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                                                                 EXHIBIT 99.2














                      AGREEMENT AND PLAN OF REORGANIZATION

                                     between

                              CITY HOLDING COMPANY


                                       and

                              HORIZON BANCORP, INC.




                                 August 7, 1998


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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                               PAGE

<S>       <C>                                                                                                    <C>
ARTICLE I GENERAL.................................................................................................2

         1.1. Holding Company Merger..............................................................................2
         1.2. Bank Mergers........................................................................................2
         1.3. Taking of Necessary Action..........................................................................2
         1.4. Tax Consequences; Accounting Treatment..............................................................2

ARTICLE II EFFECT OF TRANSACTION ON COMMON STOCK, ASSETS, LIABILITIES 
         AND CAPITALIZATION OF CITY HOLDING, CITY NATIONAL, AND HORIZON...........................................3

         2.1. Conversion of Stock; Exchange Ratio.................................................................3
         2.2. Manner of Exchange..................................................................................3
         2.3. No Fractional Shares................................................................................5
         2.4. Dissenting Shares...................................................................................5
         2.5. Assets..............................................................................................5
         2.6. Liabilities.........................................................................................6

ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................6

         3.1. Representations and Warranties of Horizon and the Horizon Banks.....................................6
                  (a)  Organization, Standing and Power...........................................................6
                  (b)  Capital Structure..........................................................................7
                  (c)  Authority..................................................................................7
                  (d)  Investments................................................................................8
                  (e)  Financial Statements.......................................................................8
                  (f)  Absence of Undisclosed Liabilities.........................................................9
                  (g)  Tax Matters................................................................................9
                  (h)  Options, Warrants and Related Matters.....................................................11
                  (i)  Property..................................................................................11
                  (j)  Additional Schedules Furnished to City Holding............................................11
                  (k)  Agreements in Force and Effect............................................................12
                  (l)  Legal Proceedings; Compliance with Laws...................................................13
                  (m)  Employee Benefit Plans....................................................................13
                  (n)  Insurance.................................................................................16
                  (o)  Loan Portfolio............................................................................16
                  (p)  Absence of Changes........................................................................17
                  (q)  Brokers and Finders.......................................................................17
                  (r)  Subsidiaries; Partnerships and Joint Ventures.............................................17
                  (s)  Reports...................................................................................18
                  (t)  Environmental Matters.....................................................................18
                  (u)  Disclosure................................................................................19
                  (v)  Accounting and Tax Matters................................................................19
                  (w)  Regulatory Approvals......................................................................20
</TABLE>


                                      (i)
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<TABLE>
<S>               <C>                                                                                            <C>
                  (x)  Year 2000 Matters.........................................................................20
                  (y)  Interest Rate Risk Management Instruments.................................................20
                  (z)  Recission of Repurchases..................................................................20
         3.2. Representations and Warranties of City Holding and City National...................................21
                  (a)  Organization, Standing and Power..........................................................21
                  (b)  Capital Structure.........................................................................21
                  (c)  Authority.................................................................................22
                  (d)  Investments...............................................................................22
                  (e)  Financial Statements......................................................................23
                  (f)  Absence of Undisclosed Liabilities........................................................24
                  (g)  Tax Matters...............................................................................24
                  (h)  Options, Warrants and Related Matters.....................................................25
                  (i)  Property..................................................................................25
                  (j)  Additional Schedules Furnished to Horizon.................................................26
                  (k)  Agreements in Force and Effect............................................................27
                  (l)  Legal Proceedings; Compliance with Laws...................................................27
                  (m)  Employee Benefit Plans....................................................................28
                  (n)  Insurance.................................................................................30
                  (o)  Loan Portfolio............................................................................31
                  (p)  Absence of Changes........................................................................31
                  (q)  Brokers and Finders.......................................................................32
                  (r)  Subsidiaries; Partnerships and Joint Ventures.............................................32
                  (s)  Reports...................................................................................32
                  (t)  Environmental Matters.....................................................................32
                  (u)  Disclosure................................................................................33
                  (v)  Accounting and Tax Matters................................................................33
                  (w)  Regulatory Approvals......................................................................34
                  (x)  Year 2000 Matters.........................................................................34
                  (y)  Interest Rate Risk Management Instruments.................................................34
                  (z)  Recission of Repurchases..................................................................34

ARTICLE IV CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE TIME OF THE HOLDING COMPANY MERGER....................35

         4.1. Access to Records and Properties of City Holding, City National, Other City Holding Subsidiaries,
                  Horizon and the Horizon Banks; Confidentiality.................................................35
         4.2. Registration Statement, Proxy Statement, Shareholder Approval......................................36
         4.3. Operation of the Businesses of the Parties.........................................................37
         4.4. No Solicitation....................................................................................38
         4.5. Dividends..........................................................................................38
         4.6. Regulatory Filings; Best Efforts...................................................................39
         4.7. Public Announcements...............................................................................39
         4.8. Operating Synergies; Conformance to Reserve Policies, Etc..........................................39
         4.9. City Holding Rights Agreement......................................................................40
</TABLE>

                                      (ii)

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<TABLE>
<S>      <C>                                                                                                    <C>
         4.10. Agreement as to Efforts to Consummate.............................................................40
         4.11. Adverse Changes in Condition......................................................................40
         4.12. Nasdaq Listing....................................................................................40
         4.13. Delivery and Updating of Schedules................................................................41
         4.14. Transactions in City Holding Common Stock.........................................................41
         4.15. Standstill Agreements; Confidentiality Agreements.................................................41
         4.16. Letters from Accountants..........................................................................42

ARTICLE V MANAGEMENT AND CORPORATE GOVERNANCE....................................................................42

         5.1. Board of Directors.................................................................................42
         5.2. Management.........................................................................................42

ARTICLE VI CONDITIONS OF MERGER..................................................................................42

         6.1. Conditions of Obligations of City Holding and City National........................................42
         6.2. Conditions of Obligations of Horizon and the Horizon Banks.........................................45

ARTICLE VII CLOSING DATE; EFFECTIVE TIME.........................................................................48

         7.1. Closing Date.......................................................................................48
         7.2. Filings at Closing.................................................................................48
         7.3. Effective Time.....................................................................................48

ARTICLE VIII TERMINATION; SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; WAIVER AND AMENDMENT............49

         8.1. Termination........................................................................................49
         8.2. Effect of Termination..............................................................................50
         8.3. Survival of Representations, Warranties and Covenants..............................................50
         8.4. Waiver and Amendment...............................................................................51

ARTICLE IX ADDITIONAL COVENANTS..................................................................................51

         9.1. Indemnification of Horizon Officers and Directors; Liability Insurance.............................51
         9.2. Employee Matters...................................................................................52

ARTICLE X MISCELLANEOUS..........................................................................................53

         10.1. Expenses..........................................................................................53
         10.2. Entire Agreement..................................................................................53
         10.3. Descriptive Headings..............................................................................53
         10.4. Notices...........................................................................................54
         10.5. Counterparts......................................................................................55
         10.6. Governing Law.....................................................................................55
</TABLE>


                                     (iii)
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                                INDEX TO EXHIBITS

A                      Holding Company Plan of Merger

B                      [RESERVED]

C                      City Holding Option Agreement

D                      Horizon Option Agreement

E                      Management of City Holding and City National following
                       the Effective Time of the Holding Company Merger

F                      [RESERVED]

G                      Opinion of Jackson & Kelly, counsel to Horizon and the
                       Horizon Banks

H                      Form of Affiliate's Undertaking

I                      Forms of Employment Agreements

J                      Opinion of Hunton & Williams, counsel to City Holding and
                       City National


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                  INDEX TO SCHEDULES TO BE PROVIDED BY HORIZON

2.2(d)                 Horizon Options

3.1(b)(1)              Horizon Banks Outstanding Capital Stock

3.1(b)(2)              Horizon Common Stock Beneficial Ownership

3.1(d)                 Securities Owned by Horizon

3.1(e)                 Horizon Financial Statements

3.1(g)                 Horizon Group Taxes Being Contested, Etc.

3.1(h)                 Horizon and Horizon Banks Options, Warrants and Related
                       Matters

3.1(j)(1)              Horizon and Horizon Banks Salary Rates, Horizon Common
                       Stock Held by Directors of Horizon or the Horizon Banks,
                       Options and Restricted Stock Awards

3.1(j)(2)              Notes, Bonds, Mortgages, Indentures, Licenses, Lease
                       Agreements and Other Contracts of Horizon or the Horizon
                       Banks

3.1(j)(3)              Employment Contracts and Related Matters of Horizon and
                       the Horizon Banks

3.1(j)(4)              Real Estate Owned or Leased by Horizon and the Horizon
                       Banks

3.1(j)(5)              Affiliates of Horizon and the Horizon Banks

3.1(1)                 Legal Proceedings of Horizon or the Horizon Banks

3.1(m)                 Employee Benefit Plans of Horizon and the Horizon Banks

3.1(n)                 Insurance of Horizon or the Horizon Banks

3.1(o)                 Horizon and the Horizon Banks Loans

3.1(p)                 Certain Changes

3.1(r)                 Horizon Subsidiaries and Joint Ventures

3.1(t)                 Environmental Changes

3.1(z)                 Horizon Share Repurchase Programs

4.3                    Horizon Share Repurchases


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                INDEX TO SCHEDULES TO BE PROVIDED BY CITY HOLDING

3.2(b)(1)              City Holding Outstanding Capital Stock

3.2(b)(2)              City Holding Common Stock Beneficial Ownership

3.2(d)                 Securities Owned by City Holding and City National

3.2(e)                 City Holding Financial Statements

3.2(g)                 City Holding Group Taxes Being Contested, Etc.

3.2(h)                 City Holding and City National Options, Warrants and
                       Related Matters

3.2(j)(1)              City Holding Salary Rates, City Holding Common Stock Held
                       by Directors of City Holding or City National, Options
                       and Restricted Stock Awards

3.2(j)(2)              Notes, Bonds, Mortgages, Indentures, Licenses, Lease
                       Agreements and Other Contracts of City Holding

3.2(j)(3)              Employment Contracts and Related Matters of City Holding

3.2(j)(4)              Real Estate Owned or Leased by City Holding

3.2(j)(5)              Affiliates of City Holding

3.2(l)                 Legal Proceedings of City Holding or City National

3.2(m)                 Employee Benefit Plans of City Holding

3.2(n)                 Insurance of City Holding

3.2(o)                 City Holding and City National Loans

3.2(p)                 Certain Changes

3.2(r)                 City Holding and City National Subsidiaries and Joint
                       Ventures

3.2(t)                 Environmental Changes

3.2(z)                 City Holding Share Repurchase Programs

4.3                    City Holding Share Repurchases



<PAGE>   8




                      AGREEMENT AND PLAN OF REORGANIZATION


         This Agreement and Plan of Reorganization (the "Agreement") dated as of
August 7, 1998 between CITY HOLDING COMPANY, a West Virginia corporation ("City
Holding") and HORIZON BANCORP, INC. a West Virginia corporation ("Horizon")
recites and provides:

         A. The boards of directors of City Holding and Horizon deem it
advisable and in furtherance of their long-term business strategies to combine
their business operations through the merger of Horizon into City Holding, with
City Holding as the surviving company (the "Holding Company Merger"), pursuant
to this Agreement and the Plan of Merger attached as Exhibit A (the "Holding
Company Plan of Merger") whereby the holders of shares of the common stock of
Horizon ("Horizon Common Stock") will receive common stock of City Holding
("City Holding Common Stock") in exchange therefor.

         B. The boards of directors of City Holding and Horizon deem it
advisable that, as soon as possible after the Holding Company Merger, City
Holding and Horizon shall cause Bank of Raleigh, a West Virginia bank
("Raleigh"), National Bank of Summers of Hinton, a national banking association
("Summers"), Greenbrier Valley National Bank, a national banking association
("Greenbrier"), The First National Bank in Marlinton, a national banking
association ("Marlinton") and The Twentieth Street Bank, a West Virginia bank
("Twentieth") (collectively, the "Horizon Banks", all of which are wholly-owned
by Horizon), to be merged into City National Bank of West Virginia, a national
banking association wholly-owned by City Holding ("City National") (the "Bank
Mergers"). The Holding Company Merger and the Bank Mergers are referred to
herein collectively as the "Transaction."

         C. To effectuate the foregoing, the parties desire to adopt this
Agreement and the Holding Company Plan of Merger, which shall represent a plan
of reorganization in accordance with the provisions of Section 368(a) of the
United States Internal Revenue Code, as amended (the "Code").

         D. As a condition to, and contemporaneously with, the execution of
this Agreement, the parties have entered into a stock option agreement, with
City Holding as Issuer and Horizon as grantee (the "City Holding Option
Agreement") in the form attached hereto as Exhibit C.

         E. As a condition to, and contemporaneously with, the execution of
this Agreement, the parties have entered into a stock option agreement, with
Horizon as Issuer and City Holding as grantee (the "Horizon Option Agreement")
in the form attached hereto as Exhibit D.

         F. For accounting purposes, the parties intend that the Transaction
shall be accounted for as a "pooling of interests."

         NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement, and of the representations, warranties, conditions and
promises herein contained, City Holding and Horizon hereby adopt this Agreement
whereby at the "Effective Time of the 


<PAGE>   9

Holding Company Merger" (as defined in Article VII hereof) Horizon shall be
merged with City Holding in accordance with the Holding Company Plan of Merger.
As soon as possible after the Holding Company Merger, the Horizon Banks will
merge directly into City National. The outstanding shares of Horizon Common
Stock shall be converted into shares of City Holding Common Stock as provided in
this Agreement on the basis, terms and conditions contained herein and in the
Holding Company Plan of Merger.

         In connection therewith, the parties hereto agree as follows:

                                    ARTICLE I
                                     GENERAL


         1.1.     Holding Company Merger.

                  Subject to the provisions of this Agreement and the Holding
Company Plan of Merger, at the Effective Time of the Holding Company Merger,
Horizon shall be merged with and into City Holding (the "Surviving Company"),
the separate existence of Horizon shall cease, the outstanding shares of Horizon
Common Stock, other than Dissenting Shares (as defined in Section 2.4) and
shares held directly by City Holding, shall be converted into the right to
receive shares of City Holding Common Stock.

         1.2.     Bank Mergers.

                  As soon as possible following the Effective Time of the
Holding Company Merger, City Holding shall cause the Horizon Banks to merge into
City National.

         1.3.     Taking of Necessary Action.

                  In case at any time after the Effective Time of the Holding
Company Merger any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest City Holding with full title to all
properties, assets, rights, approvals, immunities and franchises of Horizon, the
officers and directors of City Holding and Horizon shall take all such necessary
action.

         1.4.     Tax Consequences; Accounting Treatment.

                  The parties intend that each of the Holding Company Merger and
the Bank Mergers shall i)" (i) constitute a reorganization within the meaning of
Section 368(a) of the Code and that this Agreement shall constitute a "plan of
reorganization" for the purposes of Section 368 of the Code, and ii)" (ii) be
accounted for as a "pooling of interests."



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                                   ARTICLE II
         EFFECT OF TRANSACTION ON COMMON STOCK, ASSETS, LIABILITIES AND
           CAPITALIZATION OF CITY HOLDING, CITY NATIONAL, AND HORIZON


         2.1.     Conversion of Stock; Exchange Ratio.

                  At the Effective Time of the Holding Company Merger:

                  (a) Conversion of Stock. Each share of Horizon Common Stock
         which is issued and outstanding at the Effective Time of the Holding
         Company Merger (other than shares held directly by City Holding, which
         shall be canceled without payment therefore, and Dissenting Shares)
         shall, and without any action by the holder thereof, be converted into
         the number of shares of City Holding Common Stock determined in
         accordance with Section 2.1(b). All such shares shall be validly
         issued, fully paid and nonassessable.

                  (b) Exchange Ratio. Each share of Horizon Common Stock (other
         than shares held directly by City Holding and shares to be exchanged
         for cash) shall be converted into the number of shares of City Holding
         Common Stock determined by dividing $45.00 per share of Horizon Common
         Stock (the "Common Stock Price Per Share") by the average closing price
         of City Holding Common Stock as reported on the Nasdaq National Market
         for each of the 10 trading days ending on the 10th day prior to the day
         of the Effective Time of the Holding Company Merger (the "Average
         Closing Price"), such quotient to be rounded to the nearest one
         one-thousandth (the "Exchange Ratio"), provided, that if the Average
         Closing Price is $44.50 or greater, then the Exchange Ratio shall be
         1.011 and if the Average Closing Price is $40.50 or less, then the
         Exchange Ratio shall be 1.111.

                  The Exchange Ratio at the Effective Time of the Holding
         Company Merger shall be adjusted to reflect any consolidation,
         split-up, other subdivisions or combinations of City Holding Common
         Stock, any dividend payable in City Holding Common Stock, or any
         capital reorganization involving the reclassification of City Holding
         Common Stock subsequent to the date of this Agreement.

         2.2.     Manner of Exchange.

                  (a) After the Effective Time of the Holding Company Merger,
         each holder of a certificate for theretofore outstanding shares of
         Horizon Common Stock, upon surrender of such certificate to SunTrust
         Bank, Atlanta (which shall act as exchange agent), and a Letter of
         Transmittal, which shall be mailed to each holder of a certificate for
         theretofore outstanding shares of Horizon Common Stock by City National
         promptly following the Effective Time of the Holding Company Merger,
         shall be entitled to receive in exchange therefor a certificate or
         certificates representing the number of full shares of City Holding



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         Common Stock for which shares of Horizon Common Stock theretofore
         represented by the certificate or certificates so surrendered shall
         have been exchanged as provided in this Article II. Until so
         surrendered, each outstanding certificate which, prior to the Effective
         Time of the Holding Company Merger, represented Horizon Common Stock
         will be deemed to evidence the right to receive the number of full
         shares of City Holding Common Stock into which the shares of Horizon
         Common Stock represented thereby may be converted in accordance with
         the Exchange Ratio and, after the Effective Time of the Holding Company
         Merger will be deemed for all corporate purposes of City Holding to
         evidence ownership of the number of full shares of City Holding Common
         Stock into which the shares of Horizon Common Stock represented thereby
         were converted.

                  (b) Until outstanding certificates formerly representing
         Horizon Common Stock are surrendered, no dividend payable to holders of
         record of City Holding Common Stock for any period as of any date
         subsequent to the Effective Time of the Holding Company Merger shall be
         paid to the holder of such outstanding certificates in respect thereof.
         After the Effective Time of the Holding Company Merger, there shall be
         no further registry of transfer on the records of Horizon of shares of
         Horizon Common Stock. If a certificate representing such shares is
         presented to City Holding, it shall be canceled and exchanged for a
         certificate representing shares of City Holding Common Stock and cash
         representing fractional shares as herein provided. Upon surrender of
         certificates of Horizon Common Stock in exchange for City Holding
         Common Stock, there shall be paid to the recordholder of the
         certificates of City Holding Common Stock issued in exchange therefor
         (i) the amount of dividends theretofore paid for such full shares of
         City Holding Common Stock as of any date subsequent to the Effective
         Time of the Holding Company Merger which have not yet been paid to a
         public official pursuant to abandoned property laws and (ii) at the
         appropriate payment date the amount of dividends with a record date
         after the Effective Time of the Holding Company Merger but prior to
         surrender and a payment date subsequent to surrender. No interest shall
         be payable on such dividends upon surrender of outstanding
         certificates.

                  (c) At the Effective Time of the Holding Company Merger, each
         share of Horizon Common Stock held by City Holding shall be canceled,
         retired and cease to exist and each Dissenting Share shall be treated
         in accordance with Section 31-1-123 of the West Virginia Code ("WVC").

                  (d) At the Effective Time of the Holding Company Merger and as
         provided in the Holding Company Plan of Merger, outstanding options to
         acquire Horizon Common Stock that were granted under Horizon's employee
         benefit plans ("Horizon Options," as defined in Section 3.1(j)(1)
         hereof), and which are identified on Schedule 2.2(d), shall be
         converted, based on the Exchange Ratio, into options to acquire City
         Holding Common Stock ("City Holding Options"). The exercise price per
         share of City Holding Common 



                                     - 4 -
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         Stock under a City Holding Option shall be equal to the exercise price
         per share of Horizon Common Stock under the Horizon Option divided by
         the Exchange Ratio (rounded up to the nearest cent). The number of
         shares of City Holding Common Stock subject to a City Holding Option
         shall be equal to the number of shares of Horizon Common Stock subject
         to the Horizon Option multiplied by the Exchange Ratio (rounded down to
         the nearest whole share). Except as provided in the preceding sentences
         regarding the price of, and number of shares of City Holding Common
         Stock subject to, the City Holding Option, the terms of the City
         Holding Option shall be the same as the terms of the Horizon Option.

         2.3.     No Fractional Shares.

                  No certificates or scrip for fractional shares of City Holding
Common Stock will be issued. In lieu thereof, City Holding will pay the value of
such fractional shares in cash on the basis of the Average Closing Price.

         2.4.     Dissenting Shares.

                  Notwithstanding anything in this Agreement to the contrary,
shares of Horizon Common Stock which are issued and outstanding immediately
prior to the Effective Time of the Holding Company Merger and which are held by
a shareholder (other than City Holding and its subsidiaries, which waive such
right to dissent) who has the right (to the extent such right is available by
law) to demand and receive payment of the fair value of his shares of Horizon
Common Stock pursuant to Section 31-1-122 of the WVC (the "Dissenting Shares")
shall not be converted into or be exchangeable for the right to receive the
consideration provided in Section 2.1 of this Agreement, unless and until such
holder shall fail to perfect his or her right to dissent or shall have
effectively withdrawn or lost such right under the WVC, as the case may be. If
such holder shall have so failed to perfect his right to dissent or shall have
effectively withdrawn or lost such right, each of his shares of Horizon Common
Stock shall thereupon be deemed to have been converted into, at the Effective
Time of the Holding Company Merger, the right to receive shares of City Holding
Common Stock as provided in Section 2.1 of this Agreement.

         2.5.     Assets.

                  At the Effective Time of the Holding Company Merger, the
corporate existence of Horizon shall be merged into and continued in City
Holding as the Surviving Company. All rights, franchises and interests of
Horizon and of the Horizon Banks in and to any type of property and choses in
action shall be transferred to and vested in the Surviving Company by virtue of
the Holding Company Merger. The Surviving Company, without any order or other
action on the part of any court or otherwise, shall hold and enjoy all rights of
property, franchises and interests, including appointments, designations and
nominations, and all other rights and 



                                     - 5 -
<PAGE>   13

interests as trustee, executor, administrator, transfer agent or registrar of
stocks and bonds, guardian of estates, assignee, receiver and committee, and in
every other fiduciary capacity, in the same manner and to the same extent as
such rights, franchises and interests were held or enjoyed by Horizon at the
Effective Time of the Holding Company Merger as provided in Section 31-1-37 of
the WVC.

         2.6.     Liabilities.

                  At the Effective Time of the Holding Company Merger, the
Surviving Company shall be liable for all liabilities of Horizon, as provided in
Section 31-1-37 of the WVC. All deposits, debts, liabilities and obligations of
Horizon, accrued, absolute, contingent or otherwise, and whether or not
reflected or reserved against on balance sheets, books of accounts, or records
of Horizon shall be those of the Surviving Company, and shall not be released or
impaired by the Holding Company Merger. All rights of creditors and other
obligees and all liens on property of Horizon shall be preserved unimpaired.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES


         3.1.     Representations and Warranties of Horizon and the Horizon 
Banks.

                  Horizon represents and warrants to City Holding as follows
(subject to Section 4.13(a) with respect to the delivery of the Schedules
referred to herein):

                  (a) Organization, Standing and Power. Horizon is a corporation
         duly organized, validly existing and in good standing under the laws of
         West Virginia and has all requisite corporate power and authority to
         own, lease and operate its properties and to carry on its business as
         now being conducted and to perform this Agreement and the Holding
         Company Plan of Merger and to effect the transactions contemplated
         hereby and thereby, subject to the approval of its shareholders as
         contemplated by Section 4.2 and federal and state regulatory approvals
         provided for herein. Horizon will deliver to City Holding complete and
         correct copies of its Articles of Incorporation and its By-laws as
         amended to the date hereof.

                  Each of the Horizon Banks is a bank duly organized, validly
         existing and in good standing under the laws of its jurisdiction of
         organization and has all requisite corporate power and authority to
         own, lease and operate its properties and to carry on its business as
         now being conducted and to perform this Agreement and to effect the
         transactions contemplated hereby. Each of the Banks' deposits are
         insured by the Federal Deposit Insurance Corporation (the "FDIC") to
         the maximum extent permitted by law. 



                                     - 6 -
<PAGE>   14

         Horizon will deliver to City Holding complete and correct copies of
         each of the Horizon Banks' i)" (i) Charter and ii)" (ii) By-laws as
         amended to the date hereof.

                  (b) Capital Structure. The authorized capital stock of Horizon
         consists of 20,000,000 shares of Horizon Common Stock, par value $1.00.
         On the date hereof, 9,312,876 shares of Horizon Common Stock were
         outstanding. All of the outstanding shares of Horizon Common Stock are
         validly issued, fully paid and nonassessable.

                  The authorized capital stock of each of the Horizon Banks and
         the title and number of each class of such capital stock outstanding on
         the date hereof is set forth on Schedule 3.1(b)(1). All of such
         outstanding shares of capital stock are validly issued, fully paid and
         nonassessable. Horizon owns all of the issued and outstanding capital
         stock of the Horizon Banks free and clear of any liens, claims,
         encumbrances, charges or rights of third parties of any kind
         whatsoever.

                  Horizon knows of no person who beneficially owns 5% or more of
         the outstanding Horizon Common Stock as of the date hereof, except as
         disclosed on Schedule 3.1(b)(2).

                  (c) Authority. Subject to the approval of this Agreement and
         the Holding Company Plan of Merger by the shareholders of Horizon as
         contemplated by Section 4.2, the execution and delivery of this
         Agreement and the consummation of the transactions contemplated hereby
         and by the Holding Company Plan of Merger have been duly and validly
         authorized by all necessary action on the part of Horizon, and this
         Agreement is a valid and binding obligation of Horizon, enforceable in
         accordance with its terms. The execution and delivery of this
         Agreement, the consummation of the transactions contemplated hereby and
         by the Holding Company Plan of Merger and compliance by Horizon with
         any of the provisions hereof or thereof will not i)" (i) conflict with
         or result in a breach of any provision of its Articles of Incorporation
         or By-laws or a default (or give rise to any right of termination,
         cancellation or acceleration) under any of the terms, conditions or
         provisions of any note, bond, debenture, mortgage, indenture, license,
         material agreement or other material instrument or obligation to which
         Horizon is a party, or by which it or any of its properties or assets
         may be bound, or ii)" (ii) violate any order, writ, injunction, decree,
         statute, rule or regulation applicable to Horizon or any of its
         properties or assets. No consent or approval by any governmental
         authority, other than compliance with applicable federal and state
         securities and banking laws, the rules of the Nasdaq Stock Market and
         regulations of the Board of Governors of the Federal Reserve System
         (the "Federal Reserve Board"), the Office of the Comptroller of the
         Currency (the "OCC"), the FDIC, and the West Virginia Board of Banking
         and Financial Institutions ("WVBOB"), is required in connection with
         the execution and delivery by Horizon of this Agreement or the
         consummation by Horizon of the transactions contemplated hereby 



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         or by the Holding Company Plan of Merger. Horizon's Board of Directors
         has taken all action necessary to ensure that the Transaction is
         exempted from any West Virginia statute that purports to limit or
         restrict business combinations or the ability to acquire or vote shares
         and any change of control or anti-takeover provisions of Horizon's
         Articles or By-laws.

                  The consummation by the Horizon Banks of the transactions
         contemplated hereby, including the Bank Mergers, will not i)" (i)
         conflict with or result in a breach of any provision of their
         respective charters or by-laws or a default (or give rise to any right
         of termination, cancellation or acceleration) under any of the terms,
         conditions or provisions of any note, bond, debenture, mortgage,
         indenture, license, material agreement or other material instrument or
         obligation to which any of the Horizon Banks is a party, or by which
         any of them or any of their properties or assets may be bound, or ii)"
         (ii) violate any order, writ, injunction, decree, statute, rule or
         regulation applicable to any of the Horizon Banks or any of their
         properties or assets. No consent or approval by any governmental
         authority, other than compliance with applicable federal and state
         banking laws, the rules of the Nasdaq Stock Market and regulations of
         the Federal Reserve Board, the OCC, the FDIC and the WVBOB, is required
         in connection with the consummation by the Horizon Banks of the
         transactions contemplated hereby.

                  (d) Investments. All securities owned by Horizon and the
         Horizon Banks of record and beneficially are free and clear of all
         mortgages, liens, pledges, encumbrances or any other restriction,
         whether contractual or statutory, which would materially impair the
         ability of Horizon or the Horizon Banks freely to dispose of any such
         security at any time, except as noted on Schedule 3.1(d). Any
         securities owned of record by Horizon and the Horizon Banks in an
         amount equal to 5% or more of the issued and outstanding voting
         securities of the issuer thereof have been noted on such Schedule
         3.1(d). There are no voting trusts or other agreements or undertakings
         of which Horizon or any of the Horizon Banks is a party with respect to
         the voting of such securities. With respect to all repurchase
         agreements to which Horizon or any of the Horizon Banks is a party, as
         an investor, Horizon or the Horizon Banks has a valid, perfected first
         lien or security interest in the government securities or other
         collateral securing the repurchase agreement, and the value of the
         collateral securing each such repurchase agreement equals or exceeds
         the amount of the debt secured by such collateral under such agreement.

                  (e) Financial Statements. Schedule 3.1(e) contains copies of
         the following consolidated financial statements of Horizon and each of
         the Horizon Banks (the "Horizon Financial Statements"):

                           (i) Consolidated Balance Sheets as of December 31,
                  1997 and 1996 (audited), and as of June 30, 1998 and 1997
                  (unaudited);



                                     - 8 -
<PAGE>   16

                           (ii) Consolidated Statements of Income for each of
                  the three years ended December 31, 1997, 1996, and 1995
                  (audited) and for each of the three and six month periods
                  ended June 30, 1998 and 1997 (unaudited);

                           (iii) Consolidated Statements of Shareholders' Equity
                  for each of the three years ended December 31, 1997, 1996 and
                  1995 (audited) and for each of the three and six month periods
                  ended June 30, 1998 and 1997 (unaudited); and

                           (iv) Consolidated Statements of Cash Flows for each
                  of the three years ended December 31, 1997, 1996 and 1995
                  (audited) and for each of the three and six month periods
                  ended June 30, 1998 and 1997 (unaudited).

         Such financial statements and the notes thereto have been prepared in
         accordance with generally accepted accounting principles ("GAAP")
         applied on a consistent basis throughout the periods indicated unless
         otherwise noted in the Horizon Financial Statements. Each of such
         consolidated statements of financial condition, together with the notes
         thereto, presents fairly as of its date the consolidated financial
         condition and assets and liabilities of Horizon or the applicable
         Horizon Bank. The consolidated income statements, shareholders' equity
         and cash flows, together with the notes thereto, present fairly the
         results of operations, changes in shareholders' equity and cash flows
         of Horizon or the applicable Horizon Bank for the periods indicated in
         accordance with GAAP.

                  Except as disclosed in the Horizon Financial Statements, and
         in the case of the Horizon Banks, compliance with and subject to
         regulatory requirements of general applicability, there are no
         restrictions precluding Horizon or any of the Horizon Banks from paying
         dividends when, as and if declared by their respective Boards of
         Directors.

                  (f) Absence of Undisclosed Liabilities. At June 30, 1998,
         neither Horizon nor any of its consolidated subsidiaries had any
         material obligations or liabilities (contingent or otherwise) of any
         nature which were not reflected in the Horizon Financial Statements as
         of such dates, or disclosed in the notes thereto, or in the Horizon
         periodic reports filed with the Securities and Exchange Commission
         ("SEC") under the Securities Exchange Act of 1934 (the "1934 Act") as
         of such dates, or disclosed in the notes thereto, except for those
         which are appropriately disclosed in Schedules specifically referred to
         herein or which in the aggregate are immaterial.

                  (g) Tax Matters. The Horizon Banks and all other subsidiaries
         of Horizon are members of the same "affiliated group," as defined in
         Section 1504(a)(1) of the Code, as Horizon (collectively, the "Horizon
         Group"). Each member of the Horizon Group has filed or caused to be
         filed or (in the case of returns or reports not yet due) will file all
         tax returns and reports required to have been filed by or for them
         before the Effective Time 



                                     - 9 -
<PAGE>   17

         of the Holding Company Merger, and all information set forth in such
         returns or reports is or (in the case of such returns or reports not
         yet due) will be accurate and complete in all material respects. Each
         member of the Horizon Group has paid or made adequate provision for, or
         (with respect to returns or reports not yet filed) before the Effective
         Time of the Holding Company Merger will pay or make adequate provision
         for, all taxes, additions to tax, penalties, and interest for all
         periods covered by those returns or reports. There are, and at the
         Effective Time of the Holding Company Merger will be, no unpaid taxes,
         additions to tax, penalties, or interest due and payable by any member
         of the Horizon Group that are or could become a lien on any asset, or
         otherwise materially adversely affect the business, property or
         financial condition, of any member of the Horizon Group except for
         taxes and any such related liability (a) incurred in the ordinary
         course of business for which adequate provision has been made by any
         member of the Horizon Group or (b) being contested in good faith and
         disclosed in Schedule 3.1(g). Each member of the Horizon Group has
         collected or withheld, or will collect or withhold before the Effective
         Time of the Holding Company Merger, all amounts required to be
         collected or withheld by it for any taxes, and all such amounts have
         been, or before the Effective Time of the Holding Company Merger will
         have been, paid to the appropriate governmental agencies or set aside
         in appropriate accounts for future payment when due. Each member of the
         Horizon Group is in material compliance with, and its records contain
         all information and documents (including, without limitation, properly
         completed IRS Forms W-9) necessary to comply in all material respects
         with, all applicable information reporting and tax withholding
         requirements under federal, state, and local laws, rules, and
         regulations, and such records identify with specificity all accounts
         subject to backup withholding under Section 3406 of the Code. The
         consolidated statements of financial condition contained in the Horizon
         Financial Statements fully and properly reflect, as of the dates
         thereof, the aggregate liabilities of the members of the Horizon Group
         for all accrued taxes, additions to tax, penalties and interest in
         accordance with GAAP. For periods ending after June 30, 1998, the books
         and records of each member of the Horizon Group fully and properly
         reflect their liability for all accrued taxes, additions to tax,
         penalties and interest in accordance with GAAP. Except as disclosed in
         Schedule 3.1(g), no member of the Horizon Group has granted (nor is it
         subject to) any waiver of the period of limitations for the assessment
         of tax for any currently open taxable period, and no unpaid tax
         deficiency has been asserted in writing against or with respect to any
         member of the Horizon Group by any taxing authority. No member of the
         Horizon Group has made or entered into, or holds any asset subject to,
         a consent filed pursuant to Section 341(f) of the Code and the
         regulations thereunder or a "safe harbor lease" subject to former
         Section 168(f)(8) of the Code and the regulations thereunder. Schedule
         3.1(g) describes all tax elections, consents and agreements affecting
         any member of the Horizon Group. To the Knowledge of Horizon, no
         Horizon shareholder is a "foreign person" for purposes of Section 1445
         of the Code.



                                     - 10 -
<PAGE>   18

                  (h) Options, Warrants and Related Matters. There are no
         outstanding unexercised options, warrants, calls, commitments or
         agreements of any character to which Horizon or any of the Horizon
         Banks is a party or by which it is bound, calling for the issuance of
         securities of Horizon or the Horizon Banks or any security representing
         the right to purchase or otherwise receive any such security, except
         i)" (i) as set forth on Schedule 3.1(h) and ii)" (ii) the Horizon Stock
         Option Agreement.

                  (i) Property. Horizon and the Horizon Banks own (or enjoy use
         of under capital leases) all property reflected on the Horizon
         Financial Statements as of June 30, 1998 as being owned by them (except
         property sold or otherwise disposed of in the ordinary course of
         business after such date). All material property shown as being owned
         is owned free and clear of all mortgages, liens, pledges, charges or
         encumbrances of any nature whatsoever, except those referred to in such
         Horizon Financial Statements or the notes thereto, liens for current
         taxes not yet due and payable, any unfiled mechanics' liens and such
         encumbrances and imperfections of title, if any, as are not substantial
         in character or amount or otherwise would materially impair Horizon's
         consolidated business operations. The leases relating to leased
         property are fairly reflected in such Horizon Financial Statements.

                  Except for Other Real Estate Owned ("OREO"), all property and
         assets material to the business or operations of Horizon and the
         Horizon Banks are in substantially good operating condition and repair
         and such property and assets are adequate for the business and
         operations of Horizon and the Horizon Banks as currently conducted.

                  (j) Additional Schedules Furnished to City Holding. In
         addition to any Schedules furnished to City Holding pursuant to other
         provisions of this Agreement, Horizon has furnished to City Holding the
         following Schedules which are correct and complete as of the date
         hereof:

                           (1) Employees. Schedule 3.1(j)(1) lists as of the
                  date hereof (A) the names of and current annual salary rates
                  for all present employees of Horizon and the Horizon Banks who
                  received, respectively, $75,000 or more in aggregate
                  compensation, whether in salary or otherwise as reported or
                  would be reported on Form W-2, during the year ended December
                  31, 1997, or are presently scheduled to receive salary in
                  excess of $75,000 during the year ending December 31, 1998,
                  (B) the number of shares of Horizon Common Stock owned
                  beneficially by each director of Horizon or the Horizon Banks
                  as of the date hereof, (C) the names of and the number of
                  shares of Horizon Common Stock owned by each person known to
                  Horizon who beneficially owns 5% or more of the outstanding
                  Horizon Common Stock as of the date hereof, and (D) the names
                  of, the number of outstanding options of, and the exercise
                  price of, each agreement to make stock-



                                     - 11 -
<PAGE>   19

                  based awards granted to each person under Horizon's incentive
                  stock option plan (the "Horizon Stock Option Plan") or any
                  other option granted by Horizon or any the Horizon Banks to
                  any director, officer, employee, consultant or advisor
                  (collectively, "Horizon Options") and the exercise price of
                  each such Horizon Option. Horizon has no stock-based employee
                  benefit plan or arrangement other than the Horizon Stock
                  Option Plan, and the Horizon Employee Stock Option Plan.

                           (2) Certain Contracts. Schedule 3.1(j)(2) lists all
                  notes, bonds, mortgages, indentures, licenses, lease
                  agreements and other contracts and obligations to which
                  Horizon or any of the Horizon Banks is an indebted party or a
                  lessee, licensee or obligee as of the date hereof except for
                  those entered into by Horizon or the Horizon Banks in the
                  ordinary course of its business consistent with its prior
                  practice and that do not involve an amount remaining greater
                  than $100,000.

                           (3) Employment Contracts and Related Matters. Except
                  in all cases as set forth on Schedule 3.1(j)(3), neither
                  Horizon nor any of the Horizon Banks is a party to any
                  employment contract not terminable at the option of Horizon or
                  the Horizon Banks without liability. Except in all cases as
                  set forth on Schedule 3.1(j)(3), neither Horizon nor any of
                  the Horizon Banks is a party to (A) any retirement, profit
                  sharing or pension plan or thrift plan or agreement or
                  employee benefit plan (as defined in Section 3 of the Employee
                  Retirement Income Security Act of 1974 ("ERISA")), (B) any
                  management or consulting agreement not terminable at the
                  option of Horizon or the Horizon Banks without liability or
                  (C) any union or labor agreement.

                           (4) Real Estate. Schedule 3.1(j)(4) describes, as of
                  the date hereof, all interests in real property owned, leased
                  or otherwise claimed by Horizon and the Horizon Banks,
                  including OREO.

                           (5) Affiliates. Schedule 3.1(j)(5) sets forth the
                  names and number of shares of Horizon Common Stock owned as of
                  the date hereof beneficially or of record by any persons
                  Horizon considers to be affiliates of Horizon ("Horizon
                  Affiliates") as that term is defined for purposes of Rule 145
                  under the Securities Act of 1933 (the "1933 Act").

                  (k) Agreements in Force and Effect. All material contracts,
         agreements, plans, leases, policies and licenses referred to in any
         Schedule of Horizon or the Horizon Banks referred to herein are valid
         and in full force and effect, and neither Horizon nor any of the
         Horizon Banks has breached any provision of, nor is in default in any
         respect under the terms of, any such contract, agreement, lease, policy
         or license, the effect of which 



                                     - 12 -
<PAGE>   20

         breach or default would have a material adverse effect upon the
         financial condition, results of operations, or business of Horizon on a
         consolidated basis.

                  (l) Legal Proceedings; Compliance with Laws. Schedule 3.1(l)
         describes all legal, administrative, arbitration or other proceedings
         or governmental investigations known to Horizon pending or, to the
         Knowledge of Horizon, threatened or probable of assertion against
         Horizon or any of the Horizon Banks. Except as set forth on Schedule
         3.1(l), no such proceeding or investigation, if decided adversely,
         would have a material adverse effect on the financial condition,
         results of operations, business or prospects of Horizon on a
         consolidated basis. Except as set forth in Schedule 3.1(l), Horizon and
         the Horizon Banks have complied with any laws, ordinances,
         requirements, regulations or orders applicable to their respective
         businesses, except where noncompliance would not have a material
         adverse effect on the financial condition, results of operations or
         business of Horizon on a consolidated basis. Horizon and the Horizon
         Banks have all licenses, permits, orders or approvals (collectively,
         the "Permits") of any federal, state, local or foreign governmental or
         regulatory body that are necessary for the conduct of the respective
         businesses of Horizon and the Horizon Banks and the absence of which
         would have a material adverse effect on the financial condition,
         results of operations or business of Horizon on a consolidated basis;
         the Permits are in full force and effect; no material violations are or
         have been recorded in respect of any Permits nor has Horizon or any of
         the Horizon Banks received written notice of any violations; and no
         proceeding is pending or, to the Knowledge of Horizon, threatened to
         revoke or limit any Permit. Except as set forth in Schedule 3.1(l),
         neither Horizon nor any of the Horizon Banks has entered into any
         agreements or written understandings with the OCC, the Federal Reserve
         Board, the FDIC, the WVBOB or any other regulatory agency having
         authority over it. Neither Horizon nor any of the Horizon Banks is
         subject to any judgment, order, writ, injunction or decree which
         materially adversely affects, or might reasonably be expected
         materially adversely to affect, the financial condition, results of
         operations, or business of Horizon on a consolidated basis. "Knowledge
         of Horizon," and phrases of similar meaning, shall mean the actual
         knowledge, after due inquiry, of Frank S. Harkins, Jr., B. C. McGinnis,
         III and Philip L. McLaughlin.

                  (m) Employee Benefit Plans.

                           (1) Schedule 3.1(m) includes a correct and complete
                  list of, and City Holding has been furnished a true and
                  correct copy of (or an accurate written description thereof in
                  the case of oral agreements or arrangements) (A) all
                  qualified pension and profit-sharing plans, all deferred
                  compensation, consultant, severance, thrift, option, bonus and
                  group insurance contracts and all other incentive, welfare and
                  employee benefit plans, trust, annuity or other funding
                  agreements, and all other agreements (including oral
                  agreements) that are 



                                     - 13 -
<PAGE>   21

                  presently in effect, or have been approved prior to the date
                  hereof, maintained for the benefit of employees or former
                  employees of Horizon or the Horizon Banks or the dependents or
                  beneficiaries of any employee or former employee of Horizon or
                  the Horizon Banks, whether or not subject to ERISA (the
                  "Employee Plans"), (B) the most recent actuarial and financial
                  reports prepared or required to be prepared with respect to
                  any Employee Plan and (C) the most recent annual reports filed
                  with any governmental agency, the most recent favorable
                  determination letter issued by the Internal Revenue Service,
                  and any open requests for rulings or determination letters,
                  that pertain to any such qualified Employee Plan. Schedule
                  3.1(m) identifies each Employee Plan that is intended to be
                  qualified under Section 401(a) of the Code and each such plan
                  is qualified.

                           (2) Neither Horizon, the Horizon Banks nor any
                  employee pension benefit plan (as defined in Section 3(2) of
                  ERISA (a "Pension Plan")) maintained or previously maintained
                  by it, has incurred any material liability to the Pension
                  Benefit Guaranty Corporation ("PBGC") or to the Internal
                  Revenue Service with respect to any Pension Plan, deferred
                  compensation, consultant, severance, thrift, option, bonus and
                  group insurance contract or any other incentive, welfare and
                  employee benefit plan and agreement presently in effect, or
                  approved prior to the date hereof, for the benefit of
                  employees or former employees of Horizon and the Horizon Banks
                  or the dependents or beneficiaries of any employee or former
                  employee of Horizon or any Horizon Bank (the "Horizon Employee
                  Plans"). There is not currently pending with the PBGC any
                  filing with respect to any reportable event under Section 4043
                  of ERISA nor has any reportable event occurred as to which a
                  filing is required and has not been made.

                           (3) Full payment has been made (or proper accruals
                  have been established) of all contributions which are required
                  for periods prior to the Closing Date, as defined in Section
                  7.1 hereof, under the terms of each Horizon Employee Plan,
                  ERISA, or a collective bargaining agreement, no accumulated
                  funding deficiency (as defined in Section 302 of ERISA or
                  Section 412 of the Code) whether or not waived, exists with
                  respect to any Pension Plan (including any Pension Plan
                  previously maintained by Horizon or the Horizon Banks), and
                  except as set forth on Schedule 3.1(m), there is no "unfunded
                  current liability" (as defined in Section 412 of the Code)
                  with respect to any Horizon Employee Plan or Pension Plan.

                           (4) No Horizon Employee Plan is a "multiemployer
                  plan" (as defined in Section 3(37) of ERISA). Neither Horizon
                  nor any of the Horizon Banks has incurred any material
                  liability under Section 4201 of ERISA for a complete or
                  partial withdrawal from a multiemployer plan (as defined in
                  Section 3(37) of 



                                     - 14 -
<PAGE>   22

                  ERISA). Neither Horizon nor any of the Horizon Banks has
                  participated in or agreed to participate in, a multiemployer
                  plan (as defined in Section 3(37) of ERISA).

                           (5) All Employee Plans that are "employee benefit
                  plans," as defined in Section 3(3) of ERISA, that are
                  maintained by Horizon or any of the Horizon Banks or
                  previously maintained by Horizon or any of the Horizon Banks
                  comply and have been administered in compliance in all
                  material respects with ERISA and all other applicable legal
                  requirements, including the terms of such plans, collective
                  bargaining agreements and securities laws. Neither Horizon nor
                  any of the Horizon Banks has any material liability under any
                  such plan that is not reflected in the Horizon Financial
                  Statements or on Schedule 3.1(m) hereto.

                           (6) Except as set forth on Schedule 3.1(m), no
                  prohibited transaction has occurred with respect to any
                  Employee Plan that is an "employee benefit plan" (as defined
                  in Section 3(3) of ERISA) maintained by Horizon or any of the
                  Horizon Banks or previously maintained by Horizon or any of
                  the Horizon Banks that would result, directly or indirectly,
                  in material liability under ERISA or in the imposition of a
                  material excise tax under Section 4975 of the Code.

                           (7) Schedule 3.1(m) identifies each Horizon Employee
                  Plan that is an "employee welfare benefit plan" (as defined in
                  Section 3(1) of ERISA) and which is funded. The funding under
                  each such plan does not exceed the limitations under Section
                  419A(b) or 419A(c) of the Code. Neither Horizon nor any of the
                  Horizon Banks is subject to taxation on the income of any such
                  plan or any such plan previously maintained by Horizon or any
                  of the Horizon Banks.

                           (8) Schedule 3.1(m) identifies the method of funding
                  (including any individual accounting) for all post-retirement
                  medical or life insurance benefits for the employees of
                  Horizon and the Horizon Banks. Schedule 3.1(m) also discloses
                  the funded status of these Horizon Employee Plans.

                           (9) Schedule 3.1(m) identifies each corporate owned
                  life insurance policy, including any key man insurance policy
                  and policy insuring the life of any director or employee of
                  Horizon or the Horizon Banks, and indicates for each such
                  policy, the face amount of coverage, cash surrender value, if
                  any, and annual premiums.

                           (10) No trade or business is, or has ever been,
                  treated as a single employer with Horizon or any of the
                  Horizon Banks for employee benefit purposes under ERISA and
                  the Code.



                                     - 15 -
<PAGE>   23

                  (n) Insurance. All policies or binders of fire, liability,
         product liability, workmen's compensation, vehicular and other
         insurance held by or on behalf of Horizon or any of the Horizon Banks
         are described on Schedule 3.1(n) and are valid and enforceable in
         accordance with their terms, are in full force and effect, and insure
         against risks and liabilities to the extent and in the manner customary
         for the industry and are deemed appropriate and sufficient by Horizon
         and the Horizon Banks. Neither Horizon nor any of the Horizon Banks is
         in default with respect to any provision contained in any such policy
         or binder and has not failed to give any notice or present any claim
         under any such policy or binder in due and timely fashion. Neither
         Horizon nor any of the Horizon Banks has received notice of
         cancellation or non-renewal of any such policy or binder. Horizon has
         no knowledge of any inaccuracy in any application for such policies or
         binders, any failure to pay premiums when due or any similar state of
         facts that might form the basis for termination of any such insurance.
         Horizon has no knowledge of any state of facts or of the occurrence of
         any event that is reasonably likely to form the basis for any material
         claim against it not fully covered (except to the extent of any
         applicable deductible) by the policies or binders referred to above.
         Neither Horizon nor any of the Horizon Banks has received notice from
         any of its insurance carriers that any insurance premiums will be
         materially increased in the future or that any such insurance coverage
         will not be available in the future on substantially the same terms as
         now in effect.

                  (o) Loan Portfolio. Each loan outstanding on the books of
         Horizon and the Horizon Banks is in all respects what it purports to
         be, was made in the ordinary course of business, was not known to be
         uncollectible at the time it was made, accrues interest (except for
         loans recorded on the Horizon Banks' books as non-accrual) in
         accordance with the terms of the loan, and with respect to loans
         originated by the Horizon Banks was made in accordance with the
         applicable Horizon Bank's standard loan policies as in effect at the
         time the loan was negotiated except for loans to facilitate the sale of
         OREO or loans with renegotiated terms and conditions. The records of
         the Horizon Banks regarding all loans outstanding and OREO by the
         Horizon Banks on their respective books are accurate in all material
         respects and the risk classifications for the loans outstanding are, in
         the best judgment of the management of Horizon and the applicable
         Horizon Bank, appropriate. The reserves for possible loan losses on the
         outstanding loans of the Horizon Banks, as reflected in the Horizon
         Financial Statements, have been established in accordance with GAAP and
         with the requirements of the Federal Reserve Board, the OCC and the
         FDIC. In the best judgment of the management of Horizon and the
         applicable Horizon Bank such reserves are adequate as of the date
         hereof and will be adequate as of the Effective Time of the Holding
         Company Merger to absorb all known and anticipated loan losses in the
         loan portfolio of the Horizon Banks. Except as identified on Schedule
         3.1(o), no loan in excess of $50,000 has been classified by examiners
         (regulatory or internal) as "Special Mention", "Substandard",
         "Doubtful", "Loss", or words of similar import. Except as disclosed on
         Schedule 3.1(j)(4), the OREO 



                                     - 16 -
<PAGE>   24

         included in any nonperforming asset of the Horizon Banks is recorded at
         the lower of cost or fair value less estimated costs to sell based on
         independent appraisals that comply with the requirements of the
         Financial Institutions Reform, Recovery and Enforcement Act of 1989 and
         Uniform Standards of Professional Appraisal Practice. Except as
         identified on Schedule 3.1(o), to the Knowledge of Horizon and the
         applicable Horizon Banks, each loan reflected as an asset on the
         Horizon Financial Statements is the legal, valid and binding obligation
         of the obligor and any guarantor, subject to bankruptcy, insolvency,
         fraudulent conveyance and other laws of general applicability relating
         to or affecting creditors' rights and to general principles of equity,
         and no defense, offset or counterclaim has been asserted with respect
         to any such loan, which if successful would have a material adverse
         effect on the financial condition, results of operation or business of
         Horizon on a consolidated basis.

                  (p) Absence of Changes. Except as identified on Schedule
         3.1(p), since June 30, 1998, there has not been any material adverse
         change in the condition (financial or otherwise), aggregate assets or
         liabilities, earnings or business of Horizon, other than changes
         resulting from or attributable to i)" (i) changes since such date in
         laws or regulations, GAAP or interpretations of either thereof that
         affect the banking industry generally, ii)" (ii) changes since such
         date in the general level of interest rates, iii)" (iii) expenses since
         such date incurred in connection with the transactions contemplated by
         this Agreement, iv)" (iv) accruals and reserves by Horizon or the
         Horizon Banks since such date pursuant to the terms of Section 4.8
         hereof, or v)" (v) any other accruals, reserves or expenses incurred by
         Horizon or the Horizon Banks since such date with City Holding's prior
         written consent. Since June 30, 1998, the business of Horizon has been
         conducted only in the ordinary course.

                  (q) Brokers and Finders. Neither Horizon, the Horizon Banks
         nor any of their officers, directors or employees have employed any
         broker or finder or incurred any liability for any brokerage fees,
         commissions or finders' fees in connection with the transactions
         contemplated herein, except for the engagement of Baxter, Fentriss &
         Co., whose total compensation for its engagement shall not exceed one
         half of one percent (.5%) of the aggregate consideration of the Holding
         Company Merger, plus out-of-pocket expenses, as set forth in the
         engagement letter of Baxter, Fentriss & Co., dated as of May 1, 1998.

                  (r) Subsidiaries; Partnerships and Joint Ventures. Horizon has
         no subsidiaries, direct or indirect, other than the Horizon Banks.
         Horizon owns, directly or indirectly, all of the issued and outstanding
         capital stock of its subsidiaries free and clear of any liens, claims,
         encumbrances, charges or rights of third parties of any kind whatsoever
         and is not a party to any joint venture agreement or partnership except
         as set forth in Schedule 3.1(r).



                                     - 17 -
<PAGE>   25

                  (s) Reports. Since January 1, 1995, Horizon and the Horizon
         Banks have filed all material reports and statements, together with any
         amendments required to be made with respect thereto, that were required
         to be filed with i)" (i) the Federal Reserve Board, ii)" (ii) the FDIC,
         iii)" (iii) the OCC, iv)" (iv) the SEC, v)" (v) the WVBOB, and vi)"
         (vi) any other governmental or regulatory authority or agency having
         jurisdiction over their operations. Each of such reports and documents,
         including the financial statements, exhibits and schedules thereto,
         filed with the SEC pursuant to the 1934 Act was in form and substance
         in compliance in all material respects with the 1934 Act. No such
         report or statement, or any amendments thereto, contains any statement
         which, at the time and in light of the circumstances under which it was
         made, was false or misleading with respect to any material fact
         necessary in order to make the statements contained therein not false
         or misleading. Horizon is a reporting company under Section 12(g) or
         15(d) of the 1934 Act and the regulations of the SEC.

                  (t) Environmental Matters. For purposes of this subsection,
         the following terms shall have the indicated meaning:

                  "Environmental Law" means any federal, state or local law,
         statute, ordinance, rule, regulation, code, license, permit,
         authorization, approval, consent, order, judgment, decree, injunction
         or agreement with any governmental entity relating to i)" (i) the
         protection, preservation or restoration of the environment (including,
         without limitation, air, water vapor, surface water, groundwater,
         drinking water supply, surface soil, subsurface soil, plant and animal
         life or any other natural resource), and/or ii)" (ii) the use, storage,
         recycling, treatment, generation, transportation, processing, handling,
         labeling, production, release or disposal of Hazardous Substances. The
         term "Environmental Law" includes without limitation i)" (i) the
         Comprehensive Environmental Response, Compensation and Liability Act,
         as amended, 42 U.S.C. Section 9601, et seq; the Resource Conservation
         and Recovery Act, as amended, 42 U.S.C. Section 6901, et seq; the Clean
         Air Act, as amended, 42 U.S.C. Section 7401, et seq; the Federal Water
         Pollution Control Act, as amended, 33 U.S.C. Section 1251, et seq; the
         Toxic Substances Control Act, as amended, 15 U.S.C. Section 9601, et
         seq; the Emergency Planning and Community Right to Know Act, 42 U.S.C.
         Section 11001, et seq; the Safe Drinking Water Act, 42 U.S.C. Section
         300f, et seq; and all comparable state and local laws, and ii)" (ii)
         any common law (including without limitation common law that may impose
         strict liability) that may impose liability or obligations for injuries
         or damages due to, or threatened as a result of, the presence of or
         exposure to any Hazardous Substance.

                  "Hazardous Substance" means any substance presently listed,
         defined, designated or classified as hazardous, toxic, radioactive or
         dangerous, or otherwise regulated, under any Environmental Law, whether
         by type or by quantity, including any material containing any such
         substance as a component. Hazardous Substances include without



                                     - 18 -
<PAGE>   26

         limitation petroleum or any derivative or by-product thereof, asbestos,
         radioactive material, and polychlorinated biphenyls.

                  "Loan Portfolio Properties and Other Properties Owned" means
         those properties owned or operated by Horizon or the Horizon Banks or
         any of their subsidiaries, including those properties serving as
         collateral for any loans made and retained by Horizon or the Horizon
         Banks or for which Horizon or the Horizon Banks serves in a trust
         relationship for the loans retained in portfolio.

                  Except as disclosed in Schedule 3.1(t), to the Knowledge of
         Horizon:

                           (i) neither Horizon nor any of the Horizon Banks has
                  been or is in violation of or liable under any Environmental
                  Law;

                           (ii) none of the Loan Portfolio Properties and Other
                  Properties Owned has been or is in violation of or liable
                  under any Environmental Law; and

                           (iii) there are no actions, suits, demands, notices,
                  claims, investigations or proceedings pending or threatened
                  relating to the liability of the Loan Portfolio Properties and
                  Other Properties Owned under any Environmental Law, including
                  without limitation any notices, demand letters or requests for
                  information from any federal or state environmental agency
                  relating to any such liabilities under or violations of
                  Environmental Law.

                  (u) Disclosure. Except to the extent of any subsequent
         correction or supplement with respect thereto furnished prior to the
         date hereof, no written statement, certificate, schedule, list or other
         written information furnished by or on behalf of Horizon at any time to
         City Holding, in connection with this Agreement, when considered as a
         whole, contains or will contain any untrue statement of a material fact
         or omits or will omit to state a material fact necessary in order to
         make the statements herein or therein, in light of the circumstances
         under which they were made, not misleading. Each document delivered or
         to be delivered by Horizon to City Holding is or will be a true and
         complete copy of such document, unmodified except by another document
         delivered by Horizon.

                  (v) Accounting and Tax Matters. Neither Horizon nor any of the
         Horizon Banks has taken or agreed to take any action nor do any of them
         have any knowledge of any fact or circumstance that would prevent the
         Holding Company Merger from qualifying as a reorganization within the
         meaning of Section 368 of the Code or from being eligible for
         "pooling-of-interests" accounting.



                                     - 19 -
<PAGE>   27

                  (w) Regulatory Approvals. Neither Horizon nor any of the
         Horizon Banks knows of any reason why the approvals, consents and
         waivers of governmental authorities referred to in Sections 6.1(f) and
         6.2(f) hereof should not be obtained on a timely basis without the
         imposition of any condition of the type referred to in Section 6.1(f)
         hereof and none of them has taken or agreed to take any action that
         would materially impede or delay the receipt of such approvals,
         consents and waivers or would be reasonably likely to result in the
         imposition of any such condition.

                  (x) Year 2000 Matters. The computer software operated by
         Horizon which is material to the conduct of its business is capable of
         providing or is being adapted to provide (pursuant to plans approved by
         the Board of Directors, copies of which have been provided to City
         Holding, the expense of which has been reserved against or otherwise
         provided for), in all material respects, uninterrupted millennium
         functionality to record, store, process and present calendar dates
         falling on or after January 1, 2000 in substantially the same manner
         and with the same functionality as such software records, stores
         processes and presents such calendar dates falling on or before
         December 31, 1999. None of Horizon or any of the Horizon Banks has
         received, or reasonably expects to receive, a "Year 2000 Deficiency
         Notification Letter" (as such term is employed in the Federal Reserve
         Board's Supervision and Regulation Letter No. SR 98-3(SUP), dated March
         4, 1998).

                  (y) Interest Rate Risk Management Instruments. All interest
         rate swaps, caps, floors and option agreements and other interest rate
         risk management arrangements, whether entered into for the account of
         Horizon or any of its subsidiaries, were entered into in the ordinary
         course of business and, to the Knowledge of Horizon, in accordance with
         prudent banking practices and applicable rules, regulations and
         policies of any regulatory authority of competent jurisdiction and with
         counterparties believed to be financially responsible at the time and
         are legal, valid and binding obligations of Horizon or one of its
         subsidiaries enforceable in accordance with their terms except as
         enforceability may be limited by laws affecting insured depository
         institutions and similar laws affecting the enforcement of creditors'
         rights generally and subject to any equitable principles limiting the
         right to obtain specific performance. Horizon and each of Horizon's
         subsidiaries have duly performed all of their obligations thereunder to
         the extent that such obligations to perform have accrued, and, to the
         Knowledge of Horizon, there are no breaches, violations or defaults or
         allegations or assertions of such by any party thereunder.

                  (z) Recission of Repurchases. Except as set forth on Schedule
         3.1(z), all share repurchase programs previously authorized by the
         Board of Directors of Horizon have either expired or been revoked by
         resolution duly adopted on or prior to the date hereof.



                                     - 20 -
<PAGE>   28

         3.2.     Representations and Warranties of City Holding and City 
National.

                  City Holding and City National represent and warrant to
Horizon and the Horizon Banks as follows (subject to Section 4.13(b) with
respect to the provision of the schedules referred to herein):

                  (a) Organization, Standing and Power. City Holding is a
         corporation duly organized, validly existing and in good standing under
         the laws of West Virginia and has all requisite corporate power and
         authority to own, lease and operate its properties and to carry on its
         business as now being conducted and to perform this Agreement and the
         Holding Company Plan of Merger and to effect the transactions
         contemplated hereby and thereby, subject to the approval of its
         shareholders as contemplated by Section 4.2 and federal and state
         regulatory approvals provided for herein. City Holding will deliver to
         Horizon complete and correct copies of its Articles of Incorporation
         and its By-laws as amended to the date hereof.

                  City National is a national banking association duly
         organized, validly existing and in good standing under the laws of the
         United States and has all requisite corporate power and authority to
         own, lease and operate its properties and carry on its business as now
         being conducted and to perform this Agreement and to effect the
         transactions contemplated hereby. City National's deposits are insured
         by the FDIC to the maximum extent permitted by law. City National will
         deliver to Horizon a complete and correct copy of its Charter and
         By-laws as amended to the date hereof.

                  (b) Capital Structure. The authorized capital stock of City
         Holding consists of 20,000,000 shares of Common Stock and 500,000
         shares of Preferred Stock, of which 6,732,732 shares of Common Stock
         and no shares of Preferred Stock were issued and outstanding as of June
         30, 1998. All of such issued and outstanding shares of City Holding
         Common Stock were validly issued, fully paid and nonassessable at such
         date.

                  The authorized capital stock of City National consists of
         131,250 shares of common stock, $5.00 par value, of which 123,701
         shares were issued and outstanding as of June 30, 1998, all of which
         shares are owned by City Holding free and clear of any liens, claims,
         encumbrances, charges or rights of third parties of any kind
         whatsoever, except as disclosed on Schedule 3.2(b)(1). All such issued
         and outstanding shares of common stock of City National were validly
         issued, fully paid and nonassessable at such date.

                  City Holding knows of no person who beneficially owns 5% or
         more of the outstanding City Holding Common Stock as of the date
         hereof, except as described on Schedule 3.2(b)(2).



                                     - 21 -
<PAGE>   29

                  (c) Authority. Subject to the approval of this Agreement and
         the Holding Company Plan of Merger by the shareholders of City Holding
         as contemplated by Section 4.2, the execution and delivery of this
         Agreement and the consummation of the transactions contemplated hereby
         and by the Holding Company Plan of Merger have been duly and validly
         authorized by all necessary action on the part of City Holding; and
         this Agreement is a valid and binding obligation of City Holding,
         enforceable in accordance with its terms. The execution and delivery of
         this Agreement, the consummation of the transactions contemplated
         hereby and by the Holding Company Plan of Merger and compliance by City
         Holding with any of the provisions hereof or thereof will not i)" (i)
         conflict with or result in a breach of any provision of its Articles of
         Incorporation or By-laws or a default (or give rise to any right of
         termination, cancellation or acceleration) under any of the terms,
         conditions or provisions of any note, bond, debenture, mortgage,
         indenture, license, material agreement or other material instrument or
         obligation to which City Holding is a party, or by which it or any of
         its properties or assets may be bound or ii)" (ii) violate any order,
         writ, injunction, decree, statute, rule or regulation applicable to
         City Holding or any of its properties or assets. No consent or approval
         by any governmental authority, other than compliance with applicable
         federal and state securities and banking laws, the rules of the Nasdaq
         Stock Market and regulations of the Federal Reserve Board, the OCC, the
         FDIC and the WVBOB is required in connection with the execution and
         delivery by City Holding of this Agreement or the consummation by City
         Holding of the transactions contemplated hereby or by the Holding
         Company Plan of Merger. City Holding's Board of Directors has taken all
         action necessary to ensure that the Transaction is exempted from any
         West Virginia statute that purports to limit or restrict business
         combinations or the ability to acquire or vote shares and any change of
         control or anti-takeover provisions of City Holding's Articles or
         By-laws.

                  The consummation of the transactions contemplated hereby,
         including the Bank Mergers, and compliance by City National with any of
         the provisions hereof will not i)" (i) conflict with or result in a
         breach of any provision of its Articles of Incorporation or By-laws or
         a default (or give rise to any right of termination, cancellation or
         acceleration) under any of the terms, conditions or provisions of any
         note, bond, debenture, mortgage, indenture, license, material agreement
         or other material instrument or obligation to which City National is a
         party, or by which it or any of its properties or assets may be bound,
         or ii)" (ii) violate any order, writ, injunction, decree, statute, rule
         or regulation applicable to City National or any of its properties or
         assets. No consent or approval by any government authority, other than
         compliance with applicable federal and state securities and banking
         laws, and regulations of the OCC, the FDIC, and the WVBOB, is required
         in connection with the consummation by City National of the
         transactions contemplated hereby.

                  (d) Investments. All securities owned by City Holding and City
         National of record and beneficially are free and clear of all
         mortgages, liens, pledges, encumbrances 



                                     - 22 -
<PAGE>   30

         or any other restriction, whether contractual or statutory, which would
         materially impair the ability of City Holding or City National freely
         to dispose of any such security at any time, except as noted on
         Schedule 3.2(d). Any securities owned of record by City Holding and
         City National in an amount equal to 5% or more of the issued and
         outstanding voting securities of the issuer thereof have been noted on
         such Schedule 3.2(d). There are no voting trusts or other agreements or
         undertakings of which City Holding or City National is a party, as an
         investor, with respect to the voting of such securities. With respect
         to all repurchase agreements to which City Holding or City National is
         a party, City Holding or City National has a valid, perfected first
         lien or security interest in the government securities or other
         collateral securing the repurchase agreement, and the value of the
         collateral securing each such repurchase agreement equals or exceeds
         the amount of the debt secured by such collateral under such agreement.

                  (e) Financial Statements. Schedule 3.2(e) contains copies of
         the following consolidated financial statements of City Holding and
         City National (the "City Holding Financial Statements"):

                           (i) Consolidated Balance Sheets as of December 31,
                  1997 and 1996 (audited), and as of June 30, 1998 and 1997
                  (unaudited);

                           (ii) Consolidated Statements of Income for each of
                  the three years ended December 31, 1997, 1996, and 1995
                  (audited) and for each of the three and six month periods
                  ended June 30, 1998 and 1997 (unaudited);

                           (iii) Consolidated Statements of Changes in
                  Stockholders' Equity for each of the three years ended
                  December 31, 1997, 1996 and 1995 (audited) and for each of the
                  three and six month periods ended June 30, 1998 and 1997
                  (unaudited); and

                           (iv) Consolidated Statements of Cash Flows for each
                  of the three years ended December 31, 1997, 1996 and 1995
                  (audited) and for each of the three and six month periods
                  ended June 30, 1998 and 1997 (unaudited).

         Such financial statements and the notes thereto have been prepared in
         accordance with GAAP applied on a consistent basis throughout the
         periods indicated unless otherwise noted in the City Holding Financial
         Statements. Each of such consolidated balance sheets, together with the
         notes thereto, presents fairly as of its date the consolidated
         financial condition and assets and liabilities of City Holding and City
         National, as applicable. The consolidated income statements, statements
         of changes in shareholders' equity and statements of cash flows,
         together with the notes thereto, present fairly the 



                                     - 23 -
<PAGE>   31

         results of operations, shareholders' equity and cash flows of City
         Holding or City National, as applicable, for the periods indicated, in
         accordance with GAAP.

                  Except as disclosed in the City Holding Financial Statements,
         and in the case of City National, compliance with and subject to
         regulatory requirements of general applicability, there are no
         restrictions precluding City Holding or City National from paying
         dividends when, as and if declared by their respective Boards of
         Directors.

                  (f) Absence of Undisclosed Liabilities. At June 30, 1998 and
         December 31, 1997, City Holding and its consolidated subsidiaries had
         no material obligations or liabilities, (contingent or otherwise) of
         any nature which were not reflected in the City Holding Financial
         Statements as of such dates, or disclosed in the notes thereto or in
         the City Holding periodic reports filed with the SEC under the 1934 Act
         as of such dates, or disclosed in the notes thereto, except for those
         which are appropriately disclosed in Schedules specifically referred to
         herein or which in the aggregate are immaterial.

                  (g) Tax Matters. Each of City Holding, City National, and all
         other subsidiaries of City Holding are members of the same "affiliated
         group," as defined in Section 1504(a)(1) of the Code, as City Holding
         (collectively, the "City Holding Group"). Each member of the City
         Holding Group has filed or caused to be filed or (in the case of
         returns or reports not yet due) will file all tax returns and reports
         required to have been filed by or for them before the Effective Time of
         the Holding Company Merger, and all information set forth in such
         returns or reports is or (in the case of such returns or reports not
         yet due) will be accurate and complete in all material respects. Each
         member of the City Holding Group has paid or made adequate provision
         for, or (with respect to returns or reports not yet filed) before the
         Effective Time of the Holding Company Merger will pay or make adequate
         provision for, all taxes, additions to tax, penalties, and interest for
         all periods covered by those returns or reports. There are, and at the
         Effective Time of the Holding Company Merger will be, no unpaid taxes,
         additions to tax, penalties, or interest due and payable by any member
         of the City Holding Group that are or could become a lien on any asset,
         or otherwise materially adversely affect the business, property or
         financial condition, of any member of the City Holding Group except for
         taxes and any such related liability (a) incurred in the ordinary
         course of business for which adequate provision has been made by any
         member of the City Holding Group or (b) being contested in good faith
         and disclosed in Schedule 3.2(g). Each member of the City Holding Group
         has collected or withheld, or will collect or withhold before the
         Effective Time of the Holding Company Merger, all amounts required to
         be collected or withheld by it for any taxes, and all such amounts have
         been, or before the Effective Time of the Holding Company Merger will
         have been, paid to the appropriate governmental agencies or set aside
         in appropriate accounts for future payment when due. Each member of the
         City Holding Group is in material compliance with, and its records
         contain all 



                                     - 24 -
<PAGE>   32

         information and documents (including, without limitation, properly
         completed IRS Forms W-9) necessary to comply in all material respects
         with, all applicable information reporting and tax withholding
         requirements under federal, state, and local laws, rules, and
         regulations, and such records identify with specificity all accounts
         subject to backup withholding under Section 3406 of the Code. The
         consolidated statements of financial condition contained in the City
         Holding Financial Statements fully and properly reflect, as of the
         dates thereof, the aggregate liabilities of the members of the City
         Holding Group for all accrued taxes, additions to tax, penalties and
         interest in accordance with GAAP. For periods ending after June 30,
         1998, the books and records of each member of the City Holding Group
         fully and properly reflect their liability for all accrued taxes,
         additions to tax, penalties and interest in accordance with GAAP.
         Except as disclosed in Schedule 3.2(g), no member of the City Holding
         Group has granted (nor is it subject to) any waiver of the period of
         limitations for the assessment of tax for any currently open taxable
         period, and no unpaid tax deficiency has been asserted in writing
         against or with respect to any member of the City Holding Group by any
         taxing authority. No member of the City Holding Group has made or
         entered into, or holds any asset subject to, a consent filed pursuant
         to Section 341(f) of the Code and the regulations thereunder or a "safe
         harbor lease" subject to former Section 168(f)(8) of the Code and the
         regulations thereunder. Schedule 3.2(g) describes all tax elections,
         consents and agreements affecting any member of the City Holding Group.
         To the Knowledge of City Holding, no City Holding shareholder is a
         "foreign person" for purposes of Section 1445 of the Code.

                  (h) Options, Warrants and Related Matters. There are no
         outstanding unexercised options, warrants, calls, commitments or
         agreements of any character to which City Holding or City National is a
         party or by which it is bound, calling for the issuance of securities
         of City Holding or City National or any security representing the right
         to purchase or otherwise receive any such security, except i)" (i) as
         set forth on Schedule 3.2(h) and ii)" (ii) the City Holding Option
         Agreement.

                  (i) Property. City Holding and City National own (or enjoy use
         of under capital leases) all property reflected on the City Holding
         Financial Statements as of June 30, 1998 as being owned by them (except
         property sold or otherwise disposed of in the ordinary course of
         business after such date). All material property shown as being owned
         is owned free and clear of all mortgages, liens, pledges, charges or
         encumbrances of any nature whatsoever, except those referred to in such
         City Holding Financial Statements or the notes thereto, liens for
         current taxes not yet due and payable, any unfiled mechanics' liens and
         such encumbrances and imperfections of title, if any, as are not
         substantial in character or amount or otherwise would materially impair
         City Holding's consolidated business operations. The leases relating to
         leased property are fairly reflected in such City Holding Financial
         Statements.



                                     - 25 -
<PAGE>   33

                  All property and assets material to the business or operations
         of City Holding and City National, other than OREO, are in
         substantially good operating condition and repair, and such property
         and assets are adequate for the business and operations of City Holding
         and City National as currently conducted.

                  (j) Additional Schedules Furnished to Horizon. In addition to
         any Schedules furnished to Horizon pursuant to other provisions of this
         Agreement, City Holding has furnished to Horizon the following
         Schedules which are correct and complete as of the date hereof:

                           (1) Employees. Schedule 3.2(j)(1) lists as of the
                  date hereof (A) the names of and current annual salary rates
                  for all present employees of City Holding and its subsidiaries
                  who received, respectively, $75,000 or more in aggregate
                  compensation, whether in salary or otherwise as reported or
                  would be reported on Form W-2, during the year ended December
                  31, 1997, or are presently scheduled to receive salary in
                  excess of $75,000 during the year ending December 31, 1998,
                  (B) the number of shares of City Holding Common Stock owned
                  beneficially by each director of City Holding or City National
                  as of the date hereof, (C) the names of and the number of
                  shares of City Holding Common Stock owned by each person known
                  to City Holding who beneficially owns 5% or more of the
                  outstanding City Holding Common Stock as of the date hereof,
                  and (D) the names of, the number of outstanding options of,
                  and the exercise price of, each agreement to make stock-based
                  awards granted to each person under City Holding's incentive
                  stock option plan (the "City Holding Stock Option Plan") or
                  any other option granted by City Holding or any subsidiary to
                  any director, officer, employee, consultant or advisor
                  (collectively, "City Holding Options") and the exercise price
                  of each such City Holding Option. City Holding has no
                  stock-based employee benefit plan or arrangement other than
                  the City Holding Option Agreement, the City Holding Incentive
                  Plan, the City Holding Stock Incentive Plan, the City Holding
                  Profit Sharing and 401(k) Plan, and the City Holding
                  Employees' Stock Ownership Plan.

                           (2) Certain Contracts. Schedule 3.2(j)(2) lists all
                  notes, bonds, mortgages, indentures, licenses, lease
                  agreements and other contracts and obligations to which City
                  Holding or any of its subsidiaries is an indebted party or a
                  lessee, licensee or obligee as of the date hereof except for
                  those entered into by City Holding or its subsidiaries in the
                  ordinary course of business consistent with prior practice and
                  that do not involve an amount remaining greater than $100,000.

                           (3) Employment Contracts and Related Matters. Except
                  in all cases as set forth on Schedule 3.2(j)(3), neither City
                  Holding nor any of its subsidiaries is a 



                                     - 26 -
<PAGE>   34

                  party to any employment contract not terminable at the option
                  of such party without liability. Except in all cases as set
                  forth on Schedule 3.2(j)(3), neither City Holding nor any of
                  its subsidiaries is a party to (A) any retirement, profit
                  sharing or pension plan or thrift plan or agreement or
                  employee benefit plan (as defined in Section 3 of ERISA), (B)
                  any management or consulting agreement not terminable at the
                  option of such party without liability or (C) any union or
                  labor agreement.

                           (4) Real Estate. Schedule 3.2(j)(4) describes, as of
                  the date hereof, all interests in real property owned, leased
                  or otherwise claimed by City Holding and its subsidiaries,
                  including OREO.

                           (5) Affiliates. Schedule 3.2(j)(5) sets forth the
                  names and number of shares of City Holding Common Stock owned
                  as of the date hereof beneficially or of record by any persons
                  City Holding considers to be affiliates of City Holding ("City
                  Holding Affiliates") as that term is defined for purposes of
                  Rule 145 under the 1933 Act.

                  (k) Agreements in Force and Effect. All material contracts,
         agreements, plans, leases, policies and licenses referred to in any
         Schedule of City Holding referred to herein are valid and in full force
         and effect; and neither City Holding nor City National have breached
         any provision of, or are in default in any respect under the terms of,
         any such contract, agreement, lease, policy or license, the effect of
         which breach or default would have a material adverse effect upon the
         financial condition, results of operations or business of City Holding
         and its subsidiaries taken as a whole.

                  (l) Legal Proceedings; Compliance with Laws. Schedule 3.2(l)
         describes all legal, administrative, arbitration or other proceedings
         or governmental investigations known to City Holding pending, or, to
         the Knowledge of City Holding, threatened or probable of assertion
         against City Holding or City National. Except as set forth on Schedule
         3.2(l), no such proceeding or investigation, if decided adversely,
         would have a material adverse effect on the financial condition,
         results of operations, business or prospects of City Holding on a
         consolidated basis. Except as set forth in Schedule 3.2(l), City
         Holding and City National have complied with any laws, ordinances,
         requirements, regulations or orders applicable to their respective
         businesses, except where noncompliance would not have a material
         adverse effect on the financial condition, results of operations or
         business of City Holding on a consolidated basis. City Holding and City
         National have all licenses, permits, orders or approvals (collectively,
         the "City Permits") of any federal, state, local or foreign
         governmental or regulatory body that are necessary for the conduct of
         the respective businesses of City Holding and City National and the
         absence of which would have a material adverse effect on the financial
         condition, 



                                     - 27 -
<PAGE>   35

         results of operations, or business of City Holding on a consolidated
         basis; the City Permits are in full force and effect; no material
         violations are or have been recorded in respect of any City Permits nor
         has City Holding or City National received written notice of any
         violations; and no proceeding is pending or, to the Knowledge of City
         Holding, threatened to revoke or limit any City Permits. Neither City
         Holding nor City National is subject to any judgment, order, writ,
         injunction or decree which materially adversely affects, or might
         reasonably be expected to materially adversely affect, the financial
         condition, results of operations or business of City Holding on a
         consolidated basis. Except as set forth in Schedule 3.2(l), neither
         City Holding, nor City National, nor any other subsidiary of either has
         entered into any agreements or written understandings with the OCC, the
         Federal Reserve Board, the FDIC, the WVBOB or any regulatory agency
         having authority over it. "Knowledge of City Holding," and phrases of
         similar meaning, shall mean the actual knowledge, after due inquiry, of
         Steven J. Day, Robert A. Henson and John W. Alderman III.

                  (m) Employee Benefit Plans.

                           (1) Schedule 3.2(m) includes a correct and complete
                  list of, and Horizon has been furnished a true and correct
                  copy of (or an accurate written description thereof in the
                  case of oral agreements or arrangements) (A) all qualified
                  pension and profit-sharing plans, all deferred compensation,
                  consultant, severance, thrift, option, bonus and group
                  insurance contracts and all other incentive, welfare and
                  employee benefit plans, trust, annuity or other funding
                  agreements, and all other agreements (including oral
                  agreements) that are presently in effect, or have been
                  approved prior to the date hereof, maintained for the benefit
                  of employees or former employees of City Holding or its
                  subsidiaries or the dependents or beneficiaries of any
                  employee or former employee of City Holding or its
                  subsidiaries, whether or not subject to ERISA (the "Employee
                  Plans"), (B) the most recent actuarial and financial reports
                  prepared or required to be prepared with respect to any
                  Employee Plan and (C) the most recent annual reports filed
                  with any governmental agency, the most recent favorable
                  determination letter issued by the Internal Revenue Service,
                  and any open requests for rulings or determination letters,
                  that pertain to any such qualified Employee Plan. Schedule
                  3.2(m) identifies each Employee Plan that is intended to be
                  qualified under Section 401(a) of the Code and each such plan
                  is qualified.

                           (2) Neither City Holding nor any of its subsidiaries,
                  nor any Pension Plan maintained or previously maintained by
                  it, has incurred any material liability to the PBGC or to the
                  Internal Revenue Service with respect to any Pension Plan,
                  deferred compensation, consultant, severance, thrift, option,
                  bonus and group insurance contract or any other incentive,
                  welfare and employee benefit plan and 



                                     - 28 -
<PAGE>   36

                  agreement presently in effect, or approved prior to the date
                  hereof, for the benefit of employees or former employees of
                  City Holding and its subsidiaries or the dependents or
                  beneficiaries of any employee or former employee of City
                  Holding or any subsidiary (the "City Holding Employee Plans").
                  There is not currently pending with the PBGC any filing with
                  respect to any reportable event under Section 4043 of ERISA
                  nor has any reportable event occurred as to which a filing is
                  required and has not been made.

                           (3) Full payment has been made (or proper accruals
                  have been established) of all contributions which are required
                  for periods prior to the Closing Date, as defined in Section
                  7.1 hereof, under the terms of each City Holding Employee
                  Plan, ERISA, or a collective bargaining agreement, no
                  accumulated funding deficiency (as defined in Section 302 of
                  ERISA or Section 412 of the Code) whether or not waived,
                  exists with respect to any Pension Plan, (including any
                  Pension Plan previously maintained by City Holding, City
                  National or any other subsidiary of either), and except as set
                  forth in Schedule 3.2(m), there is no "unfunded current
                  liability" (as defined in Section 412 of the Code) with
                  respect to any City Holding Employee Plan or Pension Plan.

                           (4) No City Holding Employee Plan is a "multiemployer
                  plan" (as defined in Section 3(37) of ERISA). Neither City
                  Holding nor City National nor any subsidiary of either has
                  incurred any material liability under Section 4201 of ERISA
                  for a complete or partial withdrawal from a multiemployer plan
                  (as defined in Section 3(37) of ERISA). Neither City Holding
                  nor City National has participated in or agreed to participate
                  in, a multiemployer plan (as defined in Section 3(37) of
                  ERISA).

                           (5) All "employee benefit plans," as defined in
                  Section 3(3) of ERISA, that are maintained by City Holding,
                  City National or any subsidiary of either or previously
                  maintained by City Holding, City National or any subsidiary of
                  either comply and have been administered in compliance in all
                  material respects with ERISA and all other applicable legal
                  requirements, including the terms of such plans, collective
                  bargaining agreements and securities laws. Neither City
                  Holding nor any of its subsidiaries has any material liability
                  under any such plan that is not reflected in the City Holding
                  Financial Statements or on Schedule 3.2(m) hereto.

                           (6) Except as set forth on Schedule 3.2(m), no
                  prohibited transaction has occurred with respect to any
                  "employee benefit plan" (as defined in Section 3(3) of ERISA)
                  maintained by City Holding or any of its subsidiaries or
                  previously maintained by City Holding or any of its
                  subsidiaries that would result, 



                                     - 29 -
<PAGE>   37

                  directly or indirectly, in material liability under ERISA or
                  in the imposition of a material excise tax under Section 4975
                  of the Code.

                           (7) Schedule 3.2(m) identifies each City Holding
                  Employee Plan that is an "employee welfare benefit plan" (as
                  defined in Section 3(1) of ERISA) and which is funded. The
                  funding under each such plan does not exceed the limitations
                  under Section 419A(b) or 419A(c) of the Code. Neither City
                  Holding nor any of its subsidiaries is subject to taxation on
                  the income of any such plan or any such plan previously
                  maintained by City Holding or any of its subsidiaries.

                           (8) Schedule 3.2(m) identifies the method of funding
                  (including any individual accounting) for all post-retirement
                  medical or life insurance benefits for the employees of City
                  Holding and its subsidiaries. Schedule 3.2(m) also discloses
                  the funded status of these City Holding Employee Plans.

                           (9) Schedule 3.2(m) identifies each corporate owned
                  life insurance policy, including any key man insurance policy
                  and policy insuring the life of any director or employee of
                  City Holding and its subsidiaries, and indicates for each such
                  policy, the face amount of coverage, cash surrender value, if
                  any, and annual premiums.

                           (10) No trade or business is, or has ever been,
                  treated as a single employer with City Holding and its
                  subsidiaries for employee benefit purposes under ERISA and the
                  Code.

                  (n) Insurance. All policies or binders of fire, liability,
         product liability, workmen's compensation, vehicular and other
         insurance held by or on behalf of City Holding or any of its
         subsidiaries are described on Schedule 3.2(n) and are valid and
         enforceable in accordance with their terms, are in full force and
         effect, and insure against risks and liabilities to the extent and in
         the manner customary for the industry and are deemed appropriate and
         sufficient by City Holding or any of its subsidiaries. Neither City
         Holding nor any of its subsidiaries is in default with respect to any
         provision contained in any such policy or binder and has not failed to
         give any notice or present any claim under any such policy or binder in
         due and timely fashion. Neither City Holding nor any of its
         subsidiaries has received notice of cancellation or non-renewal of any
         such policy or binder. City Holding has no knowledge of any inaccuracy
         in any application for such policies or binders, any failure to pay
         premiums when due or any similar state of facts that might form the
         basis for termination of any such insurance. City Holding has no
         knowledge of any state of facts or of the occurrence of any event that
         is reasonably likely to form the basis for any material claim against
         it not fully covered (except to the extent of any applicable
         deductible) by the policies or binders referred to above. Neither City
         Holding nor any of its subsidiaries has received notice from any of its
         insurance 



                                     - 30 -
<PAGE>   38

         carriers that any insurance premiums will be materially increased in
         the future or that any such insurance coverage will not be available in
         the future on substantially the same terms as now in effect.

                  (o) Loan Portfolio. Each loan outstanding on the books of City
         Holding and City National is in all respects what it purports to be,
         was made in the ordinary course of business, was not known to be
         uncollectible at the time it was made, accrues interest (except for
         loans recorded on such books as non-accrual) in accordance with the
         terms of the loan, and with respect to loans originated by City
         National was made in accordance with City National's standard loan
         policies as in effect at the time the loan was negotiated except for
         loans to facilitate the sale of OREO or loans with renegotiated terms
         and conditions. The records of City National regarding all loans
         outstanding and OREO by City National on its books are accurate in all
         material respects and the risk classifications for the loans
         outstanding are, in the best judgment of the management of City Holding
         and City National, appropriate. The reserves for possible loan losses
         on the outstanding loans of City National, as reflected in the City
         Holding Financial Statements, have been established in accordance with
         GAAP and with the requirements of the OCC, the Federal Reserve Board,
         and the FDIC. In the best judgment of the management of City Holding
         and City National such reserves are adequate as of the date hereof and
         will be adequate as of the Effective Time of the Holding Company Merger
         to absorb all known and anticipated loan losses in the loan portfolio
         of City National. Except as identified on Schedule 3.2(o), no loan in
         excess of $50,000 has been classified by examiners (regulatory or
         internal) as "Special Mention", "Substandard", "Doubtful", "Loss", or
         words of similar import. Except as disclosed on Schedule 3.2(o), the
         OREO included in any nonperforming asset of City National is recorded
         at the lower of cost or fair value less estimated costs to sell based
         on independent appraisals that comply with the requirements of the
         Financial Institutions Reform, Recovery and Enforcement Act of 1989 and
         Uniform Standards of Professional Appraisal Practice. Except as
         identified on Schedule 3.2(o), to the Knowledge of City Holding and
         City National, each loan reflected as an asset on the City Holding
         Financial Statements is the legal, valid and binding obligation of the
         obligor and any guarantor, subject to bankruptcy, insolvency,
         fraudulent conveyance and other laws of general applicability relating
         to or affecting creditors' rights and to general principles of equity,
         and no defense, offset or counterclaim has been asserted with respect
         to any such loan, which if successful would have a material adverse
         effect on the financial condition, results of operation or business of
         City Holding on a consolidated basis.

                  (p) Absence of Changes. Except as identified on Schedule
         3.2(p), since June 30, 1998 there has not been any material adverse
         change in the condition (financial or otherwise), aggregate assets or
         liabilities, earnings or business of City Holding, other than changes
         resulting from or attributable to (i) changes since such date in
         laws or 



                                     - 31 -
<PAGE>   39

         regulations, GAAP or interpretations of either thereof that affect the
         banking or savings and loan industries generally, (ii) changes since
         such date in the general level of interest rates, (iii) expenses since
         such date incurred in connection with the transactions contemplated by
         this Agreement, or (iv) any other accruals, reserves or expenses
         incurred by City Holding or its subsidiaries since such date with
         Horizon's prior written consent. Since June 30, 1998, the business of
         City Holding has been conducted only in the ordinary course.

                  (q) Brokers and Finders. Neither City Holding, City National
         nor any of their respective officers, directors or employees has
         employed any broker or finder or incurred any liability for any
         brokerage fees, commissions or finders' fees in connection with the
         transactions contemplated herein, except for the engagement of Wheat
         First Securities, Inc., whose total compensation for its engagement
         shall not exceed $2,000,000.

                  (r) Subsidiaries; Partnerships and Joint Ventures. City
         Holding's only subsidiaries, direct or indirect, are set forth in
         Schedule 3.2(r). Such corporations are duly organized, validly existing
         and in good standing under the laws of their jurisdiction of
         incorporation and have all requisite corporate power and authority to
         own, lease and operate their properties and to carry on their business
         as now being conducted in all material respects. City Holding owns,
         directly or indirectly, all of the issued and outstanding capital stock
         of its subsidiaries free and clear of any liens, claims, encumbrances,
         charges or rights of third parties of any kind whatsoever and is not a
         party to any joint venture agreement or partnership except as set forth
         in Schedule 3.2(r).

                  (s) Reports. Since January 1, 1995, City Holding and City
         National have filed all material reports and statements, together with
         any amendments required to be made with respect thereto, that were
         required to be filed with (i) the Federal Reserve Board, (ii) the FDIC,
         (iii) the OCC, (iv) the WVBOB, (v) the SEC and (vi) any other
         governmental or regulatory authority or agency having jurisdiction over
         their operations. Each of such reports and documents, including the
         financial statements, exhibits and schedules thereto, filed with the
         SEC pursuant to the 1934 Act was in form and substance in compliance in
         all material respects with the 1934 Act. No such report or statement,
         or any amendments thereto, contains any statement which, at the time
         and in light of the circumstances under which it was made, was false or
         misleading with respect to any material fact necessary in order to make
         the statements contained therein not false or misleading. City Holding
         is a reporting company under Section 12(g) or 15(d) of the 1934 Act and
         the regulations of the SEC.

                  (t) Environmental Matters. For purposes of this subsection,
         the following terms shall have the indicated meaning:



                                     - 32 -
<PAGE>   40

                  "Environmental Law" and "Hazardous Substance" shall have the
         meanings ascribed to those terms in Section 3.1(t) of this Agreement.

                  "Loan Portfolio Properties and Other Properties Owned" means
         those properties owned or operated by City Holding or any of its
         subsidiaries, including those properties serving as collateral for any
         loans made and retained by City Holding or City National or for which
         City Holding or City National serves in a trust relationship for the
         loans retained in portfolio.

                  Except as disclosed in Schedule 3.2(t), to the Knowledge of
         City Holding,

                           (i) neither City Holding nor City National has been
                  or is in violation of or liable under any Environmental Law;

                           (ii) none of the Loan Portfolio Properties and Other
                  Properties Owned has been or is in violation of or liable
                  under any Environmental Law; and

                           (iii) there are no actions, suits, demands, notices,
                  claims, investigations or proceedings pending or threatened
                  relating to the liability of the Loan Portfolio Properties and
                  Other Properties Owned under any Environmental Law, including
                  without limitation any notices, demand letters or requests for
                  information from any federal or state environmental agency
                  relating to any such liabilities under or violations of
                  Environmental Law.

                  (u) Disclosure. Except to the extent of any subsequent
         correction or supplement with respect thereto furnished prior to the
         date hereof, no written statement, certificate, schedule, list or other
         written information furnished by or on behalf of City Holding at any
         time to Horizon, in connection with this Agreement, when considered as
         a whole, contains or will contain any untrue statement of a material
         fact or omits or will omit to state a material fact necessary in order
         to make the statements herein or therein, in light of the circumstances
         under which they were made, not misleading. Each document delivered or
         to be delivered by City Holding to Horizon is or will be a true and
         complete copy of such document, unmodified except by another document
         delivered by City Holding.

                  (v) Accounting and Tax Matters. Neither City Holding nor City
         National nor any subsidiary of either has taken or agreed to take any
         action or has any knowledge of any fact or circumstance that would
         prevent the Holding Company Merger from qualifying as a reorganization
         within the meaning of Section 368 of the Code, or from being eligible
         for "pooling-of-interests" accounting.



                                     - 33 -
<PAGE>   41

                  (w) Regulatory Approvals. Neither City Holding nor City
         National nor any subsidiary of either knows of any reason why the
         approvals, consents and waivers of governmental authorities referred to
         in Sections 6.1(f) and 6.2(f) hereof should not be obtained on a timely
         basis without the imposition of any condition of the type referred to
         in Section 6.1(f) hereof and neither of them has taken or agreed to
         take any action that would materially impede or delay the receipt of
         such approvals, consents and waivers or would be reasonably likely to
         result in the imposition of any such condition.

                  (x) Year 2000 Matters. The computer software operated by City
         Holding which is material to the conduct of its business is capable of
         providing or is being adapted to provide (pursuant to plans approved by
         the Board of Directors, copies of which have been provided to Horizon,
         the expense of which has been reserved against or otherwise provided
         for), in all material respects, uninterrupted millennium functionality
         to record, store, process and present calendar dates falling on or
         after January 1, 2000 in substantially the same manner and with the
         same functionality as such software records, stores processes and
         presents such calendar dates falling on or before December 31, 1999.
         Neither City Holding or City National has received, or reasonably
         expects to receive, a "Year 2000 Deficiency Notification Letter" (as
         such term is employed in the Federal Reserve Board's Supervision and
         Regulation Letter No. SR 98-3(SUP), dated March 4, 1998).

                  (y) Interest Rate Risk Management Instruments. All interest
         rate swaps, caps, floors and option agreements and other interest rate
         risk management arrangements, whether entered into for the account of
         City Holding or any of its subsidiaries, were entered into in the
         ordinary course of business and, to the Knowledge of City Holding, in
         accordance with prudent banking practices and applicable rules,
         regulations and policies of any regulatory authority of competent
         jurisdiction and with counterparties believed to be financially
         responsible at the time and are legal, valid and binding obligations of
         City Holding or one of its subsidiaries enforceable in accordance with
         their terms except as enforceability may be limited by laws affecting
         insured depository institutions and similar laws affecting the
         enforcement of creditors' rights generally and subject to any equitable
         principles limiting the right to obtain specific performance. City
         Holding and each of City Holding's subsidiaries have duly performed all
         of their obligations thereunder to the extent that such obligations to
         perform have accrued, and, to the Knowledge of City Holding, there are
         no breaches, violations or defaults or allegations or assertions of
         such by any party thereunder.

                  (z) Recission of Repurchases. Except as set forth on Schedule
         3.2(z), all share repurchase programs previously authorized by the
         Board of Directors of City Holding have either expired or been revoked
         by resolution duly adopted on or prior to the date hereof.



                                     - 34 -
<PAGE>   42

                                   ARTICLE IV
                        CONDUCT AND TRANSACTIONS PRIOR TO
                THE EFFECTIVE TIME OF THE HOLDING COMPANY MERGER


         4.1. Access to Records and Properties of City Holding, City National,
Other City Holding Subsidiaries, Horizon and the Horizon Banks; Confidentiality.

                  Between the date of this Agreement and the Effective Time of
the Holding Company Merger, each of City Holding and City National and the
subsidiaries of each on the one hand, and each of Horizon and the Horizon Banks
on the other, agree to give to the other reasonable access to all the premises
and books and records (including tax returns filed and those in preparation) of
it and its subsidiaries and to cause its officers to furnish the other with such
financial and operating data and other information with respect to the business
and properties as the other shall from time to time request for the purposes of
verifying the representations and warranties set forth herein, preparing the
Registration Statement (as defined in Section 4.2) and applicable regulatory
filings (as set forth in Section 4.6), to facilitate the parties in performing
their due diligence reviews of the affairs of one another, and otherwise as
reasonably requested in connection with the Transaction and the parties' various
regulatory reporting obligations, provided, however, that any such investigation
shall be conducted in such manner as not to interfere unreasonably with the
operation of the respective business of the other. City Holding and Horizon
shall each maintain the confidentiality of all confidential information
furnished to it by the other party hereto concerning the business, operations,
and financial condition of the party furnishing such information, and shall not
use any such information except in furtherance of the Transaction. If this
Agreement is terminated, each party hereto shall promptly return all documents
and copies of, and all workpapers containing, confidential information received
from the other party hereto. The obligations of confidentiality under this
Section 4.1 shall survive any such termination of this Agreement and shall
remain in effect, except to the extent that (a) one party shall have directly or
indirectly acquired the assets and business of the other party; (b) as to any
particular confidential information with respect to one party, such information
(i) shall become generally available to the public other than as a result of an
unauthorized disclosure by the other party or (ii) was available to the other
party on a nonconfidential basis prior to its disclosure by the first party; (c)
disclosure by any party is required by subpoena or order of a court of competent
jurisdiction or by order of a regulatory authority of competent jurisdiction; or
(d) disclosure is required by the SEC or bank or other regulatory authorities in
connection with the transactions contemplated by this Agreement, provided that
the disclosing party has, prior to such disclosure, advised the other party of
the circumstances necessitating such disclosure and have reached mutually
agreeable arrangements relating to such disclosure.



                                     - 35 -
<PAGE>   43

         4.2.     Registration Statement, Proxy Statement, Shareholder Approval.

                  Horizon and City Holding will duly call and will hold meetings
of their shareholders as soon as practicable for the purpose of approving the
Holding Company Merger and the related transactions and will comply fully with
the provisions of the 1933 Act and the 1934 Act and the rules and regulations of
the SEC under such acts to the extent applicable, and the Articles of
Incorporation and By-laws of Horizon and City Holding relating to the call and
holding of a meeting of shareholders for such purpose. The Boards of Directors
of Horizon and City Holding will recommend to and actively encourage
shareholders that they vote in favor of the Holding Company Merger, to the
maximum extent permissible in light of their fiduciary duties. City Holding and
Horizon will jointly prepare the proxy statement-prospectus to be used in
connection with such meeting (the "Proxy Statement-Prospectus") and City Holding
will prepare and file with the SEC a Registration Statement on Form S-4 (the
"Registration Statement"), of which such Proxy Statement-Prospectus shall be a
part, and use its best efforts promptly to have the Registration Statement
declared effective. In connection with the foregoing, City Holding will comply
with the requirements of the 1933 Act, the 1934 Act, the Nasdaq Stock Market and
the rules and regulations of the SEC under such acts with respect to the
offering and sale of City Holding Common Stock in connection with the
Transaction and with all applicable state Blue Sky and securities laws. The
notices of such meetings and the Proxy Statement-Prospectus shall not be mailed
to Horizon or City Holding shareholders until the Registration Statement shall
have become effective under the 1933 Act. Horizon covenants that none of the
information supplied by Horizon and City Holding covenants that none of the
information supplied by City Holding in the Proxy Statement-Prospectus will, at
the time of the mailing of the Proxy Statement-Prospectus to Horizon and City
Holding shareholders, contain any untrue statement of a material fact nor will
any such information omit any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading; and at all times subsequent to the time
of the mailing of the Proxy Statement-Prospectus, up to and including the date
of the meetings of Horizon and City Holding shareholders, as applicable, to
which the Proxy Statement-Prospectus relates, none of such information in the
Proxy Statement-Prospectus, as amended or supplemented, will contain an untrue
statement of a material fact or omit any material fact required to be stated
therein in order to make the statements therein, in light of the circumstances
in which they were made, not misleading.

                  Horizon, as the sole shareholder of the Horizon Banks, and
City Holding, as the sole shareholder of City National, hereby approve this
Agreement and the transactions contemplated herein.



                                     - 36 -
<PAGE>   44

         4.3.     Operation of the Businesses of the Parties.

                  Each of Horizon, the Horizon Banks, City Holding and City
National agrees that from June 30, 1998 to the Effective Time of the Holding
Company Merger, they and their subsidiaries have operated, and they and their
subsidiaries will operate, their respective businesses substantially as
presently operated and only in the ordinary course and in general conformity
with applicable laws and regulations, and, consistent with such operation, they
will use their best efforts to preserve intact its present business
organizations and its relationships with persons having business dealings with
it. Without limiting the generality of the foregoing, Horizon, the Horizon
Banks, City Holding and City National agree that they will not, without the
prior written consent of Horizon or City Holding, as applicable, (i) make any
change in the salaries, bonuses or title of any executive officer, subject to
bonus or compensation plans already adopted by the Board of Directors or the
Compensation Committee thereof prior to the date of this Agreement; (ii) make
any change in the title, salaries or bonuses of any other employee, other than
those permitted by current employment policies in the ordinary course of
business, any of which changes shall be reported promptly to the other parties;
(iii) enter into any bonus, incentive compensation, deferred compensation,
profit sharing, thrift, retirement, pension, group insurance or other benefit
plan or any employment or consulting agreement or increase benefits under
existing plans subject to bonus plans already adopted by the Board of Directors
or the Compensation Committee thereof prior to the date of this Agreement; (iv)
create or otherwise become liable with respect to any indebtedness for money
borrowed or purchase money indebtedness except in the ordinary course of
business; (v) amend its Articles of Incorporation, Charter or By-laws, except
that City Holding shall amend its Articles of Incorporation immediately
preceding the Effective Time of the Holding Company Merger to authorize the
issuance of up to 100,000,000 shares of City Holding Common Stock, par value
$2.50 per share, and up to 5,000,000 shares of City Holding Preferred Stock, par
value $25.00 per share; (vi) issue or contract to issue any shares of capital
stock or securities exchangeable for or convertible into capital stock except
(t) up to 94,800 shares of Horizon Common Stock issuable to senior executive
officers pursuant to Horizon Options outstanding as of June 30, 1998, (u) up to
1,853,262 shares of Horizon Common Stock pursuant to the Horizon Option
Agreement; (v) shares of or options to purchase Horizon Common Stock pursuant to
the Horizon 401(k) Plan, the Horizon Employee Stock Option Plan, the Horizon
Incentive Stock Option Plan and the Horizon Dividend Reinvestment Plan; (w) up
to 30,000 options to purchase shares of Horizon Common Stock issuable pursuant
to Horizon's Incentive Stock Option Plan; (x) up to 285,671 shares of City
Holding Common Stock issuable pursuant to City Holding Options outstanding as of
June 30, 1998; (y) up to 1,334,095 shares of City Holding Common Stock pursuant
to the City Holding Option Agreement; or (z) shares of City Holding Common Stock
issuable pursuant to City Holding's dividend reinvestment plan, 401(k) plan, and
Employee Stock Ownership Plan; (vii) except as set forth on Schedule 4.3,
repurchase any shares of Horizon or City Holding capital stock; (viii) enter
into or assume any material contract or obligation, except in the ordinary
course of business; (ix) other than as provided in (a) below with respect to the
work-out 



                                     - 37 -
<PAGE>   45

of nonperforming assets, waive, release, compromise or assign any right or claim
involving $75,000 or more; (x) propose or take any other action which would make
any representation or warranty of such party in Article III hereof untrue; (xi)
introduce any new products or services or change the rate of interest on any
deposit instrument to above-market interest rates; (xii) make any change in
policies respecting extensions of credit or loan charge-offs; (xiii) change
reserve requirement policies; (xiv) change securities portfolio policies; (xv)
acquire a policy or enter into any new agreement, amendment or endorsement or
make any changes relating to insurance coverage, including coverage for its
directors and officers, which would result in an additional payment obligation
of $50,000 or more; (xvi) propose or take any action with respect to the closing
of any branches; (xvii) amend the terms of any outstanding stock option or
similar agreements; (xviii) amend the terms of the written severance or
employment agreements; or (xix) make any change in any tax election or
accounting method or system of internal accounting controls, except as may be
appropriate to conform to any change in regulatory accounting requirements or
GAAP. Horizon, the Horizon Banks, City Holding and City National further agree
that, between the date of this Agreement and the Effective Time of the Holding
Company Merger, they will consult and cooperate with one another regarding (a)
loan portfolio management, including management and work-out of nonperforming
assets, and credit review and approval procedures and (b) securities portfolio
and funds management, including management of interest rate risk.

         4.4.     No Solicitation.

                  Unless and until this Agreement shall have been terminated
pursuant to its terms, neither Horizon, the Horizon Banks, City Holding or City
National nor any of their executive officers, directors, representatives, agents
or affiliates shall, directly or indirectly, encourage, solicit or initiate
discussions or negotiations (with any person other than a party to this
Agreement) concerning any merger, sale of substantial assets, tender offer, sale
of shares of stock or similar transaction involving such party or disclose,
directly or indirectly, any information not customarily disclosed to the public
concerning such party, afford to any other person access to the properties,
books or records of such party (unless required by the provisions of Section
31-1-105 of the WVC) or otherwise assist any person preparing to make or who has
made such an offer, or enter into any agreement with any third party providing
for a business combination transaction, equity investment or sale of significant
amount of assets. Horizon, the Horizon Banks, City Holding and City National
will promptly communicate to one another the terms of any proposal which any of
them may receive in respect to any of the foregoing transactions.

         4.5.     Dividends.

                  Horizon and City Holding agree that since June 30, 1998 they
have not, and prior to the Effective Time of the Holding Company Merger they
will not, declare any cash dividends without the prior written consent of the
other party, except for regular quarterly cash dividends 



                                     - 38 -
<PAGE>   46

not in excess of that most recently declared prior to June 30, 1998 except that
Horizon and City Holding may increase the dividend amount for the fourth quarter
of 1998, consistent with the relative increase of such dividend for the fourth
quarter of 1997. Horizon and City Holding will coordinate with one another
regarding the declaration and payment of dividends in respect of Horizon Common
Stock and City Holding Common Stock to ensure that no holder of Horizon Common
Stock will receive two dividends, or fail to receive on dividend, for any single
calendar quarter with respect to its shares of Horizon Common Stock, including
shares of City Holding Common Stock such holder may receive in connection with
the Transaction.

         4.6.     Regulatory Filings; Best Efforts.

                  City Holding and Horizon shall jointly prepare all regulatory
filings required to consummate the transactions contemplated by this Agreement
and submit the filings for approval with the Federal Reserve Board, the OCC, the
FDIC and the WVBOB as soon as practicable after the date hereof. City Holding
and Horizon shall use their best efforts to obtain approvals of such filings.

         4.7.     Public Announcements.

                  Each party will consult with the other before issuing any
press release or otherwise making any public statements with respect to the
Transaction and shall not issue any press release or make any such public
statement prior to such consultations and approval of the other party, which
approval shall not be unreasonably withheld, except as may be required by law.

         4.8.     Operating Synergies; Conformance to Reserve Policies, Etc..

                  Between the date hereof and the Effective Time of the Holding
Company Merger, the parties will work with one another to achieve appropriate
operating efficiencies following the Closing Date. Subject to the Horizon Banks'
approval, which will not be unreasonably withheld, City Holding's notification
to the Horizon Banks' customers and City Holding's direct contact with customers
regarding the Bank Mergers will commence following receipt of Federal Reserve
Board and OCC approval but not earlier than 60 days prior to the Closing Date.
At the request of City Holding and upon receipt by Horizon and the Horizon Banks
of written confirmation from City Holding and City National that there are no
conditions to the obligations of City Holding and City National under this
Agreement set forth in Article V which they believe will not be fulfilled so as
to permit them to consummate the Transaction and the other transactions
contemplated hereby, not more than three days before the Effective Time of the
Holding Company Merger Horizon and the Horizon Banks shall establish such
additional accruals, reserves and charge-offs, through appropriate entries in
its accounting books and records, provided such adjustments are in accordance
with GAAP and applicable law and regulation as may be necessary to conform
Horizon's and the Horizon Banks' accounting and credit loss 



                                     - 39 -
<PAGE>   47

reserve practices and methods to those of City Holding and City National (as
such practices and methods are to be applied from and after the Effective Time
of the Holding Company Merger). Any such accruals, reserves and charge-offs
shall not be deemed to cause any representation and warranty of Horizon and the
Horizon Banks to be untrue or inaccurate as of the Effective Time of the Holding
Company Merger.

         4.9.     City Holding Rights Agreement.

                  City Holding agrees that any rights issued pursuant to the
Rights Agreement, dated as of May 7, 1991, shall be issued with respect to each
share of City Holding Common Stock issued pursuant to the terms hereof and the
Holding Company Plan of Merger, regardless whether there has occurred a
Distribution Date under the terms of such Rights Agreement prior to the
occurrence of the Effective Time of the Holding Company Merger.

         4.10.    Agreement as to Efforts to Consummate.

                  Subject to the other terms and conditions of this Agreement,
each of City Holding, City National, Horizon and the Horizon Banks agrees to use
all reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective, as soon as practicable
after the date of this Agreement, the transactions contemplated by this
Agreement, including, without limitation, using reasonable effort to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated herein.
Each of City Holding, City National, Horizon and the Horizon Banks shall use its
best efforts to obtain consents of all third parties and governmental bodies
necessary or desirable for the consummation of the transactions contemplated by
this Agreement.

         4.11.    Adverse Changes in Condition.

                  City Holding, City National, Horizon and the Horizon Banks
each agrees to give written notice promptly to the other concerning any event or
circumstance which would cause or constitute a breach of any of the
representations, warranties or covenants of such party contained herein. Each of
City Holding, City National, Horizon and the Horizon Banks shall use its best
efforts to prevent or promptly to remedy the same.

         4.12.    Nasdaq Listing.

                  City Holding will file with the Nasdaq Stock Market an
additional listing application for the shares of City Holding Common Stock to be
issued in the Holding Company Merger and shall use its best efforts to cause
such shares to be approved for listing on the Nasdaq Stock Market prior to the
Effective Time of the Holding Company Merger.



                                     - 40 -
<PAGE>   48

         4.13.    Delivery and Updating of Schedules.

                  (a) Horizon shall prepare and deliver to City Holding all of
         the Schedules pertaining to Horizon and the Horizon Banks referred to
         in Section 3.1 not later than August 14, 1998. Such Schedules shall be
         true and correct as of the date delivered or such other date provided
         in Article III.

                  (b) City Holding shall prepare and deliver to Horizon all of
         the Schedules pertaining to City Holding and City National referred to
         in Section 3.2 not later than August 14, 1998. Such Schedules shall be
         true and correct as of the date delivered or such other date provided
         in Article III.

                  (c) Horizon shall notify City Holding, and City Holding shall
         notify Horizon, of any changes, additions or events which may cause any
         change in or addition to any Schedules delivered by it under this
         Agreement, promptly after the occurrence of same and at the Closing
         Date by delivery of updates of all Schedules, including future
         quarterly and annual financial statements. No notification made
         pursuant to this Section 4.13 shall be deemed to cure any breach of any
         representation or warranty made in this Agreement or any Schedule
         unless City Holding or Horizon, as the case may be, specifically agree
         thereto in writing, nor shall any such notification be considered to
         constitute or give rise to a waiver by Horizon or the Horizon Banks on
         the one hand, or City Holding or City National on the other hand of any
         condition set forth in this Agreement.

         4.14.    Transactions in City Holding Common Stock.

                  Other than the issuance or acquisition of City Holding Common
Stock pursuant to City Holding employee benefit plans, or the purchase or sale
of City Holding Common Stock by City National in its capacity as trustee under
City Holding employee benefit plans or in any other fiduciary capacity in which
it is directed to sell or purchase City Holding Common Stock, none of City
Holding, City National, Horizon or the Horizon Banks will, directly or
indirectly, purchase, publicly sell or publicly acquire any shares of City
Holding Common Stock, or take any other action intended to manipulate the price
of City Holding Common Stock, during the 10 trading days ending on the 10th day
prior to the Effective Time of the Holding Company Merger.

         4.15.    Standstill Agreements; Confidentiality Agreements.

                  During the period from the date of this Agreement through the
Effective Time of the Holding Company Merger, neither Horizon nor City Holding
shall terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which it or any of its respective subsidiaries is a
party. During such period, Horizon or City Holding, as the case may be, shall
enforce, to the fullest extent permitted under applicable law, the provisions of
any such 



                                     - 41 -
<PAGE>   49

agreement, including by obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any
court having jurisdiction.

         4.16.    Letters from Accountants.

                  City Holding, City National, Horizon and the Horizon Banks
shall use reasonable efforts to cause Ernst & Young, LLP, independent
accountants for City Holding and Horizon, to deliver to City Holding and City
National and Horizon and the Horizon Banks, letters dated within two business
days prior to the date the Registration Statement shall become effective and in
form and substance reasonably satisfactory to the recipient thereof to the
effect that for financial reporting purposes, the Transaction qualifies for
pooling-of-interests accounting treatment under GAAP if consummated in
accordance with this Agreement.

                                    ARTICLE V
                       MANAGEMENT AND CORPORATE GOVERNANCE


         5.1.     Board of Directors.

                  Immediately following the Effective Time of the Holding
Company Merger, the Board of Directors of City Holding shall be comprised of 24
members, 12 to be designated by City Holding and 12 to be designated by Horizon
at least 10 business days prior to the mailing of the Proxy Statement-Prospectus
to the shareholders of City Holding and Horizon. If any director so designated
shall be unwilling or unable to serve as a director of City Holding, a
replacement shall be designated by the remaining persons designated by City
Holding or Horizon, as applicable. Until the 1999 annual meeting of the Board of
Directors, the Chairman of the Board shall be elected by the directors
designated by Horizon.

         5.2.     Management.

                  Immediately following the Effective Time of the Holding
Company Merger, the management of City Holding and City National shall be as set
forth on Exhibit E.

                                   ARTICLE VI
                              CONDITIONS OF MERGER


         6.1.     Conditions of Obligations of City Holding and City National.

                  The obligations of City Holding and City National to perform
this Agreement are subject to the satisfaction at or prior to the Effective Time
of the Holding Company Merger of the following conditions unless waived by City
Holding and City National.



                                     - 42 -
<PAGE>   50

                  (a) Representations and Warranties; Performance of
         Obligations. The representations and warranties of Horizon and the
         Horizon Banks set forth in Section 3.l hereof shall be true and correct
         in all material respects as of the date of this Agreement and as of the
         Effective Time of the Holding Company Merger as though made on and as
         of the Effective Time of the Holding Company Merger (or on the date
         when made in the case of any representation and warranty which
         specifically relates to an earlier date); Horizon and the Horizon Banks
         shall have in all material respects performed all obligations required
         to be performed by them and satisfied all conditions required to be
         satisfied by them under this Agreement prior to the Effective Time of
         the Holding Company Merger; and City Holding and City National shall
         have received a certificate signed by the Chief Executive Officer and
         by the Chief Financial Officer of Horizon and each of the Horizon
         Banks, which may be to their knowledge after due inquiry, to such
         effects.

                  (b) Authorization of Transaction. All action necessary to
         authorize the execution, delivery and performance of this Agreement by
         Horizon and the Horizon Banks and the consummation of the transactions
         contemplated herein (including the shareholder action referred to in
         Section 4.2) shall have been duly and validly taken by the Boards of
         Directors of Horizon and the Horizon Banks and by the shareholders of
         Horizon and the Horizon Banks, and Horizon and the Horizon Banks shall
         have full power and right to merge into City Holding and City National,
         respectively, on the terms provided herein.

                  (c) Opinion of Counsel. City Holding and City National shall
         have received an opinion of Jackson & Kelly, counsel to Horizon and the
         Horizon Banks, dated the Closing Date and satisfactory in form and
         substance to counsel to City Holding and City National, in the form
         attached hereto as Exhibit G.

                  (d) The Registration Statement. The Registration Statement
         shall be effective under the 1933 Act and City Holding shall have
         received all state securities laws or "blue sky" permits and other
         authorizations or there shall be exemptions from registration
         requirements necessary to offer and issue the City Holding Common Stock
         in connection with the Holding Company Merger, and neither the
         Registration Statement nor any such permit, authorization or exemption
         shall be subject to a stop order or threatened stop order by the SEC or
         any state securities authority.

                  (e) Tax Opinion. City Holding and City National shall have
         received, in form and substance satisfactory to them, an opinion of
         Hunton & Williams to the effect that, for federal income tax purposes,
         each of the Holding Company Merger and the Bank Mergers will qualify as
         a "reorganization" under Section 368(a) of the Code, and no taxable
         gain will be recognized by City Holding, City National, Horizon or the
         Horizon 



                                     - 43 -
<PAGE>   51

         Banks (i) in the Holding Company Merger (a) upon the transfer of
         Horizon's assets to City Holding in exchange for City Holding Common
         Stock and the assumption of Horizon's liabilities or (b) upon the
         distribution of such City Holding Common Stock to Horizon shareholders
         or (ii) in the Bank Mergers, (a) upon the transfer of the Horizon
         Banks' assets to City National in exchange for the assumption of the
         Horizon Banks' liabilities and in constructive exchange for City
         National common stock (but the Horizon Banks or City National may be
         required to include certain amounts in income as a result of the
         termination of any bad debt reserve maintained by the Horizon Banks for
         federal income tax purposes and other possible required changes in tax
         accounting methods) or (b) upon the constructive distribution of such
         City National common stock to City Holding.

                  (f) Regulatory Approvals. All required approvals from federal
         and state regulatory authorities having jurisdiction to permit City
         Holding and City National to consummate the Transaction and to issue
         City Holding Common Stock to Horizon shareholders shall have been
         received and shall have contained no conditions deemed in good faith to
         be materially disadvantageous by City Holding, in light of the
         transaction as a whole, as to make the transition not feasible.
         Notwithstanding anything to the contrary in this Agreement, in the
         event that divestiture of operations is required by any regulatory
         agency that affects the market of Hinton or Summers County, West
         Virginia, City Holding agrees not to divest any of the operations
         currently comprising Summers, but rather to divest other operations. No
         temporary restraining order, preliminary or permanent injunction or
         other order by any Federal or state court in the United States which
         prevents the consummation of the Transaction shall have been issued and
         remain in effect.

                  (g) Affiliate Letters. Within 60 days of the date hereof, each
         shareholder of Horizon who is a Horizon Affiliate shall have executed
         and delivered a commitment and undertaking in the form of Exhibit H to
         the effect that (1) such shareholder will dispose of the shares of City
         Holding Common Stock received by him in connection with the Holding
         Company Merger only in accordance with the provisions of paragraph (d)
         of Rule 145 under the 1933 Act; (2) such shareholder will not dispose
         of any of such shares until City Holding has received, at its expense,
         an opinion of counsel acceptable to it that such proposed disposition
         will not violate the provisions of paragraph (d) of Rule 145 and any
         applicable securities laws which opinion shall be rendered promptly
         following counsel's receipt of such shareholder's written notice of its
         intent to sell shares of City Holding Common Stock; (3) such
         shareholder shall not dispose of any such shares until City Holding has
         published results of at least 30 days of the combined operations of
         City Holding and Horizon and (4) the certificates representing said
         shares may bear a legend referring to the foregoing restrictions.



                                     - 44 -
<PAGE>   52

                  (h) Nasdaq Listing. The shares of City Holding Common Stock to
         be issued in the Holding Company Merger shall have been approved for
         listing, upon notice of issuance, on the Nasdaq Stock Market.

                  (i) Acceptance by City Holding and City National Counsel. The
         form and substance of all legal matters contemplated hereby and of all
         papers delivered hereunder shall be reasonably acceptable to counsel
         for City Holding and City National.

                  (j) Letters from Accountants. City Holding and City National
         shall have received letters from Ernst & Young, LLP, independent
         accountants for City Holding and Horizon, dated within two business
         days prior to the Closing Date and in form and substance reasonably
         satisfactory to City Holding and City National to the effect that for
         financial reporting purposes, the Transaction qualifies for
         pooling-of-interests accounting treatment under GAAP if consummated in
         accordance with this Agreement.

                  (k) Dissenting Shares. The total amount of cash paid or
         payable by City Holding for Dissenting Shares, fractional shares of
         Horizon Common Stock and any shares of City Holding Common Stock with
         respect to which the holder has exercised dissenters' rights shall not
         exceed 9% of the aggregate value of the shares of City Holding Common
         Stock and cash exchanged for the shares of Horizon Common Stock in the
         Holding Company Merger.

                  (l) Fairness Opinion. Unless waived by City Holding, City
         Holding shall have received an opinion, dated within five business days
         of the date on which the Proxy Statement-Prospectus for this
         transaction is mailed to City Holding Shareholders from Wheat First
         Securities, Inc. that as of such date the Exchange Ratio is fair, from
         a financial point of view, to the holders of City Holding Common Stock.

                  (m) Employment Agreement. Steven J. Day shall have waived the
         application to any transaction contemplated by or discussed in this
         Agreement or the Holding Company Plan of Merger of the "change of
         control" provisions of any employment or severance agreement between
         him and City Holding.

         6.2.     Conditions of Obligations of Horizon and the Horizon Banks.

                  The obligations of Horizon and the Horizon Banks to perform
this Agreement are subject to the satisfaction at or prior to the Effective Time
of the Holding Company Merger of the following conditions unless waived by
Horizon and the Horizon Banks:

                  (a) Representations and Warranties; Performance of
         Obligations. The representations and warranties of City Holding and
         City National set forth in Section 3.2 hereof shall be true and correct
         in all material respects as of the date of this Agreement 



                                     - 45 -
<PAGE>   53

         and as of the Effective Time of the Holding Company Merger as though
         made on and as of the Effective Time of the Holding Company Merger (or
         on the date when made in the case of any representation and warranty
         which specifically relates to an earlier date); City Holding and City
         National shall have in all material respects performed all obligations
         required to be performed by them and satisfied all conditions required
         to be satisfied by them under this Agreement prior to the Effective
         Time of the Holding Company Merger; and Horizon and the Horizon Banks
         shall have received a certificate signed by the Chief Executive Officer
         and by the Chief Financial Officer of City Holding and City National,
         which may be to their knowledge after due inquiry, to such effects.

                  (b) Authorization of Transaction. All action necessary to
         authorize the execution, delivery and performance of this Agreement by
         City Holding and City National and the consummation of the transactions
         contemplated herein (including the shareholder action referred to in
         Section 4.2) shall have been duly and validly taken by the Boards of
         Directors of City Holding and City National and by the shareholders of
         City Holding and City National, and City Holding and City National
         shall have full power and right to merge with Horizon and the Horizon
         Banks, respectively, on the terms provided herein.

                  (c) Opinion of Counsel. Horizon and the Horizon Banks shall
         have received an opinion of Hunton & Williams, counsel to City Holding
         and City National, dated the Closing Date and satisfactory in form and
         substance to counsel to Horizon and the Horizon Banks, in the form
         attached hereto as Exhibit J.

                  (d) The Registration Statement. The Registration Statement
         shall be effective under the 1933 Act and City Holding shall have
         received all state securities laws or "blue sky" permits and other
         authorizations or there shall be exemptions from registration
         requirements necessary to offer and issue the City Holding Common Stock
         in connection with the Holding Company Merger, and neither the
         Registration Statement nor any such permit, authorization or exemption
         shall be subject to a stop order or threatened stop order by the SEC or
         any state securities authority.

                  (e) Tax Opinion. Horizon and the Horizon Banks shall have
         received, in form and substance reasonably satisfactory to them, an
         opinion of Jackson & Kelly to the effect that, for federal income tax
         purposes, each of the Holding Company Merger and the Bank Mergers will
         qualify as a "reorganization" under Section 368(a) of the Code; no
         taxable gain will be recognized by City Holding, City National, Horizon
         or the Horizon Banks (i) in the Holding Company Merger (a) upon the
         transfer of Horizon's assets to City Holding in exchange for City
         Holding Common Stock and the assumption of Horizon's liabilities or (b)
         upon the distribution of such City Holding Common Stock to Horizon
         shareholders or (ii) in the Bank Mergers, (a) upon the transfer of the
         Horizon 



                                     - 46 -
<PAGE>   54

         Banks' assets to City National in exchange for the assumption of the
         Horizon Banks' liabilities and in constructive exchange for City
         National stock (but the Horizon Banks or City National may be required
         to include certain amounts in income as a result of the termination of
         any bad-debt reserve maintained by the Horizon Banks for federal income
         tax purposes and other possible required changes in tax accounting
         methods) or (b) upon the constructive distribution of such City
         National stock to City Holding; no taxable gain will be recognized by a
         Horizon shareholder on the exchange by such shareholder of shares of
         Horizon Common Stock solely for shares of City Holding Common Stock
         (including any fractional share interest) in the Holding Company
         Merger; a Horizon common shareholder's basis in City Holding Common
         Stock (including any fractional share interest) received in the Holding
         Company Merger will be the same as the shareholder's basis in the
         Horizon Common Stock surrendered in exchange therefor; the holding
         period of such City Holding Common Stock (including any fractional
         share interest) for a Horizon shareholder will include the holding
         period of the Horizon Common Stock surrendered in exchange therefor, if
         such Horizon Common Stock is held as a capital asset by the shareholder
         at the Effective Time of the Holding Company Merger; and a Horizon
         common shareholder who receives cash in lieu of a fractional share of
         City Holding Common Stock will recognize gain or loss equal to any
         difference between the amount of cash received and the shareholder's
         basis in the fractional share interest.

                  (f) Regulatory Approvals. All required approvals from federal
         and state regulatory authorities having jurisdiction to permit Horizon
         and the Horizon Banks to consummate the Transaction and to permit City
         Holding to issue City Holding Common Stock to Horizon shareholders
         shall have been received. No temporary restraining order, preliminary
         or permanent injunction or other order by and Federal or state court in
         the United States which prevents the consummation of the Transaction
         shall have been issued and remain in effect.

                  (g) Nasdaq Listing. The shares of City Holding Common Stock to
         be issued in the Holding Company Merger shall have been approved for
         listing, upon notice of issuance, on the Nasdaq Stock Market.

                  (h) Acceptance by Horizon Counsel. The form and substance of
         all legal matters contemplated hereby and of all papers delivered
         hereunder shall be reasonably acceptable to counsel for Horizon.

                  (i) Letters from Accountants. Horizon and the Horizon Banks
         shall have received letters from Ernst & Young, LLP, independent
         accountants for City Holding and Horizon, dated within two business
         days of the Closing Date and in form and substance reasonably
         satisfactory to Horizon and the Horizon Banks to the effect that for
         financial 



                                     - 47 -
<PAGE>   55

         reporting purposes, the Transaction qualifies for pooling-of-interests
         accounting treatment under GAAP if consummated in accordance with this
         Agreement.

                  (j) Fairness Opinion. Unless waived by Horizon, the Horizon
         Board shall have received an opinion, dated within five business days
         of the date on which the Proxy Statement-Prospectus for this
         transaction is mailed to Horizon shareholders from Baxter, Fentriss &
         Co. that as of such date the consideration to be received by the
         holders of Horizon Common Stock in the Holding Company Merger is fair
         from a financial point of view.

                  (k) Employment Agreement. Steven J. Day shall have waived the
         application to any transaction contemplated by or discussed in this
         Agreement or the Holding Company Plan of Merger of the "change of
         control" provisions of any employment or severance agreement between
         him and City Holding.

                                   ARTICLE VII
                          CLOSING DATE; EFFECTIVE TIME


         7.1.     Closing Date.

                  Unless another date or place is agreed to in writing by the
parties, the closing of the transactions contemplated in this Agreement shall
take place at the offices of City Holding, 25 Gatewater Road, Charleston, West
Virginia, at 10:00 o'clock A.M., local time, on such date as City Holding and
Horizon shall agree upon; provided, that such date shall not be earlier than 10
days after the receipt of the last required regulatory approval, and shall not
be later than 60 days after the receipt of such approval and, in no event, shall
be later than March 31, 1999 (the "Closing Date"). The parties agree to use
their best efforts to make the Holding Company Merger effective on or before
December 31, 1998.

         7.2.     Filings at Closing.

                  Subject to the provisions of Article V, at the Closing Date,
City Holding shall cause Articles of Merger relating to the Holding Company Plan
of Merger to be filed in accordance with the WVC and City Holding, City
National, Horizon and the Horizon Banks shall take any and all lawful actions to
cause the Holding Company Merger to become effective.

         7.3.     Effective Time.

                  Subject to the terms and conditions set forth herein,
including receipt of all required regulatory approvals, the Holding Company
Merger shall become effective at the time Articles of Merger filed with the
Secretary of State of the State of West Virginia are made 



                                     - 48 -
<PAGE>   56

effective (the "Effective Time of the Holding Company Merger") and the Bank
Mergers shall become effective at the times the respective Articles of Merger
filed with the applicable governmental authorities are made effective (the
"Effective Time of the Bank Mergers").

                                  ARTICLE VIII
            TERMINATION; SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
                        COVENANTS; WAIVER AND AMENDMENT


         8.1.     Termination.

                  This Agreement shall be terminated, and the Transaction
abandoned, if the shareholders of City Holding or Horizon shall not have given
the approval required by Section 4.2. Notwithstanding such approval by such
shareholders, this Agreement may be terminated at any time prior to the
Effective Time of the Holding Company Merger, by:

                  (a) The mutual consent of City Holding and Horizon, as
         expressed by their respective Boards of Directors;

                  (b) Either City Holding or Horizon, as expressed by their
         respective Boards of Directors, if the Holding Company Merger has not
         occurred by March 31, 1999, provided that the failure of the Holding
         Company Merger to so occur shall not be due to a willful breach of any
         representation, warranty, covenant or agreement by the party seeking to
         terminate this Agreement;

                  (c) By City Holding in writing authorized by its Board of
         Directors if Horizon or the Horizon Banks has, or by Horizon in writing
         authorized by its Boards of Directors, if City Holding or City National
         has, in any material respect, breached (i) any covenant or agreement
         contained herein, or (ii) any representation or warranty contained
         herein, in any case if such breach has not been cured by the earlier of
         30 days after the date on which written notice of such breach is given
         to the party committing such breach or the Closing Date; provided, that
         it is understood and agreed that either party may terminate this
         Agreement on the basis of any such material breach of any
         representation or warranty which is not cured within 30 days of written
         notice thereof contained herein notwithstanding any qualification
         therein relating to the knowledge of the other party;

                  (d) Either City Holding or Horizon, as expressed by their
         respective Boards of Directors, in the event that any of the conditions
         precedent to the obligations of such parties to consummate the
         Transaction have not been satisfied or fulfilled or waived by the party
         entitled to so waive on or before the Closing Date, provided that no
         party shall be entitled to terminate this Agreement pursuant to this
         subparagraph (d) if the condition precedent or conditions precedent
         which provide the basis for termination can reasonably 



                                     - 49 -
<PAGE>   57

         be and are satisfied within a reasonable period of time, in which case,
         the Closing Date shall be appropriately postponed;

                  (e) City Holding or Horizon if the Federal Reserve Board, the
         OCC, the FDIC or the WVBOB deny approval of the Transaction and the
         time period for all appeals or requests for reconsideration has run;

                  (f) City Holding, if Horizon fails to deliver to City Holding
         as required by Section 4.13(a) the Schedules relating to Horizon and
         the Horizon Banks or if City Holding notifies Horizon not later than
         5:00 p.m., Charleston, West Virginia time, on August 21, 1998, that the
         results of its due diligence review of the affairs of Horizon and the
         Horizon Banks, including its review of such Schedules and as more
         generally provided for in Section 4.1, have been, in its sole judgment,
         unsatisfactory;

                  (g) Horizon, if City Holding fails to deliver to Horizon as
         required by Section 4.13(b) the Schedules relating to City Holding and
         City National or if Horizon notifies City Holding not later than 5:00
         p.m., Charleston, West Virginia time, on August 21, 1998, that the
         results of its due diligence review of the affairs of City Holding and
         City National, including its review of such Schedules and as more
         generally provided for in Section 4.1, have been, in its sole judgment,
         unsatisfactory;

                  (h) Either Horizon or City Holding, if any stockholder
         approval required by Section 4.2 herein is not obtained; or

                  (i) Either Horizon or City Holding, if the Board of Directors
         of the other party, acting in accordance with the second sentence of
         Section 4.2, shall have withdrawn, modified or changed in a manner
         adverse to the terminating party its approval or recommendation of this
         Agreement and the transactions contemplated hereby.

         8.2.     Effect of Termination.

                  In the event of the termination and abandonment of this
Agreement and the Transaction pursuant to Section 8.1, this Agreement, other
than the provisions of Sections 4.1 (last three sentences) and 10.1, shall
become void and have no effect, without any liability on the part of any party
or its directors, officers or shareholders, provided that nothing contained in
this Section 8.2 shall relieve any party from liability for any willful breach
of this Agreement.

         8.3.     Survival of Representations, Warranties and Covenants.

                  The respective representations and warranties, obligations,
covenants and agreements (except for those contained in Sections 1.2, 1.3, 2.1,
2.2, 2.3, 2.4, 2.5, 2.6, Article V, 7.2, 7.3, 8.1, 8.2, 8.3, 8.4, 9.1, 9.2,
10.2, 10.3, 10.4 and 10.6 which shall survive the effectiveness 



                                     - 50 -
<PAGE>   58

of the Transaction) of City Holding, City National, Horizon and the Horizon
Banks contained herein shall expire with, and be terminated and extinguished by,
the effectiveness of the Transaction and shall not survive the Effective Time of
the Holding Company Merger.

         8.4.     Waiver and Amendment.

                  Any term or provision of this Agreement may be waived in
writing at any time by the party which is, or whose shareholders are, entitled
to the benefits thereof and this Agreement may be amended or supplemented by
written instructions duly executed by all parties hereto at any time, whether
before or after the meetings of City Holding and Horizon shareholders referred
to in Section 4.2 hereof, excepting statutory requirements and requisite
approvals of shareholders and regulatory authorities, provided that any such
amendment or waiver executed after shareholders of City Holding or Horizon have
approved this Agreement and the Holding Company Plan of Merger shall not modify
either the amount or form of the consideration to be received by such
shareholders for their shares of Horizon Common Stock or otherwise materially
adversely affect such shareholders without their approval.

                                   ARTICLE IX
                              ADDITIONAL COVENANTS


         9.1.     Indemnification of Horizon Officers and Directors; Liability 
Insurance.

                  After the Effective Time of the Holding Company Merger, City
Holding acknowledges its obligation to provide, and agrees to provide,
indemnification to the directors, employees and officers of Horizon and the
Horizon Banks and the subsidiaries thereof for events occurring prior to or
subsequent to the Effective Time of the Holding Company Merger as if they had
been directors, employees or officers of City Holding prior to the Effective
Time of the Holding Company Merger, to the extent permitted under the WVC and
the Articles of Incorporation and Bylaws of City Holding as in effect as of the
date of this Agreement. Such indemnification shall continue for ten years after
the Effective Time of the Holding Company Merger, provided that any right to
indemnification in respect of any claim asserted or made within such ten year
period shall continue until final disposition of such claim. City Holding will
provide officers and directors liability insurance coverage to all directors and
officers of Horizon and the Horizon Banks and their subsidiaries, whether or not
they become part of the City Holding organization after the Effective Time of
the Holding Company Merger, to the same extent provided to City Holding's
officers and directors, provided that coverage will not extend to acts as to
which notice has been given prior to the Effective Time of the Holding Company
Merger. The right to indemnification and insurance provided in this Section 9.1
is intended to be for the benefit of directors, employees and officers of
Horizon and the Horizon Banks and the subsidiaries thereof and as such may be
personally enforced by them at law or in equity.



                                     - 51 -
<PAGE>   59

         9.2.     Employee Matters.

                  (a) Severance Benefits. City Holding or City National will pay
         a severance benefit to each person, other than those persons who have
         employment agreements with City Holding or City National, who is an
         employee of City Holding, City National, Horizon, the Horizon Banks or
         any of their subsidiaries at the Effective Time of the Holding Company
         Merger and who is terminated without cause within six months after the
         Effective Time of the Holding Company Merger. The amount of such
         severance benefit will equal one week, in the case of hourly employees,
         and two weeks, in the case of salaried employees, of such employee's
         base pay (as in effect immediately before the Effective Time of the
         Holding Company Merger) for each full year of service up to 52 weeks
         base pay, provided, however, that the severance benefit shall not be
         less than three weeks of base pay. Such severance benefit shall be in
         lieu of any other severance benefit otherwise to be provided to such
         employees.

                  (b) Employee Benefits for Transferred Employees. All employees
         of Horizon or the Horizon Banks immediately prior to the Effective Time
         of the Holding Company Merger who are employed by City Holding, City
         National or another City Holding subsidiary immediately following the
         Effective Time of the Holding Company Merger ("Transferred Employees")
         will be covered by City Holding's employee benefit plans as to which
         they are eligible based on their length of service, compensation, job
         classification, and position, including, where applicable, any
         incentive compensation plan. Notwithstanding the foregoing, City
         Holding may determine to continue any of the Horizon or the Horizon
         Banks benefit plans for Transferred Employees in lieu of offering
         participation in City Holding's benefit plans providing similar
         benefits (e.g., medical and hospitalization benefits), to terminate any
         of the Horizon or the Horizon Banks benefit plans, or to merge any such
         benefit plans with City Holding's benefit plans. Except as specifically
         provided in this Section 9.2 and as otherwise prohibited by law,
         Transferred Employees' service with Horizon or the Horizon Banks which
         is recognized by the applicable benefit plan of Horizon or the Horizon
         Banks at the Effective Time of the Holding Company Merger shall be
         recognized as service with City Holding for purposes of eligibility to
         participate and vesting, if applicable (but not for purposes of benefit
         accrual) under the corresponding City Holding benefit plan, if any,
         subject to applicable break-in-service rules.

                  (c) Advisory Directors. Following the Effective Time of the
         Holding Company Merger, City Holding agrees to appoint members of the
         Board of Directors of Raleigh, Summers, Greenbrier, Marlinton and
         Twentieth as advisory directors of City National, but this undertaking
         shall not create any obligation on City Holding's part to appoint any
         particular director as an advisory director for any particular term.
         City Holding agrees, for three years from the Effective Time of the
         Holding Company Merger, 



                                     - 52 -
<PAGE>   60

         to maintain deferred compensation plans for directors, with similar
         benefits, and shall not terminate or reduce any benefits of any person
         thereunder which have been accrued, funded or vested.

                  (d) Employment Agreements. Immediately following the Effective
         Time of the Holding Company Merger, City Holding shall enter into
         employment or consulting agreements, in the forms attached hereto as
         Exhibit I, with the individuals named on Exhibit I.

                                    ARTICLE X
                                  MISCELLANEOUS


         10.1.    Expenses.

                  Each party hereto shall bear and pay the costs and expenses
incurred by it relating to the transactions contemplated hereby.

         10.2.    Entire Agreement.

                  This Agreement contains the entire agreement among City
Holding, City National, Horizon and the Horizon Banks with respect to the
Transaction and the related transactions and supersedes all prior agreements
(including the Letter Agreement), arrangements or understandings with respect
thereto.

         10.3.    Descriptive Headings.

                  Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provisions of this
Agreement.



                                     - 53 -
<PAGE>   61

         10.4.    Notices.

                  All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:

                           If to City Holding or City National:

                                    City Holding Company
                                    25 Gatewater Road
                                    Charleston, West Virginia 25313
                                    Attention:   Robert A. Henson
                                                 Chief Financial Officer

                           Copy to:

                                    Lathan M. Ewers, Jr.
                                    Randall S. Parks
                                    Hunton & Williams
                                    951 East Byrd Street
                                    Richmond, Virginia  23219

                           If to Horizon or the Horizon Banks:

                                    Horizon Bancorp, Inc.
                                    One Park Avenue
                                    Beckley, West Virginia 25801
                                    Attention: Frank S. Harkins, Jr. Chairman



                                     - 54 -
<PAGE>   62

                           Copy to:

                                    Louis S. Southworth, II
                                    Charles D. Dunbar
                                    Jackson & Kelly
                                    1600 Laidley Tower (Zip: 25301)
                                    P.O. Box 553
                                    Charleston, West Virginia 25322

                                    E. M. Payne, III
                                    File, Payne, Scherer & File
                                    P.O. Drawer L
                                    130 Main Street
                                    Beckley, West Virginia 25801

         10.5.    Counterparts.

                  This Agreement may be executed in any number of counterparts,
and each such counterpart hereof shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement.

         10.6.    Governing Law.

                  Except as may otherwise be required by the laws of the United
States, this Agreement shall be governed by and construed in accordance with the
laws of West Virginia.




                                     - 55 -
<PAGE>   63



         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by its officers thereunto duly authorized, all as of the
day and year first above written.


                                CITY HOLDING COMPANY


                                By:     /s/ ROBERT A. HENSON
                                        -----------------------------------
                                       Name:  Robert A. Henson
                                       Title: Chief Financial Officer



                                HORIZON BANCORP, INC.


                                By:     /s/ FRANK S. HARKINS, JR.
                                        -----------------------------------
                                       Name:  Frank S. Harkins, Jr.
                                       Title: Chairman of the Board and CEO



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