<PAGE>
[Letterhead]
June 21, 2000
To Our Shareholders:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of shareholders of City Holding Company to be held at the Embassy
Suites Charleston located at 300 Court Street, Charleston, West Virginia 25301,
on July 17, 2000, at 1:00 p.m. We look forward to personally greeting those of
you who are able to attend the meeting.
The notice of meeting and proxy statement accompanying this letter describe
the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be a
report on the progress of the Company and an opportunity for questions of
general interest to the shareholders.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, you are requested to vote, sign, date, and
promptly return the enclosed proxy in the postage-paid envelope provided.
City Holding Company thanks you for your consideration and continued
support.
Sincerely,
/s/ Philip L. McLaughlin
------------------------------
Philip L. McLaughlin,
Chairman of the Board
<PAGE>
CITY HOLDING COMPANY
25 Gatewater Road
Post Office Box 7520
Charleston, West Virginia 25356-0520
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 17, 2000
Notice is hereby given that the Annual Meeting of shareholders of City
Holding Company will be held at the Embassy Suites Charleston located at 300
Court Street, Charleston, West Virginia 25301, on July 17, 2000, at 1:00 p.m.
(local time) for the following purposes:
1. To elect six Class One (I) directors to serve for a term of three
years. The names of the nominees are set forth in the accompanying
proxy statement.
2. To ratify the Board of Directors' appointment of Ernst & Young LLP as
independent auditors of City Holding Company for 2000.
3. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on June 8, 2000, are the
only shareholders entitled to notice of and to vote at the annual shareholders
meeting.
By Order of the Board of Directors,
/s/ Victoria A. Evans
-------------------------------------
Victoria A. Evans
Secretary
June 21, 2000
IMPORTANT NOTICE
Whether you expect to attend the meeting or not, please vote, sign, date, and
return the enclosed proxy in the enclosed self-addressed, postage-paid envelope
as promptly as possible. If you attend the meeting, you may vote your shares in
person, even though you have previously signed and returned your proxy.
<PAGE>
CITY HOLDING COMPANY
25 Gatewater Road
Post Office Box 7520
Charleston, West Virginia 25356-0520
PROXY STATEMENT
Information Concerning the Solicitation
This statement is furnished in connection with the solicitation of proxies
to be used at the Annual Meeting of shareholders of City Holding Company (the
"Company") to be held on July 17, 2000.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Company. The cost of preparing, assembling, and
mailing the proxy material and of reimbursing brokers, nominees, and fiduciaries
for the out-of-pocket and clerical expenses of transmitting copies of the proxy
material to the beneficial owners of shares held of record by such persons will
be borne by the Company. The Company does not currently intend to solicit
proxies otherwise than by use of the mail, but certain officers and regular
employees of the Company or its subsidiaries, without additional compensation,
may use their best efforts, by telephone or otherwise, to obtain proxies. The
proxy materials are being mailed, on or about June 21, 2000, to shareholders of
record at the close of business on June 8, 2000.
A shareholder signing and returning a proxy on the enclosed form has the
power to revoke it at any time before the shares subject to it are voted by
notifying, in writing, Victoria A. Evans, City Holding Company, P.O. Box 7520,
Charleston, West Virginia 25356-0520, by the execution of a proxy with a later
date, or by voting in person at the Annual Meeting the shares represented by the
proxy. If a shareholder specifies how the proxy is to be voted with respect to
any of the proposals for which a choice is provided, the proxy will be voted in
accordance with such specifications. If a shareholder fails to specify with
respect to such proposals, the proxy will be voted FOR proposals One and Two.
Shareholders' Proposals for 2001 Annual Meeting
Shareholders' proposals intended to be presented at the 2001 Annual Meeting
must be received by the Company no later than 120 days before the Company first
mails its proxy statement for the 2001 Annual Meeting for inclusion in the
Company's proxy statement and form of proxy for that meeting. To be so included,
all such submissions must comply with the requirements of Rule 14a-8 of the
Securities Exchange Act of 1934. The Board of Directors directs the close
attention of interested shareholders to that Rule. In addition, if the Company
does not receive notice of a shareholder proposal at least 45 days before the
Company first mails its proxy statement for the 2001 Annual Meeting, the persons
named as proxies in the Company's proxy card for the 2001 Annual Meeting will
have discretionary authority to vote on such proposal at the 2001 Annual
Meeting.
Outstanding Voting Securities
Only shareholders of record at the close of business on June 8, 2000, are
entitled to vote at the annual meeting. On that day, there were issued and
outstanding 16,887,934 shares of common stock (after deducting an aggregate of
4,979 shares held in treasury). Each share has one vote. The affirmative vote of
a majority of the shares represented and entitled to vote at the Annual Meeting
is required to ratify the appointment of Ernst & Young LLP. Directors are
elected by a plurality of the votes cast. In all elections of directors, each
shareholder shall have the right to cast one vote for each share of stock owned
by him for as many persons as there are directors to be elected, or upon notice
to the Company, he may cumulate such votes and give one candidate as many votes
as the number of directors to be elected multiplied by the number of his shares
of stock or he may distribute them on the same principle among as many
candidates and in such manner as he shall desire. If one shareholder has given
notice that he intends to cumulate votes, all shareholders may do so. If a
shareholder gives such notice, the proxies appointed by the shareholders are
authorized to cumulate their votes at their discretion.
The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of the Company's Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum at the Annual
Meeting. Abstentions will be counted as shares present for purposes of
determining the presence of a quorum.
1
<PAGE>
As a consequence, abstentions will be counted as votes against the proposal.
Because director nominees must receive a plurality of the votes cast at the
meeting, a vote withheld will not affect the outcome of the election.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTOR AND
NAMED EXECUTIVE OFFICERS
The Company's only authorized voting equity security is its Common Stock,
par value $2.50 per share (the "Common Stock"). As discussed on the preceding
pages, the Company's Common Stock has one vote per share on all matters except
the election of Directors.
The table below presents certain information as of the Record Date
regarding beneficial ownership of shares of Common Stock by Directors, nominees
for Director, named executive officers, and all Directors and executive officers
as a group. The Company knows of no person that owns more than 5% of the
outstanding Common Stock.
<TABLE>
<CAPTION>
Common Shares Aggregate
Sole Voting and Subject to a Percentage
Name of Beneficial Owner Investment Power Other/(1)/ Right to Acquire/(2)/ Owned
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Samuel M. Bowling 80,261 5,758 - *
Phillip W. Cain 4,530 714 - *
Dr. D. K. Cales 92,152 - - *
Hugh R. Clonch 19,378 91,985 - *
Steven J. Day (3) 35,676 23,524 39,043 *
William C. Dolin 34,974 - - *
Robert D. Fisher 9,983 - - *
Jay C. Goldman 10,983 333 - *
David W. Hambrick 32,113 3,153 832 *
David E. Haden 61,932 1,005 - *
Frank S. Harkins, Jr. 32,799 10,000 2,777 *
Carlin K. Harmon 43,719 - - *
Tracy W. Hylton II 12,019 - - *
C. Dallas Kayser 33,949 465 - *
Philip L. McLaughlin 32,291 692 22,108 *
E. M. Payne III 4,895 51,730 - *
Robert T. Rogers 21,588 2,721 - *
Mark H. Schaul 22,388 1,752 - *
James E. Songer, Sr. 49,999 6,823 - *
Albert M. Tieche, Jr. 28,892 - - *
Thomas E. Lilly 663 4,704 - *
James E. Songer II 5,062 9,936 - *
Robert A. Henson 6,868 9,885 18,323 *
Matthew B. Call 2,724 4,484 16,533 *
John W. Alderman III 1,020 1,373 15,745 *
Directors and Executive
Officers as a group 681,251 235,800 158,945 5.43%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%.
(1) Includes shares (a) owned by or with certain relatives; (b) held in various
fiduciary capacities; (c) held by certain corporations; (d) held in trust
by the Company's 401(k) and Profit Sharing Plan; or (e) held in trust by
the Company's Employee Stock Ownership Plan (ESOP).
(2) Includes options to acquire shares of the Company's common stock that are
exercisable within 60 days.
(3) Mr. Day resigned as a director and executive officer of the Company
effective June 14, 2000.
2
<PAGE>
ELECTION OF DIRECTORS (Proposal 1)
Mr. James E. Songer, Sr. and Dr. D. K. Cales will retire from the Board of
Directors effective with the 2000 Annual Meeting. Mr. Phillip W. Cain has chosen
not to stand for re-election to the Company's Board of Directors. Messrs. Leon
K. Oxley, Thomas L. McGinnis, and Bernard C. McGinnis resigned from the Board of
Directors effective May 15, 2000. Mr. Steven J. Day resigned from the Board of
Directors effective June 14, 2000.
There are six nominees for election as director to serve for terms of three
years expiring on the date of the Annual Meeting in 2003. Messrs. Mark H.
Schaul, David W. Hambrick, Frank S. Harkins, Jr., and Albert M. Tieche, Jr.
currently serve as directors of the Company and will stand for re-election as
Class I directors. The Nominating Committee recommended, and the Board of
Directors approved, Messrs. Thomas E. Lilly and James E. Songer, II to stand for
election as Class I nominees at the 2000 Annual Meeting with the remaining Class
I Directors/nominees.
Each director elected will continue in office until a successor has been
elected. It is intended that the persons named in the accompanying proxy will
vote to elect the six nominees listed below as directors, unless authority to so
vote is withheld. If any nominee is unable to serve, which the Board of
Directors has no reason to expect, the persons named in the accompanying proxy
intend to vote for the balance of those named and, if they deem it advisable,
for a substitute nominee. The names of the nominees for directors of the Company
and the names of directors of the Company whose terms of office will continue
after the Annual Meeting are listed in the following table.
<TABLE>
<CAPTION>
Name Age Business Experience
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nominees Whose Terms Expire in 2003:
Mark H. Schaul 69 President - Charmar Realty Company, Charleston, WV.
Director since 1976
David W. Hambrick 58 Director - Horizon Bancorp, Beckley, WV from 1993
Director since 1999 - 1998; Executive Vice President - Greenbrier
Valley National Bank, Lewisburg, WV until 1999;
Director - First National Bank in Marlinton,
Marlinton, WV until 1999; Executive Vice President
- Horizon Bancorp, Inc., Beckley, WV until 1998;
Chief Financial Officer - Horizon Bancorp, Inc.,
Beckley, WV until 1996.
Frank S. Harkins, Jr. 61 Chairman of the Board and Chief Executive Officer
Director since 1999 - Horizon Bancorp, Inc., Beckley, WV until 1998;
Director - National Bank of Summers of Hinton,
Hinton, WV until 1999; Director - Greenbrier
Valley National Bank, Lewisburg, WV until 1999;
Director, President, and Chief Executive Officer
--Bank of Raleigh, Beckley, WV until 1999;
Director - The Twentieth Street Bank, Inc.,
Huntington, WV until 1999.
Albert M. Tieche, Jr. 47 Director - Horizon Bancorp, Inc., Beckley, WV from
Director since 1999 1992 - 1998; Administrator and Treasurer - Beckley
Hospital, Inc., Beckley, WV until 1997; President
- BHI, Inc. (surviving corporation of Beckley
Hospital Inc.), Beckley, WV; Director - Bank of
Raleigh, Beckley, WV until 1999.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
Thomas E. Lilly 61 Chairman of the Board and Chief Executive Officer
- Lillys' Crown Jewelers Corporation.
James E. Songer, II 44 President - Songer Insurance Agency; Owner -
Homeseekers LLC; Former Director - Bank of Raleigh.
Directors Whose Terms Expire in 2001:
William C. Dolin 63 Director - Horizon Bancorp, Inc., Beckley, WV from
Director since 1999 1996 - 1998; President - Dolin Supply Co.,
Huntington, WV until 1998; President and Part
Owner - Land Co, LLC, Huntington, WV; Director -
The Twentieth Street Bank, Inc., Huntington, WV
until 1999; Director - Twentieth Bancorp, Inc.,
Huntington, WV until 1996.
Carlin K. Harmon 63 Executive Vice President - City Holding Company,
Director since 1988 Charleston, WV from 1990 - 1999; President & Chief
Executive Officer - First State Bank and Trust,
Rainelle, WV until 1997.
Tracy W. Hylton, II 51 Director - Horizon Bancorp, Inc., Beckley, WV
Director since 1999 until 1998; President Eller, Inc., Beckley, WV
(Surface Mining); President - Gracie, Inc.,
Mabscott, WV (Land Leasing); President -
Lightning, Inc., Skelton, WV (Land Leasing); Vice
President - Nell Jean Enterprises, Inc., Beckley,
WV (Retail); President - Nell Jean Industries,
Inc., Mabscott, WV (Mine Supply); President - New
Land Leasing Company, Inc., Skelton, WV; President
- Patience, Inc., Skelton, WV (Surface Mining);
Secretary and Treasurer - Patton, Inc.; Member - T
& M, LLC, Beckley, WV; Executive Vice President -
WRM, Inc.; Member - Harper Hotel LLC, Beckley, WV
(Management Company).
C. Dallas Kayser 48 C. Dallas Kayser, LC, Pt. Pleasant, WV (Law Firm);
Director since 1995 Owner - Twin Rivers Realty, Pt. Pleasant, WV (Real
Estate); Part Owner - Deerfield Development, Pt.
Pleasant, WV (Real Estate); Part Owner - Twin K,
Inc.; Director and Trustee - Pleasant Valley
Hospital, Inc., Pt. Pleasant, WV (Health Care);
Trustee - United Methodist Foundation of WV, Inc.
(Non-profit).
E. M. Payne, III 64 Director - Horizon Bancorp, Inc., Beckley, WV
Director since 1999 until 1998; Partner - File, Payne, Scherer & File,
Beckley, WV (Law Firm).
</TABLE>
4
<PAGE>
<TABLE>
Directors Whose Terms Expire in 2002:
<S> <C> <C>
Samuel M. Bowling 63 Vice Chairman of the Board - City Holding Company,
Director since 1983 Charleston, WV; Chairman of the Board - City
Holding Company until 1998; President and Owner -
Dougherty Co., Inc., Charleston, WV (Mechanical
Contractor); Owner - S. M. Bowling, Inc.,
Charleston, WV; Owner - Bowling Enterprises, Inc.,
Charleston, WV.
David E. Haden 61 President - RMI, ltd., a division of City National
Director since 1998 Bank, Charleston, WV.
R. T. Rogers 66 Director - Horizon Bancorp, Inc., Beckley, WV from
Director since 1999 1985 - 1998; President and Chief Executive Officer
- R. T. Rogers Oil Co., Hinton, WV (Oil and Fuel
Distributor); Director - National Bank of Summers
of Hinton, Hinton, WV until 1999.
Jay C. Goldman 57 Mayor - City of Charleston, Charleston, WV;
Director since 1988 President - Goldman and Associates, Charleston, WV
(Real Estate).
Robert D. Fisher 47 Partner - Adams, Fisher & Evans, Ripley, WV (Law
Director since 1994 Firm).
Philip L. McLaughlin 60 Chairman of the Board - City Holding Company,
Director since 1999 Charleston, WV; Regional President (Allegheny
Region) - City National Bank, Charleston, WV;
President, Chief Operating Officer and Director -
Horizon Bancorp, Inc., Beckley, WV until 1998;
President, Chief Executive Officer and Director -
Greenbrier Valley National Bank, Lewisburg, WV
until 1999; Director - First National Bank in
Marlinton, Marlinton, WV until 1999; Director -
Bank of Raleigh, Beckley, WV until 1999; Director
- The Twentieth Street Bank, Inc., Huntington, WV
until 1999.
Hugh R. Clonch 60 President - Clonch Industries, Dixie, WV (Timber).
Director since 1995
</TABLE>
5
<PAGE>
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
Committees of the Board of Directors and Meeting Attendance
The full Board of Directors met 13 times during the fiscal year ended
December 31, 1999. The Executive Committee, which consists of Hugh R. Clonch,
Steven J. Day, William C. Dolin, Robert D. Fisher, Jay C. Goldman, Tracy W.
Hylton, II, C. Dallas Kayser, E. M. Payne, III, R. T. Rogers and James E.
Songer, Sr. met three times during the fiscal year ended December 31, 1999.
Additionally, the Board of Directors has Nominating, Strategic Planning, Audit
and Compensation committees. No director attended fewer than 75% of the meetings
of the Company's Board of Directors, Executive Committee or Audit Committee.
Each member of the Compensation, Nominating, and Strategic Planning Committees,
respectively, attended each meeting held during 1999.
During 1999, the Audit Committee included Mark Schaul, Chairman, Robert D.
Fisher, James E. Songer, Sr., and Albert M. Tieche, Jr., none of whom is
employed by the Company. The Committee met six times during 1999. The Audit
Committee recommends engagement of the independent auditors, considers the scope
of the audit, reviews the activities and recommendations made by the Company's
internal auditors, and considers comments made by the independent auditors with
respect to the Company's internal control structure.
During 1999, the Compensation Committee included William C. Dolin, Dr. D.
K. Cales, Robert T. Rogers and Jay C. Goldman, none of whom is employed by the
Company. The Compensation Committee makes recommendations to the Board with
respect to the compensation of executive officers and certain other officers who
participate in the Company's Stock Incentive Plan. The Committee met once during
1999.
In August of 1999, the Board of Directors formed a Strategic Planning
Committee to consider the long-term planning and strategic issues facing the
Company. This committee, consisting of Samuel M. Bowling, Hugh R. Clonch, Steven
J. Day, William C. Dolin, C. Dallas Kayser and James E. Songer, Sr. met four
times during the fiscal year ended December 31, 1999.
The Nominating Committee is comprised of Samuel M. Bowling, Hugh R. Clonch,
William C. Dolin, Robert D. Fisher, Jay C. Goldman, Tracy W. Hylton, II, C.
Dallas Kayser, E. M. Payne, III, Robert T. Rogers, and James E. Songer, Sr.
Pursuant to the Company's Amended and Restated Bylaws, the Nominating Committee
will consider nominees recommended by shareholders if such recommendations are
submitted in writing and delivered or sent by first class registered or
certified mail to the President of the Company not less than 14 days and no more
than 50 days prior to the date of the 2001 Annual Meeting. Such recommendations
should include the name, address, occupation and ownership of shares of Common
Stock of the nominee, and the name, address and ownership of shares of Common
Stock of the nominating shareholder.
Compensation of Directors
In 1999, the Company's Directors who were members of the Executive
Committee were paid a fee of $3,500 per quarter, regardless of attendance. The
Company's Directors who were not members of the Executive Committee were paid
$1,500 per quarter, regardless of attendance. The Audit Committee and
Compensation Committee members were paid a fee of $500 for each committee
meeting attended. Directors who are also officers of the Company and its
subsidiaries receive no compensation for attendance.
6
<PAGE>
EXECUTIVE OFFICERS OF CITY HOLDING COMPANY
At December 31, 1999, the executive officers of the Company were as follows:
<TABLE>
<CAPTION>
Name Age Business Experience
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Steven J. Day (1) 47 President and Chief Executive Officer - City
Holding Company and City National Bank since 1990
Robert A. Henson 39 Chief Financial Officer - City Holding Company
since 1990
Matthew B. Call 42 Executive Vice President - City Holding Company
since 1998; Senior Vice President - City Holding
Company from 1994 - 1998
Larry L. Dawson 54 Senior Vice President - City Holding Company since
1997; Chairman of the Board, President and Chief
Executive Officer - WesBanco Bank Charleston,
Charleston, WV; Vice President - WesBanco, Inc.,
Wheeling, WV until 1997
Carlin K. Harmon (2) 63 Executive Vice President - City Holding Company,
Charleston, WV from 1990 - 1999; President & Chief
Executive Officer - First State Bank and Trust,
Rainelle, WV until 1997
David J. Vida 33 President - City Mortgage Services, a division of
City National Bank, Charleston, WV since 1997;
Executive Vice President - City Mortgage Services,
1996 - 1997; Vice President Finance/Operations -
Prime Financial Corporation, Costa Mesa,
California (Mortgage Servicing) until 1996
John W. Alderman, III 36 Senior Vice President and Chief Legal Counsel -
City Holding Company since 1998; Vice President
and Chief Legal Officer - City Holding Company,
1997 - 1998; Associate - Steptoe & Johnson,
Charleston, WV (Law Firm) until 1997
F. Eric Nelson, Jr. (3) 39 Treasurer and Investment Portfolio Manager - City
Holding Company since 1994
Peggy L. Schultz 52 Vice President - Marketing - City Holding Company
since 1997; Business Development Officer - City
Holding Company 1993 - 1997
</TABLE>
7
<PAGE>
<TABLE>
<S> <C> <C>
Victoria A. Evans 39 Senior Vice President - City Holding Company since
1998; Vice President - City Holding Company 1997 -
1998; Assistant Vice President - City Holding
Company 1993 - 1997
David E. Haden 61 President - RMI, ltd., a division of City National
Bank, Charleston, WV since its acquisition;
President - RMI, ltd. since 1987
Joe L. Ellison 56 Regional President (Capitol Region) - City
National Bank; Regional President (Ohio Valley
Region) - City National Bank 1998 - 2000;
President - Peoples Bank of Pt. Pleasant, Pt.
Pleasant, WV 1990 - 1997
Jeffrey D. Legge 36 Senior Vice President and Director of Data
Processing - City Holding Company since 1998; Vice
President of Data Processing 1997 - 1998 Assistant
Vice President of Data Processing 1993 - 1997
</TABLE>
(1) Steven J. Day resigned as a director and executive officer of the Company
effective June 2000.
(2) Carlin K. Harmon retired effective June 1999.
(3) F. Eric Nelson, Jr. resigned as an executive officer of the Company
effective February 2000.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation for the Company's
Chief Executive Officer and its other most highly paid executive officers, as
well as the total compensation paid to each individual during the Company's last
three fiscal years:
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
/(2)/ Securities
Name and /(1)/ All Other Underlying
Principal Position Year Salary ($) Bonus ($) Compensation ($) Options (#)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Steven J. Day (3) 1999 240,000 - 25,043 15,000
President, Chief Executive 1998 209,773 - 18,789 25,900
Officer and Director 1997 203,663 107,691 26,485 -
Philip L. McLaughlin 1999 180,000 - 17,082 15,000
Executive Vice President and 1998 175,534 23,182 1,600 2,777
Chairman of the Board 1997 173,229 4,400 800 3,666
Carlin K. Harmon (4) 1999 76,678 - 411,736 -
Executive Vice President 1998 167,256 - 16,054 719
and Director 1997 162,384 86,053 24,021 -
Robert A. Henson 1999 150,000 - 24,084 15,000
Chief Financial Officer 1998 105,375 - 17,006 15,461
1997 102,306 55,123 24,953 -
Matthew B. Call 1999 150,000 - 24,965 15,000
Executive Vice President 1998 92,880 - 16,263 15,339
1997 90,175 40,526 23,536 -
John W. Alderman III 1999 128,750 - 20,780 -
Senior Vice President and 1998 128,750 - 16,331 15,143
Chief Legal Counsel 1997 83,333 35,000 - 7,500
</TABLE>
(1) Includes bonus awards under the Company's Incentive Plan.
(2) Includes the imputed value of life insurance benefits, automobile
allowances and Company matching and profit-sharing contributions under the
Company's Profit-Sharing and 401(k) Plan, which was implemented January 1,
1991, and the Company's ESOP, which was implemented January 1, 1996.
(3) Mr. Day resigned as a director and executive officer of the Company
effective June 14, 2000.
(4) Mr. Harmon retired from the Company in June, 1999. Prior to his retirement,
Mr. Harmon served City Holding Company as an Executive Vice President since
1990 and, previously, as President and Chief Executive Officer of First
State Bank and Trust since 1972. Included in Mr. Harmon's other
compensation is $386,603 that was paid in 1999 as an inducement for early
retirement.
9
<PAGE>
Summary of Stock Option Activity
The following table sets forth certain information concerning stock options
granted during 1999 to the named executive officers:
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Appreciation for
Individual Grants Option Term
--------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price per Expiration
Name Granted 1999 Share Date 5% 10%
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Day 15,000 6.30% 15.25 12/6/2004 $63,150 $139,650
Philip L. McLaughlin 15,000 6.30% 15.25 12/6/2004 63,150 139,650
Carlin K. Harmon - - - - - -
Robert A. Henson 15,000 6.30% 15.25 12/6/2004 63,150 139,650
Matthew B. Call 15,000 6.30% 15.25 12/6/2004 63,150 139,650
John W. Alderman, III - - - - - -
</TABLE>
The following table summarizes options exercised during 1999 and presents
the value of unexercised options held by the named executives at December 31,
1999:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year-End Fiscal Year-End ($)
Shares Acquired on Value Realized (#) Exercisable (E)/ Exercisable (E)/
Name Exercise (#) ($) Unexercisable (U) Unexercisable (U)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven J. Day - - 39,043 (E) -
17,516 (U) -
Philip L. McLaughlin 4,444 $16,589 22,108 (E) -
13,222 (U)
Carlin K. Harmon - - - -
Robert A. Henson - - 18,323 (E) -
19,014 (U) -
Matthew B. Call - - 16,533 (E)
19,014 (U)
John W. Alderman, III - - 15,745 (E) -
7,014 (U) -
</TABLE>
10
<PAGE>
Compensation Committee Report on Executive Compensation
To the Board of Directors of City Holding Company:
The Compensation Committee of the Board of Directors of the Company submits
the following report of its deliberations with respect to compensation of the
Company executives, including the Company's Chief Executive Officer, Mr. Day,
for 1999:
City Holding executives are generally compensated under the Company's
Incentive Plan (the "Incentive Plan") adopted in 1992. The Incentive Plan is
designed to link executive compensation to the performance of the Company and to
provide levels of compensation adequate to attract and to retain quality
management.
Compensation under the Incentive Plan includes base salaries with
provisions for annual increases and bonuses, including stock options, based on
individual and corporate performance. Bonuses are paid one-half in cash and one-
half in Common Stock, while stock options are awarded at the Committee's
discretion. Maximum salary increases (as a percentage of the percentage increase
in the Consumer Price Index) and bonuses, including stock options, (as a
percentage of salary) are calculated under the Incentive Plan based upon
performance as measured by annual return on average assets and return on average
equity. The Committee believes that these ratios best measure performance that
is likely to translate into increased shareholder value. The Incentive Plan may
be amended or rescinded at any time.
Base Salaries. Base salaries for Mr. Day, Mr. McLaughlin, Mr. Henson and
Mr. Call were determined in accordance with the minimum salary provisions of
their respective employment agreements. Base salaries for all other executives
were not increased in 1999.
Annual Bonuses. For performance in 1999, no bonus awards have been granted.
Stock Options. Executive officers of the Company were awarded 87,500 stock
options during 1999, including 15,000 each to Messrs. Day, McLaughlin, Henson
and Call. Stock options were awarded at an exercise price equal to the fair
market value of the Company's common stock on the date of grant and are
exercisable, with vesting provisions, over a five-year term.
Respectfully submitted,
Dr. D. K. Cales
William C. Dolin
Jay C. Goldman
Robert T. Rogers
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Employment and Consulting Agreements
The Company has entered into employment agreements with Steven J. Day,
Philip L. McLaughlin, Robert A. Henson and Matthew B. Call (individually, the
"named executive"). The agreements specify terms of employment, including
compensation. The contracts were entered into on December 31, 1998 and terminate
on the day next preceding the fifth (for Messrs. Day and McLaughlin) and third
(for Messrs. Henson and Call) anniversary of the date of the contracts, except
that on each monthly anniversary date, the agreements are automatically extended
for an additional month. The agreements provide that if the named executive
voluntarily terminates his employment at any time after December 31, 1999, the
named executive will be entitled to receive annually 60% of his Termination
Compensation, as defined, until the earlier of (i) five years from the date on
which the named executive voluntarily terminates employment or (ii) the date on
which the named executive reaches age 65. In the event the named
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executive's employment is terminated by the Company other than for "just cause",
the named executive will receive the highest amount of annual cash compensation
received during any of the preceding five calendar years in each year until the
end of the term of the agreement. In the event of a change of control of the
Company, the named executive may voluntarily terminate employment with the
Company up until twenty-four months after the change of control and be entitled
to receive in lump sum (i) any compensation due but not yet paid through the
date of termination and (ii) an amount equal to Termination Compensation
multiplied by a factor of 2.99.
The Company has also entered into an employment and consulting agreement
with Frank S. Harkins, Jr., a director. The agreement was entered into on
December 31, 1998 and specified a term of employment until June 1, 1999, with a
consulting arrangement comprising business development and retention activities
commencing on that date and continuing for five years thereafter. The agreement
specifies the terms of the employment and consulting arrangement, including
annual compensation of $200,000. In the event Mr. Harkins' employment or
consulting arrangement is terminated by the Company other than for "just cause",
Mr. Harkins will continue to receive the annual cash compensation in each year
until the end of the term of the agreement.
The Company has also entered into an employment agreement with John W.
Alderman, III. This agreement also specifies terms of employment, including
compensation. The contract was entered into on April 21, 1997, and terminates
forty-five months from that date. The agreement provides that the Company may
only terminate the employment of Mr. Alderman for good cause, as defined.
The Company entered into a three and one-half year non-competition
agreement with Leon K. Oxley on May 15, 2000. Pursuant to the terms of the
agreement, Mr. Oxley received a single lump sum distribution of approximately
$182,000.
The Company entered into a five-year non-competition agreement with each of
Thomas L. McGinnis and Bernard C. McGinnis on May 15, 2000. Pursuant to the
terms of those agreements, Mr. Thomas L. McGinnis and Mr. Bernard C. McGinnis,
respectively, will receive approximately $66,000 and $102,000 annually for a
period of five years from the date of those agreements. Additionally, the
Company will provide, during the five-year term of the agreements, health and
life insurance conveying substantially the same coverage in place at the time of
their resignations.
Mr. Day resigned as a director and executive officer of the Company
effective June 14, 2000. With the Board of Directors concurrence, Mr. Day's
resignation was characterized as a "termination without Just Cause" under the
terms of his employment agreement. Mr. Day will receive an estimated $294,000
annually for a period of five years from the date of his resignation.
Additionally, the Company will continue to provide health insurance coverage for
Mr. Day and his family for five years, and Mr. Day retained ownership of certain
Company assets dedicated to his personal use.
Stock Incentive Plan
Shares Subject to Option; Administration
The Company's Compensation Committee administers the Stock Incentive Plan.
The Committee may delegate its authority to administer the Stock Incentive Plan
to an officer of the Company. Under the Stock Incentive Plan a total of
1,300,000 shares of Common Stock may be issued upon the exercise of options,
stock appreciation rights and stock awards. This limitation can be adjusted, as
the Compensation Committee determines is appropriate, in the event of a change
in the number of outstanding shares of Common Stock by reason of a stock
dividend, stock split, combination, reclassification, recapitalization or other
similar events.
Eligibility
Key employees of the Company and its related entities and individuals who
provide services to the Company and its related entities are eligible to
participate in the Stock Incentive Plan.
Plan Benefits
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The Committee may, from time to time, grant stock options, stock
appreciation rights ("SARs"), or stock awards to Stock Incentive Plan
participants. Options granted under the Stock Incentive Plan may be incentive
stock options ("ISOs") or nonqualified stock options. The Committee will fix the
option price at the time the option is granted, but in the case of an ISO, the
price cannot be less than the shares' fair market value on the date of grant.
The option price may be paid in cash, or, with the Committee's consent, with
shares of Common Stock, a combination of cash and Common Stock, or in
installments.
SARs entitle the participant to receive the excess of the fair market value
of a share of Common Stock on the date of exercise over the initial value of the
SAR. The initial value of the SAR is the fair market value of a share of Common
Stock on the date of grant.
SARs may be granted in relation to option grants ("Corresponding SARs") or
independently of option grants. The difference between these two types of SARs
is that to exercise a Corresponding SAR, the participant must surrender
unexercised that portion of the stock option to which the Corresponding SAR
relates.
Participants may also be awarded shares of Common Stock pursuant to a stock
award. The Committee may prescribe that a participant's right in a stock award
shall be nontransferable or forfeitable or both unless certain conditions are
satisfied. These conditions may include, for example, a requirement that the
participant continue employment with the Company for a specified period or that
the Company or the participant achieves stated objectives.
The Stock Incentive Plan provides that outstanding options and SARs will
become exercisable and outstanding stock awards will be earned in full and
nonforfeitable upon a change in control.
Duration of Stock Incentive Plan
No option, SAR or stock award may be granted under the Stock Incentive Plan
after March 8, 2003.
Termination, Suspension, or Amendment of Stock Incentive Plan
The Company's Board of Directors may, without further action by
shareholders, terminate or suspend the Stock Incentive Plan in whole or in part.
The Board of Directors may also amend the Stock Incentive Plan except that no
amendment that increases the number of shares of Common Stock that may be issued
under the Stock Incentive Plan or changes the class of individuals who may be
selected to participate in the Plan will become effective until it is approved
by shareholders.
Employee Benefit Plans
Under the Company's Profit Sharing & 401(k) Plan (the "Plan"), a deferred
compensation plan under the Internal Revenue code, eligible participants,
including Messrs. Day, McLaughlin, Henson, Call, and Alderman, may contribute
from 1% to 15% of pre-tax earnings to their Plan accounts. Contributions may be
invested in any of six investment options as selected by the participant,
including Company Common Stock. The Company matches, in its Common Stock, 50% of
the first 6% of earnings contributed by each participant. Although the profit
sharing features of this Plan remain intact, future profit sharing
contributions, if any, are expected to be made to the Employee Stock Ownership
Plan.
City Holding Company's Employees Stock Ownership Plan ("ESOP"), covers all
eligible employees, including Messrs. Day, McLaughlin, Henson, Call, and
Alderman, who have completed one year of service and have attained the age of
21. The ESOP plan was created January 1, 1996, and includes both a Money
Purchase and a Stock Bonus feature. Annually, the Company will contribute to the
Money Purchase account an amount equal to 9% of eligible compensation. The Stock
Bonus account contributions are discretionary and are determined annually by the
Company's Board of Directors. For the year ended December 31, 1999, ESOP
contributions for Messrs. Day McLaughlin, Henson, Call, and Alderman equaled 9%
of the 1999 maximum contribution limit as set forth by the Internal Revenue
Service. Contributions to all executive officers of the Company aggregated
$148,000, and included contributions of $14,400, $12,500, $14,064, $14,143, and
$12,081, respectively, to Messrs. Day, McLaughlin, Henson, Call, and Alderman.
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STOCK PERFORMANCE
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to City Holding Company's shareholders
during the five-year period ended December 31, 1999, as well as an overall stock
market index (The Nasdaq Stock Market Index) and the Company's Peer Group. The
Peer Group consists of publicly-traded financial institutions over $1 billion
but less than $5 billion in assets headquartered in Ohio, Pennsylvania,
Virginia, Kentucky, and Maryland.
[GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
City Holding Company 100 97.24 111.80 188.85 149.01 66.51
Peer Group 100 129.71 160.42 279.29 261.95 248.06
NASDAQ Stock Market Index 100 133.24 161.18 197.16 278.08 490.46
</TABLE>
CERTAIN TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
During 1999, the Company and its subsidiaries had, and expect to have in
the future, banking transactions with officers and directors of the Company,
their immediate families and entities in which they are principal owners (more
than 10% interest). The transactions are in the ordinary course of business and
on substantially the same terms, including interest rates and security, as those
prevailing at the same time for comparable transactions with others and do not
involve more than the normal risk of collectibility or present other unfavorable
factors.
The Company has entered into employment agreements and an employment and
consulting agreement with certain of its named executive officers and directors.
See Employment and Consulting Agreements above under the section titled Other
Executive Compensation Plans and Arrangements.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers, directors and 10% shareholders are
required under the Securities and Exchange Act of 1934 (the "Exchange Act") to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Copies of these reports must also be furnished to City
Holding. Based solely upon the review of copies of such reports furnished to the
Company through the date hereof, or written representations that no reports were
required, the Company believes that during 1999, all filing requirements
applicable to its officers, directors and 10% shareholders were met, except with
respect to: Samuel M. Bowling made one late Form 4 filing; William C. Dolin made
one late Form 4 filing; Frank S. Harkins, Jr. made two late Form 4 filings; Leon
K. Oxley made one late Form 4 filing; Mark H. Schaul made one late Form 4
filing; Albert M.
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Tieche, Jr. made one late Form 4 filing; Larry L. Dawson made one late Form 4
filing and Peggy L. Schultz made one late Form 4 filing.
APPOINTMENT OF INDEPENDENT AUDITORS (Proposal 2)
Subject to ratification by the Company's shareholders, the Company's Board
of Directors has appointed Ernst & Young LLP as independent auditors to audit
the consolidated financial statements of the Company for the year ending
December 31, 2000.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they so desire and
will be available to respond to appropriate questions.
Recommendation
The affirmative vote of a majority of the shares represented and entitled
to vote at the annual meeting is required to ratify the appointment of Ernst &
Young LLP. The Board of Directors unanimously recommends the shareholders vote
"FOR" such ratification.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not
informed of any matters, other than those stated above, that may be brought
before the meeting. However, if any other matters are brought before the
meeting, the persons named in the enclosed form of proxy or their substitutes
will vote with respect to such matters in accordance with their best judgment.
By Order of the Board of Directors,
/s/ Victoria A. Evans
---------------------------------
Victoria A. Evans
Secretary
June 21, 2000
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CITY HOLDING COMPANY
Post Office Box 7520
Charleston, West Virginia 25356-0520
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS - JULY 17, 2000
(THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CITY HOLDING
COMPANY)
The undersigned shareholder of City Holding Company hereby appoints John W.
Alderman, III and Victoria A. Evans and each of them, with full power of
substitution, as proxies and hereby authorizes them to represent and to vote,
as designated below, all the shares of Common Stock of City Holding Company
held of record by the undersigned on June 8, 2000 at the 2000 Annual Meeting
of Shareholders to be held on July 17, 2000 or any adjournment or adjournments
thereof. The undersigned shareholder authorizes the proxies to cumulate their
votes at their discretion.
Management and the Board of Directors recommends a vote FOR Proposals 1 and 2.
(1) PROPOSAL TO ELECT SIX CLASS I DIRECTORS TO SERVE FOR A TERM OF THREE
YEARS.
FOR [_] (except as marked to the contrary below) WITHHOLD AUTHORITY [_]
Mark H. Schaul, Albert M. Tieche, Jr., David W. Hambrick, Thomas E. Lilly,
Frank S. Harkins, Jr., James E. Songer, II
To withhold authority to vote for any individual nominee, strike a line
through the nominee's name above.
(2) PROPOSAL TO RATIFY THE BOARD OF DIRECTORS' APPOINTMENT OF ERNST & YOUNG,
LLP AS THE INDEPENDENT AUDITORS FOR CITY HOLDING COMPANY FOR 2000
FOR [_] AGAINST [_] ABSTAIN [_]
<PAGE>
(3) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting of Shareholders or
any adjournment or adjournments thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR Proposals 1 and 2. You may revoke this proxy at any time
prior to the time it is voted at the Annual Meeting.
Dated___________________________ , 2000
---------------------------------------
Signature
---------------------------------------
Signature, if held jointly
Please date and sign exactly as name
appears hereon. If shares are held
jointly, each shareholder should
sign. Agents, executors,
administrators, guardians, trustees,
etc. should use full title, and, if
more than one, all should sign. If
the shareholder is a corporation,
please sign full corporate name by
the president or another authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
Please mark, sign, date and return
the proxy promptly using the
enclosed envelope.
