UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A INFORMATION
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Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant x
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Filed by a Party other than the Registrant o
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Check the appropriate box:
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o
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Preliminary Proxy Statement
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o
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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o
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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CITY HOLDING COMPANY
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(Name of Registrant as Specified In Its Charter)
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N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary materials.
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o
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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Philip L. McLaughlin
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Chairman of the Board
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Charles R. Hageboeck
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President & CEO
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1.
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Election of Directors. To elect four Class I directors to serve for a term of three years. The names of the nominees are set forth in the accompanying proxy statement.
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2.
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Ratify Independent Registered Public Accounting Firm. To ratify the Audit Committee and the Board of Directors’ appointment of Ernst & Young LLP as the independent registered public accounting firm for City Holding Company for 2015.
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3.
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Advisory (Non-binding) Vote on Executive Compensation. To approve a non-binding advisory proposal on the compensation of the Named Executive Officers.
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4.
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Other Business. To transact such other business as may properly come before the meeting.
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By Order of the Board of Directors,
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Victoria A. Faw,
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Secretary
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1.
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FOR the nominees for director listed in these materials and on the proxy;
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2.
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FOR the ratification of the selection of the Company’s independent registered public accounting firm; and
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3.
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FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in these materials.
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BENEFICIAL OWNERSHIP
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Name of Beneficial Owner
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Sole Voting and Investment Power(1)
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Common Shares Subject to a Right to Acquire (2)
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Aggregate Percentage Owned
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CHCO Shares Held as Collateral
for Loans
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(# | ) | (# | ) |
(%)
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(# | ) | ||||||||||
Directors
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John R. Elliot (3)
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162,627 | - | 1.07 | - | ||||||||||||
Charles W. Fairchilds
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6,957 | - | * | - | ||||||||||||
William H. File III
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23,046 | - | * | - | ||||||||||||
Robert D. Fisher
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22,262 | - | * | - | ||||||||||||
Jay C. Goldman
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22,019 | - | * | - | ||||||||||||
Charles R. Hageboeck
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78,640 | 33,750 | * | - | ||||||||||||
David W. Hambrick (3)
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44,943 | - | * | - | ||||||||||||
Tracy W. Hylton II
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51,765 | - | * | - | ||||||||||||
J. Thomas Jones (3)
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2,578 | - | * | - | ||||||||||||
C. Dallas Kayser
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20,592 | - | * | - | ||||||||||||
Philip L. McLaughlin
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42,138 | - | * | - | ||||||||||||
James L. Rossi (3)
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15,401 | - | * | - | ||||||||||||
Sharon H. Rowe (4)
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10,569 | - | * | 10,000 | ||||||||||||
Named Executive Officers
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David L. Bumgarner
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13,380 | 2,750 | * | - | ||||||||||||
Craig G. Stilwell
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37,434 | 16,000 | * | - | ||||||||||||
John A. DeRito
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21,948 | 5,000 | * | - | ||||||||||||
Jeffrey D. Legge
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12,944 | 1,250 | * | - | ||||||||||||
Directors and Executive Officers as a group
(17 persons)
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589,243 | 58,750 | 4.26 | % | 10,000 |
(1)
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Includes shares (a) owned by or with certain relatives; (b) held in various fiduciary capacities; (c) held by certain corporations; (d) held in trust under the Company's 401(k) Plan & Trust.
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(2)
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Includes options to acquire shares of the Company's Common Stock that are exerciseable within 60 days.
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(3)
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Messrs. Elliot, Hambrick, Jones and Rossi are nominees for election or re-election to the Board of Directors as Class I directors.
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(4)
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In December, 2014, the Board of Directors approved and adopted a revised insider trading policy which, among other things, added a prohibition against the pledging by executive officers or Directors of Company securities as collateral for loan or other financial obligations. Ms. Rowe’s pledge of shares pre-dates the adoption of the revised policy and the Board of Directors has approved an exception to the policy with respect to Ms. Rowe’s pledge.
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Name and Address of Beneficial Owner
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Amount and Nature of
Beneficial Ownership (1)
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Percent of
Class (1)
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BlackRock, Inc.
40 East 52nd Street
New York, NY 10022
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1,402,721 | 9.20 | % | |||||
Royce & Associates, LLC
745 Fifth Avenue
New York, NY 10151
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1,259,136 | 8.27 | % | |||||
The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
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1,068,686 | 7.02 | % |
(1)
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Information regarding Royce & Associates, LLC’s, BlackRock, Inc.’s, and The Vanguard Group, Inc.’s address, holdings, and percent of class are based solely upon the Company’s review of Schedules 13F and 13G filed with the Securities and Exchange Commission pursuant to Rule 13d-1(b) for the period ended December 31, 2014.
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February 25, 2015
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ELECTION OF DIRECTORS
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(Proposal 1)
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CLASS I DIRECTORS (Nominees for a term to expire in 2018)
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John R. Elliot, 69, has served as a director since 2007. Mr. Elliot received Bachelor’s degrees from Kent State University (architecture) and West Virginia Institute of Technology (health care administration). Mr. Elliot founded John Elliot Associates, Architects & Planners in 1972 and Continental Health Care Construction Company in 1980, both which specialized in the design and construction of nursing homes. In 1982, Mr. Elliot founded AMFM, LLC, which today operates 15 skilled nursing facilities with over 1,120 beds throughout West Virginia and employs more than 1,500 people. The Governance Committee considers AMFM to be a company of similar size and complexity to City Holding Company. As the Owner and President of AMFM, LLC, the Board of Directors of City considers that Mr. Elliot’s business experience makes him a highly qualified addition to the Board. Mr. Elliot currently serves as Chairman of the West Virginia Symphony Orchestra, a member of the Executive Committee of the Clay Center for Arts and Sciences, and member of the Board of the Kent State University Foundation. He has also served on the boards of the United Way, the YMCA, Buckskin Council, Boy Scouts of America and the Sunrise Art Museum, and as a trustee of the AIA-WV Foundation for Architecture, giving him deep knowledge of the Charleston economy and its leaders. Mr. Elliot was the President of the West Virginia Health Care Association and has served as the Regional Multi-facility Vice Chair and Secretary for the American Health Care Association, providing him a high level of industry experience in the health care industry. In 2010, Mr. Elliot was recognized as a recipient of the State Journal’s prestigious “Who’s Who in West Virginia Business” award. Mr. Elliot owns, directly or indirectly, 162,627 shares of City Holding Company common stock.
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David W. Hambrick, 73, has served as a director since 1993(1). Mr. Hambrick received a Bachelor’s degree (finance) from the University of Florida and Doctor of Jurisprudence degree (law) from West Virginia University College of Law. Mr. Hambrick was President and Chief Executive Officer of First National Bank of Alderson from 1976 until 1986; Executive Vice President and Trust Officer of Greenbrier Valley National Bank from 1986 until 2000; Executive Vice President of Horizon Bancorp, Inc. until December 1998 and Vice President of City Holding Company from 1999 until March 2000. During his tenure, he held a variety of lending, trust and financial positions including several years as principal financial officer. In addition, Mr. Hambrick was a member of the Board of the Greenbrier Valley National Bank from 1993 to 1999; a member of the Board of Horizon Bancorp, Inc. from 1993 until its merger with City Holding Company on December 31, 1998; and, subsequently, he has been a member of the City Holding Company Board, giving him long-term historical perspective regarding the banking industry. Mr. Hambrick resides in Alderson, WV and is active in civic affairs within the region providing him strong knowledge of the Greenbrier County, WV market and its business leaders. The Governance Committee nominated Mr. Hambrick based upon his knowledge of the banking industry, his knowledge of the Greenbrier County market and his long service to City and its predecessor Boards. Mr. Hambrick owns, directly or indirectly, 44,943 shares of City Holding Company common stock.
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J. Thomas Jones, 65, Mr. Jones was appointed to the Board of Director in July 2013. Since January 2014, Mr. Jones has been the Consultant to the CEO of West Virginia United Health System. He was the Chief Executive Officer of West Virginia United Health System located in Fairmont, West Virginia, from 2003 until January 2014. During his tenure at United Health System, he oversaw its expansion from two hospitals—Ruby Memorial in Morgantown and United Hospital Center in Clarksburg—to include hospitals in Morgantown, Ranson and Parkersburg and become the largest health system in the state, employing over 10,000 people on 6 campuses. Mr. Jones is also a director of Arch Coal, Inc. and, in 2014, was appointed to The Board of Governors of West Virginia University. He has also been active in the state’s business community, and was inducted in 2012 into the West Virginia Business Hall of Fame. He has been chair of the Board of Directors of the West Virginia Chamber of Commerce, and has served on the boards of the American Hospital Association, the West Virginia Higher Education Policy Commission and many other local, state, and national groups. In 2008, WV Executive magazine named Jones one of the 50 Most Influential Leaders in West Virginia. The Governance Committee nominated Mr. Jones based upon his business experience running a large, complex organization as well as his extensive knowledge of the Morgantown and central WV markets. Mr. Jones owns, directly or indirectly, 2,578 shares of City Holding Company common stock.
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James L. Rossi, 60, has served as a director since 2001(2). Mr. Rossi, a licensed CPA, received his Bachelor’s degree from West Virginia University. Mr. Rossi maintained his own public accounting firm, James Rossi, CPA from September 1978 to July 2008. From July 2008 until May 2013, Mr. Rossi was the Chief Financial Officer of Valtronics, Inc. (which manufactures products for commercial and industrial clients). Mr. Rossi also serves on the Board of Directors of Fruth Pharmacy, which operates 25 retail pharmacies in WV, KY and OH and employs over 600 people. The Governance Committee considers Mr. Rossi’s accounting background, and status as an accounting expert, a key reason why he has been nominated and elected to City’s Board of Directors. Additionally, Mr. Rossi joined the Board of Directors of The Peoples National Bank (formerly known as The Peoples Bank of Point Pleasant) in 1997, the Board of Directors of City National Bank in 1999 and the City Holding Company Board of Directors in 2001. The Governance Committee nominated Mr. Rossi based on his long experience on bank boards, his deep roots in Mason County, WV, and his knowledge regarding that local economy and its leaders. Mr. Rossi owns, directly or indirectly, 15,401 shares of City Holding Company common stock.
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CLASS II DIRECTORS (Directors whose terms expire in 2016)
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Charles W. Fairchilds, 67, Mr. Fairchilds was President of Allied Ready Mix Company in Waynesboro, VA from 1987 until his retirement in January 2009. In this role, he was responsible for all aspects of three operating divisions that specialized in construction materials and employed over 150 people. Prior to joining Allied Ready Mix Company, Mr. Fairchilds owned and operated his own machine shop business in Waynesboro, VA for over three years. He started his manufacturing career with Cummins Engine Company in 1973, holding various manufacturing positions within the company, including serving as Plant Manager of the Columbus Engine Plant which had over a million square feet of space and housed 5,500 employees, until his departure in 1983. During his time in Waynesboro and Augusta County (Virginia), Mr. Fairchilds served his community in a variety of different roles including President of the Waynesboro YMCA and the Waynesboro/East Augusta Chamber of Commerce. He earned his MBA at the University of Virginia. Mr. Fairchilds previously served on the Board of Directors of Community Bank (“Community”), Staunton, VA beginning in 1996 until its merger with City Holding Company in January 2013. Additionally, he served as Chairman of the Audit Committee of Community. The Governance Committee believes that due to his education and professional experiences, Mr. Fairchilds will bring strong leadership, management, finance and accounting skills to the Company’s Board. Mr. Fairchilds owns, directly or indirectly, 6,957 shares of City Holding Company common stock.
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William H. File III, 67, has served as a director since 2001(2). Mr. File received a Bachelor’s degree (political science) from Lynchburg College, Virginia, and a Doctor of Jurisprudence (law) degree from West Virginia University College of Law. Mr. File is a member of the firm File Payne Scherer & File PLLC and is the City Solicitor for Beckley, West Virginia. Mr. File was first elected to the Bank of Raleigh Board of Directors in 1984. He was a member of the Board of Horizon Bancorp, Inc. from 1993 until its merger with City Holding Company on December 31, 1998; and, subsequently, he has been a member of the City National Bank and City Holding Company Boards until the present date. He is Chairman of the West Virginia Educational Broadcasting Authority that oversees public television and public radio in West Virginia, and is Past President of the Board of the Beckley Area Foundation, a 34 million dollar community foundation, serving the Raleigh County market. Mr. File has deep knowledge of the Raleigh County economy and local leaders. The Governance Committee of the Board nominated Mr. File based upon his legal expertise, his knowledge of the Raleigh County market, and his long tenure on bank boards. Mr. File owns, directly or indirectly, 23,046 shares of City Holding Company common stock.
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Tracy W. Hylton II, 66, has served as a director since 1993(1). Mr. Hylton is the President of Eller, Inc., a construction and reclamation company; President of Patience, Inc., a surface coal mining operation; and President of Lightning, Inc., a lease holding and coal sales company. Mr. Hylton has a number of business interests including those in coal, automotive retailing, retail and real estate. Through these business interests he has knowledge of, and contacts with, many other business people around West Virginia. He is active with a number of civic organizations, including the Raleigh County YMCA. Mr. Hylton joined the board of the Bank of Raleigh in 1984, the board of Horizon Bancorp, Inc. in 1993, and subsequent to the merger with City Holding on December, 31, 1998, the City Holding Company Board. Mr. Hylton has deep business contacts and knowledge of the West Virginia and Raleigh County marketplace. The Governance Committee of the Board nominated Mr. Hylton based upon his varied business interests, knowledge, and contacts, his knowledge of the Raleigh County market, and his experience on bank boards. Mr. Hylton owns, directly or indirectly, 51,765 shares of City Holding Company common stock.
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C. Dallas Kayser, 63, has served as a director since 1995. Mr. Kayser received a Bachelor’s degree (economics) from Marshall University and a Doctor of Jurisprudence degree (law) from West Virginia University College of Law. Mr. Kayser is the Senior Partner of Kayser, Layne & Clark PLLC of Point Pleasant, WV and has been in the practice of law in Mason County for many years. He serves as Treasurer of Deerfield Development Company. In addition, he has served as Chairman of the Board of Trustees of the United Methodist Foundation of West Virginia, Inc., and has served as Treasurer, and on its Executive, Compensation, Audit and Investment Committees. As such, he is knowledgeable about the economy and leaders of this market. Mr. Kayser was first nominated to the Board of The Peoples National Bank (formerly known as The Peoples Bank of Point Pleasant) in 1987 and subsequently to the City Holding Company Board in 1995. As Chairman of City’s Compensation Committee, Mr. Kayser has attended a significant number of continuing board education workshops and conferences regarding compensation and has been a guest speaker at director education conferences in both Chicago, IL and Nashville, TN. The Governance Committee nominated Mr. Kayser based upon his legal background, his knowledge of the business community of Mason County gained as an attorney, and his experience on bank boards. Mr. Kayser owns, directly or indirectly, 20,592 shares of City Holding Company common stock.
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Sharon H. Rowe, 64, has served as a director since 2001(2). Mrs. Rowe attended West Virginia University. In February 2013, Ms. Rowe formed a limited liability corporation, SHR Consulting, LLC, which provides public relations, marketing and events planning services. She retired as Vice President of Communications of The Greenbrier Resort and Club Management Company in 2005 after 27 years with the company and subsequently served as a senior consultant to two marketing communications firms until forming SHR Consulting, LLC. Mrs. Rowe joined the Board of the Greenbrier Valley National Bank and Horizon Bancorp, Inc. in 1996, the Board of City National Bank of West Virginia in 1999 and, subsequently, in 2001, the City Holding Company Board of Directors. A recognized leader in West Virginia’s tourism industry, she serves on the West Virginia Tourism Commission and is past chair and member of the board of directors of the West Virginia Hospitality and Travel Association. Mrs. Rowe serves as a director on numerous boards in West Virginia including the Clay Center for the Arts and Sciences, The Mary Babb Randolph Cancer Center Board of Visitors, Greenbrier County Convention and Visitors Bureau and is a Director Emeritus of both HospiceCare and The Education Alliance. The Governance Committee of the Board nominated Mrs. Rowe based upon her marketing and communications experience, prior bank board service and her statewide involvement. Mrs. Rowe owns, directly or indirectly, 10,569 shares of City Holding Company common stock.
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CLASS III DIRECTORS (Directors whose terms expire in 2017)
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Robert D. Fisher, 62, has served as a director since 1994. Mr. Fisher received a Bachelor’s degree (finance) from West Virginia University and a Doctor of Jurisprudence degree (law) from West Virginia University College of Law. He is the managing member of Adams, Fisher & Chappell, PLLC in Ripley, WV. Mr. Fisher is active and well known in the legal community in West Virginia, having served as President of The West Virginia Bar from 2006 to 2007. Mr. Fisher joined the board of Bank of Ripley in 1987 and, subsequent to its merger with City Holding Company, the City Holding Company Board in 1994. Mr. Fisher serves as Chairman of the Company’s Legal Oversight Committee. He lives in the Jackson County market and is very active in community affairs, providing him knowledge of the community and its leaders. The Governance Committee of the Board nominated Mr. Fisher based upon his legal expertise, his community experience and his prior board service. Mr. Fisher owns, directly or indirectly, 22,262 shares of City Holding Company common stock.
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Jay C. Goldman, 71, has served as a director since 1988. Mr. Goldman received Bachelor’s degrees (business administration and real estate) from Morris Harvey College and the University of Charleston, respectively, and a Doctor of Jurisprudence degree (law) from West Virginia University. Mr. Goldman is a licensed and State-certified real estate appraiser and licensed real estate broker, as well as a member of the WV State Bar. He serves on the Board of Directors of the West Virginia Chamber of Commerce and as a trustee of the University of Charleston. Mr. Goldman is currently President of Goldman Associates, Inc., a real-estate firm based in Charleston, WV providing real-estate brokerage, appraisals, and consulting services. As a result, Mr. Goldman’s knowledge regarding real estate and construction throughout West Virginia is extensive and highly beneficial to City. Mr. Goldman’s knowledge of the economy and leaders throughout the State of WV is also exceptionally strong. Mr. Goldman served as a Municipal Judge for the City of Charleston and as Mayor of Charleston, WV from 1999 until 2003. He is, therefore, knowledgeable about political and municipal issues in West Virginia. Mr. Goldman joined the City National Bank Board of Directors in 1986 and the City Holding Company Board of Directors in 1988. As Chairman of City’s Governance and Nominating Committee, Mr. Goldman has attended numerous Continuing Education conferences on these topics. The Governance Committee of the Board nominated Mr. Goldman based upon his expertise in real estate which is an important industry for City’s commercial lending business, his knowledge of the WV economy and its leaders, his experience in governance matters, and his prior board experience. Mr. Goldman owns, directly or indirectly, 22,019 shares of City Holding Company common stock.
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Charles R. Hageboeck, 52, has served as a director since 2005. Mr. Hageboeck received a Ph.D. in Economics from Indiana University in 1991. He has spent most of his career in banking. He now serves as City’s Chief Executive Officer and President. Mr. Hageboeck was formerly with Indiana National Bank, NBD Bank, N.A., and Peoples Bank of Indianapolis. Mr. Hageboeck is the Chairman of the West Virginia Banker’s Association and serves on the Boards of the West Virginia Chamber of Commerce, the West Virginia Symphony Orchestra, and Thomas Health Systems. He is active in other civic and cultural organizations. In 2012, Mr. Hageboeck was recognized as a recipient of the State Journal’s prestigious “Who’s Who in West Virginia Business” award. Mr. Hageboeck was elected to City’s Board upon becoming CEO in 2005, and is the only management director on the Board. The Governance Committee of the Board nominated Mr. Hageboeck by virtue of his role as City’s Chief Executive Officer and due to his strong experience as an officer at both smaller and larger banking institutions. Mr. Hageboeck owns, directly or indirectly, 78,640 shares of City Holding Company common stock.
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Philip L. McLaughlin, 74, has served as a director since 1993(1). Mr. McLaughlin received a Bachelor's degree (mathematics) from the College of William and Mary University, Williamsburg, Virginia. He also completed the Stonier Graduate School of Banking program at Rutgers University. Mr. McLaughlin joined City Holding Company in December 1998 through the merger of Horizon Bancorp, Inc. into City Holding Company. He served as Chairman of the Board of City Holding Company from 1998 to 2002 and from 2007 until present; president and chief operating officer and director of Horizon Bancorp, Inc. from 1993 to 1998; and president and chief executive officer and director of Greenbrier Valley National Bank from 1971 to 1993. Complementing his years of banking experience, Mr. McLaughlin served on the Board of Directors of the Federal Reserve Bank of Richmond for three years. During his term he served on the bank audit committee with one year as chairman. He also served as president of the West Virginia Bankers Association. He has been involved with numerous charitable organizations and currently serves on two foundation boards. The Governance Committee nominated Mr. McLaughlin based upon his knowledge of the banking industry and, in particular, his long service to City and its predecessor Boards and the leadership that he has shown in his role as City's chairman. Mr. McLaughlin owns, directly or indirectly, 42,138 shares of City Holding Company common stock.
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(1)
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On December 31, 1998, the merger of Horizon Bancorp, Inc. (“Horizon”) into City Holding Company (“City Holding”) was consummated and certain directors of Horizon became directors of City Holding.
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Director
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Executive
Committee
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Audit
Committee
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Nominating
and
Governance
Committee
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Compensation
Committee
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Legal
Oversight
Committee
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Trust
Committee
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Independent*
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John R. Elliot
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-- | -- | X | X | -- | -- | X | |||||||||||||||||||||
Charles W. Fairchilds
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-- | X | -- | -- | -- | -- | X | |||||||||||||||||||||
William H. File III
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-- | -- | X | X | X | X | X | |||||||||||||||||||||
Robert D. Fisher (1)
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-- | -- | X | -- |
Chairman
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-- | X | |||||||||||||||||||||
Jay C. Goldman (1)
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X | -- |
Chairman
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-- | X | -- | X | |||||||||||||||||||||
Charles R. Hageboeck
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X | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
David W. Hambrick
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-- | X | -- | -- | X | -- | X | |||||||||||||||||||||
Tracy W. Hylton II
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-- | X | -- | -- | -- | X | X | |||||||||||||||||||||
J. Thomas Jones (2)
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-- | -- | -- | X | -- | -- | X | |||||||||||||||||||||
C. Dallas Kayser
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X | --- | X |
Chairman
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X | -- | X | |||||||||||||||||||||
Philip L. McLaughlin
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Chairman
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-- | -- | -- | -- | -- | X | |||||||||||||||||||||
James L. Rossi
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X |
Chairman
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-- | -- | -- | -- | X | |||||||||||||||||||||
Sharon H. Rowe
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-- | X | -- | -- | -- | -- | X | |||||||||||||||||||||
-- | ||||||||||||||||||||||||||||
Number of Meetings
Held in 2014
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2 | 6 | 1 | 4 | 1 | 2 | 12 |
*
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Director meets the independence requirements as defined in the listing standards of Nasdaq and SEC Regulations
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(1)
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Messrs. Fisher and Goldman were not reappointed to serve on the Compensation Committee following the 2014 Annual Meeting.
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(2)
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Mr. Jones was appointed to serve on the Compensation Committee following the 2014 Annual Meeting.
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Monthly Pension Benefit
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Pension Start Date
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Present Value of Benefit @ 12/31/14
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Expense Recognized In 2014 In Regard to Benefits
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William H. File III
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$ | 6,631 |
7/1/2017
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$ | 683,409 | $ | 42,151 | ||||||
Tracy W. Hylton II
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$ | 4,790 |
9/1/2018
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$ | 460,332 | $ | 28,392 |
DIRECTOR COMPENSATION
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Name
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Fees Earned
or Paid in
Cash
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Stock Awards
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Option Awards
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Non-Equity
Incentive
Plan
Compensation
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Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
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All Other
Compensation
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Total
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($)
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($)
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($)
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($)
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($)
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($)
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($)
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John R. Elliot
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27,250 | 24,983 | - | - | - | - | 52,233 | |||||||||||||||||||||
Charles W. Fairchilds
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29,000 | 24,983 | - | - | - | - | 53,983 | |||||||||||||||||||||
William H. File III
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30,500 | 24,983 | - | - | 42,151 | - | 97,634 | |||||||||||||||||||||
Robert D. Fisher
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28,250 | 24,983 | - | - | - | - | 53,233 | |||||||||||||||||||||
Jay C. Goldman
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34,750 | 24,983 | - | - | - | - | 59,733 | |||||||||||||||||||||
Charles R. Hageboeck (1)
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- | - | - | - | - | - | - | |||||||||||||||||||||
David W. Hambrick
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29,000 | 24,983 | - | - | - | - | 53,983 | |||||||||||||||||||||
Tracy W. Hylton II
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28,750 | 24,983 | - | - | 28,392 | - | 82,125 | |||||||||||||||||||||
J. Thomas Jones (2)
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25,250 | 12,492 | - | - | - | - | 37,742 | |||||||||||||||||||||
C. Dallas Kayser
|
35,500 | 24,983 | - | - | - | - | 60,483 | |||||||||||||||||||||
Philip L. McLaughlin
|
55,500 | 24,983 | - | - | - | - | 80,483 | |||||||||||||||||||||
James L. Rossi
|
40,500 | 24,983 | - | - | - | - | 65,483 | |||||||||||||||||||||
Sharon H. Rowe
|
29,000 | 24,983 | - | - | - | - | 53,983 |
Name
|
Age
|
Business Experience
|
|||
Charles R. Hageboeck
|
52 |
President and Chief Executive Officer, City Holding Company and City National Bank since February 2005. Executive Vice President and Chief Financial Officer, City Holding Company and City National Bank from June 2001 – January 2005.
|
|||
Craig G. Stilwell
|
59 |
Executive Vice President of Retail Banking, City Holding Company and City National Bank since February 2005. Executive Vice President of Marketing & Human Resources, City Holding Company and City National Bank May 2001 – February 2005.
|
|||
John A. DeRito
|
65 |
Executive Vice President of Commercial Banking, City Holding Company and City National Bank since June 2004.
|
|||
David L. Bumgarner
|
50 |
Senior Vice President and Chief Financial Officer, City Holding Company and City National Bank since February 2005.
|
|||
Jeffrey D. Legge
|
51 |
Senior Vice President, Chief Administrative Officer and Chief Information Officer, City Holding Company and City National Bank since December 2005.
|
|
|
Overview
|
|
Executive Summary
|
|
Financial and Strategic Highlights
|
·
|
Net income of $53.0 million
|
·
|
Return on Average Assets (“ROAA”) of 1.56%
|
·
|
Return on Average Tangible Common Equity (“ROATCE”) of 16.5%
|
·
|
Efficiency ratio of 53.7%
|
·
|
Net interest margin of 3.98%
|
·
|
Loan balances increased $46 million
|
·
|
Salaries: Salaries were set in 2014 based in part upon recommendations from an independent outside compensation consultant, McLagan, an Aon Hewitt Company.
|
·
|
Cash Incentives: The Company performed above targeted performance levels in 2014 and achieved its performance triggers relating to capital and asset quality. As a result, executives received cash incentives above the targeted payout levels. Awards were 110-142% of targeted payout levels.
|
·
|
Long-Term Incentives: The Company granted restricted stock and stock options in early 2014 based on Company and executive performance in 2013. Awards values were determined based on both formalized performance goals and the Board’s subjective assessment of Company and individual performance. Based on these factors, executives received equity equal to 157% of targeted payout levels.
|
|
Executive Compensation Philosophy
|
·
|
Reviewed and approved stock ownership requirements of named executive officers and directors, first effective in 2012
|
·
|
Hired an independent compensation consultant to assist in a review of executive compensation, and with their assistance:
|
o
|
Reviewed and approved the compensation peer group
|
o
|
Reviewed base salaries for the named executive officers
|
o
|
Reviewed the Company’s compensation philosophy
|
o
|
Reviewed and approved the 2014 cash incentive plan
|
o
|
Reviewed and approved equity awards to named executive officers
|
o
|
Reviewed and approved cash incentive payments for named executive officers
|
o
|
Reviewed the Compensation Committee charter
|
|
|
Role and Relationship of the Compensation Consultant
|
·
|
Reviewed and updated a peer group of institutions for compensation benchmarking
|
·
|
Compiled information relating to executive compensation from peer banks
|
·
|
Advised the Committee on changes in industry compensation practices and provided insight on emerging regulations
|
·
|
Provided recommendations to the Committee regarding salaries and the appropriate level of cash incentives and equity awards
|
·
|
Assisted in the re-design of the Company’s annual cash incentive and long-term equity incentive programs
|
·
|
Compiled information relating to board of director compensation from peer banks
|
·
|
Provided recommendations to the committee with regard to structure and amount of board of director compensation for 2014
|
·
|
Assisted in the development of the Company’s Compensation Discussion & Analysis in the 2013 proxy statement
|
|
Role of Management
|
|
Competitive Benchmarking and Peer Groups
|
·
|
National Peer Group – Publicly traded banks with total assets between $2 and $5 billion (105 banks as of December 31, 2014). This group was used for performance comparisons and was not used to conduct a formal market analysis of compensation.
|
·
|
Regional Peer Group – The Regional Peer Group was determined in 2013, with the assistance of McLagan, to reflect the company’s larger footprint due to two recent acquisitions. The committee reviewed the peer group during 2014. The peer group is comprised of 20 banks, and was based on the following criteria:
|
o
|
Asset size in the range of $2 billion - $8 billion
|
o
|
ROAA & ROAE > 0%
|
o
|
At least fifteen percent of revenues from non-interest income
|
o
|
No TARP participants
|
o
|
Commercial loans <85% of total loans
|
o
|
Branches >20
|
o
|
Operating in Indiana, Kentucky, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, and New York (excluding New York City)
|
§
|
excludes companies in top 5 metro areas (MSA’s)
|
§
|
excludes thrifts
|
§
|
excludes thinly traded companies
|
o
|
No targets of announced mergers (excluding Union First Market Bankshares Corporation and StellarOne Corporation)
|
1st Source Corporation (IN, SRCE)
|
BNC Bancorp (NC, BNCN)
|
Cardinal Financial Corporation (VA, CFNL)
|
Community Trust Bancorp Inc. (KY, CTBI)
|
Financial Institutions, Inc. (NY, FISI)
|
First Commonwealth Financial Corporation (PA, FCF)
|
First Community Bancshares Inc. (VA, FCBC)
|
First Financial Corporation (IN, THFF)
|
First Merchants Corporation (IN, FRME)
|
MainSource Financial Group, Inc. (IN, MSFG)
|
Metro Bancorp, Inc. (PA, METR)
|
Republic Bancorp Inc. (KY, RBCAA)
|
S&T Bancorp, Inc. (PA, STBA)
|
S.Y. Bancorp, Inc (KY, SYBT)
|
Sandy Spring Bancorp, Inc. (MD, SASR)
|
South State Corporation (SSB)
|
Tompkins Financial Corp (NY, TMP)
|
Union First Market Bankshares Corporation (VA, UBSH)
|
Univest Corp. of Pennsylvania (PA, UVSP)
|
WesBanco Inc. (WV, WSBC)
|
Performance Measures – 2013
|
CHCO
|
National
Peer Group
(Median)
|
CHCO to National
Peer Group
(Percentile Rank)
|
Regional
Peer Group
(Median)
|
CHCO to Regional
Peer Group
(Percentile Rank)
|
|||||||||||||||
Total Assets
|
$ | 3.5B | $ | 3.1B | 64 | % | $ | 3.7 B | 38 | % | ||||||||||
Net Income
|
$ | 53.0M | $ | 25.0M | 91 | % | $ | 38.2M | 71 | % | ||||||||||
ROAA
|
1.56 | % | 0.87 | % | 95 | % | 1.01 | % | 95 | % | ||||||||||
ROATCE
|
16.5 | % | 9.9 | % | 95 | % | 11.6 | % | 95 | % | ||||||||||
Number of Branches
|
82 | 40 | 91 | % | 68 | 67 | % |
|
Discussion of Executive Compensation Components
|
Compensation Element
|
Description
and Purpose
|
Link to Performance
|
Fixed/
Performance Based
|
Short/Long-Term
|
Base Salary
|
Helps attract and retain executives through periodic payments of market-competitive base pay
|
Based on individual performance, experience, and scope of responsibility. Used to establish cash and equity incentive award opportunities.
|
Fixed
|
Short-Term
|
Cash Incentives
|
Encourages achievement of financial performance metrics that create near-term shareholder value
|
Quantitatively ties the executive’s compensation directly to factors that are judged important to the success of the Company and within each executive’s own sphere of influence.
Most executives share a common profitability goal, while a portion of the incentive plan for the EVP Commercial Banking is tied to commercial loan growth.
Incentives for all executives are conditioned on additional performance triggers that help ensure Company remains positioned to perform over the long-term.
|
Performance Based
|
Short-Term
|
Long-Term Incentive Awards
|
Aligns long-term interests of executives and shareholders while creating a retention incentive through multi-year vesting
|
Grant values are based partially on the achievement of predefined Company performance objectives and partially on the Board’s subjective evaluation of performance.
Resulting awards are designed to maintain a link to the long-term interests of shareholders and emphasize long-term demonstrated financial performance through a tie to the Company’s stock price and dividend payments.
|
Performance Based
|
Long-Term
|
Other Compensation
|
Dividends on restricted stock and health and welfare benefits on the same basis as other employees
|
Dividends on restricted stock further enhance the executive’s link to shareholders by ensuring they share in the distribution of income generated from ongoing financial performance.
|
Fixed & Performance Based
|
Short-Term & Long-Term
|
Name
|
Title
|
2012
Salary
|
2013
Salary
|
2014
Salary
|
|||||||||
Charles R. Hageboeck
|
President & CEO
|
$ | 450,000 | $ | 460,000 | $ | 500,000 | ||||||
David L. Bumgarner
|
Chief Financial Officer
|
195,000 | 200,000 | 207,000 | |||||||||
Craig G. Stilwell
|
EVP, Retail Banking
|
275,000 | 285,000 | 330,000 | |||||||||
John A. DeRito
|
EVP, Commercial Banking
|
230,000 | 238,000 | 250,000 | |||||||||
Jeffrey D. Legge
|
SVP Operations/CIO
|
- | 158,000 | 175,000 |
Name
|
Title
|
Goal Weighting
|
Charles R. Hageboeck
|
President & CEO
|
100% ROATCE
|
David L. Bumgarner
|
Chief Financial Officer
|
100% ROATCE
|
Craig G. Stilwell
|
EVP, Retail Banking
|
100% ROATCE
|
John A. DeRito
|
EVP, Commercial Banking
|
50% ROATCE
50% Commercial Loan Growth
|
Jeffrey D. Legge
|
SVP Operations/CIO
|
100% ROATCE
|
2014 Performance Goal
|
||||||||||||||||
Threshold
|
Target
|
Maximum
|
Actual 2014 Result
|
|||||||||||||
ROATCE*
|
8 | % | 14 | % | 20 | % | 16.5 | % | ||||||||
Average Commercial Loan Growth (Mr. DeRito only)**
|
-- | 2.25 | % | -- | 1.0 | % | ||||||||||
Performance Triggers – Payment of incentives are subject to the following conditions
|
||||||||||||||||
Company must receive “well-capitalized” rating by primary regulators (achieved in 2014)
Ratio of non-performing assets to total assets cannot exceed 4.84% (achieved in 2014)
|
2014 ROATCE
|
||||
Reported Income Before Income Taxes
|
$ | 77,233 | ||
Income Taxes
|
24,271 | |||
Adjusted Net Income
|
$ | 52,962 | ||
Average Equity
|
$ | 395,940 | ||
Average Intangible Assets
|
74,698 | |||
Average Tangible Equity
|
$ | 321,242 | ||
Return on Average Tangible Common Equity
|
16.5 | % |
Cash Incentive Award Opportunity as % of Salary
|
Actual 2014 Award
|
|||||||||||||||||||
Name
|
Threshold
|
Target
|
Maximum
|
(% of salary)
|
($)
|
|||||||||||||||
Charles R. Hageboeck
|
0 | % | 45 | % | 90 | % | 64 | % | 318,375 | |||||||||||
David L. Bumgarner
|
0 | % | 25 | % | 50 | % | 35 | % | 73,226 | |||||||||||
Craig G. Stilwell
|
0 | % | 35 | % | 70 | % | 50 | % | 163,433 | |||||||||||
John A. DeRito
|
0 | % | 35 | % | 70 | % | 39 | % | 96,533 | |||||||||||
Jeffrey D. Legge
|
0 | % | 25 | % | 50 | % | 35 | % | 61,906 |
Stock Options
|
Options derive their value through price-appreciation only and therefore, motivate executives to increase stock price. The Company does not weight options as heavily as restricted stock in the total (30% of 2014 equity grant)
|
Restricted Stock
|
Restricted stock rewards executives for long-term stock price increases and preserves alignment with shareholders throughout all stock price performance conditions—both above and below the price on the date of grant. The Committee has chosen to emphasize restricted stock (70% of 2014 equity grant) to ensure that a majority of each executive’s long-term compensation remains aligned with shareholders even during periods of general market decline.
|
Vesting
|
The Board established a five-year vesting period to encourage the executive to remain a part of and contribute to the Company’s long-term success. Both stock options and restricted stock vest in three equal parts-three, four, and five years from the date of grant. Additionally, stock options and restricted stock awarded in 2014 will only vest if the Company earns an average ROAA over the vesting period that equal to or greater than the median ROAA for all banks over the immediately preceding twenty (20) year period, provided, however, that all merger and acquisition expenses and any losses on a legacy venture capital investment are excluded from such calculation. Executives would forfeit unvested shares upon leaving the Company’s employment prior to the completion of the vesting period.
|
Dividends
|
The Company provides dividends on restricted stock to allow executives to share in the distribution of income generated from the Company’s ongoing financial performance and further align the interests of the executives with those of shareholders.
Dividend payments ensure that executives are immediately affected by any decrease or increase in the Company’s dividend payments.
|
Timing of Awards
|
The Compensation Committee has adopted a general practice of providing long-term incentive awards to executives annually in conjunction with the payment of cash incentives based on the performance of the Company and the executive in the previous year, typically in February or March of each year. However, the Committee may consider recommendations for stock grants to the Company’s executive officers at any time, at its own discretion, and as circumstances necessitate.
|
Pricing of Awards
|
It is the Company’s policy that the exercise price of all option and restricted stock grants be equal to the closing price of the Company’s common stock on the date the option or restricted stock is granted.
|
Name
|
Title
|
Goal Weighting
|
Charles R. Hageboeck
|
President & CEO
|
50% ROATCE (2013)
50% Board Discretion
|
David L. Bumgarner
|
Chief Financial Officer
|
50% ROATCE (2013)
50% Board Discretion
|
Craig G. Stilwell
|
EVP, Retail Banking
|
50% ROATCE (2013)
50% Board Discretion
|
John A. DeRito
|
EVP, Commercial Banking
|
25% ROATCE (2013)
25% Commercial Loan Growth (2013)
50% Board Discretion
|
Jeffrey D. Legge
|
SVP Operations/CIO
|
25% ROATCE (2013)
|
2013 Performance Goals
|
||||||||||||||||
Threshold
|
Target
|
Maximum
|
Actual 2013 Result
|
|||||||||||||
ROATCE*
|
8 | % | 14 | % | 20 | % | 17.4 | % | ||||||||
Commercial Loan Growth (Mr. DeRito only)
|
-- | 2.5 | % | -- | 7.3 | % |
2013 ROATCE – Reconciliation for expenses associated with acquisition
|
||||
Reported Income Before Income Taxes
|
$ | 73,490 | ||
Merger Expenses
|
5,526 | |||
Adjusted Reported Income Before Income Taxes
|
79,016 | |||
Income Taxes
|
27,176 | |||
Adjusted Net Income
|
$ | 51,840 | ||
Average Equity
|
$ | 373,102 | ||
Average Intangible Assets
|
75,453 | |||
Average Tangible Equity
|
$ | 297,649 | ||
Return on Average Tangible Common Equity
|
17.4 | % |
Total Long-Term Incentive Award Opportunity as % of Salary
|
Actual 2014 Award
|
|||||||||||||||||||||||||||
Name
|
Threshold
|
Target
|
Maximum
|
(% of salary)
|
Grant Date Fair Value ($)
|
# Options
|
# Restricted Shares
|
|||||||||||||||||||||
Charles R. Hageboeck
|
0 | % | 45 | % | 90 | % | 57 | % | 260,157 | 6,026 | 5,123 | |||||||||||||||||
David L. Bumgarner
|
0 | % | 25 | % | 50 | % | 31 | % | 62,812 | 1,455 | 1,237 | |||||||||||||||||
Craig G. Stilwell
|
0 | % | 35 | % | 70 | % | 44 | % | 125,280 | 2,902 | 2,467 | |||||||||||||||||
John A. DeRito
|
0 | % | 35 | % | 70 | % | 44 | % | 104,502 | 2,421 | 2,058 | |||||||||||||||||
Jeffrey D. Legge
|
0 | % | 25 | % | 50 | % | 31 | % | 49,610 | 1,149 | 977 |
·
|
President & CEO – 2x base salary
|
·
|
Other Named Executive Officers – 1x base salary
|
SUMMARY COMPENSATION
|
|||||||||||||||||||||||||||||||||
Name and
Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive
Plan
Compensation
|
Change
In
Pension
Value
and Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation (1)
|
Total
|
||||||||||||||||||||||||
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||||||||||||||||||||||||||
Charles R. Hageboeck
|
2014
|
500,000 | - | 227,615 | 32,542 | 318,375 | - | 74,357 | 1,152,889 | ||||||||||||||||||||||||
President, Chief Executive Officer and Director
|
2013
|
460,000 | - | 193,002 | 76,534 | 325,191 | - | 64,587 | 1,119,314 | ||||||||||||||||||||||||
(Principal Executive Officer)
|
2012
|
450,000 | - | 180,984 | 77,554 | 263,588 | - | 55,025 | 1,027,151 | ||||||||||||||||||||||||
David L. Bumgarner
|
2014
|
207,000 | - | 54,960 | 7,852 | 73,226 | - | 25,985 | 369,023 | ||||||||||||||||||||||||
Chief Financial Officer
|
2013
|
200,000 | - | 44,118 | 17,494 | 78,500 | - | 23,211 | 363,323 | ||||||||||||||||||||||||
(Principal Financial Officer)
|
2012
|
195,000 | - | 41,371 | 17,727 | 63,416 | - | 22,004 | 339,518 | ||||||||||||||||||||||||
Craig G. Stilwell
|
2014
|
330,000 | - | 109,608 | 15,672 | 163,433 | - | 41,459 | 660,172 | ||||||||||||||||||||||||
Executive Vice President, Retail Banking
|
2013
|
285,000 | - | 91,746 | 36,383 | 156,608 | - | 37,229 | 606,966 | ||||||||||||||||||||||||
2012
|
275,000 | - | 86,033 | 36,868 | 125,342 | - | 33,478 | 556,721 | |||||||||||||||||||||||||
John A. DeRito
|
2014
|
250,000 | - | 91,437 | 13,065 | 96,533 | - | 38,056 | 489,091 | ||||||||||||||||||||||||
Executive Vice President, Commercial Banking
|
2013
|
238,000 | - | 76,235 | 30,229 | 130,627 | - | 34,240 | 509,331 | ||||||||||||||||||||||||
2012
|
230,000 | - | 71,488 | 30,632 | 103,135 | - | 30,200 | 465,455 | |||||||||||||||||||||||||
Jeffrey D. Legge
|
2014
|
175,000 | - | 43,409 | 6,201 | 61,906 | - | 14,347 | 300,863 | ||||||||||||||||||||||||
Senior Vice President, Operations/CIO
|
2013
|
158,000 | - | 99,178 | 13,455 | 62,015 | - | 10,378 | 343,026 | ||||||||||||||||||||||||
(1)
|
“All Other Compensation” for 2012, 2013 and 2014 consists of the following: (i) the Company’s matching contribution under the City Holding Company 401(k) Plan & Trust, (ii) group term life insurance premium payments, and (iii) dividends paid on restricted shares.
|
ACTUAL CASH EQUIVALENT COMPENSATION
|
|||||||||||||||||||||||||||||
Name and
Principal Position
|
Year
|
Salary
|
Bonus
|
Vested Restricted Stock
Awards
|
Exercise of Stock Option
Awards
|
Cash
Incentive
Compensation
|
Dividends
on Restricted Stock
|
Total
|
|||||||||||||||||||||
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||||
Charles R. Hageboeck
|
2014
|
500,000 | - | 91,300 | 109,375 | 318,375 | 64,158 | 1,083,208 | |||||||||||||||||||||
President, Chief Executive Officer and Director
|
2013
|
460,000 | - | - | 571,721 | 325,191 | 54,388 | 1,411,300 | |||||||||||||||||||||
(Principal Executive Officer)
|
2012
|
450,000 | - | - | 51,411 | 263,588 | 44,920 | 809,919 | |||||||||||||||||||||
2011
|
450,000 | - | - | - | 258,525 | 37,740 | 746,265 | ||||||||||||||||||||||
2010
|
415,000 | - | - | - | 104,165 | 35,020 | 554,185 | ||||||||||||||||||||||
David L. Bumgarner
|
2014
|
207,000 | - | 29,373 | 19,550 | 73,226 | 16,660 | 346,109 | |||||||||||||||||||||
Chief Financial Officer
|
2013
|
200,000 | - | 13,972 | 73,267 | 78,500 | 14,551 | 380,290 | |||||||||||||||||||||
(Principal Financial Officer)
|
2012
|
195,000 | - | 87,150 | - | 63,416 | 13,547 | 359,113 | |||||||||||||||||||||
2011
|
195,000 | - | - | - | 62,217 | 14,297 | 271,514 | ||||||||||||||||||||||
2010
|
172,500 | - | - | - | 30,308 | 13,413 | 216,221 | ||||||||||||||||||||||
Craig G. Stilwell
|
2014
|
330,000 | - | 45,650 | - | 163,433 | 30,000 | 569,083 | |||||||||||||||||||||
Executive Vice President, Retail Banking
|
2013
|
285,000 | - | 29,940 | 88,684 | 156,608 | 25,673 | 585,905 | |||||||||||||||||||||
2012
|
275,000 | - | - | 47,716 | 125,342 | 21,978 | 470,036 | ||||||||||||||||||||||
2011
|
275,000 | - | - | - | 122,909 | 18,530 | 416,439 | ||||||||||||||||||||||
2010
|
245,000 | - | - | - | 61,495 | 17,170 | 323,665 | ||||||||||||||||||||||
John A. DeRito
|
2014
|
250,000 | - | 38,803 | - | 96,533 | 25,180 | 410,516 | |||||||||||||||||||||
Executive Vice President, Commercial Banking
|
2013
|
238,000 | - | 25,948 | 53,541 | 130,627 | 21,580 | 469,696 | |||||||||||||||||||||
2012
|
230,000 | - | 87,150 | - | 103,135 | 19,376 | 439,661 | ||||||||||||||||||||||
2011
|
230,000 | - | - | - | 102,118 | 18,972 | 351,090 | ||||||||||||||||||||||
2010
|
205,000 | - | - | - | 56,134 | 17,663 | 278,797 | ||||||||||||||||||||||
Jeffrey D. Legge (1)
|
2014
|
175,000 | - | 18,260 | 18,825 | 61,906 | 8,147 | 282,138 | |||||||||||||||||||||
Senior Vice President, Operations/CIO
|
2013
|
158,000 | - | 13,972 | 8,655 | 62,015 | 5,105 | 247,747 |
(1)
|
Mr. Legge was named as an executive officer of the Company as of February 26, 2014.
|
Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
|||||||||||||||||||||
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
|||||||||||||||
($)
|
($)
|
($)
|
(# | ) | (# | ) | (# | ) | ||||||||||||||
Charles R. Hageboeck
|
|
none
|
225,000 | 450,000 | ||||||||||||||||||
(Principal Executive Officer)
|
|
|||||||||||||||||||||
David L. Bumgarner
|
|
none
|
51,750 | 103,500 | ||||||||||||||||||
(Principal Financial Officer)
|
|
|||||||||||||||||||||
Craig G. Stilwell
|
none
|
115,500 | 231,000 | |||||||||||||||||||
|
||||||||||||||||||||||
John A. DeRito
|
|
none
|
87,500 | 175,000 | ||||||||||||||||||
|
||||||||||||||||||||||
Jeffrey D. Legge
|
|
none
|
43,750 | 87,500 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
||||||||||||||||||||||||||||||||||||||||
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
|
Number of
Securities
Underlying
Unexercised
Options
|
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Vesting Date
|
Number
of Shares
of Units
of Stock
That
Have Not
Vested
|
Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares, or
Other
Rights
That Have
Not
Vested
|
||||||||||||||||||||||||||||||
(# | ) | (# | ) | (# | ) |
($)
|
(# | ) |
($)
|
(# | ) |
($)
|
||||||||||||||||||||||||||||
Exerciseable
|
Unexerciseable
|
|||||||||||||||||||||||||||||||||||||||
Charles R. Hageboeck
|
37,500 | - | - | 39.340 |
2/27/2017
|
- | - | - | - | - | ||||||||||||||||||||||||||||||
(Principal Executive Officer)
|
- | - | - | - | - | (1) | 22,250 | 1,035,293 | - | - | ||||||||||||||||||||||||||||||
- | 6,250 | - | 32.090 |
2/25/2020
|
2/26/2015
|
2,000 | 93,060 | - | - | |||||||||||||||||||||||||||||||
- | 6,250 | - | 35.090 |
3/29/2021
|
3/29/2016
|
2,000 | 93,060 | - | - | |||||||||||||||||||||||||||||||
- | 2,008 | - | 44.430 |
3/25/2024
|
3/26/2017
|
1,707 | 79,427 | - | - | |||||||||||||||||||||||||||||||
- | 6,803 | - | 35.390 |
3/27/2022
|
3/28/2017
|
5,114 | 237,954 | - | - | |||||||||||||||||||||||||||||||
- | 6,803 | - | 37.740 |
2/26/2023
|
2/26/2018
|
5,114 | 237,954 | - | - | |||||||||||||||||||||||||||||||
- | 2,008 | - | 44.430 |
3/25/2024
|
3/26/2018
|
1,707 | 79,427 | - | - | |||||||||||||||||||||||||||||||
- | 2,010 | - | 44.430 |
3/25/2024
|
3/26/2019
|
1,709 | 79,520 | - | - | |||||||||||||||||||||||||||||||
David L. Bumgarner
|
1,500 | - | - | 40.880 |
3/25/2018
|
- | - | - | - | - | ||||||||||||||||||||||||||||||
(Principal Financial Officer)
|
- | - | - | - | - | (2) | 5,875 | 273,364 | - | - | ||||||||||||||||||||||||||||||
- | 1,250 | - | 32.090 |
2/25/2020
|
2/26/2015
|
650 | 30,245 | - | - | |||||||||||||||||||||||||||||||
- | 1,250 | - | 35.090 |
3/29/2021
|
3/29/2016
|
650 | 30,245 | - | - | |||||||||||||||||||||||||||||||
- | 485 | - | 44.430 |
3/25/2024
|
3/26/2017
|
412 | 19,170 | - | - | |||||||||||||||||||||||||||||||
- | 1,555 | - | 35.390 |
3/27/2022
|
3/28/2017
|
1,169 | 54,394 | - | - | |||||||||||||||||||||||||||||||
- | 1,555 | - | 37.740 |
2/26/2023
|
2/26/2018
|
1,169 | 54,394 | - | - | |||||||||||||||||||||||||||||||
- | 485 | - | 44.430 |
3/25/2024
|
3/26/2018
|
412 | 19,170 | - | - | |||||||||||||||||||||||||||||||
- | 485 | - | 44.430 |
3/25/2024
|
3/26/2019
|
413 | 19,217 | - | - | |||||||||||||||||||||||||||||||
Craig G. Stilwell
|
10,000 | - | - | 39.340 |
2/27/2017
|
- | - | - | - | - | ||||||||||||||||||||||||||||||
3,000 | - | - | 40.880 |
3/25/2018
|
- | - | - | - | - | |||||||||||||||||||||||||||||||
3,000 | - | - | 28.150 |
3/24/2019
|
3/25/2014
|
- | - | - | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | (3) | 10,125 | 471,116 | - | - | |||||||||||||||||||||||||||||||
- | 3,000 | - | 32.090 |
2/25/2020
|
2/26/2015
|
1,000 | 46,530 | - | - | |||||||||||||||||||||||||||||||
- | 3,000 | - | 35.090 |
3/29/2021
|
3/29/2016
|
1,000 | 46,530 | - | - | |||||||||||||||||||||||||||||||
- | 967 | - | 44.430 |
3/25/2024
|
3/26/2017
|
822 | 38,248 | - | - | |||||||||||||||||||||||||||||||
- | 3,234 | - | 35.390 |
3/27/2022
|
3/28/2017
|
2,431 | 113,114 | - | - | |||||||||||||||||||||||||||||||
- | 3,234 | - | 37.740 |
2/26/2023
|
2/26/2018
|
2,431 | 113,114 | - | - | |||||||||||||||||||||||||||||||
- | 967 | - | 44.430 |
3/25/2024
|
3/26/2018
|
822 | 38,248 | - | - | |||||||||||||||||||||||||||||||
- | 968 | - | 44.430 |
3/25/2024
|
3/26/2019
|
823 | 38,294 | - | - | |||||||||||||||||||||||||||||||
John A. DeRito
|
5,000 | - | - | 30.650 |
2/22/2015
|
- | - | - | - | - | ||||||||||||||||||||||||||||||
5,000 | - | - | 36.900 |
12/20/2015
|
- | - | - | - | - | |||||||||||||||||||||||||||||||
2,500 | - | - | 40.880 |
3/25/2018
|
- | - | - | - | - | |||||||||||||||||||||||||||||||
2,500 | - | - | 28.150 |
3/24/2019
|
- | - | - | - | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | (4) | 8,375 | 389,689 | - | - | |||||||||||||||||||||||||||||||
- | 2,500 | - | 32.090 |
2/25/2020
|
2/26/2015
|
850 | 39,551 | - | - | |||||||||||||||||||||||||||||||
- | 3,000 | - | 35.090 |
3/29/2021
|
3/29/2016
|
1,000 | 46,530 | - | - | |||||||||||||||||||||||||||||||
- | 807 | - | 44.430 |
3/25/2024
|
3/26/2017
|
686 | 31,920 | - | - | |||||||||||||||||||||||||||||||
- | 2,687 | - | 35.390 |
3/27/2022
|
3/28/2017
|
2,020 | 93,991 | - | - | |||||||||||||||||||||||||||||||
- | 2,687 | - | 37.740 |
2/26/2023
|
2/26/2018
|
2,020 | 93,991 | - | - | |||||||||||||||||||||||||||||||
- | 807 | - | 44.430 |
3/25/2024
|
3/26/2018
|
686 | 31,920 | - | - | |||||||||||||||||||||||||||||||
- | 807 | - | 44.430 |
3/25/2024
|
3/26/2019
|
686 | 31,920 | - | - | |||||||||||||||||||||||||||||||
Jeffrey D. Legge
|
- | 1,250 | - | 32.090 |
2/25/2020
|
2/26/2015
|
400 | 18,612 | - | - | ||||||||||||||||||||||||||||||
- | 1,250 | - | 35.090 |
3/29/2021
|
3/29/2016
|
650 | 30,245 | - | - | |||||||||||||||||||||||||||||||
- | 383 | - | 44.430 |
3/25/2024
|
3/26/2017
|
325 | 15,122 | - | - | |||||||||||||||||||||||||||||||
- | 1,196 | - | 35.390 |
3/27/2022
|
3/28/2017
|
899 | 41,830 | - | - | |||||||||||||||||||||||||||||||
- | 1,196 | - | 37.740 |
2/26/2023
|
2/26/2018
|
899 | 41,830 | - | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | (5) | 1,500 | 69,795 | - | - | |||||||||||||||||||||||||||||||
- | 383 | - | 44.430 |
3/25/2024
|
3/26/2018
|
325 | 15,122 | - | - | |||||||||||||||||||||||||||||||
- | 383 | - | 44.430 |
3/25/2024
|
3/26/2019
|
327 | 15,215 | - | - |
(1)
|
Mr. Hageboeck was awarded 22,250 shares of restricted stock on 4/29/2009. Those restricted shares will vest as follows: 4/30/2016 – 2,000 shares; 4/30/2017—4,000 shares; 4/30/2018—6,000 shares; 4/30/2019—10,250 shares. Cumulative vesting occurs on involuntary termination after a change of control as follows: before 4/30/2010—4,450 shares; 5/1/2010 to 4/30/2011—8,900 shares; 5/1/2011 to 4/30/2012—13,350 shares; 5/1/2012 to 4/30/2013—17,800 shares; after 5/1/2013—22,250 shares.
|
(2)
|
Mr. Bumgarner was awarded 5,875 shares of restricted stock on 7/15/2009. Those restricted shares will vest as follows: 7/15/2016 – 500 shares; 7/15/2017—500 shares; 7/15/2018—1,000 shares; 7/15/2019—1,000 shares; 7/15/2020—2,875 shares. Cumulative vesting occurs on involuntary termination after a change of control as follows: before 7/14/2010—1,175 shares; 7/15/2010 to 7/14/2011—2,350 shares; 7/15/2011 to 7/14/2012—3,525 shares; 7/15/2012 to 7/14/2013—4,700 shares; after 7/15/2013—5,875 shares.
|
(3)
|
Mr. Stilwell was awarded 10,125 shares of restricted stock on 4/29/2009. Those restricted shares will vest as follows: 4/30/2016 – 2,000 shares; 4/30/2017—2,500 shares; 4/30/2018—2,700 shares; 4/30/2019—2,925 shares. Cumulative vesting occurs on involuntary termination after a change of control as follows: before 4/30/2010—2,025 shares; 5/1/2010 to 4/30/2011—4,050 shares; 5/1/2011 to 4/30/2012—6,075 shares; 5/1/2012 to 4/30/2013—8,100 shares; after 5/1/2013—10,125 shares.
|
(4)
|
Mr. DeRito was awarded 8,375 shares of restricted stock on 4/29/2009. Those restricted shares will vest as follows: 4/30/2016 – 2,000 shares; 4/30/2017—2,000 shares; 4/30/2018—2,500 shares; 4/30/2019—1,875 shares. Cumulative vesting occurs on involuntary termination after a change of control as follows: before 4/30/2010—1,675 shares; 5/1/2010 to 4/30/2011—3,350 shares; 5/1/2011 to 4/30/2012—5,025 shares; 5/1/2012 to 4/30/2013—6,700 shares; after 5/1/2013—8,375 shares.
|
(5)
|
Mr. Legge was awarded 1,500 shares of restricted stock on 9/25/2013. Those restricted shares will vest as follows: 9/25/2021 – 500 shares; 9/25/2022—500 shares; 9/25/2023—500 shares. Cumulative vesting occurs on involuntary termination after a change of control as follows: before 9/25/2014—300 shares; 9/26/2014 to 9/25/2015—600 shares; 9/26/2015 to 9/25/2016—900 shares; 9/26/2017 to 9/25/2018—1,200 shares; after 9/26/2018—1,500 shares.
|
OPTION EXERCISES AND STOCK VESTED
|
||||||||||||||||
Option Awards
|
Stock Awards
|
|||||||||||||||
Name
|
Number of
Shares
Acquired
on Exercise
|
Value
Realized
Upon
Exercise
|
Number of
Shares
Acquired on
Vesting
|
Value
Realized
on
Vesting
|
||||||||||||
(# | ) |
($)
|
(# | ) |
($)
|
|||||||||||
Charles R. Hageboeck
|
6,250 | 109,375 | 2,000 | 91,300 | ||||||||||||
(Principal Executive Officer)
|
||||||||||||||||
David L. Bumgarner
|
1,250 | 19,550 | 650 | 29,673 | ||||||||||||
(Principal Financial Officer)
|
||||||||||||||||
Craig G. Stilwell
|
- | - | 1,000 | 45,650 | ||||||||||||
John A. DeRito
|
- | - | 850 | 38,803 | ||||||||||||
Jeffrey D. Legge
|
1,250 | 18,825 | 400 | 18,260 |
POST-EMPLOYMENT PAYMENTS – HAGEBOECK
|
||||||||||||||||||||||||||||
Executive Benefits and Payments
Upon Termination
|
Cash
Payments
($)
|
Health
Insurance
($)
|
Life
Insurance
($)
|
Option Awards
In-the-Money
($) (1)
|
Restricted Stock Awards
($)(6)
|
Tax
Gross-Up
($)
|
Total Compensation
($)
|
|||||||||||||||||||||
Termination for Just Cause
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Termination without Just Cause (2)
|
2,455,125 | 80,106 | - | 269,625 | - | - | 2,804,856 | |||||||||||||||||||||
Voluntary Termination at 12/31/2013 (2)(5)
|
1,236,770 | 80,106 | - | 269,625 | - | - | 1,586,501 | |||||||||||||||||||||
Death
|
2,455,125 | - | 1,000,000 | 269,625 | 1,487,502 | - | 5,212,252 | |||||||||||||||||||||
Disability (2)(3)
|
2,455,125 | 80,106 | - | 269,625 | 1,487,502 | - | 4,292,358 | |||||||||||||||||||||
Change of Control(2)(4)
|
2,455,125 | 80,106 | - | 579,613 | 1,935,695 | - | 5,050,539 |
(1)
|
Vested Option Awards In-the-Money for Mr. Hageboeck are exercisable for 90 days following his termination of employment for Termination without Just Cause, Voluntary Termination, Death or Disability. All Option Awards In-the-Money will become 100% vested upon a change in control. For purposes of calculating the amounts in this column, the “spread” between the exercise of 37,500 vested option awards and the market value of the Company’s common stock on December 31, 2014 of $46.53 has been calculated for a Termination without Just Cause, Voluntary Termination, Death or Disability, or a change-of-control. There are 32,132 options in-the-money that were unvested at December 31, 2014 which would vest under a change-of control.
|
(2)
|
The Employment Agreement for Mr. Hageboeck provides for a continuation of health insurance coverage on the same terms as were in effect prior to his termination of employment for a period of up to 60 months under either the Company’s plan or comparable coverage. The estimated value of this benefit is $80,106 and would be effective if Mr. Hageboeck’s employment were terminated voluntarily by Mr. Hageboeck, if terminated by the Company Without Just Cause, due to a Change of Control, or due to disability.
|
(3)
|
In the event of disability, the employment contract for Mr. Hageboeck provides that he have up to 12 months of continuous disability before his employment agreement may be terminated. After that, the Company may terminate his employment and he is entitled to receive an amount equal to “Termination Compensation” times three (which represents three years of compensation). Termination Compensation will be the highest amount of cash compensation received by the officer in the prior three fiscal years. Thus, Termination Compensation for Mr. Hageboeck will be determined in reference to the calendar year ended December 31, 2014 as $818,375 reduced by the amount of any compensation received pursuant to any applicable disability insurance plan of the Company.
|
(4)
|
The Employment and/or Change in Control Agreements for each of the NEO's provides for salary continuation for a period following termination as a result of a Change in Control as defined by the respective agreements. Amounts shown in this row are payable in either a lump sum or over a severance period. The amount shown in this row for Mr. Hageboeck reflects “Termination Compensation” of $818,375 times three (which represents three years of compensation), as provided for in his employment agreement and amendments thereto. Additionally, Mr. Hageboeck’s Employment and/or Change in Control Agreement provides that if Mr. Hageboeck collects an amount arising from any and all sources of compensation from the Company exceeding the product of 2.99 and Mr. Hageboeck's “base amount” as defined in Section 280G(b)(3) of the Internal Revenue Code (the “Code § 280G Maximum”) at the time of a change in control, the Company shall pay Mr. Hageboeck 147.5% of the federal excise taxes payable by Mr. Hageboeck under Internal Revenue Code § 4999. As of December 31, 2014, the Company is unable to determine if any such amount related to Code § 280G would be payable to Mr. Hageboeck.
|
(5)
|
Mr. Hageboeck and Mr. Stilwell joined the Company in 2001 when the Company was significantly troubled as part of a “turnaround team”. The Company signed agreements with Mr. Hageboeck, Mr. Stilwell, and three other executive officers providing them the opportunity to voluntarily resign and receive a Termination Benefit following four years of service to the Company. These benefits for Mr. Hageboeck and Mr. Stilwell became fully vested in 2005. Three of the other executives with such benefits terminated their employment with the Company during 2004 and 2005 and received payments under their respective 2001 employment agreements. The Company asked Mr. Hageboeck and Mr. Stilwell to accept positions as the Company’s CEO and Executive Vice-President in 2005, and the voluntary Termination Benefits remain vested and have been preserved in subsequent employment contracts with Mr. Hageboeck and Mr. Stilwell. The voluntary Termination Benefits grow each year at an amount equal to the one-year constant maturity treasury rate and cannot be forfeited except where the officer personally profits from willful fraudulent activity that materially and adversely affects the Employer. The costs of this vested Termination Benefit have been fully accrued and expensed by the Company.
|
(6)
|
Mr. Hageboeck holds 41,601 restricted shares. Of these restricted share awards for Mr. Hageboeck, 19,351 shares become 100% vested upon death, disability or a change in control. The remaining 22,250 “long-vested shares” vest proportionately over the ten year period following grant date in the event of death or disability. In the event of a change-of-control these “long-vested shares” would be 100% vested as of December 31, 2014.
|
POST-EMPLOYMENT PAYMENTS - BUMGARNER
|
||||||||||||||||||||||||
Executive Benefits and Payments
Upon Termination
|
Cash
Payments
($)
|
Health
Insurance
($)
|
Life
Insurance
($)
|
Option Awards
In-the-Money
($) (1)
|
Restricted Stock Awards
($) (2)
|
Total Compensation
($)
|
||||||||||||||||||
Termination for Just Cause
|
- | - | - | - | - | - | ||||||||||||||||||
Termination without Just Cause
|
- | - | - | 8,475 | - | 8,475 | ||||||||||||||||||
Voluntary Termination at 12/31/2013
|
- | - | - | 8,475 | - | 8,475 | ||||||||||||||||||
Death
|
- | - | 414,000 | 8,475 | 381,855 | 804,330 | ||||||||||||||||||
Disability
|
- | - | - | 8,475 | 381,855 | 390,330 | ||||||||||||||||||
Change of Control (3)(4)
|
280,226 | 16,021 | - | 74,872 | 500,198 | 871,316 |
(1)
|
Vested Option Awards In-the-Money for Mr. Bumgarner are exercisable for 90 days following his termination of employment for Termination without Just Cause, Voluntary Termination, Death or Disability. All Option Awards In-the-Money will become 100% vested upon a change in control. For purposes of calculating the amounts in this column, the “spread” between the exercise of 1,500 vested option awards and the market value of the Company’s common stock on December 31, 2014 of $46.53 has been calculated for a Termination without Just Cause, Voluntary Termination, Death or Disability, or a change-of-control. There are 7,065 options in-the-money that were unvested at December 31, 2014 which would vest under a change-of control.
|
(2)
|
Mr. Bumgarner holds 10,750 restricted shares. Of these restricted share awards for Mr. Bumgarner, 4,855 shares become 100% vested upon death, disability or a change in control. The remaining “long-vested shares” vest proportionately over the 11- year period following grant date in the event of death or disability. In the event of a change-of-control, these “long-vested shares” would be 100% vested as of December 31, 2014.
|
(3)
|
The Change in Control Agreement for Mr. Bumgarner provides for a continuation of health insurance coverage on the same terms as were in effect prior to his termination of employment for a period of up to 12 months under either the Company’s plan or comparable coverage. The estimated value of this benefit is $16,021 and would be effective if Mr. Bumgarner’s employment were terminated by the Company because of a Change of Control.
|
(4)
|
The Employment and/or Change in Control Agreements for each of the NEO's provides for salary continuation for a period following termination as a result of a Change in Control as defined by the respective agreements. Amounts shown in this row are payable in either a lump sum or over a severance period. The severance period for Mr. Bumgarner is 12 months. The amount shown in this row for Mr. Bumgarner reflects “Termination Compensation” of $280,226 times one (which represents one year of compensation).
|
POST-EMPLOYMENT PAYMENTS – STILWELL
|
||||||||||||||||||||||||||||
Executive Benefits and Payments
Upon Termination
|
Cash
Payments
($)
|
Health
Insurance
($)
|
Life
Insurance
($)
|
Option Awards
In-the-Money
($) (1)
|
Restricted Stock Awards
($) (2)
|
Tax
Gross-Up
($)
|
Total Compensation
($)
|
|||||||||||||||||||||
Termination for Just Cause
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Termination without Just Cause (3)
|
1,480,298 | 80,106 | - | 143,990 | - | - | 1,704, 394 | |||||||||||||||||||||
Voluntary Termination at 12/31/2013 (3)(6)
|
763,771 | 80,106 | - | 143,990 | - | - | 987,867 | |||||||||||||||||||||
Death
|
1,480,298 | - | 660,000 | 143,990 | 701,242 | - | 2,985,530 | |||||||||||||||||||||
Disability (3)(4)
|
1,480,298 | 80,106 | - | 143,990 | 701,242 | - | 2,405,636 | |||||||||||||||||||||
Change of Control (3)(5)
|
1,480,298 | 80,106 | - | 292,178 | 905,195 | - | 2,757,776 |
(1)
|
Vested Option Awards In-the-Money for Mr. Stilwell are exercisable for 90 days following his termination of employment for Termination without Just Cause, Voluntary Termination, Death or Disability. All Option Awards In-the-Money will become 100% vested upon a change in control. For purposes of calculating the amounts in this column, the “spread” between the exercise of 16,000 vested option awards and the market value of the Company’s common stock on December 31, 2014 of $46.53 has been calculated for a Termination without Just Cause, Voluntary Termination, Death or Disability, or a change-of-control. There are 15,370 options in-the-money that were unvested at December 31, 2014 which would vest under a change-of control.
|
(2)
|
Mr. Stilwell holds 19,454 restricted shares. Of these restricted share awards for Mr. Stilwell, 9,379 shares become 100% vested upon death, disability or a change in control. The remaining 10,125 “long-vested shares” vest proportionately over the ten year period following grant date in the event of death or disability. In the event of a change-of-control these “long-vested shares” would be 100% vested at December 31, 2014.
|
(3)
|
The Employment Agreement for Mr. Stilwell provides for a continuation of health insurance coverage on the same terms as were in effect prior to his termination of employment for a period of up to 60 months under either the Company’s plan or comparable coverage. The estimated value of this benefit is $80,106 and would be effective if Mr. Stilwell’s employment were terminated voluntarily by Mr. Stilwell, if terminated by the Company Without Just Cause, due to a Change of Control, or due to disability.
|
(4)
|
In the event of disability, the employment contract for Mr. Stilwell provides that he have up to 12 months of continuous disability before his employment agreement may be terminated. After that, the Company may terminate his employment and he is entitled to receive an amount equal to “Termination Compensation” times three (which represents three years of compensation). Termination Compensation will be the highest amount of cash compensation received by the officer in the prior three fiscal years. Thus, Termination Compensation for Mr. Stilwell will be determined in reference to the calendar year ended December 31, 2014 as $493,433, reduced by the amount of any compensation received pursuant to any applicable disability insurance plan of the Company.
|
(5)
|
The Employment and/or Change in Control Agreements for each of the NEO's provides for salary continuation for a period following termination as a result of a Change in Control as defined by the respective agreements. Amounts shown in this row are payable in either a lump sum or over a severance period. The amount shown in this row for Mr. Stilwell reflects “Termination Compensation” of $493,433 times three (which represents three years of compensation), as provided for in his employment agreement and amendments thereto. Additionally, Mr. Stilwell’s Employment and/or Change in Control Agreement provides that if Mr. Stilwell collects an amount arising from any and all sources of compensation from the Company exceeding the product of 2.99 and Mr. Stilwell's “base amount” as defined in Section 280G(b)(3) of the Internal Revenue Code (the “Code § 280G Maximum”) at the time of a change in control, the Company shall pay Mr. Stilwell 147.5% of the federal excise taxes payable by Mr. Stilwell under Internal Revenue Code § 4999. As of December 31, 2014, the Company is unable to determine if any such amount related to Code § 280G would be payable to Mr. Stilwell.
|
(6)
|
Mr. Hageboeck and Mr. Stilwell joined the Company in 2001 when the Company was significantly troubled as part of a “turnaround team”. The Company signed agreements with Mr. Hageboeck, Mr. Stilwell, and three other executive officers providing them the opportunity to voluntarily resign and receive a Termination Benefit following four years of service to the Company. These benefits for Mr. Hageboeck and Mr. Stilwell became fully vested in 2005. Three of the other executives with such benefits terminated their employment with the Company during 2004 and 2005 and received payments under their respective 2001 employment agreements. The Company asked Mr. Hageboeck and Mr. Stilwell to accept positions as the Company’s CEO and Executive Vice-President in 2005, and the voluntary Termination Benefits remain vested and have been preserved in subsequent employment contracts with Mr. Hageboeck and Mr. Stilwell. The voluntary Termination Benefits grow each year at an amount equal to the one-year constant maturity treasury rate and cannot be forfeited except where the officer personally profits from willful fraudulent activity that materially and adversely affects the Employer. The costs of this vested Termination Benefit have been fully accrued and expensed by the Company.
|
POST-EMPLOYMENT PAYMENTS – DERITO
|
||||||||||||||||||||||||
Executive Benefits and Payments
Upon Termination
|
Cash
Payments
($)
|
Health
Insurance
($)
|
Life
Insurance
($)
|
Option Awards
In-the-Money
($) (1)
|
Restricted Stock Awards
($) (2)
|
Total Compensation
($)
|
||||||||||||||||||
Termination for Just Cause
|
- | - | - | - | - | - | ||||||||||||||||||
Termination without Just Cause (4)
|
425,339 | 18,486 | - | 187,625 | - | 631,450 | ||||||||||||||||||
Voluntary Termination at 12/31/2013
|
- | - | - | 187,625 | - | 187,625 | ||||||||||||||||||
Death
|
- | - | 500,000 | 187,625 | 590,808 | 1,278,433 | ||||||||||||||||||
Disability
|
- | - | - | 187,625 | 590,808 | 778,433 | ||||||||||||||||||
Change of Control (3)(5)
|
737,254 | 32,042 | - | 316,681 | 759,509 | 1,845,487 |
(1)
|
Vested Option Awards In-the-Money for Mr. DeRito are exercisable for 90 days following his termination of employment for Termination without Just Cause, Voluntary Termination, Death or Disability. All Option Awards In-the-Money will become 100% vested upon a change in control. For purposes of calculating the amounts in this column, the “spread” between the exercise of 15,000 vested option awards and the market value of the Company’s common stock on December 31, 2014 of $46.53 has been calculated for a Termination without Just Cause, Voluntary Termination, Death or Disability, or a change-of-control. There are 13,295 options in-the-money that were unvested at December 31, 2014 which would vest under a change-of control.
|
(2)
|
Mr. DeRito holds 16,323 restricted shares. Of these restricted share awards for Mr. DeRito, 7,948 shares become 100% vested upon death, disability or a change in control. The remaining 8,375 “long-vested shares” vest proportionately over the ten year period following grant date in the event of death or disability. In the event of a change-of-control these “long-vested shares” would be 100% vested as of December 31, 2014.
|
(3)
|
The Change in Control Agreement for Mr. DeRito provides for a continuation of health insurance coverage on the same terms as were in effect prior to his termination of employment for a period of up to 24 months under either the Company’s plan or comparable coverage. The estimated value of this benefit is $32,042 and would be effective if Mr. DeRito’s employment were terminated because of a Change of Control.
|
(4)
|
Mr. DeRito’s Change in Control Agreement provides that if Mr. DeRito is terminated Without Just Cause, Mr. DeRito will be paid an amount equal to his “Termination Compensation” for 60 weeks and provided health care for 60 weeks.
|
(5)
|
The Employment and/or Change in Control Agreements for each of the NEO's provides for salary continuation for a period following termination as a result of a Change in Control as defined by the respective agreements. Amounts shown in this row are payable in either a lump sum or over a severance period. The severance period for Mr. DeRito is 24 months. The amount shown in this row for Mr. DeRito reflects “Termination Compensation” of $368,627 times two (which represents two years of compensation).
|
POST-EMPLOYMENT PAYMENTS – LEGGE
|
||||||||||||||||||||||||
Executive Benefits and Payments
Upon Termination
|
Cash
Payments
($)
|
Health
Insurance
($)
|
Life
Insurance
($)
|
Option Awards
In-the-Money
($)(1)
|
Restricted Stock Awards
($) (2)
|
Total Compensation
($)
|
||||||||||||||||||
Termination for Just Cause
|
- | - | - | - | - | - | ||||||||||||||||||
Termination without Just Cause
|
- | - | - | - | - | - | ||||||||||||||||||
Voluntary Termination at 12/31/2013
|
- | - | - | - | - | - | ||||||||||||||||||
Death
|
- | - | 350,000 | - | 196,526 | 546,526 | ||||||||||||||||||
Disability
|
- | - | - | - | 196,526 | 196,526 | ||||||||||||||||||
Change of Control (3)(\4)
|
236,906 | 16,021 | - | 58,599 | 205,895 | 517,422 |
(1)
|
Vested Option Awards In-the-Money for Mr. Legge are exerciseable for 90 days following his termination of employment for Termination without Just Cause, Voluntary Termination, Death or Disability. All Option Awards In-the-Money will become 100% vested upon a change in control. For purposes of calculating the amounts in this column, the “spread” between the exercise of 6,041 options in-the-money that were unvested at December 31, 2014 and the market value of the Company’s common stock on December 31, 2014 of $46.53 has been calculated for a change-of-control. .
|
(2)
|
Mr. Legge holds 5,325 restricted shares. Of these restricted share awards for Mr. Legge, 3,825 shares become 100% vested upon death, disability or a change in control. The remaining 1,500 “long-vested shares” vest proportionately over the ten-year period following grant date in the event of death or disability. In the event of a change-of-control these “long-vested shares” vest 20%, 40%, 60%, 80% and 100%, on September 25th, 2014, 2015, 2016, 2017 and 2018, respectively.
|
(3)
|
The Change in Control Agreement for Mr. Legge provides for a continuation of health insurance coverage on the same terms as were in effect prior to his termination of employment for a period of up to 12 months. The estimated value of this benefit is $16,021 and would be effective if Mr. Legge’s employment were terminated either by the Company, or by the employee for “Good Cause” as defined in the Agreement, following a Change of Control.
|
(4)
|
Mr. Legge is employed under a Change in Control Agreement which provides for salary continuation for a period following termination as a result of a Change in Control as defined by the respective agreements. Amounts shown in this row are payable in either a lump sum or over a severance period. The severance period for Mr. Legge is 12 months. The amount shown in this row for Mr. Legge reflects “Termination Compensation” of $236,906 times one (which represents one year of compensation).
|
2014
|
2013
|
|||||||
Audit Fees (1)
|
$ | 617,767 | $ | 688,769 | ||||
Audit-Related Fees
|
- | - | ||||||
Tax Fees (2)
|
63,482 | 66,865 | ||||||
Total Fees
|
$ | 681,249 | $ | 755,634 |
(1)
|
Audit Fees include fees associated with the annual audit of the Company’s consolidated financial statements, included in its annual report on Form 10-K filed with the Securities and Exchange Commission, the audit of the effectiveness of the Company’s internal control over financial reporting, reviews of the Company’s quarterly reports on Form 10-Q filed with the Securities and Exchange Commission and the issuance of consents in filings with the Securities and Exchange Commission.
|
(2)
|
Tax Fees primarily include fees related to preparation, review and filing of tax returns.
|
|
o
|
as to each person whom the shareholder proposes to nominate for election as a director:
|
|
o
|
as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made:
|
|
o
|
as to each matter:
|
|
o
|
as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, the information described above, with respect to the shareholder proposing such business.
|
By Order of the Board of Directors,
|
![]() |
Victoria A. Faw,
|
Secretary
|
Vote by Telephone
|
Vote by Internet
|
Vote by Mail
|
||
Call Toll-Free using a
|
Access the Website and
|
Return your proxy
|
||
touch-tone telephone:
|
cast your vote:
|
in the postage-paid
|
||
1-888-693-8683
|
www.cesvote.com
|
envelope provided
|
è
|
Dated:
|
||
Signature
|
||
Signature, if held jointly
|
CLASS I NOMINEES:
|
(1) John R. Elliot
|
(2) David W. Hambrick
|
(3) J. Thomas Jones
|
(4) James L. Rossi
|
2.
|
Proposal to ratify the Audit Committee and the Board of Directors’ appointment of Ernst & Young, LLP as the independent registered public accounting firm for City Holding Company for 2015.
|
3.
|
Advisory vote on executive compensation
|
4.
|
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.
|
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