11
COMMUNITY TRUST BANCORP, INC.
208 North Mayo Trail
Pikeville, Kentucky 41501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1999
The Annual Meeting of Shareholders of Community Trust Bancorp, Inc. will
be held at the Community Trust Bank, 208 North Mayo Trail, Pikeville,
Kentucky, on Tuesday, April 27, 1999 at 10:00 a.m., local time, for the
following purposes:
1. To elect a Board of eight Directors to hold office until the
next Annual Meeting of Shareholders and until their successors are
elected and qualify.
2. To ratify and approve the appointment of Ernst & Young
LLP as the Corporation's Independent Certified Public Accountants
for the fiscal year ending December 31, 1999.
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only those holders of stock of record at the close of business on February
28, 1999 are entitled to notice of and to vote at the Annual Meeting and
any adjournment thereof.
The Proxy Statement describing matters to be considered at the Annual
Meeting is attached to this notice.
We hope you will attend the meeting and vote your shares in person.
By Order of the Board of Directors
/s/ Burlin Coleman /s/ Jean R. Hale
Burlin Coleman Jean R. Hale
President and Executive Vice
Chairman of the Board President
Pikeville, Kentucky
March 22, 1999
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE U.S. IN THE EVENT YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON AT
ANY TIME BEFORE YOUR PROXY IS EXERCISED.
<PAGE>
Community Trust Bancorp, Inc.
208 North Mayo Trail
Pikeville, Kentucky 41501
PROXY STATEMENT
Annual Meeting of Shareholders
to be held April 27, 1999
INTRODUCTION
This Proxy Statement and accompanying proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of
Community Trust Bancorp, Inc. (the "Company") for use at the Annual Meeting
of Shareholders (the "Annual Meeting") to be held on Tuesday, April 27,
1999, at 10:00 a.m. (EDT), at Community Trust Bank, 208 North Mayo Trail,
Pikeville, Kentucky, and any adjournments thereof. A copy of the Company's
1998 Annual Report to Shareholders and Form 10-K accompanies this Proxy
Statement.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited in person, by
telephone and other means of communication by directors, officers, and
other employees of the Company, none of whom will receive additional
compensation for such services. The Company will also request brokerage
houses, custodians and nominees to forward soliciting materials to the
beneficial owners of stock held of record by them, and will pay the
reasonable expenses of such persons for forwarding such materials. This
Proxy Statement and the accompanying proxy are first being mailed or given
to shareholders of the Company on or about March 30, 1999.
RECORD DATE AND VOTING SECURITIES
The Common Stock of the Company ("Common Stock") is the only class of
outstanding voting securities. Only holders of Common Stock of record at
the close of business on February 28, 1999 (the "Record Date") are entitled
to notice of and to vote at the Annual Meeting. At the Record Date, there
were 10,064,968 shares of Common Stock outstanding. With respect to the
election of directors, shareholders have cumulative voting rights.
Accordingly, each shareholder will have the right to cast as many votes in
the aggregate as equals the number of shares of Common Stock held by the
shareholder multiplied by the number of directors to be elected at the
Annual Meeting. Each shareholder may cast all of his or her votes for one
candidate, or distribute such votes among two or more candidates.
Shareholders will be entitled to one vote for each share of Common Stock
held of record on the Record Date with regard to any other matters that
properly come before the Annual Meeting or any adjournment thereof.
Each proxy, unless the shareholder otherwise specifies, will be voted
in favor of the election of the eight nominees for director named herein
and in favor of the ratification of Ernst & Young LLP as the Company's
independent auditors for the 1999 fiscal year. Where a shareholder has
appropriately specified how the proxy is to be voted, it will be voted
accordingly. As to any other matter which may properly be brought before
the Annual Meeting or any adjournment thereof, a vote may be cast pursuant
to the accompanying proxy in accordance with the judgment of the person or
persons voting the proxy. A shareholder may revoke his or her proxy at any
time prior to its exercise. Revocation may be effected by written notice
to the Company, by a subsequently dated proxy received by the Company, or
by oral revocation in person at the Annual Meeting or any adjournment
thereof, or by voting in person at the Annual Meeting or any adjournment
thereof.
A majority of the outstanding shares present in person or by proxy is
required to constitute a quorum to transact business at the Annual Meeting.
Abstentions will be treated as present for purposes of determining a
quorum, but as unvoted shares for purposes of determining the approval of
any matter submitted to the shareholders for a vote. If a broker indicates
that it does not have discretionary authority as to certain shares to vote
on a particular matter, such shares will not be considered as present and
entitled to vote with respect to such matter.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth information as to each shareholder
known by the Company to beneficially own more than five percent of the
Common Stock as of the Record Date.
Beneficial Owners Amount and Nature Percent
Name and Address of Beneficial Ownership of Class
Trust Company of Kentucky, NA 990,643 (1) 9.8%
as Fiduciary
100 East Vine St., Suite 400
Lexington, Kentucky 40507
(1) The shares indicated are held by Trust Company of Kentucky, NA, a
subsidiary of the Company, in fiduciary capacities as trustee, executor,
agent or otherwise. Of the shares indicated, Trust Company has sole voting
rights with respect to 190,173 shares, shared voting rights with respect to
26,174 shares and no voting rights with respect to 774,296 shares. Trust
Company has shared investment power with respect to 52,456 shares and sole
investment power with respect to 938,187 shares.
ELECTION OF DIRECTORS
The Company's directors are elected at each annual meeting of the
shareholders and hold office until the next election of directors or until
their successors are duly elected and qualify. The persons named below,
all of whom currently serve as directors of the Company, have been
nominated for election to serve until the 2000 Annual Meeting of
Shareholders. The following table sets forth certain information
respecting the persons nominated to be directors of the Company:
<TABLE>
<CAPTION>
Amount and
Positions Nature of
and Director Principal Beneficial Percent
Name and Age (1) Offices * Since Occupation (2) Ownership (3) of Class
<S> <C> <C> <C> <C> <C>
Charles J. Baird; 49 Director 1988 Baird, Baird, Baird 40,000 (4)
& Jones, P.S.C.,
Attorneys
Burlin Coleman; 69 Chairman of 1980 Chairman of Board 443,775 (5) 4.4%
Board of of Directors,
Directors, President & CEO -
President & Community Trust
CEO Bancorp, Inc.
Nick A. Cooley; 65 Director 1980 President - Unit 34,809 (4)
Coal Corporation
William A. Graham, Jr.; 62 Director 1990 Chairman of the 109,719 (6) 1.1%
Advisory Board -
Fleming County
Region - Community
Trust Bank, NA
Jean R. Hale; 52 Executive VP, 1993 President & CEO - 57,107 (7) (4)
Secretary & Community Trust
Director Bank, NA
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<PAGE>
Steven L. Lawson; 34 Director 1998 President - Mountain 200 (4)
Enterprises, Inc.
M. Lynn Parrish; 49 Director 1993 President - Knott Floyd 60,600 (4)
Land Co., Inc.
Ernest M. Rogers; 71 Director 1980 President and General 51,886 (8) (4)
Manager - Rogers Petroleum
Services, Inc.
All directors and executive officers as a group 818,038 (9) 8.1%
(13 in number, including the above named individuals)
* Burlin Coleman is also a director of Community Trust Bank, NA,
Community Trust Bank, FSB and Trust Company of Kentucky, NA. Jean Hale is
also a director of Community Trust Bank, NA and Trust Company of Kentucky,
NA.
</TABLE>
(1) The ages listed are as of February 28, 1999.
(2) Each of the nominees has been engaged in the principal occupation
specified above for five years or more.
(3) Under the rules of the Securities and Exchange Commission, a person
is deemed to beneficially own a security if the person has or shares
the power to vote or direct the voting of such security, or the power
to dispose or to direct the disposition of such security. A person
is also deemed to beneficially own any shares which that person has
the right to acquire beneficial ownership within sixty days. Shares
of Common Stock subject to options exercisable within sixty days are
deemed outstanding for computing the percentage of class of the person
holding such options but are not deemed outstanding for computing the
percentage of class for any other person. Unless otherwise indicated,
the named persons have sole voting and investment power with respect
to shares held by them.
(4) Less than 1 percent.
(5) Includes the following shares beneficially owned by Burlin Coleman:
286,669 shares held in trust over which Mr. Coleman has sole
voting and investment power; 59,398 shares in which Mr. Coleman shares
voting power pursuant to a power of attorney; 434 shares held directly
by Mr. Coleman; and 97,274 shares held in KSOP which Mr. Coleman has
the power to vote. Excludes 9,647 shares held by Mr. Coleman's wife,
over which Mr. Coleman has no voting or investment power.
(6) Includes 7,903 shares that Mr. Graham may acquire pursuant to options
exercisable within sixty days of the Record Date and 1,973 shares held
in the KSOP, which Mr. Graham has the power to vote.
(7) Includes 16,498 shares which Mrs. Hale may acquire pursuant to options
exercisable within sixty days of the Record Date and 16,685 shares
held in the KSOP, which Mrs. Hale has the power to vote. Excludes 5,419
shares held by Mrs. Hale's husband, over which Mrs. Hale has no voting
or investment power.
(8) Excludes 14,388 shares held by Mr. Rogers' wife, over which Mr. Rogers
has no voting or investment power.
(9) Includes 29,384 shares which may be acquired by all directors and
executive officers as a group pursuant to options exercisable within
sixty days of the Record Date.
Unless authority to do so is withheld, it is the intention of the
persons named in the proxy to vote for the election of each of the nominees
listed above. All nominees have indicated a willingness to serve and the
Company does not anticipate that any of the above nominees will decline or
be unable to serve if elected as a director. However, in the event that
one or more of such nominees is unable, unwilling or unavailable to serve,
the persons named in the proxy shall have authority, according to their
judgment, to vote for such substitute nominees as they, after consultation
with the Company's Board of Directors, shall determine. If considered
desirable, cumulative voting will be exercised by the persons named in the
proxy to elect as many of such nominees as possible.
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<PAGE>
The following persons are also executive officers of Community Trust
Bancorp, Inc. They are not nominated to serve as directors. Their
security ownership is as follows:
Amount & Nature of Percent
Name Position Beneficial Ownership of Class
Mark Gooch Executive Vice President 4,681 (2) (1)
John Shropshire Executive Vice President 8,764 (3) (1)
Ronald M. Holt Executive Vice President 6,014 (4) (1)
William Hickman Executive Vice President 483 (5) (1)
(1) Less than 1 percent.
(2) Includes 1,414 shares which Mr. Gooch may acquire pursuant to options
exercisable within sixty days of the Record Date and 3,052 shares held
in KSOP, which Mr. Gooch has the power to vote.
(3) Includes 1,212 shares which Mr. Shropshire may acquire pursuant to
options exercisable within sixty days of the Record Date, 6,300 shares
held in IRA and 1,142 shares held in KSOP, which Mr. Shropshire has
the power to vote.
(4) Includes 2,357 shares which Mr. Holt may acquire pursuant to options
exercisable within sixty days of the Record Date and 2,557 shares held
in KSOP, which Mr. Holt has the power to vote.
(5) Includes 338 shares held in KSOP, which Mr. Hickman has the power to
vote.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Directors of the Company, who are not also officers of the Company,
were paid $1,000 per meeting of the Board for 1998. Directors who are also
officers of the Company did not receive additional compensation for serving
as a director.
The Board of Directors had six meetings during the 1998 fiscal year.
The Board has among other committees, Audit and Asset Quality, Compensation
and Directors Nominating Committees. M. Lynn Parrish attended less than
75% of the meetings held.
The Audit and Asset Quality Committee consists of Charles Baird, Nick
Cooley, Ernest M. Rogers and William A. Graham, Jr. The Audit and Asset
Quality Committee met four times during 1998. The committee reviews and
reports to the Board with respect to various auditing and accounting
matters, including the appointment and performance of the independent
auditors, the scope of audit procedures, general auditing policy matters
and adequacy of internal controls.
The Compensation Committee consists of Ernest M. Rogers, Charles Baird
and Nick Cooley. The Compensation Committee, which did not meet during
1998, reviews the compensation practices of the Company and its
subsidiaries.
The Directors Nominating Committee consists of Burlin Coleman and
Charles Baird. This committee met twice in 1998.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
In the ordinary course of business, the Company, through its
commercial bank and savings bank, both of which are wholly-owned
subsidiaries, has in the past and expects to have in the future, banking
transactions, including lending to its directors, officers, principal
shareholders and their associates. When these banking transactions are
credit transactions they are made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with others. In
the opinion of the Company's Board of Directors, such transactions do not
involve more than the normal risk of collectibility or present any other
unfavorable features.
Mr. Charles Baird, a director of the Company, is a partner in Baird,
Baird, Baird, & Jones, P.S.C., a law firm which provided services to the
Company and its affiliates during 1998 and will be retained by the Company
and its affiliates during the current fiscal year 1999. Approximately
$642,000 in legal fees were paid to Baird, Baird, Baird, & Jones during
1998.
4
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Act")
requires the Company's executive officers and directors and persons who own
more than ten percent (10%) of the Common Stock, to file initial reports of
ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") as well as to furnish the Company with a copy of such
report (the Company is not aware of any beneficial owner of more than 10%
of its Common Stock). Additionally, SEC regulations require the Company to
identify in its Proxy Statement those individuals for whom one of the
referenced reports was not filed on a timely basis during the most recent
fiscal year. Burlin Coleman and Brandt Mullins, a deceased director, each
had one late filing of SEC Form 4 (statement of changes in beneficial
ownership) during 1998. Mr. Graham had one late filing of SEC Form 5
(annual statement of beneficial ownership) during 1998.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
As of December 31, 1998, the Company had executed certain termination
of employment and change-in-control agreements ("Severance Agreements")
with Jean R. Hale, Ronald M. Holt, Mark Gooch, John Shropshire, Jim
Richardson and William Hickman. Ms. Hale and Mr. Holt's Severance
Agreements were executed on January 23, 1996, Mr. Gooch's was executed on
January 1, 1997, Mr. Shropshire's was executed on January 21, 1997, Mr.
Richardson's was executed on April 15, 1997, and Mr. Hickman's was executed
on December 12, 1997. The Severance Agreements were effective for a term
equal to the longer of three years or the covered period should a change-in-
control of the Company occur during such three year period. The covered
period during which the terms and conditions of the Severance Agreements
are effective is the period of time following a change-in-control equal to
(i) two years following the occurrence of the change-in-control in the
event of an involuntary termination or a voluntary termination following a
change in duties, or (ii) the thirteenth month following the change-in-
control in the event of a voluntary termination not preceded by a change in
duties. We expect to enter into new similar Severance Agreements with Ms.
Hale and Mr. Holt in 1999.
The Severance Agreements require the payment to the applicable named
executive officer of a severance amount in the event of an involuntary or
voluntary termination of employment after a change-in-control of the
Company during the covered period. The severance amount payable under the
Severance Agreement is equal to (i) 2.99 times the named executive
officer's base annual salary in the event of involuntary termination, or
2.99 times the named executive officer's base annual salary in the event of
a voluntary termination of employment preceded by a change in duties
subsequent to a change-in-control of the Company, or (ii) 2.00 times the
named executive officer's annual base salary in the event of a voluntary
termination of employment not preceded by a change in duties subsequent to
a change-in-control of the Company.
A change-in-control has occurred when (i) any person, including a
group under Section 13(d)(3) of the Securities Exchange Act of 1934, is or
becomes the owner of 30% or more of combined voting power of the Company's
outstanding securities; (ii) as a result of, or in connection with, any
tender offer, exchange offer, merger or other combination, sale of assets
or contested election, the persons who were directors of the Company before
such transaction(s) shall cease to constitute a majority of the Board of
Directors of the Company or successor of the Company; (iii) a tender or
exchange offer is made and consummated for the ownership of 30% or more of
the combined voting power of the Company's outstanding voting securities;
or (iv) the Company transfers substantially all of its assets to another
corporation that is not a wholly-owned subsidiary of the Company.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the total annual compensation paid or
accrued by the Company to or for the account of the Chief Executive Officer
and each of the executive officers of the Company whose total cash
compensation for the fiscal year ended December 31, 1998 exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Long-Term
Compensation Compensation
Name and Salary Bonus (1) Options (2) All Other
Principal Position Year ($) ($) (#) Compensation (3) ($)
<S> <C> <C> <C> <C> <C>
Burlin Coleman (4) 1998 186,923 0 0 12,477
President, Chief Executive 1997 180,000 0 0 11,150
Officer, and Director 1996 24,231 0 0 0
Jean R. Hale 1998 191,538 0 0 12,158
Executive Vice President, 1997 179,231 0 10,156 8,666
Secretary, and Director 1996 170,000 68,136 29,233 10,233
Ronald M. Holt 1998 145,289 0 0 9,845
Executive Vice President 1997 136,000 0 8,565 8,404
1996 120,769 45,500 27,786 36,009
William Hickman (5) 1998 135,000 0 0 10,400
Executive Vice President 1997 13,000 0 0 0
1996 0 0 0 0
Ralph Weickel (6) 1998 111,946 0 0 8,483
Executive Vice President 1997 103,846 0 2,122 7,206
1996 93,462 14,997 22,000 8,338
Mark Gooch (7) 1998 111,808 0 0 9,169
Executive Vice President 1997 103,654 0 24,828 13,768
1996 69,092 22,280 0 6,988
John Shropshire 1998 111,808 0 0 13,623
Executive Vice President 1997 100,385 0 24,424 6,805
1996 75,000 0 0 0
</TABLE>
(1) Bonuses are paid under the senior management incentive plan, which is open
to executive officers and affiliate CEO's. Bonuses are based on earnings
per share of the Company, with modifying factors which are different for
each officer. (See report of the Compensation Committee)
(2) These options were granted under the 1989 Stock Option Plan (the "Option
Plan"). The Option Plan permits the grant of options to employees of the
Company and its subsidiaries whose efforts contribute, or may be expected
to contribute materially to the successful performance of the Company.
(3) Amounts in this column include contributions made by the Company under the
Savings and Employee Stock Ownership Plan (the "KSOP Plan") and relocation
expenses. For 1998, all amounts listed are KSOP Plan contributions except
for Mr. Mark Gooch ($8,961 KSOP Plan) and Mr. John Shropshire ($9,291 KSOP
Plan, $4,332 relocation). For 1997, all amounts listed are KSOP Plan
contributions except for Mr. Mark Gooch ($8,698 KSOP Plan, $5,070
relocation). For 1996, all amounts listed are KSOP Plan contributions
except for Mr. Ronald Holt ($6,060 KSOP Plan, $29,949 relocation).
Participation in the KSOP Plan is available to any employee of the Company
or its subsidiaries who has been employed for one year, completed 1,000
hours of service and has attained the age of 21 ("Participant").
Participants may contribute 1% to 15% of their annual salary and the
Company will contribute 50% of the Participant's first 8% of contributions.
The Company also contributes a base percentage of each Participants salary
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<PAGE>
as determined annually by the Board of Directors. For 1996, 1997 and 1998,
the Company made a base contribution of 4% of the Participant's annual
salaries.
(4) Burlin Coleman became Chairman, President and Chief Executive Officer on
November 1, 1996. Prior to that date, Mr. Coleman was the Chairman of
the Board.
(5) William Hickman was employed by the Company on December 12, 1997.
(6) Ralph Weickel resigned as executive officer of the Company on December 31,
1998.
(7) Mark Gooch was employed by the Company on May 18, 1981 and served as
President and CEO of First Security Bank & Trust Co., Whitesburg, KY
prior to becoming an executive officer of the Company.
There were no options granted to the executive officers in 1998.
The following table sets forth the number and value of unexercised
options held by the named executive officers of the Company at December
31, 1998. No options or SARs were exercised by the named executive
officers during the 1998 fiscal year. No SARs were held by the named
executive officers at December 31, 1998.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
Number of
Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs
Fiscal Year-End (#) at Fiscal Year-End ($) (1)
Name Exercisable Unexercisable Exercisable Unexercisable
Jean R. Hale 14,315 32,605 100,971 124,089
Ronald M. Holt 1,316 30,349 3,868 118,174
Ralph Weickel 1,355 23,867 2,698 109,560
John Shropshire 606 23,818 745 24,236
Mark Gooch 707 24,121 870 24,609
Burlin Coleman - - - -
William Hickman - - - -
(1) Based on the closing price of the Common Stock at December 31, 1998.
REPORT OF THE COMPENSATION COMMITTEE
The principal duties of the Compensation Committee are to review the
compensation of executive officers of the Company and make recommendations
to the Board for approval. Compensation for executive officers consists of
base salary, bonus and stock options under the Option Plan.
The total compensation package, including base salaries, is set at
levels the Compensation Committee believes are sufficient to attract and
retain qualified executives. It is the goal of the Compensation Committee
to retain quality executives, which will mutually benefit the executive and
the Company. The Compensation Committee believes its total compensation
package is in line with compensation packages offered by other companies
within the Company's peer group of bank holding companies with total
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<PAGE>
consolidated assets of one to three billion dollars. This is not the peer
group used to construct the performance graph contained in this proxy
statement.
Bonuses to executive officers are computed under the senior management
incentive plan, which is open to all senior executives. The bonuses are
based on earnings per share of the Corporation adjusted for modifying
factors which are different for each senior executive. This is different
from the incentive plan available to other employees which is also based on
earnings per share, but without modifying factors.
Stock options are also computed under the senior management incentive
plan, and issued under the Option Plan. Stock options are based on
earnings per share adjusted for modifying factors which are different for
each senior executive. Stock options are not available to other employees.
Stock options may also be issued to senior executives for management
retention purposes, which must be approved by the Compensation Committee.
The salary of Burlin Coleman, the Chief Executive Officer, was not
tied to stock performance. Burlin Coleman received no bonus or stock
options for 1998. The Compensation Committee believes the compensation of
the chief executive officer is in line with other companies in its peer
group.
OBRA Deductibility Limitation. The Omnibus Budget Reconciliation Act
of 1994 ("OBRA") prohibits the deduction by public companies of
compensation of certain executive officers in excess of $1 million, unless
certain criteria are met. The Company has determined not to take any
action at this time with respect to its compensation plans to seek to meet
these criteria.
Ernest M. Rogers Charles Baird Nick Cooley
During 1998 there were no interlocking relationships between any
executive officers of the Company and any entity whose directors or
executive officers serve on the Board of Directors' Compensation
Committee.
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<PAGE>
COMMON STOCK PERFORMANCE
The following graph shows the cumulative return experienced by the
Company's shareholders during the last five years compared to The NASDAQ
Stock Market's National Market and the NASDAQ Bank Index. The graph
assumes the investment of $100 on December 31, 1993 in the Company's Common
Stock and each index and the reinvestment of all dividends paid during the
five year period.
Comparison of 5 Year Cumulative Total Return
among Community Trust Bancorp, Inc., NASDAQ Stock Market (U.S.),
and NASDAQ Bank Stocks
Fiscal Year Ending December 31 ($)
1993 1994 1995 1996 1997 1998
Community Trust 100 92 70 91 130 102
Bancorp, Inc.
NASDAQ Stock 100 98 138 170 209 293
Market (U.S.)
NASDAQ Bank Stocks 100 100 148 196 328 325
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board of Directors will request shareholders to ratify its
selection of Ernst & Young LLP ("Ernst & Young"), independent auditors, to
examine the consolidated financial statements of the Company for the fiscal
year ending December 31, 1999. Ernst & Young has audited the Company's
financial statements since 1996. Ernst & Young is not expected to have a
representative present at the meeting. The affirmative vote of a majority
of the shares represented at the meeting is required for the ratification
of the Board's selection of Ernst & Young as the Company's independent
auditors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE
COMPANY.
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<PAGE>
SHAREHOLDER PROPOSALS
It is currently contemplated that the Company's 2000 Annual Meeting of
Shareholders will be held on or about April 25, 2000. In the event that a
shareholder desires to have a proposal considered for presentation at the
Company's 2000 Annual Meeting of Shareholders and inclusion in the Proxy
Statement for such meeting, the proposal must be forwarded in writing to
the Secretary of the Company so that it is received no later than November
16, 1999. Any such proposal must comply with the requirements of Rule
14(a)-8 promulgated under the Act. If a shareholder intends to present a
proposal at the 2000 Annual Meeting of Shareholders, but has not sought the
inclusion of such proposal in the Company's proxy, notice of meeting and
proxy statement, such proposal must be received by the Secretary of the
Company prior to February 14, 2000 or the Company's management proxies for
the 2000 Annual Meeting will be entitled to use their discretionary voting
authority should such proposal then be raised, without any discussion of
the matter in the Company's proxy, notice of meeting or proxy statement.
MISCELLANEOUS
The Board of Directors of the Company knows of no other business to be
presented to the Annual Meeting. If other matters should properly come
before the Annual Meeting or any adjournment thereof, a vote may be cast
pursuant to the accompanying proxy in accordance with the judgment of the
person or persons voting the proxy. The Board of Directors urges each
shareholder who does not intend to be present and to vote at the Annual
Meeting to complete, sign and return the enclosed proxy as promptly as
possible.
By Order of the Board of Directors
/s/ Burlin Coleman
Burlin Coleman
President and Chairman of the Board
/s/ Jean R. Hale
Jean R. Hale
Executive Vice President
Pikeville, Kentucky
March 22, 1999
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