ex10-1.htm


    EXHIBIT
      10.1

    


    EMPLOYMENT
      AGREEMENT

    


    


    THIS
      EMPLOYMENT AGREEMENT (“Agreement”) is effective as of July 25, 2007, and is
      among CITY HOLDING COMPANY, a West Virginia corporation (the “Company”), CITY
      NATIONAL BANK OF WEST VIRGINIA, a national banking association
      (“City National”), and John W. Alderman III (“Employee”). The Company and
      City National are referred to collectively herein as the
“Employer.”

     

    Recitals:

     

    A.
      The
      Company and City National desire to employ Employee as its Senior Vice-President
      & Chief Legal Officer.

     

    B.
      This
      employment agreement replaces and supersedes the Employment Agreement entered
      into between the Employer and Employee on March 14, 2002 and all former
      employment agreements between the Employer and Employee. The Employment
      Agreement dated March 14, 2002 terminated on March 14, 2007.

     

    C.
      Employee is willing to make his services available to Employer on the terms
      and
      subject to the conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and promises contained
      herein and other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the parties agree as follows:

     

    Agreement:

     

    1.  Employment.
      Employee is employed as Senior Vice-President and Chief Legal Officer of the
      Company and City National. Employee shall have such duties and responsibilities
      as are commensurate with such positions. Employee accepts and agrees to such
      employment, subject to the general supervision and pursuant to the orders,
      advice and direction of Employer and its Boards of Directors. Employee shall
      report to and be under the supervision of the President or Chief Executive
      Officer. Employee shall perform such duties as are customarily performed by
      one
      holding such positions in other same or similar businesses or enterprises as
      that engaged in by Employer and shall also render such other services and duties
      as may be reasonably assigned to him from time to time by Employer, consistent
      with his positions.

     

    2.  Term
      of Employment. The term of this Agreement shall commence on July
      25, 2007 and shall terminate on July 31, 2009, unless extended. On each
      monthly anniversary date following July 31, 2007, this Agreement will be
      automatically extended for an additional month; provided, however, that on
      any
      one month anniversary date following July 31, 2007 either Employer or
      Employee may serve notice to the other party to fix the term to a definite
      two
      year period from the date of such notice and, in such event, no further
      automatic extensions will occur. The term of this Agreement as it may be
      extended pursuant to this Section 2, or as it may be shortened in accordance
      with Section 5 or Section 6, is referred to as the “Term.”

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    3.  Compensation.

     

    (a)  For
      all
      services rendered by Employee to Employer under this Agreement, Employer shall
      pay to Employee a minimum annual salary at a rate not less than $170,000 or
      as
      it has been periodically adjusted, payable in accordance with the payroll
      practices of Employer applicable to its officers. The Company and/or City
      National may make such payments as well as any other payments provided for
      in
      this Agreement but, regardless of who is the payor, both the Company and City
      National shall be jointly and severally liable for such payments.

     

    (b)  Employee
      shall have the right to participate in the incentive plans of Employer for
      which
      he may become eligible and designated a participant, including but not limited
      to any equity based compensation plans and future incentive plans adopted by
      the
      Employer during the Term.

     

    (c)   Except
      as otherwise specifically provided herein, for so long as Employee is employed
      by Employer, Employee also shall be paid, on the same basis as other officers
      of
      Employer, employee pension and welfare benefits and group employee benefits
      such
      as sick leave, vacation, group disability and health, life, and accident
      insurance and similar indirect compensation which Employer may from time to
      time
      extend to its officers; provided that Employee shall receive term life insurance
      coverage in an amount not less than two (2) times his base salary as then in
      effect. For purposes of clarification, under Employer’s existing policies
      Employee shall be entitled to up to eight weeks of vacation each year. Unused
      vacation pay shall not carry over to succeeding years.

     

    (d)  If
      during
      the Term of the Agreement Employee becomes eligible for retirement under
      Employer's retirement plans and he retires, Employee may elect to continue
      receiving the health insurance coverage provided to Employee prior to retirement
      at a comparable rate and benefit available to other retired employees (or,
      if no
      such benefit is then made available to other retired employees, at the rate
      and
      benefit available to Employee at the time of retirement).

     

    (e)  For
      so
      long as Employee is employed by Employer, Employer shall pay Employee's
      reasonable legal bar dues, bar association dues and reasonable costs of
      continuing legal education programs for Employee, and provide necessary legal
      books and similar materials to enable Employee to carry out his duties as Chief
      Legal Officer.

     

    4.  Covenants
      of Employee.

     

    (a)  Subject
      to the limitations provided in Subsections 4(b), 4(c), 4(d), and 4(e) (whichever
      may be applicable), upon termination of Employee's employment, Employee will
      not, directly or indirectly, either as a principal, executive officer, employer,
      stockholder, co-partner or in any other individual or representative capacity
      whatsoever, engage in the consumer, savings or commercial banking business,
      the
      savings and loan business, or the mortgage banking business in any county of
      any
      state in which the Company or City National Bank maintains offices immediately
      prior to the termination of employment, as well as the counties of Kanawha,
      Putnam, Jackson, Cabell, Wayne, Mason, Lincoln, Doddridge, Marion, Raleigh,
      Summers, Fayette, Greenbrier, Nicholas, Braxton, Lewis, Monroe, Pocahontas,
      Mercer, Wood, Harrison, Jefferson, Berkeley, Morgan, Hampshire in West Virginia
      or the counties of Boyd, Carter, Greenup or Johnson in Kentucky, or the counties
      of Lawrence or Scioto in Ohio, nor will Employee solicit, or assist any other
      person in so soliciting, any depositors or customers of Employer or its
      Affiliates or induce any then or former employee of Employer or its Affiliates
      to terminate his or her employment with Employer or its Affiliates; provided,
      however, that nothing herein contained shall be deemed to prevent or limit
      the
      right of Employee to invest in a business similar to Employer's business if
      such
      investment is limited to less than one percent of the capital stock or other
      securities of any corporation or similar organization whose stock or securities
      are publicly owned or are regularly traded on any public exchange. The term
      “Affiliate” as used in this Agreement means a Person that directly or indirectly
      through one or more intermediaries, controls, or is controlled by, or is under
      common control with, another Person. The term “Person” as used in this Agreement
      means any person, partnership, corporation, group or other entity.
      Notwithstanding the foregoing, Employee may engage in the general practice
      of
      law, and such practice of law shall not be considered a violation hereof, even
      if Employee represents financial institutions as a third party
      attorney.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (b)  Except
      as
      provided in Section 4(e) hereof, if Employee voluntarily terminates his
      employment with Employer, Employee will be subject to the provisions of
      Subsection 4(a) for a period of 24 months following the date of termination
      of
      employment of Employee.

     

    (c)  If
      Employee's employment is terminated by Employer for Just Cause (as defined
      in
      Subsection 6(b)), Employee will be subject to the provisions of Subsection
      4(a)
      for a period of 24 months following the date of termination of Employee’s
      employment.

     

    (d)  If
      Employee's employment is terminated by Employer for reasons other than Just
      Cause (as defined In Subsection 6(b)) at any time, Employee will not be subject
      to the provisions of Subsection 4(a), provided, however, that for 24 months
      after termination, Employee shall not solicit or assist another person in
      soliciting, any depositor or customer of Employer or its Affiliates or induce
      any then or former employee to terminate his or her employment with Employer
      or
      its Affiliates.

     

    (e)  Notwithstanding
      any other provision of this Agreement to the contrary, if Employee voluntarily
      terminates his employment with Employer in accordance with Subsection 6(e),
      Employee will not be subject to Subsection 4(a), provided, however, that for
      24
      months after termination, Employee shall not solicit or assist another person
      in
      soliciting, any depositor or customer of Employer or its Affiliates or induce
      any then or former employee to terminate his or her employment with Employer
      or
      its Affiliates.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (f)  During
      the Term of Employee's employment hereunder and thereafterfor a period of 24
      months, and except as required by any court, supervisory authority or
      administrative agency or as may be otherwise required by applicable law,
      Employee shall not, without the written consent of the Board of Directors of
      Employer or a person authorized thereby, disclose to any person, other than
      an
      employee of Employer or an Affiliate thereof or a person to whom disclosure
      is
      reasonably necessary or appropriate in connection with the performance by
      Employee of his duties as an employee of Employer or an Affiliate, any
      confidential information obtained by him while in the employ of Employer, unless
      such information has become a matter of public knowledge at the time of such
      disclosure.

     

    (g)  The
      covenants contained in this Section 4 shall be construed and interpreted in
      any
      judicial proceeding to permit their enforcement to the maximum extent permitted
      by law. Employee agrees that the restraints imposed herein are necessary for
      the
      reasonable and proper protection of Employer and its Affiliates and that each
      and every one of the restraints is reasonable in respect to such matter, length
      of time and the area proscribed. Employee further acknowledges that damages
      at
      law would not be a measurable or adequate remedy for breach of the covenants
      contained in this Section 4 and, accordingly, Employee agrees to submit to
      the
      equitable jurisdiction of any court of competent jurisdiction in Charleston,
      West Virginia in connection with any action to enjoin Employee from violating
      any such covenants.

     

    5.  Disability.

     

    If,
      by
      reason of Total and Permanent Disability (as defined below) during the Term,
      Employee is unable to carry out the essential functions of his employment for
      12
      consecutive months, his services may be terminated by the Board of Directors
      determining so to do upon one month's notice to be given to Employee at any
      time
      after the period of 12 continuous months of Total and Permanent Disability
      and
      while such Total and Permanent Disability continues. If, prior to the expiration
      of the one month period after the giving of such notice, Employee shall recover
      from such Total and Permanent Disability and return to the full-time active
      discharge of his duties, then such notice shall be of no further force and
      effect and Employee's employment shall continue as if the same had been
      uninterrupted. If Employee shall not so recover from his Total and Permanent
      Disability and return to his duties, then his services shall terminate at the
      expiration date of such one month's notice with the same force and effect as
      if
      that date had been the date of termination originally provided for hereunder.
      During the first 12 months of the period of Employee's Total and Permanent
      Disability, Employee shall continue to earn all compensation (including bonuses
      and incentive compensation) to which Employee would have been entitled as if
      he
      had not been Totally and Permanently Disabled, such compensation to be paid
      at
      the time, in the amounts, and in the manner provided in Subsection 3(a), and
      to
      be reduced by the amount of any compensation received pursuant to any applicable
      disability insurance plan of Employer. Thereafter, Employee shall receive
      compensation to which he is entitled under any applicable disability insurance
      plan. If a dispute arises between Employee and Employer concerning Employee's
      physical or mental ability to continue or return to the performance of his
      duties as aforesaid, Employee shall submit to examination by a competent
      physician mutually agreeable to the parties, and his opinion as to Employee's
      capability to so perform will be final and binding. Upon termination of
      Employee's services by reason of Total and Permanent Disability, the Term shall
      end. For purposes of this Agreement, “Total and Permanent Disability” means the
      Employee: (i) is unable to engage in any substantial gainful activity by
      reason of any medically determinable physical or mental impairment which can
      be
      expected to result in death or can be expected to last for a continuous period
      of not less than twelve (12) months; or (ii) is, by reason of any medically
      determinable physical or mental impairment which can be expected to result
      in
      death or can be expected to last for a continuous period of not less than twelve
      (12) months, receiving income replacement benefits for a period of not less
      than
      three (3) months under an accident and health plan covering employees of the
      Company.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    6.  Termination.

     

    (a)  “Termination
      Compensation” means the highest amount of cash compensation paid (or earned and
      payable whether or not deferred) to or for the benefit of Employee in respect
      of
      any of the three most recent calendar years ending prior to the date of
      termination, determined by reference to the annual cash compensation (salary,
      incentive compensation, and  bonus) reflected in the summary
      compensation table set forth in the Company’s proxy statement for such year, or,
      in the absence of such previously reported table, by reference to the amount
      of
      such compensation as would be reflected for such year in such a summary
      compensation table prepared in accordance with Item 402(b) of Regulation S-K
      of
      the Securities and Exchange Commission.

     

    (b)  Employer
      shall have the right to terminate Employee's employment under this Agreement
      at
      any time for Just Cause, which termination shall be Effective immediately.
      Termination for “Just Cause” shall include termination for (a) Employee's
      commission of an act materially and demonstrably detrimental to the Employer,
      which act constitutes willful misconduct by the Employee in the performance
      of
      his material duties to the Employer not authorized, directed or ratified by
      City
      National’s or the Company’s Board of Directors; (b) Employee's conviction of a
      felony involving moral turpitude; or (c) Employee’s material breach of any other
      provision of this Agreement, provided that Employee has received written notice
      from Employer of such material breach and such breach remains uncured 30 days
      after the delivery of such notice. No act or failure to act will be considered
      “willful” under this Agreement unless it is done, or omitted to be done, by the
      Employee in bad faith or without reasonable belief that his action or omission
      was in the best interests of the Employer. In the event Employee's employment
      under this Agreement is terminated for Just Cause, Employee shall have no right
      to receive compensation or other benefits under this Agreement for any period
      after such termination.

     

    (c)  If
      Employee shall die during the Term, this Agreement and the employment
      relationship hereunder will automatically terminate on the date of death, which
      date shall be the last date of the Term. Notwithstanding this Subsection 6(c),
      if Employee dies while employed by Employer, Employee's estate shall receive
      an
      amount equal to the Employee's Termination Compensation paid over 12 equal
      monthly payments commencing with the first day of the month following the date
      of death, in addition to any life insurance benefits available to all employees
      of City National.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (d)  Employer
      may terminate Employee’s employment other than for “Just Cause,” as described in
      Subsection 6(b), at any time upon written notice to Employee, which termination
      shall be effective immediately. In the event Employer terminates Employee
      pursuant to this Subsection 6(d), Employee will nevertheless receive his
      Termination Compensation paid in 12 monthly installments commencing with the
      first day of the month following Employee’s termination of employment under this
      Section 6(d). In addition, Employee shall continue to receive health insurance
      coverage from Employer on the same terms as were in effect prior to Employee’s
      termination, either under Employer’s plans or comparable coverage, for 24
      months, or until Employee becomes eligible for health benefits offered by
      another employer, which benefits are substantially equivalent to those provided
      by Employer to Employee immediately prior to termination, whichever is shorter.
      Notwithstanding anything in this Agreement to the contrary, if Employee breaches
      Subsection 4(d), Employee will not be entitled to receive any further
      compensation or benefits pursuant to this Subsection 6(d).

     

    (e)  Employee
      may voluntarily terminate employment with Employer (i) pursuant to
      paragraph 8(g) hereof, or (ii) for “Good Reason.”  In either such
      event, Employee shall be entitled to receive (i) any compensation due but not
      yet paid through the date of termination, and (ii) in lieu of any further salary
      payments from the date of termination to the end of the Term, an amount equal
      to
      the Termination Compensation paid in 12 monthly installments commencing with
      the
      first day of the month following the date of such termination of employment.
      In
      addition, Employee shall continue to receive health insurance coverage from
      Employer on the same terms as were in effect prior to Employee’s termination,
      either under Employer’s plans or comparable coverage for either 24 months or
      until Employee becomes eligible for health benefits provided by another
      employer, which benefits are substantially equivalent to those offered by
      Employer to Employee immediately prior to termination, whichever is shorter.
      Under these circumstances, Employee shall not be subject to the restrictions
      in
      Section 4(a), as set forth in Section 4(e).

     

    “Good
      Reason” shall mean the occurrence of any of the following events without
      Employee's express written consent:

     

    (i)  the
      assignment to Employee of duties inconsistent with the position of Senior
      Vice-President and Chief Legal Officer of companies similar to the
      Employer;

     

    (ii)   a
      reduction by Employer in Employee's pay grade or base salary as then in effect
      or the exclusion of Employee from participation in Employer's benefit plans
      in
      which he previously participated as in effect at the date hereof or as the
      same
      may be increased from time to time during the term of this
      Agreement.

     

    (iii)   an
      involuntary relocation of Employee more than 50 miles from the location where
      Employee worked immediately following his most recent voluntary relocation
      or
      the breach by Employer of any other material provision of this
      Agreement;

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (iv)  any
      purported termination of the employment of Employee by Employer which is not
      effected in accordance with this Agreement; or

     

    (v)  the
      occurrence of a Change of Control within the period of 24 months preceding
      such
      termination.

     

    A
“Change
      of Control” shall be deemed to have occurred if (i) any person or group of
      persons (as defined in Section 13(d) and 14(d) of the Securities Exchange Act
      of
      1934) together with its affiliates, excluding employee benefit plans of
      Employer, is or becomes, directly or indirectly, the “beneficial owner” (as
      defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
      of
      securities of the Company or of City National representing 20% or more of the
      combined voting power of its then outstanding securities; or (ii) during the
      term of this Agreement as a result of a tender offer or exchange offer for
      the
      purchase of securities of the Company or of City National (other than such
      an
      offer by the Company or City National for its own securities), or as a result
      of
      a proxy contest, merger, consolidation or sale of assets, or as a result of
      any
      combination of the foregoing, individuals who at the beginning of any two-year
      period during the Term of this Agreement constitute the Company’s or City
      National’s Board of Directors, plus new directors whose election or nomination
      for election by the Company’s or City National’s shareholders, as applicable, is
      approved by a vote of at least two-thirds of the directors still in office
      who
      were directors at the beginning of such two-year period, cease for any reason
      during such two-year period to constitute at least two-thirds of the members
      of
      such Board of Directors; or (iii) the shareholders of the Company or of City
      National approve a merger or consolidation of the Company and/or City National
      with any other corporation or entity regardless of which entity is the survivor,
      other than a merger or consolidation which would result in the voting securities
      of the Company or City National outstanding immediately prior thereto continuing
      to represent (either by remaining outstanding or being converted into voting
      securities of the surviving entity) at least 80% of the combined voting power
      of
      the voting securities of the Company or City National or such surviving entity
      outstanding immediately after such merger or consolidation; or (iv) the
      shareholders of the Company or City National, as applicable, approve a plan
      of
      complete liquidation or winding-up of the Company or City National or an
      agreement for the sale or disposition by the Company or City National of all
      or
      substantially all of the Company’s or City National’s assets; or (v) any event
      which Employer's Board of Directors determines should constitute a Change of
      Control.

     

    (f)  In
      receiving any payments pursuant to this Section 6, Employee shall not be
      obligated to seek other employment or take any other action by way of mitigation
      of the amounts payable to Employee hereunder, and such amounts shall not be
      reduced or terminated whether or not Employee obtains other
      employment.

     

    (g)  In
      the
      event that Employer's independent public accountants or the Internal Revenue
      Service determine, at any time during or after expiration of this Agreement,
      that Employee has collected an amount arising from any and all sources of
      compensation from Employer (including, without limitation, by virtue of the
      immediately following sentence) exceeding the product of 2.99 and Employee's
      “base amount” as defined in Section 280G(b)(3) of the Internal Revenue Code (the
“Code § 280G Maximum”), notwithstanding any provision of this agreement or any
      plan or arrangement of Employer to the contrary, Employer shall pay Employee
      147.5% of the federal excise taxes payable by Employee under Code § 4999. Such
      tax gross up payment shall be made to Employee no later than the due date of
      the
      Employee’s tax return reporting the amount of such tax. If, by virtue of any
      plan or arrangement of Employer, benefits to which Employee would otherwise
      be
      entitled would be curtailed or reduced because Employee may collect an amount
      exceeding the Code § 280G Maximum, Employer shall nevertheless pay to Employee
      an amount equal to 100% of the value by which such benefits are curtailed or
      reduced, and any such payments shall be subject to the excise tax reimbursement
      prescribed by the preceding section.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (h)  To
      the
      extent that Employee is a "key employee" (as defined under Section 416(i) of
      the
      Internal Revenue Code, disregarding Section 416(i)(5) of the Internal Revenue
      Code) of the Company, no payment of Termination Compensation may be made under
      this Section 6 prior to the earlier of (i) the expiration of the six (6)-month
      period measured from the date of Employee's separation from service, or (ii)
      the
      date of Employee's death; provided, however, that the six (6) month delay
      required under this Section 6(i) shall not apply to the portion of any payment
      resulting from the Employee’s “involuntary separation from service” (as defined
      in Treas. Reg. § 1.409A 1(n) and including a “separation from service for good
      reason,” as defined in Treas. Reg. § 1.409A 1(n)(2)) that (a) is payable no
      later than the last day of the second year following the year in which the
      separation from service occurs, and (b) does not exceed two times the lesser
      of
      (i) the Employee’s annualized compensation for the year prior to the year in
      which the separation from services occurs, or (ii) the dollar limit described
      in
      Section 401(a)(17) of the Code. To the extent Termination Compensation payable
      in monthly installments under this Section 6 is required to be deferred under
      the preceding sentence, the first six months of monthly installments shall
      be
      payable in month seven following Employee's separation from service and the
      remaining monthly payments shall be made when otherwise scheduled.

     

    (i)  Any
      reference in this Agreement to a termination of employment, severance from
      employment or separation from employment shall be deemed to mean a “Termination
      of Employment.”  A “Termination of Employment” means the termination
      of the Employee’s employment with the Company and its Affiliates for reasons
      other than death or Total and Permanent Disability.  Whether a
      Termination of Employment takes place is determined based on the facts and
      circumstances surrounding the termination of the Employee’s
      employment.  A Termination of Employment will be considered to have
      occurred if it is reasonably anticipated that:

     

    (i)  the
      Employee will not perform any services for the Company or its Affiliates after
      Termination of Employment, or

     

    (ii)  the
      Employee will continue to provide services as the Company or its Affiliates
      at
      an annual rate that is less than fifty percent (50%) of the bona fide services
      rendered during the immediately preceding twelve (12) months of
      employment.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    7.  Other
      Employment.

     

    Employee
      shall devote all of his business time, attention, knowledge and skills solely
      to
      the business and interest of Employer and its Affiliates, and Employer and
      its
      Affiliates shall be entitled to all of the benefits, profits and other
      emoluments arising from or incident to all work, services and advice of
      Employee, and Employee shall not, during the Term hereof, become interested
      directly or indirectly, in any manner, as partner, officer, director,
      stockholder, advisor, employee or in any other capacity in any other business
      similar to Employer's business; provided, however, that nothing herein contained
      shall be deemed to prevent or limit the right of Employee to invest in a
      business similar to Employer's business if such investment is limited to less
      than one percent of the capital stock or other securities of any corporation
      or
      similar organization whose stock or securities are publicly owned or are
      regularly traded on any public exchange.

     

    8.  Miscellaneous.

     

    (a)   This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of West Virginia without regard to conflicts of law principles
      thereof.

     

    (b)  This
      Agreement constitutes the entire Agreement between Employee and Employer, with
      respect to the subject matter hereof, and supersedes all prior agreements with
      respect thereto. Without limiting the foregoing, Employee agrees that this
      Agreement satisfies any rights he may have had under the prior employment
      agreements.

     

    (c)  This
      Agreement may be executed in one or more counterparts, all of which, taken
      together, shall constitute one and the same instrument.

     

    (d)  Any
      notice or other communication required or permitted under this Agreement shall
      be effective only if it is in writing and delivered in person or by reliable
      overnight courier service or deposited in the mails, postage prepaid, return
      receipt requested, addressed as follows:

     

    To
      Employer:

     

    City
      Holding Company

     

    25
      Gatewater Road

     

    Charleston,
      West Virginia 25313

     

    (304)
      769-1100

     

    Attention:      Corporate
      Secretary

     

    To
      Employee:

     

    John
      W.
      Alderman, III

     

    [Address
      and Telephone Number]

     

    


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    Notices
      given in person or by overnight courier service shall be deemed given when
      delivered to the address required by this Subsection 8(d), and notices given
      by
      mail shall be deemed given three days after deposit in the mails. Any party
      hereto may designate by written notice to the other party in accordance herewith
      any other address to which notices addressed to him shall be sent.

     

    (e)  The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity or
      enforceability of the other provisions hereof. It is understood and agreed
      that
      no failure or delay by Employer or Employee in exercising any right, power
      or
      privilege under this Agreement shall operate as a waiver thereof, nor shall
      any
      single or partial exercise thereof preclude any other or further exercise
      thereof or the exercise of any other right, power or privilege
      hereunder.

     

    (f)  In
      the
      event any dispute shall arise between Employee and Employer as to the terms
      or
      interpretations of this Agreement, whether instituted by formal legal
      proceedings or otherwise, including any action taken by Employee to enforce
      the
      terms of this Agreement or in defending against any action taken by Employer,
      Employer shall reimburse Employee for all reasonable costs and expenses,
      including reasonable attorneys' fees, arising from such dispute, proceeding
      or
      action, if Employee shall prevail in any action initiated by Employee or shall
      have acted reasonably and in good faith in defending against any action
      initiated by Employer. Such reimbursement shall be paid within 10 days of
      Employee furnishing to Employer written evidence, which may be in the form,
      among other things, of a canceled check or receipt, of any costs or expenses
      incurred by Employee. Any such request for reimbursement by Employee shall
      be
      made no more frequently than at 60 day intervals.

     

    (g)  Should
      Employee die after termination of his employment with Employer while any amounts
      are payable to him hereunder, this Agreement shall inure to the benefit of
      and
      be enforceable by Employee's executors, administrators, heirs, distributees,
      devisees and legatees and all amounts payable hereunder shall be paid in
      accordance with the terms of this Agreement to Employee's devisee, legatee
      or
      other designee or, if there is no such designee, to his estate. Employer shall
      require any successor (whether direct or indirect, by purchase, merger,
      consolidation or other-wise) to all or substantially all of the business or
      assets of Employer, by agreement in form and substance reasonably satisfactory
      to Employee to expressly assume and agree to perform this Agreement in the
      same
      manner and same extent that Employer would be required to perform it if no
      such
      succession had taken place. Failure of Employer to obtain such agreement prior
      to the effectiveness of any such succession shall be deemed “Good Reason”,
      permitting termination by Employee pursuant to Section 6(e). As used in this
      Agreement, “Employer” shall mean Employer as hereinbefore defined and any
      successor to its business or assets as aforesaid.

     

    (h)  To
      the
      extent necessary to effectuate the terms of this Agreement, the terms of this
      Agreement, and the respective rights and obligations of the parties, which
      must
      survive the termination of Employee's employment or the termination or
      expiration of this Agreement shall so survive. Without limiting the foregoing,
      Sections 4, 5, 6, and 8(g) shall expressly survive the termination of this
      Agreement.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

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

    


     

    


     

    
      	
              CITY
                HOLDING COMPANY

            
	 
	 
	
              By:           /s/
                Charles R. Hageboeck

            
	
              Charles
                R. Hageboeck, President
                &

            
	
              CEO

            


    

    


    


    
      	
              CITY
                NATIONAL BANK OF

            
	
              WEST
                VIRGINIA

            
	 
	 
	
              By:           /s/
                Charles R. Hageboeck

            
	
              Charles
                R. Hageboeck, President
                &

            
	
              CEO

            


    

    


    


    
      	
              EMPLOYEE

            
	 
	 
	
              /s/
                John W. Alderman III

            
	
              John
                W. Alderman
                III

            


    

    


    -15-