a 10% decrease in salary effective January 1, 1992, and to
an additional decrease to $540,000 per year effective September 1, 1992. The
1990 Agreement provides for an annual incentive bonus to be paid to Mr.
Goldsmith, which bonus shall be no less a percentage of Mr. Goldsmith's annual
salary than the percentage used to calculate the bonus to any other member of
executive management of the Bank. A bonus of $270,000 was paid to Mr.
Goldsmith in 1995 with respect to 1994. The 1990 Agreement provides for split
dollar life insurance on the joint lives of Mr. Goldsmith and Mrs. Elaine
Goldsmith in the amount of $5,521,946, the premium for which was fully paid in
1990. The amount of this policy was subsequently increased to $7,000,000 for
no additional premium. There is no arrangement or understanding, whether
formal or informal, that Mr. Goldsmith has or will receive or be allocated an
interest in the cash surrender value of the insurance policy.

The 1990 Agreement further provided for the grant of a stock option (which
was not an Incentive Stock Option) pursuant to the 1985 Stock Option Plan for
400,000 shares of the Corporation's common stock at an exercise price of
$21.25 per share (the fair market value on January 31, 1990), together with
accompanying Tax Offset Bonus Rights payable only in cash in an amount equal
to 11.1% of the excess of the fair market value of the shares when the options
were exercised over the exercise price of the options (which percentage was
subject to adjustment in the event of a change in applicable capital gains tax
rates, to yield the same net after-tax benefit to Mr. Goldsmith as though the
option were an Incentive Stock Option). In November 1993, the option was
adjusted pursuant to anti-dilution provisions of the 1985 Stock Option Plan
for the Corporation's rights offering in May 1993. As adjusted, the option was
for 436,080 shares at an exercise price of $19.50 per share. The option vested
in increments of 25% on January 31 of 1991, 1992, 1993 and 1994, and expired
unexercised on January 30, 1995.

The 1990 Agreement also provides that if a "change of control" takes place
with respect to the Bank, Mr. Goldsmith may terminate the 1990 Agreement but
remain entitled to receive all compensation payable for the balance of the
term of the 1990 Agreement as if it had not been terminated, subject to
certain limitations. For this purpose, a "change of control" is deemed to have
occurred if any person other than Mr. Goldsmith or the Corporation's Profit
Sharing Plan acquires beneficial ownership of more than 20% of the outstanding
voting securities of the Corporation, excluding securities purchased directly
from Mr. Goldsmith.

In March 1995, the Bank entered into a new Employment Agreement (the "1995
Agreement") with Mr. Goldsmith pursuant to which he will continue to serve as
Chairman of the Board and Chief Executive Officer of the Bank until May 14,
1998. The terms of the 1995 Agreement are the same as the 1990 Agreement,
described above, with the following exceptions. The 1995 Agreement provides
for an annual salary of $540,000 per year and does not provide for the grant
of any stock options or Tax Offset Bonus Rights. However, Mr. Goldsmith will
be eligible to receive options and other awards under the City National
Corporation 1995 Omnibus Plan (the "1995 Omnibus Plan") proposed for approval
by the shareholders of the Corporation. See "CITY NATIONAL CORPORATION 1995
OMNIBUS PLAN," below.

The 1995 Agreement contains provisions for the payment of compensation to
Mr. Goldsmith in the event of a "change of control" that are the same as under
the 1990 Agreement. The 1995 Agreement also provides that in the event CNB
terminates Mr. Goldsmith's employment without good cause, Mr. Goldsmith will
be entitled to receive all compensation payable for the balance of the term of
the 1995 Agreement as if it had not been terminated. For this purpose, "good
cause" consists only of a conviction of a crime directly related to Mr.
Goldsmith's employment, a conviction of a felony involving moral turpitude,
willful and gross mismanagement of the

7
<PAGE>

Bank's business and affairs, or breach of any material provision of the 1995
Agreement. Under the 1995 Agreement, if Mr. Goldsmith's employment is
terminated because of injury, physical or mental illness, he will receive all
compensation payable for the balance of the term of the 1995 Agreement as if it
had not been terminated, less any amount paid in lieu of salary under any
private or governmental insurance program, and if he dies, the lesser of his
annual salary for the balance of the term of the 1995 Agreement or two years
annual salary will be paid to his wife, if she is living, or his Revocable
Living Trust, if she is not. The 1995 Agreement provides that, at the request
of either Mr. Goldsmith or the Bank, any dispute relating to the 1995 Agreement
will be resolved through binding arbitration.

The Bank has a Separation Pay Plan with respect to all employees, including
the Named Officers, who are regularly scheduled to work at least 30 hours per
week and have completed at least three months of continuous service at the time
they are laid off. The Separation Pay Plan provides continuing pay based on the
employee's wage or salary rate in the event of layoff, provided the employee is
not offered a position with the Bank at a comparable salary or a position with
an employer that acquires from the Bank the line of business that the employee
formerly worked in. The basic period during which the employee is entitled to
receive separation pay is determined by position, and ranges up to six weeks
for Vice Presidents or above. However, if the employee executes a General
Release and Separation Agreement, the separation pay period is extended, based
on position and years of service, up to a maximum of 26 weeks of salary
(including the six week basic period) for Vice Presidents or above with 16 or
more years of service.

Both the 1985 Stock Option Plan and outstanding options issued under the 1983
Stock Option Plan, which has expired, contain provisions applicable to all
option holders, including the Named Officers, relating to exercisability of
options and SARs upon termination of the option holder's employment and certain
other events that may occur in connection with a change in control of the
Corporation. Depending upon the value of the Corporation's common stock at the
time any such event occurred, the value of options and SARs affected by such
provisions might exceed $100,000 with respect to a Named Person.

If an option holder's employment is terminated for any reason other than for
cause, death, disability or retirement, any options or SARs held by the
employee expire 3 months after the termination date, and until that time can
only be exercised to the extent vested on the date of termination. If an
employee dies or terminates employment by reason of disability or retirement,
all options and SARs vest in full on the termination date, regardless of any
vesting schedule otherwise applicable. In the event of the optionee's death,
options and SARs must be exercised by the employee's estate within one year. If
employment terminates because of retirement or disability, options and SARs may
be exercised until 3 years after the termination date. The provisions relating
to vesting and expiration after termination of employment may be altered by the
Compensation and Directors Nominating Committee of the Corporation's Board of
Directors in its discretion, but only with respect to stock options that are
not qualified as Incentive Stock Options for tax purposes ("NSOs") and SARs. In
no event may the expiration of options or SARs be extended to later than 10
years after the date of grant.

In the event (a) more than 70% of the Corporation's common stock is acquired
by a person or entity other than the Corporation; or (b) the Corporation is
liquidated or dissolved following the sale of all or substantially all of its
assets; or (c) the Corporation is merged or consolidated into another entity,
then all outstanding stock options and SARs held by employees become
exercisable unless the Board of Directors unanimously votes to the contrary. If
the Corporation is merged or consolidated into another entity and the Board
votes against the immediate maturity of outstanding options, the Board will
make arrangements with the successor entity to assume the 1985 Stock Option
Plan and outstanding options and SARs issued under the 1983 Stock Option Plan
or substitute a new Plan in their place with appropriate adjustments.

In the event of a tender offer or exchange offer for the Corporation's common
stock by a person or entity other than the Corporation which results in the
acquisition of stock by the person or entity making the offer, the Stock Option
Committee may, in its discretion, permit employees who hold NSOs to surrender
the options and any SARs in tandem therewith and receive the difference between
(i) the higher of the highest price offered by such person or entity for the
Corporation's common stock during the 60-day period before surrender of the
NSOs or the highest market price of the Corporation's common stock during such
60-day period, and (ii) the exercise price of the NSOs and SARs surrendered.

8
<PAGE>

The proposed 1995 Omnibus Plan also contains provisions relating to
exercisability of awards upon termination of the holder's employment and
certain other events that may occur in connection with a change in control of
the Corporation. See "CITY NATIONAL CORPORATION 1995 OMNIBUS PLAN," below.

OPTION GRANTS, EXERCISES AND HOLDINGS

No stock options or stock appreciation rights ("SARs") were granted to the
Named Officers in 1994. Beginning with 1994, the Corporation altered the
schedule for compensation decisions and awards, and stock options were granted
in February 1995.

The following information is furnished with respect to stock options and SARs
held by the Named Officers at December 31, 1994. None of the Named Officers
exercised stock options or SARs in 1994.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES

<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARS Options/SARS
Acquired at FY-End at FY-End(1)
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
---- -------- -------- ------------- ----------------
<S> <C> <C> <C> <C>
Bram Goldsmith.............. 0 -- 436,080/0(2) $0/0
Steven D. Broidy............ 0 -- 73,259/83,505(3) $170,491/282,803
George H. Benter, Jr. ...... 0 -- 73,259/83,505(3) $170,491/282,803
Frank P. Pekny.............. 0 -- 29,350/42,265(4) $132,675/142,773
Robert A. Moore............. 0 -- 22,376/34,427(5) $37,965/113,902
</TABLE>
- - --------
(1) Based upon fair market value of $10.625 per share, the closing price on the
New York Stock Exchange of the Corporation's common stock on December 30,
1994.
(2) Stock options under 1985 Stock Option Plan with exercise price of $19.50
per share, paired with Tax Offset Bonus Rights (SARs). These options and
SARs expired unexercised on January 30, 1995. See "Employment Contracts and
Termination of Employment and Change-In-Control Arrangements," above.
(3) Stock options under 1985 Stock Option Plan with exercise prices ranging
from $6.43 to $11.01 per share.
(4) Stock options under 1985 Stock Option Plan with exercise prices ranging
from $5.05 to $7.63 per share.
(5) Stock options under 1985 Stock Option Plan with exercise prices ranging
from $6.31 to $12.04 per share.

COMPENSATION OF DIRECTORS

The Corporation does not pay cash fees to its directors for attendance at
Board meetings. However, the Bank, whose Board of Directors is the same as the
Corporation's and generally meets jointly with the Corporation's Board, pays a
fee of $1,000 to each non-employee director for attendance at each meeting of
the Bank's Board of Directors. The Bank also pays directors an annual cash
retainer in the amount of $3,000. Non-employee directors serving on committees
appointed by the Bank's Board of Directors receive a fee of $1,000 for each
committee meeting attended. Bank Board committee chairs also receive a $3,000
annual cash retainer.

In addition to the above, the Corporation's 1985 Stock Option Plan provides
for the automatic annual grant of discounted stock options (which are not
Incentive Stock Options) to non-employee directors, including members of the
Compensation and Directors Nominating Committee ("Director Stock Options"). The
exercise price of Director Stock Options is $1.00 per share, and each non-
employee director receives Director Stock Options each year having a net value
of $3,000, based on the fair market value of the Corporation's common stock on
the date of the Annual Meeting of Shareholders. Director Stock Options vest 6
months after the date of issuance or upon the termination of the holder's
directorship (other than for cause), whichever is earlier, and expire 10 years
after the date of grant. The 1995 Omnibus Plan provides for Director Stock
Options on similar terms. See "CITY NATIONAL CORPORATION 1995 OMNIBUS PLAN,"
below.

9
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation and Directors Nominating Committees of the Corporation's and
Bank's Boards of Directors are each composed of Messrs. Charles E.
Rickershauser, Jr., Chairman, Stuart D. Buchalter and Russell Goldsmith.
Messrs. Burton S. Horwitch and Kenneth Ziffren also served on the predecessor
Compensation Committee in 1994. None of the committee members has ever been an
officer or employee of the Corporation, the Bank or any subsidiary of the Bank.
Mr. Buchalter is of counsel to the law firm of Buchalter, Nemer, Fields &
Younger, a Professional Corporation, which was retained by the Bank during the
Corporation's last two fiscal years. In 1994, payments by the Corporation and
its subsidiaries for legal services rendered by the firm did not exceed 5% of
the firm's gross revenues for the year.

The Bank has an outstanding unsecured loan to Horwitch Brothers 3, a general
partnership of which Mr. Horwitch is a partner. At March 1, 1995, the
outstanding balance on this loan was $263,677; the largest amount outstanding
since January 1, 1994, was $749,640. The loan bears interest at the Bank's
prime rate plus 1 1/2%, and matures on January 4, 1999. At March 1, 1994, the
interest rate on the loan was 10.5%. This loan may involve more than the normal
risk of collectibility.

Until April 30, 1994, Mr. Bram Goldsmith, Chairman of the Board and Chief
Executive Officer of the Corporation, was a member of the Board of Directors of
Republic Pictures Corporation, of which Mr. Russell Goldsmith, a director of
the Corporation, was Chairman of the Board and Chief Executive Officer until
April 1994. During that time, the Board of Directors of Republic Pictures
Corporation had no Compensation Committee or other Board committee performing
equivalent functions, and matters of compensation of executive officers were
acted upon by the Republic Board as a whole.

BOARD COMPENSATION AND DIRECTORS NOMINATING COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

Decisions regarding compensation of the Corporation's executive officers, all
of whom are employees of the Bank, are made by the Compensation and Directors
Nominating Committees of the Corporation and the Bank, which meet jointly (the
"Compensation Committee"). As noted elsewhere, the Corporation does not pay any
direct compensation to its executive officers, except pursuant to the
Corporation's Profit Sharing Plan and 1985 Stock Option Plan. The Compensation
Committee administers the 1985 Stock Option Plan and grants options thereunder,
as well as administering outstanding options issued under the 1983 Stock Option
Plan, which expired in 1993. If approved by shareholders, the Compensation
Committee will also administer the 1995 Omnibus Plan. See "CITY NATIONAL
CORPORATION 1995 OMNIBUS PLAN," below. The executive officers of the
Corporation are compensated by the Bank and receive benefits under various Bank
employee benefit plans. The Compensation Committee oversees the compensation
programs for officers of the Bank, and specifically the compensation of members
of the Bank's Executive Committee, some of whom may be deemed to be executive
officers of the Corporation.

The following report is presented by the Compensation Committee.

OVERALL PHILOSOPHY

The Bank's executive compensation programs are designed to:

1. Provide levels of compensation that integrate pay with the Bank's
annual and long-term performance goals, so as to align the interests of
executive management with the long-term interests of shareholders;

2. Motivate executive management to achieve the business goals of the
Bank and to recognize their individual contributions; and

10
<PAGE>

3. Provide compensation opportunities which are approximately at the
median of those offered by competitive financial institutions, in order to
assist the Bank in attracting and retaining qualified executives. Although
the exact identity of the competitive institutions surveyed to establish
comparability varies from time to time, based on the availability of
compensation data from third-party surveys concerning comparable positions,
these generally include banks of a size comparable to, or larger than, the
Bank, both within and outside of Southern California. Some, but not all, of
these banks are included within the Montgomery Securities Western Bank
Monitor California Independent Bank Proxy index utilized in "SHAREHOLDER
RETURN GRAPH," below. Banks not included in the index are selected
primarily on the basis of asset size and secondarily on the basis of
location.

Beginning with 1994, the Compensation Committee has instituted a policy that
an increasing emphasis be placed on incentive compensation for executive
officers, tied to annual financial performance goals for the Bank, such as the
Executive Management Bonus Plan discussed below, rather than on base salary.
This approach is considered more consistent with compensation practices at the
surveyed competitive institutions, and serves to further align the interests of
the executive officers with those of the shareholders.

For 1994, the key elements of the compensation program for executive
management were base salary, annual cash bonus, stock option grants and
benefits typically offered to executive officers by competitive financial
institutions. The Corporation has not adopted any policy with respect to
qualifying compensation paid to executive officers under Section 162(m) of the
Internal Revenue Code.

BASE SALARY

The Compensation Committee considers Bank management proposals concerning
base salaries for executive officers, with the exception of Mr. Bram Goldsmith,
whose compensation was established by the 1990 Agreement with the approval of
the Board of Directors (see "Employment Contracts and Termination of Employment
and Change-in-Control Arrangements," above), and has made recommendations to
the Bank's Board of Directors for approval. Such adjustments are usually
effective beginning March 1.

Executive officer base salaries for 1994 were established by the Compensation
Committee under the terms of a revised corporate salary administration program
that became effective on January 1, 1994. For the majority of Bank officers,
the program establishes ranges for base salaries by salary grade, based on
median salary levels for similar positions at competitive financial
institutions. However, members of the Bank's Executive Committee, some of whom
may be deemed to be executive officers of the Corporation, are not assigned a
salary grade under the revised program. Based on the Bank's operating results
in 1993 and a survey of the salary levels for similar positions at competitive
financial institutions, both in Southern California and nationally, using data
provided by Hewitt Associates and other independent sources, no executive
officer received a salary increase in 1994 for 1993 performance.

Mr. Goldsmith's base salary for 1994 was determined by the terms of his
existing contract, which will expire May 14, 1995. The Bank has entered into
the 1995 Agreement with Mr. Goldsmith, which will remain in effect until May
14, 1998. See "Employment Contracts and Termination of Employment and Change-
in-Control Arrangements," above. In line with the Compensation Committee's goal
of de-emphasizing base salary as a component of the compensation package, Mr.
Goldsmith's base salary under the 1995 Agreement was continued at the 1994
level, $540,000 per year (which base salary had been reduced voluntarily by Mr.
Goldsmith from the level originally provided for in the 1990 Agreement), with
no increases during the term of the 1995 Agreement, and was not based upon the
Bank's financial performance in 1994.

ANNUAL CASH BONUSES

Executive officers of the Bank are eligible to participate, depending on
position, in either the Executive Management Bonus Plan or the Key Officer
Bonus Plan discussed below.

11
<PAGE>

Executive Management Bonus Plan The Executive Management Bonus Plan governs
annual cash bonuses payable to members of the Bank's Executive Committee, some
of whom may be deemed to be executive officers of the Corporation. Under this
Plan, the Bank's Strategy and Planning Committee each year recommends to the
Compensation Committee for its review and adoption (i) a financial performance
goal for the Bank, measured in terms of net income, and (ii) the upper limit
for bonuses, expressed as a percentage of annual base salary, based primarily
on bonus levels for similar positions at competitive financial institutions. If
the goal is not achieved, no cash bonuses are paid. If the goal is achieved,
bonuses may be paid, but only out of net profits in excess of the goal. After
the end of the year, the determination of which executive officers will receive
bonuses and in what amounts is made by the Compensation Committee following
discussion of the recommendations of the Bank's Strategy and Planning
Committee, based on a discretionary evaluation of the officers' contribution to
the accomplishment of the Bank's goal and department or division goals.

In February 1994, the Compensation Committee established the Corporation's
net income goal for 1994, as well as the maximum bonuses to be awarded if the
goal were met, which were up to 50% of the annual base salary for members of
the Strategy and Planning Committee (consisting of Messrs. Bram Goldsmith,
Steven D. Broidy, George H. Benter, Jr. and Frank P. Pekny) and up to 30% for
other members of the Executive Committee. The goal was achieved, and bonuses
were paid in January 1995. See "COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS," above.

In December 1994, the Compensation Committee established the net income goal
for 1995, and the maximum percentages of annual base salary that can be paid as
bonuses if the target is achieved. Unlike 1994, the maximum percentages in 1995
will be a sliding scale, according to the degree to which the net income goal
is achieved, with different percentages set if the Corporation achieves 95%,
100%, 110% or 120% of its goal. For members of the Strategy and Planning
Committee, the maximum bonus percentages range from up to 25% of base salary if
the Corporation achieves 95% of its goal, to up to 60% of base salary if it
achieves up to 120% of its goal. For other members of the Executive Committee,
the corresponding percentages range from up to 17.5%, to up to 42%,
respectively.

Mr. Goldsmith's bonus for 1994 was determined by the terms of his existing
contract, but his bonus for 1995 will be determined according to the 1995
Agreement, which states that the bonus will be no less a percentage of Mr.
Goldsmith's base salary than the percentage used to calculate the bonus of any
other member of executive management pursuant to the Executive Management Bonus
Plan. As described above, the bonus will be based on the degree to which the
Corporation achieves the net income goal established by the Compensation
Committee.

Key Officer Bonus Plan The Key Officer Bonus Plan governs annual cash bonuses
payable to officers considered to be key members of management who are not
members of the Bank's Executive Committee. One such officer may be deemed to be
an executive officer of the Corporation.

Early each year, upon consideration of the recommendations of the Strategy
and Planning Committee, the Compensation Committee establishes the maximum
sizes of bonuses under the Key Officer Bonus Plan, expressed as a percentage of
annual base salary, based primarily on bonus levels for similar positions at
competitive financial institutions. Unlike the Executive Management Bonus Plan,
maximum bonus percentages are classified into three categories, based on the
extent to which the officer achieves individual performance goals and, in some
cases, department or division goals: "minimum" (the officer achieves most
goals), "target" (the officer achieves or slightly exceeds all goals) or
"maximum" (the officer significantly surpasses his or her goals). After the end
of the year, the determination of which officers will receive bonuses, and in
what amounts, is made by the Compensation Committee following discussion of the
recommendations of the Bank's Strategy and Planning Committee, based on a
discretionary evaluation of the officers' achievement of their goals. In
general, bonuses may be paid if the Corporation's net income is within 20% of
the net income goal established for the Executive Management Bonus Plan.
However, if the Corporation's

12
<PAGE>

net income is less than 80% of the net income goal for the year, bonuses may
still be paid in reduced percentages in the discretion of the Bank's Strategy
and Planning Committee; likewise, if the net income is more than 120% of the
goal, bonus percentages may be increased.

For 1994, the maximum bonus percentages for achievement of the officers'
goals established by the Compensation Committee ran from a minimum of 5% to a
maximum of 20%. Since the Corporation's net income goal was achieved, bonuses
were paid based on these percentages in January 1995. For 1995, the
Compensation Committee has approved a matrix of maximum bonus percentages,
based on both the level of achievement of the officer's goals, as described
above, and the Compensation Committee's assessment of the officer's ability to
contribute to the Corporation's attainment of its net income goal. These range
from up to 5%, to up to 40% of annual base salary.

STOCK OPTION GRANTS

Recommendations of the Bank's Strategy and Planning Committee for the grant
of stock options to executive officers under the Corporation's 1985 Stock
Option Plan are generally submitted to the Compensation Committee after the end
of each fiscal year. After full discussion of the recommendations presented,
the Committee decides whether to award stock options.

The 1985 Stock Option Plan is designed to align the interests of the
executive officers with the long-term interest of the Corporation's
shareholders in increasing the market value of the Corporation's stock. The
option exercise price is the fair market value of the Corporation's common
stock on the date of grant, and the options generally have a vesting schedule
of 25% per year beginning one year after the grant date in order to encourage
retention of executive officers and the creation of shareholder value over the
long term, since the option holder receives the full benefit of the option only
after a number of years. In determining whether to grant an option and the size
of the grant to be awarded, the Compensation Committee considers executive
officers' salary levels, their expected contribution toward the growth and
profitability of the Bank based upon performance of their individual job
responsibilities, and option grant levels at competitive financial institutions
(in order of decreasing importance). Past financial performance of the Bank and
the Corporation is given less weight in the decision, because the value of the
option is based upon future appreciation in the stock price.

Utilizing these guidelines, the Compensation Committee granted stock option
awards to executive officers under the 1985 Stock Option Plan in February 1995,
based on their job performance in 1994. If approved by shareholders, future
option grants will be made pursuant to the City National Corporation 1995
Omnibus Plan. See "CITY NATIONAL CORPORATION 1995 OMNIBUS PLAN," below.

NEWLY HIRED EXECUTIVE OFFICERS

It is the policy of the Bank to present to the Compensation Committee, prior
to extending an offer of employment to a candidate for an executive officer
position, the proposed total compensation package proposed to be offered,
including annual base salary, eligibility for an annual cash bonus, the maximum
percentage of annual base salary on which the bonus, if any, would be
calculated, and any stock option grant proposed to be awarded at the time of
hire. The Compensation Committee then recommends the proposed annual base
salary and eligibility for an annual cash bonus to the Bank's Board of
Directors for approval, and decides whether to grant any proposed stock
options. All elements of compensation for newly hired executive officers are
based primarily on the responsibilities of the position, the experience of the
individual and the incentive compensation practices of other competitive
financial institutions (in order of decreasing importance), rather than the
Corporation's financial performance.

CHARLES E. RICKERSHAUSER, JR., Chairman
STUART D. BUCHALTER
RUSSELL GOLDSMITH

13
<PAGE>

SHAREHOLDER RETURN GRAPH

The following line graph compares the total cumulative shareholder return on
the Corporation's common stock, based upon quarterly reinvestment of all
dividends, to the cumulative total returns of the Standard & Poor's S&P
Composite 500 Stock Index and the Montgomery Securities Western Bank Monitor
California Independent Bank Proxy index of selected bank stocks. The graph
assumes $100 invested on December 31, 1989, in the Corporation's common stock
and each of the indices.

CITY NATIONAL CORPORATION
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
PERIOD ENDING DECEMBER 31, 1994

[The following table sets forth the data points for the performance graph.]

<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1989 1990 1991 1992 1993 1994
------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
City National Corporation.......... $100.00 $104.08 $53.21 $29.68 $33.60 $47.83
S&P 500............................ 100.00 93.44 118.02 123.29 131.99 129.96
Montgomery Securities Western Bank
Monitor California Independent
Bank Proxy........................ 100.00 87.47 83.46 82.46 98.04 103.01
</TABLE>

14
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT
The following table presents the amount and nature of beneficial ownership of
the Corporation's common stock, $1.00 par value, by all directors of the
Corporation, each Named Officer (see "COMPENSATION OF DIRECTORS AND OFFICERS,"
above) and the Corporation's directors and executive officers as a group:

<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
-----------------------------------------
Name of Beneficial
Owner Amount Held Nature of Holdings Percent of Class
- - ------------------ ----------------------- ------------------------ ----------------
<S> <C> <C> <C>
GEORGE H. BENTER, JR. 10,000(1) BD *
2,199(2) BDE
73,259(3) F

RICHARD L. BLOCH 228,071(4) BD *
1,534(3) F

MIRION P. BOWERS, M.D. 120 AC *
393(3) F

STEVEN D. BROIDY 79,154 AC *
11,533(5) E
73,259(3) F

STUART D. BUCHALTER 9,581 AC *
2,000(6) AC
375(6) E

BRAM GOLDSMITH 6,579,019(7) BD 15%
40,613(2) BDE
169,720(8) BDE

RUSSELL GOLDSMITH 6,177 AC 2%
790,107(9) AC
69,720(8) BDE
73,495(9) BDE

BURTON S. HORWITCH 115,213(10) AC *
600(10) BDE

ROBERT A. MOORE 25,102(3) F *

FRANK P. PEKNY 5,000 AC *
1,689(2) BDE
29,350(3) F
CHARLES E.
RICKERSHAUSER, JR. 12,262 AC *

EDWARD SANDERS 14,563 AC *
1,137(11) BD
393(3) F

ANDREA L. VAN DE KAMP 1,000 AC *
393(3) F

KENNETH ZIFFREN 1,316 AC *
15,786(12) BD
1,384(3) F
ALL EXECUTIVE OFFICERS
and DIRECTORS as a
Group 8,527,227(13) 19%
</TABLE>
- - --------
* Does not exceed 1% of class.
A Possesses sole voting power.
B Possesses shared voting power.
C Possesses sole investment power.
D Possesses shared investment power.

15
<PAGE>

E Disclaims beneficial ownership.
F Shares as to which listed beneficial owner has right to acquire beneficial
ownership, as specified in Rule 13d-3(d)(1)(i) of the Securities and
Exchange Commission.

(1) Shares owned by the Benter Living Trust, of which Mr. Benter is a co-
trustee and beneficiary.

(2) Represents the officer's proportionate interest, according to his account
balance, in shares held in the Company Stock Fund under the City National
Bank Profit Sharing Plan at the most recent valuation date, December 31,
1994. Fund investments are not allocated to individual participant
accounts, and the participants disclaim beneficial ownership thereof.

(3) Unexercised stock options granted under the Corporation's 1983 or 1985
Stock Option Plan which are vested or will vest within 60 days.

(4) Shares owned by the Richard and Nancy Bloch Family Trust, of which Mr.
Bloch is a co-trustee and beneficiary.

(5) 11,133 shares are owned by Mr. Broidy's wife, individually and as trustee,
and 400 shares are owned by Mr. Broidy's son. Mr. Broidy disclaims
beneficial ownership of shares held by his wife and his son.

(6) 2,000 shares are held by City National Bank as custodian of Mr.
Buchalter's rollover IRA. 375 shares are owned by Mr. Buchalter's wife,
individually and for the benefit of her IRA. Mr. Buchalter disclaims
beneficial ownership of shares held by or for the benefit of his wife.

(7) 6,011,030 shares are owned by the Bram and Elaine Goldsmith Family Trust,
and 567,989 shares are owned by the Elaine Goldsmith Revocable Trust. Mr.
Goldsmith is a co-trustee of both trusts. Mr. Goldsmith may be deemed a
"control person" of the Corporation.

(8) Shares owned by Goldsmith Family Foundation, a tax-exempt charitable
foundation. Mr. Bram Goldsmith and Mr. Russell Goldsmith each disclaim
beneficial ownership of shares held by the Foundation, of which both are
directors.

(9) 790,107 shares are owned by trusts of which Mr. Goldsmith is sole trustee.
73,495 shares are owned by B. N. Maltz Foundation, a tax-exempt charitable
foundation of which Mr. Goldsmith is a director. Mr. Goldsmith disclaims
beneficial ownership of shares held by the Foundation.

(10) 87,551 shares are owned by the Burton Horwitch Living Trust, of which Mr.
Horwitch is sole trustee; 27,662 shares are held by Kemper Clearing
Corporation as custodian for the benefit of Mr. Horwitch's contributory
IRA; and 600 shares are held by the Horwitch Bros. Charitable Foundation,
a tax-exempt charitable foundation of which Mr. Horwitch is a co-trustee.
Mr. Horwitch disclaims beneficial ownership of shares held by the
Foundation.

(11) Shares held by City National Bank as custodian for Mr. Sanders' Keogh
plan.

(12) Shares held jointly by Mr. Ziffren and his wife.

(13) Includes shares held by officers of the Bank who may be deemed to be
executive officers of the Corporation. Of the amount shown, 251,529 shares
represent unexercised stock options granted under the Corporation's 1983
and 1985 Stock Option Plans, as to which directors and officers have the
right to acquire beneficial ownership, as specified in Rule 13d-3(d)(1)(i)
of the Securities and Exchange Commission. Also includes 49,515 shares
held by the Company Stock Fund under the City National Corporation Profit
Sharing Plan, representing the proportionate interests therein of Bank
officers who may be deemed to be executive officers of the Corporation,
according to their account balances at the most recent valuation date,
December 31, 1994. Fund investments are not allocated to individual
participant accounts, and the participants disclaim beneficial ownership
of such shares.

The directors of the Bank do not hold director-qualifying stock of the Bank.
Rather, they have satisfied this qualification requirement by holding a
requisite number of shares of the Corporation in accordance with an
interpretive ruling issued by the Comptroller of the Currency.

16
<PAGE>

CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS

Since 1967, the Bank's Pershing Square Regional Office and a number of Bank
departments have occupied leased space in the office building located at 600
South Olive Street in downtown Los Angeles. The building was originally
developed and built by a partnership between a wholly-owned subsidiary of the
Bank, Citinational Bancorporation, and Buckeye Construction Co. and Buckeye
Realty and Management Corporation (two corporations then affiliated with Mr.
Bram Goldsmith, now Chairman of the Board and Chief Executive Officer of the
Corporation and the Bank); since its completion, the building has been owned
by Citinational-Buckeye Building Co., a limited partnership of which
Citinational Bancorporation and Olive-Sixth Buckeye Co. are the only general
partners, each with a 29% partnership interest. Citinational Bancorporation
has an additional 3% interest as a limited partner of Citinational-Buckeye
Building Co.; the remainder is held by other, unaffiliated limited partners.
Olive-Sixth Buckeye Co. is a limited partnership of which Mr. Goldsmith is a
49% general partner; therefore, Mr. Goldsmith has an indirect 14% ownership
interest in Citinational-Buckeye Building Co. The remaining general partner
and all limited partners of Olive-Sixth Buckeye Co. are not affiliated with
the Corporation.

The Bank occupies space in the building under leases signed in 1966, 1985
and 1991, all of which expire in 1996. Prior to 1991, rental and other
payments were made to an unaffiliated ground lessee, Tishman Speyer South
Olive Street. This ground lease was terminated in December 1990, and the Bank
now pays rent and operating expense pass-throughs to Citinational-Buckeye
Building Co. Rental rates and other lease terms were negotiated at arms'
length without Mr. Goldsmith's involvement, and are comparable to, or better
than, rentals and lease terms for unaffiliated tenants in the building. In
1994, the Bank paid Citinational-Buckeye Building Co. a total of $761,637 for
rent under all leases in the building and $161,777 for operating expense pass-
throughs. Based on existing lease terms, rentals payable by the Bank to
Citinational-Buckeye Building Co. total $63,470 per month for all leases in
the building, not including operating expense pass-throughs.

Certain indebtedness of Citinational-Buckeye Building Co. to the Bank is
described below. In addition, since 1991, Mr. Goldsmith and the other general
partner of Olive-Sixth Buckeye Co. have made unsecured advances to
Citinational-Buckeye Building Co. to cover operating expenses and common area
and tenant improvements. Mr. Goldsmith has advanced a total of $5,137,500 (of
which $450,000 was paid in 1994), which bears interest at the Bank's prime
rate plus 1% per annum, interest payable quarterly, with principal and
accrued, unpaid interest being due and payable on December 31, 1998.

In the ordinary course of its business, and subject to the limitations set
forth in applicable laws and regulations, the Bank makes loans to directors
and executive officers of the Corporation and/or to businesses in which they
have interests as officers, directors, partners, trustees and/or stockholders.
In the opinion of management, all such loans were made on substantially the
same terms, including interest rates and collateral (if any required), as
those prevailing at the time for comparable transactions with other persons,
and such loans did not involve more than normal risk of collectibility or
present other unfavorable features. However, as a result of deteriorating
economic conditions, certain loans discussed below may involve more than the
normal risk of collectibility.

The Bank has an outstanding loan to Citinational-Buckeye Building Co., with
which Mr. Bram Goldsmith, Chairman of the Board and Chief Executive Officer of
the Corporation, is affiliated, as described above. The loan is secured by the
office building described above and is non-recourse to the general partners of
the borrower. The loan bears interest at the Bank's prime rate plus 1/2%, with
a maximum of 12.5% and a minimum of 8.5%. The rate in effect at March 1, 1995
was 9.5%. At March 1, 1995, the outstanding balance of the loan was
$16,380,255; the largest amount outstanding since January 1, 1994, was
$16,650,842. The loan matures in 1998, and is, and from its inception has
been, current as to required payments of principal and interest, in part
because certain partners have voluntarily made advances to the partnership, as
described above.

A loan to Horwitch Brothers 3, a partnership of which Mr. Burton S.
Horwitch, a director of the Corporation, is a partner, is described under
"Compensation Committee Interlocks and Insider Participation," above.

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SECTION 16(A) REPORTING DELINQUENCIES

Under federal securities laws and rules of the Securities and Exchange
Commission, directors and executive officers of the Corporation, as well as
persons holding more than 10% of the Corporation's outstanding shares of common
stock, are required to file reports showing their initial ownership of the
Corporation's common stock and any subsequent changes in that ownership with
the Securities and Exchange Commission and the New York Stock Exchange by
certain specified due dates. Based solely on the Corporation's review of copies
of such reports furnished to the Corporation and written representations that
no other reports were required to be filed, during 1994, all such reports that
were required were filed on a timely basis, except that Mr. George H. Benter,
Jr., President and a director of the Corporation, reported a single transaction
relating to Mr. Benter's account in the Company Stock Fund under the City
National Corporation Profit Sharing Plan on Form 5 filed in February 1995,
which transaction should have been reported on Form 4 on or before February 10,
1994.

CITY NATIONAL CORPORATION 1995 OMNIBUS PLAN

INTRODUCTION

On February 22, 1995, the Board of Directors adopted the City National
Corporation 1995 Omnibus Plan (the "1995 Omnibus Plan"), subject to the
approval of the Corporation's shareholders. The purpose of the 1995 Omnibus
Plan is to promote the success of the Corporation by providing an additional
means to attract, motivate, retain and reward key employees, including officers
(whether or not also directors), of the Corporation and its subsidiaries with
awards and incentives for high levels of individual performance and improved
financial performance of the Corporation. The 1995 Omnibus Plan is intended to
replace the Corporation's 1983 Stock Option Plan, which expired in 1993, and
1985 Stock Option Plan, which will expire on November 27, 1995. The Board of
Directors has found stock based compensation to be an effective means of
compensating employees under past stock option plans, and therefore recommends
adoption of the 1995 Omnibus Plan.

The material features of the 1995 Omnibus Plan are described below. However,
this summary is subject to, and qualified in its entirety by, the full text of
the 1995 Omnibus Plan, a copy of which is attached hereto as Exhibit A.

The 1995 Omnibus Plan provides for the award ("Awards") of Incentive Stock
Options, as defined in Section 422 of the Internal Revenue Code and regulations
thereunder ("ISOs"); stock options other than Incentive Stock Options
("Nonqualified Stock Options" or "NSOs"), which include Director Stock Options
("DSOs") (ISOs, NSOs and DSOs are collectively referred to as "stock options"
or "options"); stock appreciation rights ("SARs"), either in tandem with ISOs
or NSOs, or independently ("freestanding SARs"); restricted stock; performance
shares and stock bonuses; and Tax Offset Bonus Rights in tandem with NSOs ("Tax
Offset Bonus Rights"). The 1995 Omnibus Plan will terminate on February 22,
2005, unless terminated sooner by the Compensation and Directors Nominating
Committee (the "Committee") of the Corporation's Board of Directors.

ADMINISTRATION AND ELIGIBILITY

The 1995 Omnibus Plan is administered by the Committee, which also
administers the Corporation's 1985 Stock Option Plan and outstanding options
issued under the Corporation's 1983 Stock Option Plan. Officers at a level of
Vice President or the equivalent are eligible to participate. The Committee
determines which key employees will receive Awards, the nature, price, number
of shares and other terms of Awards, and the form and terms of Award
agreements, except that DSOs are awarded annually on an automatic basis,
without action of the Committee. See "Kinds of Awards--Stock Options," below.
Awards may also be granted to other persons (not including non-employee
directors), including significant agents and consultants, who perform
substantial services for the Corporation or the Bank of a nature similar to
those performed by key employees, except that ISOs may be granted only to
employees. The Committee is authorized to interpret the 1995 Omnibus Plan,
adopt rules and regulations, amend outstanding Awards subject to certain
limitations (see "Amendment," below) and make such other determinations and
take such other actions in the administration of the 1995 Omnibus Plan as it
shall deem proper.

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The Committee has not designated which officers or how many officers will be
selected to participate, the number of shares with respect to which Awards will
be granted, if any, or the price or other terms of any such grant. As of March
1, 1995, approximately 264 officers were eligible for selection to participate
in the 1995 Omnibus Plan, and 9 non-employee directors were eligible only for
DSOs. No determination has been made as to the number of agents, consultants
and other persons who are neither employees nor directors, but who might be
eligible to participate in the 1995 Omnibus Plan.

MAXIMUM SHARES

Under the 1995 Omnibus Plan, Awards may be granted with respect to up to
3,000,000 shares of the Corporation's authorized and unissued (or reacquired)
common stock. The maximum number of shares for which options and freestanding
SARs may be granted to a single employee in any single year is 500,000. Both
limitations are subject to adjustment in the event of changes in the
capitalization or corporate structure of the Corporation. (See "Adjustments and
Extraordinary Events," below.) Upon termination, cancellation, forfeiture or
expiration of any unexercised Award, the number of shares with respect to which
Awards may be granted under the 1995 Omnibus Plan will be increased by the
number of shares to which such unexercised Award pertained.

TERMS OF AWARDS

Under the 1995 Omnibus Plan, certain restrictions and limitations are
applicable to more than one type of Award.

The Committee may determine the vesting and, where applicable, the expiration
date of Awards, but Awards that provide for the right to acquire stock may not
remain outstanding more than 10 years after grant date, and any ISO Award
granted to any eligible employee owning more than 10% of the Corporation's
stock must not be longer than five years. Unless the Committee determines
otherwise, Awards do not vest or become exercisable until 6 months after the
date of grant.

If an Award requires exercise accompanied by payment by the employee, payment
must generally be in cash or cash equivalents, but the Committee may accept
payment by promissory note under certain conditions, including the requirements
that the note mature in not more than 10 years, be full recourse and bear
interest at a rate no less than the applicable imputed interest rate under the
Internal Revenue Code, and that it be due and payable in full within 10 days
after termination of the employee's employment, with certain exceptions for
executive officers and directors subject to Section 16(b) of the Securities
Exchange Act of 1934. In addition, payment with respect to the exercise of an
option may be made by the surrender or withholding of the Corporation's common
stock under certain circumstances. See "Kinds of Awards -- Stock Options,"
below.

Awards may generally be exercised only by the employee to whom they were
granted, and cannot be sold, pledged, assigned or otherwise transferred, except
to the Corporation, by will or the laws of descent and distribution upon the
employee's death or, with respect to Awards other than ISOs, according to the
terms of certain court orders incident to divorce or dissolution of marriage.
However, the Committee may permit other kinds of transfers.

KINDS OF AWARDS--STOCK OPTIONS

Under the 1995 Omnibus Plan, the Committee may from time to time grant stock
options, either ISOs or NSOs (but not including DSOs), to eligible employees.
As required by the Internal Revenue Code and regulations thereunder, ISOs are
subject to certain limitations not applicable to NSOs. The exercise price of
all stock options other than DSOs may not be less than the fair market value of
the Corporation's common stock on the date of grant, except that the exercise
price for any ISO granted to any eligible employee owning more than 10% of the
Corporation's stock may not be less than 110% of the fair market value of the
stock on the date of grant. The exercise price may be adjusted in the event of
changes in the capital or corporate structure of the Corporation. (See
"Adjustments and Extraordinary Events," below.) The aggregate fair market value
(determined at the date of grant) of the stock subject to all ISOs held by an
optionee that vest in any single calendar year cannot exceed $100,000. Options
may not be hypothecated, assigned or transferred other than by will or
inheritance. See "Termination of Employment, Death or Disability," below.

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Unlike other NSOs, the 1995 Omnibus Plan provides for the automatic issuance
of DSOs without action of the Committee each year, immediately after the Annual
Meeting of Stockholders, to each non-employee director of the Corporation with
a value on the date of issuance of $3,000, the equivalent of an annual $3,000
director retainer fee. DSOs have an exercise price of $1.00 per share, payable
in cash or cash equivalents, by surrender of the Corporation's common stock
held by the director for at least a year before exercise, or any combination of
the two. This exercise price may be adjusted in the event of changes to the
Corporation's capital or corporate structure. (See "Adjustments and
Extraordinary Events," below.) The actual number of DSOs granted to a director
in a given year is determined according to the following formula, rounded to
the nearest share:

$3,000, divided by the fair market value of a share of the Corporation's
common stock on the day of the Annual Meeting less $1.00.

The fair market value of the Corporation's common stock is the price of the
last transaction of the day, as shown on the New York Stock Exchange. All DSOs
vest six months after the date of issuance or upon the termination of a
director's membership on the Board (otherwise than for cause), whichever occurs
first. Except as set forth above, the terms of DSOs are the same as other NSOs
issued under the 1995 Omnibus Plan.

At the time of granting of an option, the Committee may grant Dividend
Equivalents attributable to the shares subject to the option. A Dividend
Equivalent is the right to receive cash representing all or a portion of the
dividend payable with respect to the number of shares subject to the
unexercised option, and is paid when the corresponding dividend is paid.

In addition to the kinds of payment described above (see "Terms of Awards"),
payment to the Corporation upon exercise of an option may be effected through
delivery of previously acquired Corporation common stock or, if approved by the
Committee or specified in the Award agreement, by deducting shares from the
number of shares for which the option is exercised. Any shares so delivered to
the Corporation or deducted from the exercise for the purchase price shall be
valued at their fair market value on the exercise date.

KINDS OF AWARDS--STOCK APPRECIATION RIGHTS AND TAX OFFSET BONUS RIGHTS

Under the 1995 Omnibus Plan, the Committee may from time to time grant SARs,
either in tandem with stock options or freestanding, or Tax Offset Bonus
Rights, which must be in tandem with NSOs. When these rights are exercised, the
holder receives a specified amount in cash, the Corporation's stock or a
combination of the two.

Each SAR entitles the holder to receive the excess of the fair market value
of a share of the Corporation's common stock on the exercise date over the fair
market value of such share on the date the SAR was awarded, subject to a
maximum determined by the Committee. If SARs are granted in tandem with
options, they may be exercised only during the time and to the extent that the
related options may be exercised, and the number of options held by the
optionee is decreased by the number of SARs exercised by that optionee.

Each Tax Offset Bonus Right entitles the holder to receive an amount
determined by the Committee at the time of grant, which may, but need not, be a
specified percentage of the excess of the fair market value of the
Corporation's common stock acquired upon exercise of the related NSO over the
fair market value of such stock on the date the NSO was awarded. Tax Offset
Bonus Rights are exercised automatically upon the exercise of the corresponding
NSOs, and cannot be exercised independently.

In addition to these general time limitations, all rights may be exercised
only during the period commencing on the third business day after the
Corporation releases certain specified financial data (generally consisting of
quarterly or annual operations and earnings statements) to the press and ending
on the twelfth day after such data is released.

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KINDS OF AWARDS--RESTRICTED STOCK

Under the 1995 Omnibus Plan, the Committee may from time to time grant
restricted stock to eligible employees. Restricted stock is common stock issued
by the Corporation, subject to restrictions on sale or transfer and any other
restrictions specified by the Committee in the Award, which continue until such
time, or the satisfaction of such conditions, as the Committee determines.
Unless otherwise provided in the Award agreement, an employee holding
restricted stock is entitled to receive cash dividends and vote the shares. At
such time as the conditions specified by the Committee are satisfied, the
restrictions lapse. If the employee's employment terminates before the
restrictions lapse, or if any conditions specified by the Committee are not
fulfilled within the time specified by the Committee, the restricted stock must
be returned to the Corporation.

KINDS OF AWARDS--PERFORMANCE SHARES AND STOCK BONUSES

Under the 1995 Omnibus Plan, the Committee may from time to time grant Awards
of performance shares or stock bonuses. Performance share Awards establish
criteria determined by the Committee which, if achieved, result in the
Corporation's issuing to the employee the number of shares of common stock
specified in the Award agreement. The criteria may consist of performance goals
or measures for the employee or the Corporation over a specified period of
time, and the Committee may provide for full or partial credit for the
satisfaction of criteria before the end of the period of time specified or the
attainment of the specified goal, in the event of the employee's death,
retirement or disability or under such other circumstances as the Committee may
determine.

To reward exceptional or special services, contributions or achievements, the
Committee may also grant bonuses consisting of such number of shares of the
Corporation's stock on such terms, including restrictions on such shares, as
the Committee may determine. The issuance of either performance or bonus shares
may be deferred by the Committee at the request of the employee on such terms
as the Committee may determine.

TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY

The Committee will determine the effect of the termination of employment on
Awards, which determination may be different depending on the nature of the
termination, such as terminations for cause, terminations resulting from death,
disability or retirement and the like. The Committee may in its complete
discretion change the exercise period or the number of shares for which an
award is vested or exercisable at the time of termination or within a
reasonable time thereafter.

Because of limitations imposed by the Internal Revenue Code, in the event of
a termination of employment for any reason other than for cause or the death,
retirement or disability of the optionee, ISOs must be exercised within three
months after the employment termination date. In the event of the optionee's
death, ISOs must be exercised by the employee's estate within one year. If
employment terminates because of retirement or disability, as defined in the
Internal Revenue Code, ISOs must be exercised within three years after the
termination date; however, any ISOs exercised more than three months after the
date of retirement or more than one year after termination of employment by
reason of disability will be treated as NSOs for tax purposes. (See "Federal
Income Tax Consequences and Accounting Treatment," below.)

Upon termination of employment, SARs granted in tandem with options and Tax
Offset Bonus Rights are exercisable only to the extent that the related options
can be exercised, and expire when the related options expire.

Certain other consequences of the termination of employment are discussed
above. See "Kinds of Awards--Restricted Stock" and "Kinds of Awards--
Performance Shares and Stock Bonuses".

ADJUSTMENTS AND EXTRAORDINARY EVENTS

The 1995 Omnibus Plan provides that if the Corporation's common stock is
changed into or exchanged for cash, other property or a different kind or
number of shares or securities of the Corporation, or if

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additional shares or other securities are distributed with respect to the
common stock through a merger or reorganization in which the Corporation is the
surviving entity, or through a combination, consolidation, recapitalization,
reclassification, stock dividend, stock split, consolidation, reverse stock
split or distribution of cash or property to the Corporation's shareholders, or
if there is any other extraordinary corporate transaction or event or a sale of
substantially all the Corporation's assets which the Committee determines
materially affects the common stock, then the Committee may, in such manner and
to such extent as it deems appropriate and equitable, proportionately adjust
the 1995 Omnibus Plan and outstanding Awards as to the number or kind of shares
to which they relate, the price payable upon the exercise or paid in connection
with restricted stock or the applicable performance standards or criteria. In
the case of an extraordinary dividend or other distribution, merger,
reorganization, consolidation, combination, sale of assets, split up, exchange
or spinoff, the Committee may also provide for cash payment or for the
substitution or exchange of outstanding Awards or the shares, cash or other
property for which they may be exercised based upon the amount or property
payable or distributable to shareholders because of such event.

Under the 1995 Omnibus Plan, if a Change in Control Event takes place, then
all outstanding options, SARs and Tax Offset Bonus Rights become exercisable,
all restricted stock vests free of restrictions and all performance shares
become immediately issuable, unless the Committee determines otherwise, in
which event the Committee will make provision for continuation and, if
required, assumption of the 1995 Omnibus Plan and outstanding Awards or for the
substitution of new Awards therefor. A "Change in Control Event" occurs if (a)
more than 20% of the Corporation's common stock or combined voting power is
acquired by a person or entity other than Bram Goldsmith, the Corporation or
any employee benefit plan of the Corporation, but not including any acquisition
directly from the Corporation; or (b) a majority of the Corporation's Board of
Directors ceases to consist of the present directors or persons whose election
or nomination was approved by a majority of the then incumbent Board (excluding
any director who assumes his or her position as a result of an actual or
threatened proxy contest); or (c) the Corporation is reorganized, merged or
consolidated into another entity; or (d) the shareholders approve the
liquidation or dissolution of the Corporation or the sale of all or
substantially all of its assets; unless, with respect to (a), (c) or (d), after
the event more than 80% of the common stock and combined voting power of the
Corporation, the surviving company or the company that purchases the
Corporation's assets is still held by persons who were formerly the
shareholders of the Corporation, and no person or entity other than Bram
Goldsmith, the Corporation, any employee benefit plan of the Corporation or the
resulting company, or 20% shareholder prior to the transaction holds more than
20% of such company's common stock or combined voting power.

In the event of a tender offer or exchange offer for the Corporation's common
stock by a person or entity other than the Corporation which results in the
acquisition of stock by the person or entity making the offer, the Committee
may, in its discretion, permit the holders of options to surrender unexercised
options and any rights in tandem therewith and receive the difference between
(i) the higher of the highest price offered by such person or entity for the
Corporation's common stock during the 60-day period before surrender of the
NSOs or the highest market price of the Corporation's common stock during such
60-day period, and (ii) the exercise price of the options surrendered.

AMENDMENT

The Board of Directors of the Corporation may amend, suspend or discontinue
the 1995 Omnibus Plan in its discretion, except that shareholder approval is
required for any amendment which would materially increase the benefits to
participants under the 1995 Omnibus Plan, materially increase the maximum
number of shares subject to the 1995 Omnibus Plan (otherwise than as a
consequence of a change in the corporate or capital structure, as described in
"Adjustments and Extraordinary Events," above) or materially modify the
requirements as to eligibility to participate in the 1995 Omnibus Plan. The
1995 Omnibus Plan cannot be amended more frequently than every six months with
respect to the persons eligible to receive DSOs, the purchase price of stock
pursuant to DSOs or the formula that determines the number of DSOs awarded to
each director. Termination of the 1995 Omnibus Plan will not affect any Awards
then outstanding.

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The Committee may grant to an employee who holds an Award, if he or she
consents (provided such consent is required), a new or modified Award, or may
amend the existing Award, which new grant or amendment may alter the number of
shares subject to the Award, the exercise price, the term of the Award or any
other term or condition of the existing, subject to the limitations of the 1995
Omnibus Plan and applicable law.

FEDERAL INCOME TAX CONSEQUENCES AND ACCOUNTING TREATMENT

Incentive Stock Options. Under generally accepted accounting principles, the
Corporation does not recognize any compensation expense, and for federal income
tax purposes, the holder of an ISO receives no taxable income at the time of
the grant or exercise of the ISO. If such person retains the stock for a period
of at least two years after the option is granted and one year after the option
is exercised, any gain upon the subsequent sale of the stock will be taxed as a
long-term capital gain. An optionee who disposes of shares acquired by exercise
of an ISO prior to the expiration of two years after the option is granted or
one year after the option is exercised will realize ordinary income as of the
date of exercise equal to the difference between the exercise price and fair
market value of the stock on the date of exercise. To the extent ordinary
income is recognized by the optionee because the optionee's disposition of the
ISO shares does not meet holding period requirements, the Corporation may
deduct a like amount as compensation.

Nonqualified Stock Options. Under present Treasury regulations, an optionee
who receives an NSO with an exercise price equal to the fair market value of
the stock on the grant date will not realize taxable income on the grant of
such option, but will realize ordinary income at the time of exercise of the
option equal to the difference between the option exercise price and the fair
market value of the stock on the date of exercise. The Corporation will be
eligible for a concurrent deduction equal to the income realized by the option
holder, but will not recognize any compensation expense for accounting
purposes. If an NSO is granted at an exercise price significantly below the
fair market value of the stock on the grant date (such as DSOs), the holder may
have to recognize ordinary income on the option vesting date equal to the
difference between the exercise price and the fair market value of the stock on
the vesting date. The Corporation will recognize a compensation expense for
accounting purposes on the date the NSO is granted, requiring a charge against
earnings, and will be able to take a deduction equal to the income realized by
the holder on the vesting date.

The recipient of Dividend Equivalents realizes no taxable income at the time
the equivalents are awarded, nor does the Corporation receive any deduction at
that time. When the Dividend Equivalents are paid, it is taxed as ordinary
income on the date of payment, and the Corporation receives a deduction in the
same amount.

Stock Appreciation Rights and Tax Offset Bonus Rights. The recipient of a SAR
or Tax Offset Bonus Right will not be taxed upon the grant of such right, but
will realize ordinary income at the time the right is exercised equal to the
amount of cash and/or the fair market value of the stock received. The
Corporation will be entitled to a deduction at the time of exercise equal to
the income realized by the recipient and recognizes a compensation expense at
the time of grant or, if vesting is delayed, during the period of vesting
according to the rules of the Financial Accounting Standards Board (FASB).

Restricted Stock. As long as restricted stock remains both nontransferable
and subject to a substantial risk of forfeiture, there are generally no tax
consequences resulting from the Award for either the recipient or the
Corporation. At such time as the restricted stock either becomes transferable
or is no longer subject to a substantial risk of forfeiture, the recipient will
recognize ordinary income in an amount equal to the excess of the fair market
value of the stock over the amount the recipient paid for it, if any. However,
the recipient may elect, within 30 days after receipt of the Award, to report
the fair market value of the restricted stock subject to the Award (valued as
if it were unrestricted) as ordinary income at the time of receipt. The
Corporation will receive a compensation deduction equal to the ordinary income
recognized by the recipient when so recognized. If such an election is made and
the restrictions on the stock fail to lapse for any reason,

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the recipient will not be entitled to a deduction. For accounting purposes, the
Corporation recognizes a compensation expense during the period of vesting
according to the rules of FASB.

When stock that was formerly restricted stock is sold or otherwise disposed
of, the tax treatment will depend on whether the recipient made the election
described in the previous paragraph. If the recipient did not make the
election, disposition of the stock will result in a long- or short-term capital
gain or loss, depending on the length of time from the date the restrictions
lapsed to the date of sale or other disposition, in an amount equal to the
difference between the amount received on disposition and the greater of the
amount the recipient paid for the stock or the fair market value of the stock
on the date the restrictions lapsed. If the recipient made the election,
disposition of the stock will result in a long- or short-term capital gain or
loss, depending on the length of time from the Award to the date of
disposition, in an amount equal to the difference between the amount received
on disposition and the sum of any amount paid by the recipient for the
restricted stock and the amount recognized by the recipient as ordinary income
at the time of the Award.

Performance Share Awards. An employee who has been granted a performance
share Award will not realize taxable income at the time of grant, and the
Corporation will not be entitled to a deduction at that time. When an Award is
paid, the participant will have ordinary income, and the Corporation will have
a corresponding deduction in the amount of the fair market value of the shares.
For accounting purposes, a compensation expense is recognized by the
Corporation as the Award is earned.

Stock Bonus. The recipient of a stock bonus is taxed on the fair market value
of the stock on the date of award, and the Corporation receives a deduction and
recognizes compensation expense for accounting purposes in the same amount.

Persons Subject to Section 16. Under the Internal Revenue Code, special rules
may apply to executive officers and directors who are subject to the
restrictions on sale of the shares under Section 16(b) of the Securities
Exchange Act of 1934. These rules, which effectively take into account the
restrictions, apply in limited circumstances, and may impact the timing or
amount of income recognized by the individual with respect to certain stock-
based Awards.

Excess Parachute Payments. If, as a result of a Change of Control Event (see
"Adjustments and Extraordinary Events," above), an employee's options, SARs or
Tax Offset Bonus Rights become exercisable, restricted stock vests free of
restrictions or performance shares become immediately issuable, the additional
economic value attributable to the acceleration, if any, may be deemed a
"parachute payment" if such value, when combined with all other payments
resulting from the change of control, equals or exceeds 300% of the employee's
average annual taxable compensation over the five preceding calendar years. In
such case, the excess of the total parachute payments over such average annual
taxable compensation is subject to a 20% non-deductible excise tax, in addition
to any income tax payable, and the Corporation is not entitled to deduct the
portion of the parachute payment that is subject to such excise tax.

Section 162(m) Limits. Notwithstanding the foregoing discussion, Section
162(m) of the Internal Revenue Code and proposed Treasury regulations
thereunder would render non-deductible to the Corporation certain compensation
to certain executive officers that exceeds $1,000,000 in any year, unless the
compensation is exempt. The proposed rules include an exemption for
performance-based compensation plans that includes the requirement, among other
things, that the material terms of the plan be approved by shareholders.
Although the Corporation believes that options, SARs and Tax Offset Bonus
Rights granted under the 1995 Omnibus Plan should be exempt under the proposed
rules and consequently deductible to the Corporation as discussed above, other
kinds of Awards, such as restricted stock, performance shares and stock
bonuses, may not be exempt, if the aggregate compensation of the executive
officer would exceed such limit. In the event of a further change in the
applicable law or rules, the continued deductibility of Awards cannot be
assured.

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MARKET VALUE AND PREEMPTIVE RIGHTS

As of March 7, 1995, the last sale price for the Corporation's common stock
as reported on the New York Stock Exchange was $10.75 per share. Stockholders
do not have any preemptive rights with respect to the Corporation's issuance of
common stock.

REQUIRED VOTE

The 1995 Omnibus Plan must be approved by the holders of a majority of the
shares of common stock of the Corporation represented at the Annual Meeting in
person or by proxy, including abstentions, but not including broker non-votes.
Each shareholder is entitled to one vote for each share held, and abstentions
and broker non-votes will not be counted in favor of approval. The Board of
Directors recommends shareholder approval of the 1995 Omnibus Plan. For more
complete information concerning the 1995 Omnibus Plan, reference is made to
Exhibit A.

PROPOSALS OF SHAREHOLDERS

All proposals of shareholders intended to be presented at the Corporation's
1996 Annual Meeting of Stockholders must be directed to the attention of the
Secretary of the Corporation, at the address of the Corporation set forth on
the first page of this Proxy Statement, before November 17, 1995, if they are
to be considered for possible inclusion in the Proxy Statement and form of
proxy, in accordance with rules and regulations of the Securities and Exchange
Commission.

INDEPENDENT ACCOUNTANTS

On June 22, 1994, the Audit Committee of the Board of Directors of the
Corporation selected KPMG Peat Marwick LLP to serve as independent accountants
of the Corporation for its fiscal year which ended December 31, 1994. The Audit
Committee has not yet selected independent accountants for the current fiscal
year, which ends on December 31, 1995. The Audit Committee, according to its
normal procedures, will make its recommendations to the Corporation's Board of
Directors as to independent accountants later in the year, at which time the
independent accountants for the current fiscal year will be selected.

Before August 25, 1993, Price Waterhouse had served as independent
accountants of the Corporation and had audited the Corporation's financial
statements. Price Waterhouse was dismissed by the Audit Committee on August 25,
1993. Price Waterhouse's report on the Corporation's financial statements for
the fiscal year ended December 31, 1992, did not contain any adverse opinion or
disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope or accounting principles. Through August 25, 1993, there was no
disagreement between the Corporation and Price Waterhouse on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to Price Waterhouse's satisfaction,
would have caused it to make a reference to the subject matter of such
disagreement in connection with its report, nor did any reportable event, as
defined by the rules of the Securities and Exchange Commission, occur. The
Corporation did not consult KPMG Peat Marwick LLP before August 25, 1993,
regarding the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Corporation's financial statements, or regarding any matter
that was either the subject of a disagreement or a reportable event, as defined
by the rules of the Securities and Exchange Commission.

A representative of KPMG Peat Marwick LLP is expected to attend the 1995
Annual Meeting of Stockholders, with the opportunity to make a statement and
respond to appropriate questions.

By Order of the Board of Directors

RICHARD H. SHEEHAN, JR.
Secretary

March 17, 1995

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THE CORPORATION'S ANNUAL REPORT FOR 1994 TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K WILL BE AVAILABLE AFTER MARCH 31, 1995, AND MAY BE
OBTAINED FREE OF CHARGE UPON WRITTEN REQUEST TO:

HENG CHEN, SENIOR VICE PRESIDENT
CITY NATIONAL BANK
FINANCE DIVISION
9696 WILSHIRE BOULEVARD
THIRD FLOOR
BEVERLY HILLS, CA 90212

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EXHIBIT A

CITY NATIONAL CORPORATION
1995 OMNIBUS PLAN

I. THE PLAN

1.1. Purpose

The purpose of this Plan is to promote the success of the Company 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 Company with awards and incentives for high levels of individual
performance and improved financial performance of the Company.

1.2. Definitions

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

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

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

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

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

(f) "Board" shall mean the Board of Directors of the Company.

(g) "Change in Control Event" shall mean:

(1) The acquisition by any individual (other than Bram Goldsmith), 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 (A)
the then outstanding shares of Common Stock (the "Outstanding Common
Stock") or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change in Control Event:
(i) any acquisition directly from the Company (except that an acquisition
by virtue of the exercise of a conversion privilege shall not be considered
within this clause (i) unless the converted security was itself acquired
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 or
(iv) any acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (A) and (B) of paragraph
(3) below are satisfied;

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(2) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual who becomes 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 either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; provided,
however, that any transaction which does not constitute a Change in Control
Event by reason of an exception contained in Section 1.2(g)(1), (3) or (4),
shall not constitute a Change in Control Event by reason of this Section
1.2(g)(2); or

(3) Approval by the shareholders of the Company of a reorganization,
merger or consolidation (a "transaction"), unless, following such
transaction in each case, (A) more than 80% of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
transaction and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by 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 transaction and (B) no Person
(excluding the Company, Bram Goldsmith, any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
transaction and any Person beneficially owning, immediately prior to such
transaction, directly or indirectly, 20% or more of the Outstanding Common
Stock or Outstanding Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
transaction or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors; or

(4) Approval by the shareholders of the Company of (A) a complete
liquidation or dissolution of the Company or (B) the sale or other
disposition of all or substantially all of the assets of the Company,
unless such assets are sold to a corporation and following such sale or
other disposition, the conditions described in clauses (A) and (B) of
paragraph (3) above are satisfied with respect to the acquiring
corporation.

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

(i) "Commission" shall mean the Securities and Exchange Commission.

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

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

(l) "Company" shall mean City National Corporation and its Subsidiaries.

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

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

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

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

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

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

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

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

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

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

(w) "Other Eligible Person" shall mean any other person (including
significant agents and consultants) who performs substantial services for the
Company 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.

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

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

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

(aa) "Plan" shall mean this 1995 Omnibus Plan.

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

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

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

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

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

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

(hh) "Shares" shall mean shares of Common Stock of the Company.

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

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

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

1.3. Administration and Authorization; Power and Procedure

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

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

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

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

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

(iv) To construe and interpret this Plan and any agreements defining the
rights and obligations of the Company 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 Company's rights with respect to, or
modify, discontinue, suspend, or terminate, any or all outstanding Awards
held by Participants, subject to any required consent under Section 7.6;

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

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

(c) Binding Determinations. Any action taken by, or inaction of, the Company,
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

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Company, 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 Company. No director, officer or agent of the Company 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 Company.

1.4. Participation

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

1.5. Shares Available for Awards

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

(a) Number of Shares. The maximum number of shares of Common Stock that may
be delivered pursuant to Awards granted to Eligible Employees under this Plan
shall not exceed 3,000,000 Shares subject to subsection (c) below and the
adjustments contemplated by Section 7.2. The maximum number of Options and
Stock Appreciation Rights (whether payable in Shares, cash or any combination
thereof) that may be granted to an Eligible Employee during any one-year period
shall not exceed 500,000, subject to adjustment as contemplated in Section 7.2.

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

(c) Cash Only Award Limit. Awards payable solely in cash under the Plan and
Awards payable either in cash or shares that are actually paid in cash shall
constitute and be referred to as "Cash Only Awards". The number of Cash Only
Awards shall be determined by reference to the number of Shares by which the
Award is measured. The maximum number of Cash Only Awards that may be paid
shall not, together with the aggregate number of Shares that may be delivered
under subsection (a), exceed 3,000,000, subject to adjustments under Section
7.2. Awards payable either in cash or shares shall not be counted against the
Cash Only Award limit if charged against the share limit in subsection (a).
Notwithstanding the foregoing, if an Award paid or payable solely in cash
satisfies the requirements for the exclusion from the definition of a

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derivative security in Rule 16a-l(c) that does not require that the award be
made under a Rule 16b-3 plan, the Award shall not be counted against any of the
limits of this Section.

(d) Reissue of Awards. Subject to any restrictions under Rule 16b-3, the
shares which are subject to any unexercised, unconverted, unvested or
undistributed portion of any expired, canceled, terminated or forfeited Award,
or any alternative form of consideration under an Award that is not paid in
connection with the settlement of an Award or any portion of an Award shall
again be available for Award under subsection (a) or (c) above, as applicable,
provided the Participant has not received dividends or Dividend Equivalents
during the period in which the Participant's ownership was restricted or
otherwise not vested. Shares that are issued pursuant to Awards and
subsequently reacquired by the Company 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 Company pursuant to either Section 2.2(b) or 7.5 to be available for
reissuance under the Plan.

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

1.6. Grant of Awards

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

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

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

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

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

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

1.10. No Transferability

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

2.1. Grants

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

2.2. Option Price

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

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

2.3. Limitations on Grant and Terms of Incentive Stock Options

(a) $100,000 Limit. To the extent that the aggregate "fair market value" of
Common Stock with respect to which Incentive Stock Options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking into
account both Common Stock subject to Incentive Stock Options under this Plan
and stock subject to incentive stock options under all other plans of the
Company, 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 Company, unless the
exercise price of such Option with respect to the Common Stock covered by the
Option is at least 110% of the Fair

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Market Value of the Common Stock subject to the Option and such Option by its
terms is not exercisable after the expiration of five years from the date such
Option is granted.

2.5. Option Repricing; Cancellation and Regrant; Waiver of Restrictions

Subject to Section 1.5 and Section 7.6 and the specific limitations on Awards
contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible Employee,
any adjustment in the exercise or purchase price, the number of shares subject
to, the restrictions upon or the term of, an Award granted under this Article
by cancellation of an outstanding Award and a subsequent regranting of an
Award, by amendment, by substitution of outstanding Award, by waiver or by
other legally valid means. Such amendment or other action may result among
other changes in an exercise or purchase price which is higher or lower than
the exercise or purchase price of the original or prior Award, provide for a
greater or lesser number of shares subject to the Award, or provide for a
longer or shorter vesting or exercise period. Notwithstanding the foregoing,
any amendment or other action must contain terms and provisions permitted under
the terms of this Plan as if the Option were granted on the date of the
amendment.

2.6. Dividend Equivalents

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

2.7. Surrender of Stock Options

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

The term "Offer" as used in this Section means any tender offer or exchange
offer for Shares, other than one made by the Company, 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 Company'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.

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2.8. Special Requirements for Director Stock Options

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

(b) Grant of Director Options. Every eligible director will receive Director
Stock Options having a value equal to the Retainer Amount for the year
beginning on the date of each annual meeting of shareholders. Director Stock
Options shall be granted automatically to each such eligible director on the
business day following such annual meeting of shareholders, without further
action of the Committee or the Board. The number of Director Stock Options
granted hereunder shall be determined according to the following formula,
rounded to the nearest share: The Retainer Amount shall be divided by the Fair
Market Value of a share of stock on the date of the annual meeting of
shareholders immediately preceding the grant less $1.00. The "Retainer Amount"
shall be $3,000.

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

III. STOCK APPRECIATION RIGHTS

3.1. Grants

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

3.2. Exercise of Stock Appreciation Rights

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

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<PAGE>

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

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

3.3. Payment

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

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

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

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

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

IV. RESTRICTED STOCK AWARDS

4.1. Grants

The Committee may, in its discretion, grant one or more Restricted Stock
Awards to any Eligible Employee. Each Restricted Stock Award Agreement shall
specify the number of Shares to be issued, the date of such issuance, the
consideration for such Shares (but not less than the minimum lawful
consideration) to be paid, if any, by the Participant and the restrictions
imposed on such Shares and the conditions of release or lapse of such
restrictions. Such restrictions shall not lapse earlier than six months after
the Award Date, except to the extent the Committee may otherwise provide. Stock
certificates evidencing shares of Restricted Stock pending the lapse of the
restrictions ("restricted shares") shall bear a legend making appropriate
reference to the restrictions imposed hereunder and shall be held by the
Company 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.

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(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.

4.3. Return to the Company

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 Company in such manner and on such terms as the Committee shall
therein provide.

V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES

5.1. Grants of Performance Share Awards

The Committee may, in its discretion, grant one or more Performance Share
Awards to any Eligible Employee based upon such factors, which in the case of
any Award to a Section 16 Person shall include but not be limited to the
contributions, responsibilities and other compensation of the person, as the
Committee shall deem relevant in light of the specific type and terms of the
Award. An Award Agreement shall specify the maximum number of Shares (if any)
subject to the Performance Share Award, the consideration (but not less than
the minimum lawful consideration) to be paid for any such Shares as may be
issuable to the Participant, the duration of the Award and the conditions upon
which delivery of any Shares or cash to the Participant shall be based. The
amount of Shares that may be deliverable pursuant to such Award shall be based
upon the degree of attainment over a specified period (a "performance cycle")
as may be established by the Committee of such measure(s) of the performance of
the Company (or any part thereof) or the Participant as may be established by
the Committee. The Committee may provide for full or partial credit, prior to
completion of such performance cycle or the attainment of the performance
achievement specified in the Award, in the event of the Participant's death,
Retirement, or Total Disability, a Change in Control Event or in such other
circumstances as the Committee, consistent with Section 7.10(c)(2), if
applicable, may determine.

5.2. Grants of Stock Bonuses

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

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

5.3. Deferred Payments

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

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VI. TAX OFFSET BONUS RIGHTS

6.1. Grants

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

6.2. Tax Offset Bonus Rights Period

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

6.3. Exercise of Rights

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

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

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

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

6.4. Payments

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

6.5. Termination of Employment

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

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<PAGE>

VII. OTHER PROVISIONS

7.1. Rights of Eligible Employees, Participants and Beneficiaries

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

(b) No Employment Contract. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) shall confer upon any Eligible
Employee or Participant any right to continue in the employ or other service of
the Company or constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the Company 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 Company, 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 Company 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 Company 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 Company.

7.2. Adjustments; Acceleration

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

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<PAGE>

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

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

7.3. Effect of Termination of Employment

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

7.4. Compliance with Laws

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

7.5. Tax Withholding

(a) Cash or Shares. Upon any exercise, vesting, or payment of any Award, the
Company 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 Company 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 Company may be required to
withhold with respect to such cash amount. In any case where

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<PAGE>

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 Company
reduce the number of shares to be delivered by the appropriate number of shares
valued at their then Fair Market Value, to satisfy such withholding obligation.

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

7.6. Plan Amendment, Termination and Suspension

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

(b) Shareholder Approval. If any amendment would (i) materially increase the
benefits accruing to participants under this Plan, (ii) materially increase the
aggregate number of securities that may be issued under this Plan, or (iii)
materially modify the requirements as to eligibility for participation in this
Plan, then to the extent then required by Rule 16b-3 to secure benefits
thereunder or to avoid liability under Section 16 of the Exchange Act (and
Rules thereunder) or required under Section 424 of the Code or any other
applicable law, or deemed necessary or advisable by the Board, such amendment
shall be subject to shareholder approval. Notwithstanding the foregoing, the
provisions of Section 2.8 shall not be amended more than once every six months
other than to comport with changes in the Code, ERISA or the rules thereunder.

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

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

7.7. Privileges of Stock Ownership

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

7.8. Effective Date of the Plan

This Plan shall be effective as of February 22, 1995, the date of Board
approval, subject to shareholder approval within 12 months thereafter.

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<PAGE>

7.9. Term of the Plan

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

7.10. Governing Law; Construction; Severability

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

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

(1) It is the intent of the Company 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.

(2) It is the further intent of the Company 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.

7.11. Captions

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

7.12. Non-Exclusivity of Plan

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

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- - --------------------------------------------------------------------------------

CITY NATIONAL CORPORATION

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- APRIL 18, 1995

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE CORPORATION

The undersigned hereby appoints RICHARD H. SHEEHAN, JR., with power of
substitution, as proxy of the undersigned, to attend the Annual Meeting of
Shareholders of CITY NATIONAL CORPORATION to be held at the offices of City
National Bank, 400 N. Roxbury Drive, Beverly Hills, California, on April 18,
1995, at 4:00 P.M., and any adjournments thereof, and to vote the number of
shares the undersigned would be entitled to vote if personally present on the
following:

(1) ELECTION OF DIRECTORS

[_] FOR all the nominees [_] WITHHOLD AUTHORITY to
listed below (except vote for all nominees
as marked to the listed below
contrary below)

George H. Benter, Jr., Richard L. Bloch, Mirion P. Bowers, M.D., Steven D.
Broidy, Stuart D. Buchalter, Bram Goldsmith, Russell D. Goldsmith, Burton
S. Horwitch, Charles E. Rickershauser, Jr., Edward Sanders, Andrea L. Van
De Kamp, Kenneth Ziffren.

INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.

----------------------------------------------------------------------------

(2) 1995 OMNIBUS PLAN

[_] FOR [_] AGAINST [_] ABSTAIN FROM

Approval of the City National Corporation 1995 Omnibus Plan, as previously
approved by the Board of Directors, and the reservation of 3,000,000 shares
of common stock for issuance or delivery pursuant to awards under the Plan.

(3) In their discretion, upon all other matters as may properly be brought
before the meeting or any adjournments thereof.

(CONTINUED, AND TO BE SIGNED, ON OTHER SIDE)
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<PAGE>

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(CONTINUED FROM OTHER SIDE)

THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CHOICE IS INDICATED, THIS PROXY
WILL BE VOTED FOR ITEMS (1) AND (2).

Date _________________________, 1995

____________________________________
Signature(s)

Please sign as name(s) appear on
stock certificate (as indicated
hereon). Joint owners should both
sign. If signed by an attorney,
executor, guardian or in some other
capacity or as officer of a
corporation, please add title as
such.

SHAREHOLDERS ARE URGED TO MARK,
SIGN AND RETURN THIS PROXY PROMPTLY
TO CITY NATIONAL CORPORATION IN THE
ENVELOPE PROVIDED

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