Exhibit 10.3

                                  AGREEMENT

     This Agreement, made and entered into as of this 28th day of October,
1998, by and between CITY NATIONAL BANK AND TRUST COMPANY, a national banking
association (hereinafter referred to as the "Company") and WILLIAM N. SMITH
(hereinafter referred to as "Executive").

                                 WITNESSETH:

     WHEREAS, the Executive has been employed by the Company and/or its
parent corporation, CNB Bancorp, Inc. (hereinafter referred to as "Parent")
in various executive capacities for a period of 24 years, possesses intimate
knowledge of the business and affairs of the Parent and the Company, and has
acquired certain confidential information and data with respect to the Parent
and the Company; and

     WHEREAS, the Parent and the Company desire to insure, insofar as
possible, that they will continue to have the benefit of the Executive's
services and to protect their confidential information and goodwill; and

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     WHEREAS, the Parent and the Company recognize that circumstances may
arise in which a Change of Control (as hereinafter defined) of the Parent or
the Company occurs thereby causing uncertainty of employment without regard
to the Executive's competence or past contributions, which uncertainty may
result in the loss of valuable services of the Executive to the detriment of
the Parent, the Company and their shareholders, and the Parent, the Company
and the Executive wish to provide reasonable security to the Executive
against changes in the Executive's relationship with the Parent and the
Company in the event of any such Change of Control; and

     WHEREAS, the Parent, the Company and the Executive are desirous that a
proposal for any Change of Control will be considered by the Executive
objectively and with reference only to the business interests of the Company,
the Parent and its shareholders; and

     WHEREAS, The Executive will be in a better position to consider the
Parent's and the Company's best interests if the Executive is afforded
reasonable security as provided in this Agreement, against altered conditions
of employment, which could result from any such Change of Control.

     NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:

1.   Definitions.

          (a) Act. For purposes of this Agreement, the term "Act" means the
     Securities Exchange Act of --- 1934.

          (b) Change of Control. For purposes of this Agreement, a "Change of
     Control" shall mean, a change in control of the Company or of the Parent
     of a nature that would be required to be reported (if, in the case of
     the Company, the Company were a reporting company) in response to Item
     1(a) of a Current Report on Form 8-K pursuant to the Act, except that
     any merger, consolidation or corporate reorganization in which the
     owners of the capital stock entitled to vote in the election of
     directors of the Parent or the Company ("Voting Stock") prior to said
     combination, own 75% or more of the resulting entity's Voting Stock
     shall not be considered a Change of Control for the purposes of this
     Agreement; provided that, without limitation, such a Change of Control
     shall be

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     deemed to have occurred if (i) any "person" (as that term in used
     in Sections 13(d) and 14(d)(2) of the Act), other than a trustee or
     other fiduciary holding securities under an employee benefit plan of the
     Company or the Parent, is or becomes the beneficial owner (as that term
     is used in Section 13(d) of the Act), directly or indirectly, of 25% or
     more of the Voting Stock of the Parent, the Company or their successors;
     or (ii) during any period of two consecutive years, individuals who at
     the beginning of such period constitute the Board of Directors of the
     Parent or the Company (each an "Incumbent Board") cease for any reason
     to constitute at least a majority thereof provided, however, that any
     person becoming a director of the Parent or the Company after the
     beginning of such period whose election was approved by a vote of at
     least three-quarters of the directors comprising the Incumbent Board
     shall, for the purposes hereof, be considered as though he were a member
     of the Incumbent Board; or (iii) there shall occur the sale of all or
     substantially all of the assets of the Parent or the Company.
     Notwithstanding anything in the foregoing to the contrary, no Change of
     Control shall be deemed to have occurred for purposes of this Agreement
     by virtue of any transaction which results in the Executive, or a group
     of persons which includes the Executive, acquiring, directly or
     indirectly, more than 25 percent of the combined voting power of the
     Parent's or the Company's outstanding securities.

          (c) Person. For purposes of this Agreement, "Person" shall have the
     meaning used in Section 3(a)(9) of the Act.

          (d) Cause. "Cause" for termination by the Parent or the Company of
     the Executive's employment after a Change of Control shall, for purposes
     of this Agreement, be limited to:

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               (i) The engaging by the Executive in willful misconduct which
          results in demonstrable and serious injury to the Parent or the
          Company, monetary or otherwise;

               (ii) Conviction of a felony, as evidenced by binding and final
          judgment, order, or decree of a court of competent jurisdiction, in
          effect after exhaustion or lapse of all right of appeal; and

               (iii) Willful and continued failure by the Executive to
          substantially perform the Executive's duties or responsibilities.
          For purposes of this subsection (d), no act or failure to act on
          the Executive's part shall be considered "willful" unless done or
          omitted to be done by the Executive not in good faith and without
          reasonable belief that the action or omission was in the best
          interest of the Parent and/or Company.

     Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board of
Directors of the Parent or the Company at a meeting of the Board called and
held for the purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, the
Executive was guilty of conduct set forth above and specifying the
particulars thereof in detail.

     (e) Good Reason. For purposes of this Agreement, the Executive shall
have a "Good Reason" for termination of employment after a Change of Control
in the event of:

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               (i) Any breach of this Agreement by the Parent or the Company;

               (ii) The removal of the Executive from or any failure to
          reelect the Executive to any of the positions with the Parent or
          the Company held on the date of the Change of Control or any other
          positions to which the Executive shall thereafter be elected or
          assigned except in the event that such removal or failure to
          reelect relates to the termination by the Parent or the Company of
          the Executive's employment for Cause or by reason of disability;

               (iii) A good-faith determination by the Executive, which
          determination shall be conclusive and binding on the Parent and the
          Company, that there has been a significant adverse change, without
          the Executive's written consent, in working conditions or status,
          including but not limited to (A) a significant change in the nature
          or scope of the Executive's authority, powers, functions, duties or
          responsibilities, or (B) a reduction in the level of support
          services, staff, secretarial and other assistance, office space and
          accoutrements available to a level below that which is reasonably
          necessary for the performance of such duties;

               (iv) a reduction in the Executive's base salary in effect
          immediately prior to a Change of Control or as such base salary may
          be increased from time to time thereafter; or the failure to
          increase such base salary each year after a Change of Control by an
          amount which at least equals, on a percentage basis, the mean
          percentage increase in base salary for all officers of the Company
          during the two full calendar years immediately preceding a Change
          of Control;

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               (v) a failure by the Company to continue its [Executive
          Incentive Program], as the same may be amended or modified from
          time to time but substantially in the form presently in effect
          ("Program"), or failure by the Company to continue the Executive as
          a participant in the Program on at least the basis in effect
          immediately preceding a Change of Control or to pay the Executive
          any installment of a previous award or of deferred compensation, if
          any, under the Program or any deferred compensation program in
          effect in which the Executive participated immediately preceding a
          Change of Control;

               (vi) The Company requiring the Executive to be based anywhere
          other than the office at which he was based ("Office") immediately
          preceding the Change of Control except for required travel on
          business to an extent substantially consistent with the business
          travel obligations the Executive experienced immediately preceding
          a Change of Control or, in the event the Executive consents to any
          relocation of his Office, the failure by the Company to pay (or
          reimburse the Executive for) all reasonable moving expenses
          incurred by him relating to a change of his principal residence in
          connection with such relocation and to indemnify him against any
          loss (defined as the difference between the actual sales price of
          such residence and the higher of (a) the Executive's aggregate
          investment in such residence, or (b) the fair market value of such
          residence as determined by a real estate appraiser designated by
          the Executive and reasonably satisfactory to the Company) realized
          in the sale of the Executive's principal residence in connection
          with any such change of residence; or

               (vii) the failure by the Parent or the Company to continue in
          effect any benefit or compensation plan or arrangement, in which
          the Executive

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          is participating immediately preceding a Change of Control,
          the taking of any action by the Parent or the Company not required
          by law which would adversely affect the Executive's participation
          in or materially reduce his benefits under any such plans or
          deprive him of any material fringe benefit enjoyed by him at the
          time of the Change of Control or the failure by the Parent or the
          Company to provide the Executive with the number of paid vacation
          days, holidays and personal days to which he is then entitled in
          accordance with the leave policy in effect immediately preceding a
          Change of Control.

          (f) Code. For purposes of this Agreement, the term "Code" means in
     Internal Revenue Code of 1986, as amended.

          (g) Employment Period. For purposes of this Agreement, the term
     "Employment Period" means a period commencing on the date of a Change of
     Control, and ending on the fifth anniversary of such date.

          (h) Termination Date. For purposes of this Agreement, except as
     otherwise provided in Section 8(b) hereof, the term "Termination Date"
     means:

               (i) If the Executive's employment is terminated by the
          Executive's death, the date of death;

               (ii) If the Executive's employment is terminated by reason of
          voluntary early retirement, the agreed upon date of such early
          retirement;

               (iii) If the Executive's employment is terminated by reason of
          disability, 60 days after the delivery of the Notice of Termination
          unless the Executive shall, prior to the expiration of such period,
          have returned to the performance of the Executive's duties on a
          full-time basis;

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               (iv) If the Executive's employment is terminated by the
          Executive voluntarily other than for Good Reason the date specified
          in the Notice of Termination; and

               (v) If the Executive's employment is terminated by the Parent
          or the Company other than by reason of disability, or by the
          Executive for Good Reason, 60 days after the delivery of the Notice
          of Termination; provided, that the conduct constituting Cause as
          described by the Parent or the Company in its Notice of Termination
          has not been cured by the Executive within such 60 day period.
          Notwithstanding the foregoing, the Termination Date shall be
          delayed if, within any period referred to above following receipt
          of a Notice of Termination the party receiving the Notice of
          Termination notifies the other party in good faith that a dispute
          exists concerning the termination, the Termination Date shall be
          the earlier of the date on which the dispute is finally determined,
          either by mutual written agreement of the parties, by a binding and
          final arbitration award or by a final judgment, order or decree of
          court of competent jurisdiction (with time for appeal therefrom
          having expired and no appeal have been perfected) or the end of the
          Employment Period.

     2. Termination or Cancellation Prior to Chang of Control. Except as
provided below, each of the Parent, the Company and the Executive shall
retain the right to terminate the employment of the Executive at any time
prior to a Change of Control. In addition and except as provided below, the
Parent or the Company, upon approval of its Board of Directors, may cancel
this Agreement, pursuant to written notice, at any time prior to a Change of
Control. Notwithstanding the foregoing, neither the Parent nor the Company
shall have any right to terminate the employment of the Executive or cancel
this Agreement,

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and any such attempted termination or cancellation shall be
void and of no force and effect, if, within six (6) months prior to the
effective date of such termination or cancellation, representatives of the
Parent or Company have engaged in discussions with a person or organization
regarding a potential Change of Control and within twelve (12) months after
the effective date of such termination or cancellation there occurs a Change
of Control involving the person or organization with whom the prior
discussions were had.

     3. Employment Period. If a Change of Control occurs when the Executive
is employed by the Parent or the Company, the Parent or the Company will
continue thereafter to employ the Executive and the Executive will remain in
the employ of the Parent or the Company, in accordance with the terms and
provisions of this Agreement, during the Employment Period.

     4. Duties. During the Employment Period, the Executive shall, in the
same capacities and positions with the Parent and/or the Company held by the
Executive at the time of such Change of Control or in such other capacities
and positions with the Parent and/or the Company as may be agreed to by the
Parent and/or the Company and the Executive in writing, devote the
Executive's best efforts and all of the Executive's business time, attention
and skill to the business and affairs of the Parent and/or the Company, as
such business and affairs now exist and as they may hereafter be conducted.

     5. Compensation. During the Employment Period, the Executive shall be
compensated by the Parent or the Company as follows:

          (a) The Executive shall receive, at such intervals and in
     accordance with such standard policies as may be in effect on the date
     of the Change of Control, an annual salary not less than the Executive's
     aggregate

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     annual salary as in effect as of the date of the Change of Control,
     subject to adjustment as hereinafter provided;

          (b) The Executive shall be reimbursed, as such intervals and in
     accordance with such standard policies as may be in effect on the date
     of the Change of Control, for any and all monies advanced in connection
     with the Executive's employment for reasonable and necessary expenses
     incurred by the Executive on behalf of the Parent or the Company,
     including travel expenses;

          (c) The Executive shall be included to the extent eligible
     thereunder in any and all plans providing general benefits for the
     employees of the Parent or the Company, including but not limited to,
     group life insurance, hospitalization, disability, medical, pension, and
     thrift and sharing plans and be provided any and all other benefits and
     perquisites made available to other employees of comparable status and
     position, at the expense of the Parent or the Company of a comparable
     basis;

          (d) The Executive shall receive annually not less than the amount
     of paid vacation and not fewer than the number of paid holidays received
     annually immediately prior to the Change of Control or such greater
     amount of paid vacation and number of paid holidays as may be made
     available annually to other employees of comparable status and position;
     and

          (e) The executive shall be included in all plans providing special
     benefits to senior executives, including but not limited to profit
     sharing, bonus, deferred compensation, incentive compensation,
     supplemental pension, stock option, stock appreciation, and similar or
     comparable plans extended by the Parent or the Company from time to time
     to senior corporate officers, key employees and other employees of
     comparable status.

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     6. Annual Compensation Adjustments. During the Employment Period the
Board of Directors of the Company or any appropriate committee thereof will
consider and appraise, at least annually, the contributions of the Executive
to the operating efficiency, growth, production and profits of the Parent and
the Company, and in accordance with past practice, the Executive's
compensation rate shall be adjusted upward, at least annually by an amount
which at least equals, on a percentage basis, the mean percentage increase in
base salary for all officers of the Company during the two full calendar
years immediately preceding a Change of Control

     7. Payments Upon Termination.

          (a) Accrued Benefits. For purposes of this Agreement, the
     Executive's Accrued Benefits shall include the following amounts,
     payable as described herein:

               (i) All salary earned or accrued through the Termination Date;

               (ii) Reimbursement for any and all monies advanced in
          connection with the Executive's employment for reasonable and
          necessary expenses incurred by the Executive through the
          Termination Date;

               (iii) Any and all other cash benefits previously earned
          through the Termination Date and deferred at the election of the
          Executive or pursuant to any deferred compensation plans then in
          effect;

               (iv) A lump-sum payment of the bonus or incentive compensation
          otherwise payable to the Executive with respect to the year in

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          which termination occurs under any bonus or incentive
          compensation plan or plans in which the Executive is a participant;
          and

               (v) All other payments and benefits to which the Executive may
          be entitled under the terms of any benefit plan of the Company.
          Payment of amounts other than those described in Subsection (iv)
          and (v) hereof shall be made within 10 days after the Termination
          Date. Payment of amounts under Subsection (iv) hereof shall be made
          within 10 days after determination of the amount of such bonus in
          accordance with such plan or plans. Payment of amounts under
          Subsection (v) hereof shall be made promptly pursuant to the terms
          of any such benefit plan;

          (b) Termination Payments. For purposes of this Agreement, the
     Executive's Termination Payments shall include the following amounts
     payable as described herein:

               (i) An amount equal to the product of (A) the Executive's
          annual salary from the Parent and/or the Company, as in effect on
          the date of the Change of Control as adjusted upward, from time to
          time, pursuant to Section 6 hereof ("Annual Salary") plus (B) the
          highest incentive compensation earned by the Executive during the
          twenty-four (24) months ended on the Termination Date, times (C)
          the lesser of three or the number of years (rounded to the nearest
          one-twelfth) remaining in the Employment Period, provided, however,
          that such amount shall not be less than the Executive's Annual
          Salary. Such amount shall be payable in a lump sum within 14 days
          of the applicable Termination Date hereunder.

               (ii) In the event that any payments made to the Executive
          under this Agreement or otherwise (the "Payments") are subject to
          the excise tax

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          imposed by Section 4999 of the Code (the "Excise Tax"), then
          the Company shall pay the Executive an additional amount ("Gross
          Up") such that the net amount retained by the Executive after
          deduction of any Excise Tax on the Payments and any Federal and
          State income taxes and Excise Tax upon the Payments shall be equal
          to the Payments. For purposes of determining the amount of the
          Gross Up, the Executive shall be deemed to pay Federal, State and
          local income taxes at the highest marginal rate of taxation in the
          calendar year in which the Payment is to be made. State and local
          income taxes shall be determined based upon the state and locality
          of the Executive's domicile on the Termination Date. The
          determination of whether such Excise Tax is payable and the amount
          thereof shall be based upon the opinion of tax counsel selected by
          the Company and acceptable to the Executive. If such opinion is not
          finally accepted by the Internal Revenue Service upon audit, then
          appropriate adjustments shall be computed (without interest but
          with Gross Up, if applicable) by such tax counsel based upon the
          final amount of the Excise Tax so determined. The amount shall be
          paid by the appropriate party in one lump sum within 30 days of
          such computation; and

               (iii) All relocation and indemnity payments (as set forth in
          Section 1(e)(vi) hereof) if the Executive moves his principal
          residence more than 50 miles within one year from the Termination
          Date. 8. Death.

          (a) If the Executive shall die during the Employment Period but
     prior to the delivery of a Notice of Termination either (i) by the
     Company (other than by reason of disability) or (ii) by the Executive
     for Good Reason, the Executive's employment shall terminate and the
     Executive's estate, heirs, and beneficiaries shall receive all the
     Executive's Accrued Benefits through the

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          Termination Date and, in addition, all benefits available to them
     under the benefit plans of the Parent and the Company as in effect on
     the Termination Date.

          (b) If the Executive shall die during the Employment Period, but
     after delivery of a Notice of Termination either (i) by the Company
     (other than by reason of disability) or (ii) by the Executive for Good
     Reason, the Executive's employment shall terminate on the date of death
     and the Executive's estate, heirs and beneficiaries shall be entitled to
     the benefits described in Section 8(a) hereof and, subject to the
     provisions of this Agreement, to the payments described in Section 7(b)
     hereof as the Executive would have been entitled to had the executive
     lived.

     9. Retirement. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from the Parent and the Company, or the Executive shall otherwise
voluntarily choose to retire early from the Parent and the Company, the
Executive shall receive Accrued Benefits through the Termination Date.

     10. Termination for Disability. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness, the
Executive shall have been absent from the Executive's duties hereunder on a
full-time basis for four consecutive months, and within 60 days after the
Company notified the Executive in writing that it intends to terminate the
Executive's employment, the Executive shall not have returned to the
performance of the Executive's duties hereunder on a full-time basis, the
Company may terminate the Executive's employment pursuant to the procedure
set forth in Section 13 hereof. During the term of the Executive's disability
prior to termination, the

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Executive shall continue to receive all salary and
benefits payable under Section 5 hereof, including participation in all
employee benefit plans and programs in which the Executive was entitled to
participate immediately prior to the disability provided that the Executive's
continued participation is possible under the general terms and provisions of
such plans and programs. In the event that the Executive's participation in
any such plan or program is barred as the result of such disability, the
Executive shall be entitled to receive an amount equal to the annual
contributions, payments, credits or allocations which would have been paid by
the Parent and the Company to the Executive, to the Executive's account or on
the Executive's behalf under such plans and programs from which the
Executive's continued participation is barred. In the event the Executive's
employment is terminated on account of the Executive's disability in
accordance with this section, the Executive shall receive any Accrued
Benefits in accordance with Section 7(a) hereof and shall remain eligible for
all benefits provided by any long-term disability programs of the Parent
and/or the Company in effect at the time of such termination.

     11. Termination Not Giving Rise to Termination Payments. If, during the
Employment Period, the Executive's employment is terminated for Cause, or if
the Executive voluntarily terminates the Executive's employment other than
for Good Reason, any such termination to be subject to the procedures set
forth in Section 13 hereof, then the Executive shall be entitled to receive
only Accrued Benefits pursuant to Section 7(a) hereof.

     12. Termination Giving Rise to Termination Payments.

          a) If, during the Employment Period, the Executive's employment is
     terminated by the Executive for Good Reason or by the Company,

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     other than by reason of death or disability or Cause, any such
     termination to be subject to the procedures set forth in Section 13
     hereof, then the Executive shall be entitled to receive pursuant to
     Section 7 hereof, Accrued Benefits and the Termination Payments.

          (b) If, at any time following the Employment Period while the
     Executive is employed by the Company, the Executive's employment is
     terminated by the Company other than by reason of death or Cause or by
     reason of the Executive's disability due to physical or mental illness
     resulting in the Executive's absence from duty on a full-time basis for
     a period of four consecutive months, then the Executive shall be
     entitled to receive, pursuant to Section 7 hereof, Accrued Benefits and
     the Termination Payments.

     13. Termination Notice and Procedure. Any termination by the Company, or
by the Executive, of the Executive's employment during the Employment Period
shall be communicated by written Notice of Termination to the Executive if
such Notice is delivered by the Company if such Notice is delivered by the
Executive, all in accordance with the following procedures:

          (a) The Notice of Termination shall indicate the specific
     termination provision in this Agreement relied upon and shall set forth
     the reasonable detail the facts and circumstances alleged to provide a
     basis for termination.

          (b) Any Notice of Termination by the Company shall be approved by a
     resolution duly adopted by 75% of the directors of such entity (or any
     successor corporation) then in office, specifying in detail the basis
     for such termination.

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          (c) Except as provided in Section 10 hereof with respect to
     termination of employment due to disability, the Executive shall have 60
     days or such longer period as the Company may determine to be
     appropriate, to cure any conduct or act, if curable, alleged to provide
     grounds for termination of the Executive's employment under this
     Agreement.

     14. Obligations of the Executive.

          (a) Competition. The Executive agrees that if, during or following
     the Employment Period, the Executive's employment is terminated in a
     manner such that the Executive will or has received Termination
     Payments, the Executive shall not, for a period commencing on the
     Termination Date and ending after the lesser of three years or the
     number of years remaining in the Employment Period (rounded to the
     nearest one-twelfth), but in no event for a period of less than one
     year, either directly or indirectly as agent, stockholder, employee,
     officer, director, trustee, partner, proprietor or otherwise (except as
     the holder of no more than 5% of the stock of a publicly held company),
     engage in, render advice or assistance to (other than on behalf of the
     Parent, the Company or any of their Subsidiaries) or be employed by any
     person, firm or entity engaged in direct competition with the Parent,
     the Company or any of their Subsidiaries within a 50 mile radius of
     Gloversville, New York.

          (b) Confidential Information. During the Executive's employment by
     the Parent and the Company, the Executive shall hold in confidence and
     not directly or indirectly disclose or use or copy or make lists of any
     confidential information or proprietary data of the Parent or the
     Company, except to the extent authorized in writing by the Board of
     Directors of the Company or required by any court or administrative
     agency, other than to an employee of the

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     Parent, the Company, any of their Subsidiaries, or a person to whom
     disclosure is reasonably necessary or appropriate in connection with the
     performance by the Executive of duties as an executive of the Parent
     and/or the Company. Confidential Information shall not include any
     information known generally to the public or any information of a type
     not otherwise considered confidential by persons engaged in the same
     business or a business similar to that of the Parent or the Company. All
     records, files, documents and materials or copies thereof, relating to
     the Parent or the Company's business, which the Executive shall prepare,
     or use, or come into contact with, shall be and remain the sole property
     of the Parent or the Company, and shall be promptly returned to the
     Parent or the Company upon termination of employment with the Parent or
     the Company.

     15. Expenses and Interest. If, after a Change of Control the Executive
is entitled to Termination Payments hereunder, the Company shall also pay all
legal fees and expenses incurred by the Executive as a result of such
termination (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain or
enforce any right or benefit provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment or benefit hereunder). Reimbursement
of such legal fees and expenses shall be made on a regular and periodic basis
by the Company upon the Executive's presentation to the Company of a
statement of such fees and expenses prepared by his counsel under standard
and customary methods. The Executive shall also be entitled to receive from
the Company prejudgment interest on any money judgment obtained by the
Executive calculated at the rate

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of interest announced by the Company from time to time as its prime rate
from the date that payments to him should have been made under this
Agreement.

     16. Payment Obligations Absolute. The Company's obligation during and
after the Employment Period to pay or cause to be paid to the Executive the
compensation and to make the arrangements provided herein shall be absolute
and unconditional and shall not be affected by any circumstances, including,
without limitation, any setoff, counterclaim, recoupment, defense or other
right which the Parent or the Company may have against him or anyone else.
All amounts payable by the Company hereunder shall be paid without notice or
demand. Each and every payment made hereunder by the Company shall be final
and the Company will not seek to recover all or any part of such payment from
the Executive or from whomsoever may be entitled thereto, for any reason
whatsoever. The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in
this Agreement be reduced by any compensation earned by him or benefits,
including retirement benefits, provided to him as the result of employment by
another employer after the Termination Date or otherwise.

     17. Successors.

          (a) If the Parent or the Company sells, assigns, or transfers all
     or substantially all of the business and assets to any person, excluding
     affiliates of the Parent or the Company, or if the Parent or the Company
     merges into or consolidates or otherwise combines with any person which
     is a continuing or successor entity, then the Company shall assign all
     of its right, title and interest in this Agreement as of the Date of
     such event to the person which is either the

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     acquiring or successor corporation, and such person(s) shall assume
     and perform from and after the date of such assignment all of the terms,
     condition and provision imposed by this Agreement upon the Company. In
     case of such assignment by the Company and of assumption and agreement
     by such person(s), all further rights as well as all other obligations
     of the Company under this Agreement thenceforth shall cease and
     terminate and thereafter the expression "the Company" wherever used
     herein shall be deemed to mean such person(s).

          (b) This Agreement and all rights of the Executive shall inure to
     the benefit of and be enforceable by the Executive's personal or legal
     representatives, estates, executors, administrators, heirs and
     beneficiaries. All amounts payable to the Executive under section 8, 9,
     10, 11 and 12 hereof if the Executive had lived shall be paid, in the
     event of the Executive's death, to the Executive's estate, heirs and
     representatives. This Agreement shall inure to the benefit of, be
     binding upon and be enforceable by, any successor, surviving or
     resulting corporation or other entity to which all or substantially all
     of the Company's business and assets shall be transferred. This
     Agreement shall not be terminated by the voluntary or involuntary
     dissolution of the Company.

     18. Enforcement. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared
invalid or unenforceable by a court of competent jurisdiction, the validity
and enforceability of the remainder of such provisions or parts hereof and
the applicability thereof shall not be affected thereby.

     19. Amendment. At any time prior to a Change of Control, the Company,
upon approval of its Board of Directors, may amend this Agreement, pursuant
to written notice to the Executive. This Agreement may not be

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<PAGE>

amended or modified at any time after a Change of Control except by
written instrument executed by the Company and the Executive.

     20. Withholding. The Company shall be entitled to withhold from amounts
to be paid to the Executive hereunder any federal, state or local withholding
or other taxes or charges which it is from time to time required to withhold.
The Company shall be entitled to rely on an opinion of counsel if any
question as to the amount or requirement of any such withholding shall arise.

     21. Venue; Governing Law. This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of
the State of New York. Any action concerning this Agreement shall be brought
in the state courts located in Fulton County or the United States District
Court for the Northern District of New York, and each party consents to the
venue and jurisdiction of such courts.

     22. Notice. Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested,
addressee only, postage prepaid, if to the Company, to:

                     City National Bank and Trust Company
                     12-22 North Main Street
                     Gloversville, NY 12078

Or if to the Executive, at the address set forth below the Executive's
signature line of this Agreement, or to such other address as the party to be
notified shall have given to the other.

     23. No Waiver. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this

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<PAGE>

Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior
or subsequent time.

     24. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.

     25. Entire Agreement. This Agreement expresses the entire agreement of
the parties with respect to the subject matter hereof.

                                [END OF TEXT]

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.

                     CITY NATIONAL BANK AND TRUST COMPANY

                      By:     /s/      George A. Morgan
                              _________________________________
                              Name:    George A. Morgan
                              Title:   Executive Vice President




                              /s/      William N. Smith
                              _________________________________
                                       WILLIAM N. SMITH
                                       172 Wesskum Woods Road
                                       Gloversville, NY  12078

                                     23

<PAGE>


STATE OF NEW YORK )
                  )  ss.:
COUNTY OF FULTON  )

     On October 28, 1998, before me personally appeared George A. Morgan, to
me known, who, being by me duly sworn, did depose and say that he resides in
Gloversville, New York; that he is the Executive Vice President of City
National Bank and Trust Company, the corporation described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.

                                            /s/ Carole Gottung
                                            _________________________________
                                            Notary Public

STATE OF NEW YORK )
                  )  ss.:
COUNTY OF FULTON  )

     On October 28, 1998, before me, the subscriber, personally appeared
WILLIAM N. SMITH, to me known and known to me to be the same person described
in and who executed the within instrument and he acknowledge to me that he
executed the same.

                                            /s/ Carole Gottung
                                            _________________________________
                                            Notary Public
                                     24