UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
CATSKILL FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
SEC 1913 (3-99)
<PAGE>
CATSKILL
FINANCIAL CORPORATION
----------
341 Main St.
Catskill, New York 12414
(518) 943-3600
----------
January 14, 2000
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Catskill Financial
Corporation (the "Company"), we cordially invite you to attend our Annual
Meeting of Stockholders. The meeting will be held at the main office of the
Company located at 341 Main Street, Catskill, New York, on Tuesday, February 15,
2000, at 7:00 p.m.
At the meeting, stockholders will be asked to elect two directors to serve for
three-year terms. The Board of Directors has nominated directors George P. Jones
and Hugh J. Quigley to serve for the three-year terms. Stockholders will also be
asked to ratify the appointment of the Company's independent auditors.
We urge you to exercise your rights as a stockholder to vote and participate in
this process. Your Board of Directors unanimously recommends that you vote "For"
the nominees and the ratification of the Company's independent auditors.
Please read the enclosed Proxy Statement and then complete, sign and date the
enclosed proxy card and return it in the accompanying postage prepaid return
envelope as promptly as possible. We encourage you to return the proxy card even
if you plan to attend the meeting. This will save the Company additional expense
in soliciting proxies and will ensure that your shares are represented at the
meeting.
Sincerely,
/s/Wilbur J. Cross
Wilbur J. Cross
President, Chairman of the Board and
Chief Executive Officer
<PAGE>
CATSKILL
FINANCIAL CORPORATION
341 MAIN ST.
CATSKILL, NEW YORK 12414
(518) 943-3600
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on February 15, 2000
----------
Notice is hereby given that the Annual Meeting of Stockholders of Catskill
Financial Corporation (the "Company") will be held at the main office of the
Company located at 341 Main Street, Catskill, New York, on Tuesday, February 15,
2000, at 7:00 p.m.
A Proxy Card and a Proxy Statement for the meeting are included with this
notice.
The meeting is for the purpose of considering and acting upon:
I. The election of two directors to serve for three-year terms and until
their successors have been duly elected and qualified;
II. The ratification of the appointment of KPMG LLP as auditors for the
Company for the fiscal year ending September 30, 2000; and
such other matters as may properly come before the meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the meeting.
Any action may be taken on the foregoing proposals at the meeting on the date
specified above, or on any date or dates to which the meeting may be adjourned.
Stockholders of record at the close of business on December 17, 1999, (the
"Record Date") are the stockholders entitled to vote at the meeting and any
adjournments thereof.
You are requested to complete and sign the enclosed form of proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
Catskill, New York
January 14, 2000
================================================================================
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
================================================================================
<PAGE>
PROXY STATEMENT
----------
CATSKILL FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
February 15, 2000
----------
This Proxy Statement is furnished in connection with the solicitation on behalf
of the Board of Directors of Catskill Financial Corporation (the "Company"), the
parent company of Catskill Savings Bank (the "Bank"), of proxies to be used at
the annual meeting of stockholders of the Company, which will be held at the
main office of the Company located at 341 Main Street, Catskill, New York, on
Tuesday, February 15, 2000, at 7:00 p.m. and all adjournments of the meeting.
The accompanying Notice of Meeting and this Proxy Statement are first being
mailed to stockholders on or about January 14, 2000.
At the meeting, stockholders of the Company are being asked to consider and vote
upon the election of two directors for three-year terms and the ratification of
the appointment of KPMG LLP as the auditors of the Company for the fiscal year
ending September 30, 2000. The Board of Directors has fixed December 17, 1999,
as the Record Date for determining stockholders entitled to notice of and to
vote at the meeting. As of the Record Date, there were 3,789,211 shares of the
Company's common stock ("Common Stock"), par value $.01 per share, issued and
outstanding, 77,103 of which are unvested shares issued pursuant to the
Company's Management Recognition Plan (the "MRP"), that cannot be voted at the
meeting.
Vote Required and Proxy Information
Each share of Common Stock is entitled to one vote on each matter to come before
the meeting. Directors are elected by a plurality of votes cast at the meeting,
so that, the nominees with the highest vote totals will be elected. There is no
cumulative voting in the election of directors, which means that no stockholder
may cast more votes in favor of any one nominee than the number of shares owned
of record by that stockholder. The ratification of the appointment of KPMG LLP
requires the affirmative vote of a majority of the votes cast at the meeting.
Proxy cards in the form solicited by the Board of Directors which are signed and
received by the Company before or at the meeting and not revoked, will be voted
in accordance with the instructions on the proxy card. If a proxy card is
signed, but does not contain voting instructions, the shares represented by the
proxy will be voted in favor of the nominees for director named in this Proxy
Statement and in favor of the proposal to ratify the appointment of KPMG LLP.
The Company does not know of any matters, other than those described in this
Proxy Statement, that are to come before the meeting. If any other matters are
properly presented at the meeting for action, including the adjournment of the
meeting, the Board of Directors, as the holders of the proxies solicited by the
Board, will have the discretion to vote on such matters in accordance with their
best judgment.
If 1,263,070 shares of the Common Stock are present in person or represented by
proxy at the meeting, there will be a quorum, which will allow the meeting to
commence. Once a quorum is present, the meeting can continue, even if some
stockholders leave the meeting. If a stockholder is present in person or by
proxy but abstains from voting any shares, or if a broker who holds shares in
the name of a nominee (also known as holding in "street name") submits a proxy
or attends the meeting but does not vote those shares (also
1
<PAGE>
known as a "broker non-vote"), then the shares are counted as present for the
purposes of determining whether there is a quorum. Those shares will not affect
the vote on any matter when the vote is based on the number of votes cast at the
meeting, such as the election of directors and ratification of the appointment
of KPMG LLP. Abstentions and broker non-votes will have the same effect as a
vote against a proposal when the result must be determined based upon the number
of votes eligible to be cast at the meeting.
A proxy given pursuant to this solicitation may be revoked at any time before it
is voted. Stockholders may revoke a proxy by: (i) filing with the Secretary of
the Company at or before the meeting a written notice of revocation bearing a
later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the meeting; or (iii) attending the meeting and voting in person (although
attendance at the meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy must be delivered to David L.
Guldenstern, Corporate Secretary, Catskill Financial Corporation, 341 Main
Street, Catskill, New York 12414.
In order for any stockholder of the Company entitled to vote for the election of
directors to nominate a person to the Board of Directors at any meeting, the
stockholder must deliver to David L. Guldenstern, Corporate Secretary, at the
Company's address, a notice of nomination in writing. The notice, which must
contain the name and address of the stockholder, the class and number of shares
of the Common Stock beneficially owned by the stockholder and the name of each
person the stockholder proposes to nominate for director and all other
information required under the Securities and Exchange Act of 1934 (the
"Exchange Act"), shall be delivered or mailed to and received at the principal
offices of the Company not less than 60 days prior to the date of the meeting.
In the event that less than 40 days notice of the meeting is given to the
stockholders, a notice of nomination must be received by the Company not later
than the close of business on the tenth day following the date on which such
notice of meeting was mailed or public announcement first made.
PROPOSAL I - ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of six members and, as
provided in the Company's by-laws, it is divided into three classes, with each
class of directors being elected for three-year terms. At the meeting, two
directors will be elected to hold office until the annual meeting of
stockholders in the year 2003 and until their successors have been elected and
qualified.
The Board of Directors has nominated George P. Jones and Hugh J. Quigley for
election as directors at the meeting. Mr. Jones and Mr. Quigley have consented
to being nominated and to serve if elected. In case any nominee becomes
unavailable for election for any presently unforeseen reason, the persons
authorized to cast the votes represented by the enclosed proxy will have the
right to use their discretion to vote for a substitute.
2
<PAGE>
INFORMATION CONCERNING THE BOARD OF
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information, as of September 30, 1999, with respect
to the nominees for director, continuing directors in office and executive
officers who are not directors. There are no arrangements or understandings
pursuant to which any director was selected to serve as such, and there are no
family relationships between any directors or executive officers of the Company.
<TABLE>
<CAPTION>
NOMINEES FOR TERMS EXPIRING IN 2003
Company
Director Term as Director
Name and Age Position With the Company and the Bank Since Expires
- ------------ -------------------------------------- ----- -------
<S> <C> <C> <C>
George P. Jones, 60 Director of the Company and the Bank 1995 2000
Hugh J. Quigley, 50 Director of the Company and the Bank 1995 2000
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE IN FAVOR OF THESE TWO NOMINEES
<TABLE>
<CAPTION>
CONTINUING DIRECTORS
Company
Director Term as Director
Name and Age Position With the Company and the Bank Since Expires
- ------------ -------------------------------------- ----- -------
<S> <C> <C> <C>
Wilbur J. Cross, 57 Director, Chairman of the Board, 1995 2002
President and Chief Executive
Officer of the Company and the Bank
Richard A. Marshall, 59 Director of the Company and the Bank 1995 2001
Allan D. Oren, 58 Director of the Company and the Bank 1995 2002
Edward P. Stiefel, 52 Director of the Company and the Bank 1995 2001
</TABLE>
Board of Directors - Biographical Information
Business experience for the directors listed below comprises experience for at
least the past five years.
Wilbur J. Cross. Mr. Cross, who joined the Bank in 1961, is Chairman of the
Board, President and Chief Executive Officer of the Company and the Bank. He has
been a director of the Bank since 1979 and President and Chief Executive Officer
since 1984. Mr. Cross is also President of the Catskill Mountain Housing
Development Corp., a nonprofit organization providing financial counseling and
housing to low to moderate income residents of Greene County, New York, and past
Treasurer and Director of the Columbia-Greene Community Foundation, Inc., which
provides financial assistance to college students from low to moderate income
families.
3
<PAGE>
George P. Jones. Mr. Jones is the President of STG Company, Inc., a real estate
development company and SNYT, Inc., a building maintenance company, both located
in Greenville, New York. Mr. Jones also serves as Vice President of the
Greenville Chamber of Commerce. Mr. Jones has been a director of the Bank since
1988.
Richard A. Marshall. Mr. Marshall is the President of Marshall's Garage, an
automotive service station, and Marshall's Auto Exchange, an automobile
dealership, both of which are located in Ravena, New York. He also is a member
of the Capital District Automobile Dealers Association, a philanthropic
organization located in Albany, New York. Mr. Marshall has been a director of
the Bank since 1987.
Allan D. Oren. Mr. Oren is President of A. Oren & Sons Furniture Stores
headquartered in Catskill. Mr. Oren also serves as a Director of the Quantum
Fund, which provides low interest rate loans to small businesses in the Greene
County area, and Vice President of the Columbia-Greene Community Foundation,
Inc. Mr. Oren has been a director of the Bank since 1973.
Hugh J. Quigley. Mr. Quigley is President of Dynabil Industries, a company
located in Greene County, New York and San Diego, California, which manufactures
aircraft and aerospace components. He also serves as Vice Chairman of the Greene
County Industrial Development Corp., which promotes industrial development in
Greene County, and is a former President and Trustee Emeritus of the
Columbia-Greene Community Foundation, Inc. Mr. Quigley is also a S.U.N.Y.
Trustee for Columbia-Greene Community College. Mr. Quigley has been a director
of the Bank since 1991.
Edward P. Stiefel, Esq. Mr. Stiefel is a principal in the law firm of Stiefel &
Winans, Catskill, New York and has been engaged in the practice of law in
Catskill since 1972. Mr. Stiefel also serves as a Trustee of the Pioneer
Insurance Company. From time to time, Stiefel & Winans provides legal services
to the Bank. Mr. Stiefel has been a director of the Bank since 1976.
Executive Officers Who Are Not Directors
Executive officers are elected for one-year terms and serve at the pleasure of
the Board of Directors. Provided below is certain information regarding the
executive officers of the Company and the Bank who are not directors.
David J. DeLuca. Mr. DeLuca, age 47, has been Vice President and Chief Financial
Officer of the Company and the Bank since August 1996. He is also the Treasurer
of the Company. Mr. DeLuca was Senior Vice President and Corporate Controller of
KeyCorp, a bank holding company, from 1987 to 1994 and Senior Vice President and
Manager of Corporate Planning and Forecasting of KeyCorp from 1994 to 1996. Mr.
DeLuca is a certified public accountant.
David L. Guldenstern. Mr. Guldenstern, age 56, is Vice President and Secretary
of the Bank, positions he has held since 1984. Mr. Guldenstern is also Vice
President and Secretary of the Company. Mr. Guldenstern joined the Bank in 1970.
Deborah S. Henderson. Ms. Henderson, age 46, has been employed by the Bank since
1973 and is Vice President of Loan Administration and Operations and has been
the Bank's Senior Loan Officer since 1988.
4
<PAGE>
Keith A. Lampman. Mr. Lampman, age 33, is the Bank's Vice President of Branch
Administration and Operations, a position he has held since December 1996. He
has also served as the Bank's Compliance Officer since 1989. Mr. Lampman joined
the Bank in 1988.
Meetings of the Board of Directors and Certain Committees
The Company's Board of Directors held 14 meetings during the 1999 fiscal year,
which encompasses the period from October 1, 1998, through September 30, 1999.
Each of the directors of the Company is also a director of the Bank. The Board
of Directors of the Company has an Examining ("Audit") Committee and a Stock
Option Plan and Management Recognition Plan Committee ("SOP and MRP Committee").
The entire Board of Directors acts as a nominating committee. The Bank also has
a Compensation Committee and an Executive Committee.
The Examining Committee of the Company, which also serves as the audit committee
of the Bank, consists of directors Jones, Quigley and Stiefel. The Examining
Committee (i) recommends and maintains communications with the independent
auditors; (ii) reviews the status of the annual audit; and (iii) supervises the
Bank's internal auditor. Since the conversion of the Bank to stockholder
ownership, and the more comprehensive financial statement audits conducted in
connection with such ownership, the functions of the Examining Committee have
been performed by the entire Board of Directors.
The SOP and MRP Committee consists of directors Marshall, Oren and Stiefel. The
committee is responsible for determining and approving awards under the
Company's 1996 Stock Option and Incentive Plan (the "Stock Option Plan") and the
MRP. The committee also establishes rules and standards applicable to awards
under those plans, as permitted by the plans. The committee met once during the
1999 fiscal year.
The Compensation Committee of the Bank consists of directors Marshall, Oren and
Stiefel. Mr. Cross is a non-voting ex-officio member of the committee but he
does not participate in decisions regarding his own compensation. The committee
is responsible for determining officer and employee compensation and addresses
other personnel matters. The committee met six times during the 1999 fiscal
year.
The Executive Committee has the authority to approve security and loan
transactions and to exercise most powers of the Board of Directors in the
intervals between meetings of the Board. Any actions of this committee are
reported to the Board at its next meeting. The committee met twelve times during
the 1999 fiscal year.
The Board of Directors will consider nominees for directorships submitted by
stockholders. Any stockholder desiring to propose a person as a possible
director should submit in writing a detailed resume of such person and a
statement of such person's knowledge, expertise and experience in banking and
financial matters.
5
<PAGE>
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on the Record Date will be
entitled to one vote for each share of Common Stock then held. The following
table sets forth information as of December 17, 1999, regarding share ownership
of: (i) those persons or entities which management believes own beneficially
more than five percent of the Common Stock; (ii) each of the Company's
directors; (iii) each officer of the Company and the Bank who made in excess of
$100,000 (salary and bonus) during the fiscal year ended September 30, 1999,
(the "Named Officers"); and (iv) all directors and executive officers of the
Company and the Bank as a group. Management knows of no person, except as listed
below, who beneficially owned more than 5% of the Common Stock as of December
17, 1999. Information set forth in the table with respect to persons or entities
who own beneficially more than five percent of the Common Stock is based upon
filings with the Securities and Exchange Commission (the "SEC") made pursuant to
Section 13 of the Exchange Act and other sources believed by the Company to be
reliable.
<TABLE>
<CAPTION>
Shares Beneficially Owned Percent
Beneficial Owner at December 17, 1999(1) of class(2)
- ---------------- ----------------------- -----------
<S> <C> <C>
Catskill Financial Corporation Employee Stock
Ownership Plan
341 Main Street, Catskill, New York 12414 375,342(3) 9.4%
Thomson, Horstmann & Bryant, Inc.
Park 80 West, Plaza Two, Saddle Brook, New Jersey 07663 379,500(4) 9.5%
Brandes Investment Partners, L.P.
12750 High Bluff Drive, San Diego, California 92130 238,783(4) 6.0%
Wellington Management Company, L.L.P.
75 State Street, Boston, Massachusetts 02109 234,000(4) 5.9%
John Hancock Financial Services
101 Huntington Avenue, Boston, Massachusetts 02199 210,000(4) 5.3%
Wilbur J. Cross
Chairman of the Board and Chief Executive Officer 143,477(5) 3.6%
David J. DeLuca
Vice President and Chief Financial Officer 51,816(6) 1.3%
Deborah S. Henderson
Vice President and Senior Loan Officer 43,379(7) 1.1%
George P. Jones, Director 32,856(8) *
Richard A. Marshall, Director 64,239(9) 1.6%
Allan D. Oren, Director 77,935 2.0%
Hugh J. Quigley, Director 33,277(10) *
Edward P. Stiefel, Esq., Director 61,656 1.5%
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Owned Percent
Beneficial Owner at December 17, 1999(1) of class(2)
- ---------------- ----------------------- -----------
<S> <C> <C>
Directors and executive officers of the Company and the
Bank, as a group (10 persons) 564,538(11) 14.2%
</TABLE>
- ------------------
1 Amount includes shares held directly, as well as shares allocated to such
individuals under the Catskill Financial Corporation Employee Stock
Ownership Plan ("ESOP"), and other shares with respect to which a person
may be deemed to have sole voting and/or investment power. The table also
includes 4,551 shares awarded to each non-employee director pursuant to the
MRP which are not vested and cannot be voted at the meeting. The table also
includes 17,058 shares subject to options granted to directors Jones,
Marshall and Quigley and 1,058 shares subject to options granted to
director Oren pursuant to the Stock Option Plan because they were
exercisable on the Record Date or within 60 days thereafter.
2 Based upon 3,982,142 shares outstanding on December 17, 1999, which
includes 77,103 shares issued but unvested under the MRP and stock options
for 192,931 shares exercisable on the Record Date or within 60 days
thereafter. An asterisk ("*") means a percentage held of less than 1%.
3 Excludes 79,598 shares allocated to ESOP participants. First Bankers Trust
Co., N.A., the trustee of the ESOP, may be deemed to own beneficially the
unallocated shares held by the ESOP. Unallocated shares and allocated
shares for which no voting instructions are received are voted in the same
proportion as allocated shares voted by participants.
4 Shares are beneficially owned by an investment advisory company on behalf
of certain of its clients. Amounts shown are based upon the most recent
available reports filed pursuant to Section 13 of the Exchange Act and may
not reflect actual beneficial ownership on the Record Date.
5 Includes 200 shares owned by Mr. Cross' wife, as to which he disclaims
beneficial ownership; 9,310 shares allocated to Mr. Cross in the ESOP;
22,748 unvested MRP shares, which cannot be voted at the meeting; and
85,299 shares which Mr. Cross had the right to acquire on the Record Date
or within 60 days thereafter pursuant to the Stock Option Plan.
6 Includes 11,800 unvested MRP shares, which cannot be voted at the meeting;
18,000 shares which Mr. DeLuca had the right to acquire on the Record Date
or within 60 days thereafter pursuant to the Stock Option Plan; and 4,316
shares allocated to Mr. DeLuca in the ESOP.
7 Includes 4,800 unvested MRP shares, which cannot be voted at the meeting;
18,000 shares which Ms. Henderson had the right to acquire on the Record
Date or within 60 days thereafter pursuant to the Stock Option Plan; and
5,379 shares allocated to Ms. Henderson in the ESOP.
8 Includes 425 shares owned by Mr. Jones' daughter, as to which he disclaims
beneficial ownership.
9 Includes 5,000 shares owned by Mr. Marshall's wife and 3,000 shares owned
by Mr. Marshall's daughters, as to which he disclaims beneficial ownership.
10 Includes 980 shares owned by Mr. Quigley's wife's Individual Retirement
Account, as to which he disclaims beneficial ownership.
7
<PAGE>
11 Includes 26,759 ESOP shares allocated to executive officers, 47,348
unvested MRP shares awarded to executive officers as a group and 22,755
unvested MRP shares awarded to non-employee directors, which MRP shares
cannot be voted at the meeting. Also includes 140,699 stock options granted
to executive officers and 52,232 stock options granted to non-employee
directors, representing options exercisable on the Record Date or within 60
days thereafter.
- --------------------
Director Compensation
The Company's non-employee directors are paid a quarterly retainer of $500 for
their service on the Company's Board of Directors. In addition, the non-employee
directors of the Bank are paid a fee of $1,000 for attendance at each regular
meeting of the Bank's Board and also receive $300 per meeting for attendance at
the Bank's Executive and Compensation Committees. Directors may defer their Bank
fees until retirement, pursuant to a deferral plan under which fees once earned
are deferred and credited with interest until paid. The Bank accrues a liability
for the deferred fees as they are earned.
Executive Compensation
The Company has not paid any compensation to its executive officers since its
formation. The Company does not presently anticipate paying any compensation to
them until it becomes actively involved in the operation or acquisition of
businesses other than the Bank, except for stock-based compensation pursuant to
the Company's ESOP, MRP and Stock Option Plans.
The following table sets forth information concerning the compensation paid to
the Company's named officers for services in all capacities to the Company for
the fiscal years ended September 30, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
------------------------------------------ --------------------------------------
Options/Stock
Name and Other Annual Restricted Stock Appreciation
Principal Position Year Salary($) Bonus($) Compensation($)(1) Awards($)(2,3) Rights (SARs)(#)(4)
------------------ ---- --------- -------- ------------------ -------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Wilbur J. Cross 1999 $196,623 None None None None
President, Chairman of the Board and 1998 $192,375 None None None None
Chief Executive Officer 1997 $182,876 None None $710,838 142,168
David J. DeLuca 1999 $136,538 None None $ 41,094 None
Vice President and 1998 $127,190 None None $ 33,000 None
Chief Financial Officer 1997 $120,327 None None $234,688 45,000
Deborah S. Henderson 1999 $104,810 None None None None
Vice President and 1998 $ 93,269 None None None None
Senior Loan Officer 1997 $ 85,846 None None $150,000 30,000
<CAPTION>
Name and All Other
Principal Position Compensation($)(5)
------------------ ------------------
<S> <C>
Wilbur J. Cross $92,194
President, Chairman of the Board and $45,446
Chief Executive Officer $ 5,629
David J. DeLuca $ 4,168
Vice President and $ 3,732
Chief Financial Officer $ 36
Deborah S. Henderson $ 3,464
Vice President and $ 2,991
Senior Loan Officer $ 2,786
</TABLE>
- ------------------------
1 Neither Mr. Cross, Mr. DeLuca nor Ms. Henderson received additional
benefits or perquisites which in the aggregate exceeded 10% of their
respective salary and bonus.
2 On September 30, 1999, Mr. Cross had 34,121 shares of unvested restricted
stock with a value of $513,948, Mr. DeLuca had 14,900 shares with a value
of $224,431 and Ms. Henderson had 7,200 shares with a value of $108,450,
based upon a closing market price of $ 15.063 on that date. Mr. Cross, Mr.
DeLuca and Ms. Henderson have been awarded 56,867, 22,500 and 12,000 shares
of restricted stock respectively, under the MRP. The 56,867 shares of
restricted stock awarded Mr. Cross, the 12,000 shares awarded to Ms.
Henderson and 15,500 of the 22,500 shares awarded to Mr. DeLuca, vested 20%
on October 24, 1997, 1998, and 1999 and an equal amount will vest on each
of October 24, 2000 and 2001. 2,500 of the shares awarded to Mr. DeLuca
vested 20% on August 19, 1998 and 1999, and an equal amount will vest on
each of August 19, 2000, 2001 and 2002. 2,000 of the shares awarded to Mr.
DeLuca vested 20% on August 1, 1999, and an equal amount will vest on each
of August 1, 2000, 2001, 2002, and 2003. The remaining 2,500 shares awarded
to Mr. DeLuca will vest 20% on August 1, 2000, 2001, 2002, 2003 and 2004.
8
<PAGE>
3 Pursuant to the MRP, the payment of dividends declared or paid on
restricted stock is deferred during the restricted period and credited to
the participant's account, together with accrued interest at the rate of
5.83% per annum as determined by the SOP and MRP Committee. Payment of
deferred dividends, together with accrued interest, is made upon the
earlier to occur of the lapsing of the restriction (i.e., vesting of the
award), death or disability of the participant.
4 Pursuant to the Stock Option Plan, on October 24, 1996, the Company granted
Mr. Cross and Ms. Henderson options to purchase 142,168 and 30,000 shares
of Common Stock, respectively. Also pursuant to the Stock Option Plan, on
October 24, 1996 and August 19, 1997, the Company granted Mr. DeLuca
options to purchase 35,000 shares and 10,000 shares, respectively, of
Common Stock.
5 Amount includes Company matching contribution accrued to Mr. Cross'
accounts under the Bank's 401(k) Plan of $4,984, $4,825 and $5,418 and life
insurance premiums of $1,415, $193, and $211 for the 1999, 1998, and 1997
fiscal years, respectively, and $85,725 and $40,428 accrued to Mr. Cross'
account under the Company's Supplemental Executive Retirement Plan for
fiscal 1999 and 1998, respectively. Mr. DeLuca received matching
contributions under the 401(k) Plan of $3,994 and $3,539 in 1999 and 1998,
respectively, and received a benefit of $174, $193 and $36 in life
insurance premiums for the 1999, 1998 and 1997 fiscal years. Ms. Henderson
received matching contributions under the 401(k) Plan of $3,290, $2,798 and
$2,575 in the 1999, 1998 and 1997 fiscal years and a benefit of $174, $193
and $211 in life insurance premiums in the 1999, 1998 and 1997 fiscal
years.
- ----------------------------
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Unexercised Options
--------------------------------
Shares Acquired Value Realized
Name on Exercise (#) ($)(2) Exercisable Unexercisable
- ---- --------------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Wilbur J. Cross None --- 56,866 85,305
David J. DeLuca 2,000 $4,750 13,000 27,000
Deborah S. Henderson None --- 12,000 18,000
<CAPTION>
Value of Unexercised In-The-Money
Options at Fiscal Year End(1)
----------------------------------
Name Exercisable Unexercisable
- ---- ----------- -------------
<S> <C> <C>
Wilbur J. Cross $145,719 $218,594
David J. DeLuca $ 23,063 $ 53,813
Deborah S. Henderson $ 30,750 $ 46,125
</TABLE>
- ----------------------------
1 Represents the difference between $15.063, the fair market value of the
Common Stock on September 30, 1999, and the exercise price for such
options.
2 Represents the difference between the fair market value of the Common Stock
on the date of exercise and the exercise price for such options.
- ----------------------------
9
<PAGE>
Employment Agreements. Each of the Bank and the Company has entered into an
employment agreement with Wilbur J. Cross. The material terms and conditions of
Mr. Cross' employment under the two agreements are identical, except as detailed
below. However, they do not require duplicate payments by the Bank and the
Company. Instead, the employment agreement with the Company guarantees the
payments due to Mr. Cross under the employment agreement with the Bank.
The employment agreements provide for initial terms of three years, commencing
on April 1, 1998, and for annual extensions, subject to a review and approval of
such extensions by the Bank's and the Company's Board of Directors. Pursuant to
the agreements, Mr. Cross' salary may not be reduced below his salary in effect
from time to time thereunder. In the event of Mr. Cross' death while the
agreements are in effect, his estate or his beneficiary would receive a payment
in an amount equal to two times his then current salary and, during the
remaining terms of the agreements, his dependents would continue to receive the
health insurance and other benefits maintained for the benefit of other officers
of the Bank.
The Bank or the Company may terminate Mr. Cross' employment at any time for
cause as defined in the employment agreements. If Mr. Cross' employment is
involuntarily terminated, he would be entitled to receive his annual salary,
bonus, health and life insurance, and benefits under the Bank's employee benefit
plans for the remaining terms of the agreements. For the purposes of the
agreements, "involuntary termination" means: (i) termination of Mr. Cross'
employment for any reason other than those reasons which constitute termination
for cause; (ii) Mr. Cross' resignation following a material breach of the
agreements by the Bank or the Company, including a material diminution or
interference with his duties, responsibilities and benefits as President and
Chief Executive Officer of the Bank or the Company; and (iii) his resignation,
upon thirty days written notice, following a change in control of the Bank or
the Company. As used in the agreements, a "change in control" generally means:
(i) the occurrence of an event that results in a change in control of the
Company or the Bank within the meaning of the Home Owners' Loan Act; (ii) the
acquisition by any person of beneficial ownership of 25% of the Bank's or the
Company's outstanding securities; (iii) a change in control of a majority of the
Bank's or the Company's Board of Directors as a result of a contested election;
or (iv) the merger, consolidation or sale of substantially all of the assets of
the Bank or the Company.
The employment agreements provide for the payment of severance benefits to Mr.
Cross in the event of his involuntary termination within twelve months following
a change in control. In general, the aggregate severance payment due to Mr.
Cross under the employment agreements with the Company and the Bank is equal to
299% of his average annual compensation during his five most recent calendar
years. If there had been a change in control under circumstances in which Mr.
Cross would have been entitled to a payment under the employment agreements as
of September 30, 1999, the Company and the Bank would have been required to pay
him approximately $693,818 and provide to him continued benefits under their
employee benefit plans for the remaining term of the agreements.
Cash and benefits paid to Mr. Cross under the employment agreements with the
Bank and the Company together with payments under other benefit plans following
a change in control of the Bank or the Company, as described above, may
constitute an "excess parachute" payment under Section 280G of the Internal
Revenue Code of 1986 (the "Code"), resulting in the imposition of a 20% excise
tax on the recipient and the denial of the deduction for such excess amounts to
the Company and the Bank. The employment agreement with the Company includes a
provision indemnifying Mr. Cross on an after tax basis for any such excise
taxes.
10
<PAGE>
On August 1, 1998, the Bank entered into employment agreements with Messrs.
DeLuca and Lampman, which were amended on August 1, 1999, to include death
benefits. These agreements supersede prior severance agreements entered into
between the Bank and Messrs. DeLuca and Lampman. On February 1, 1999, the Bank
entered into an employment agreement with Ms. Henderson. The material provisions
of the agreements with Mr. DeLuca, Mr. Lampman and Ms. Henderson are
substantially the same as those contained in Mr. Cross' employment agreement
with the Bank, except that they provide for initial terms of two years,
severance payments limited to 200% of compensation in the event of a change in
control of the Bank and they provide for a cash payment in the amount of their
then current salary in the event of death.
Retirement Income Plan. The Bank sponsors a defined benefit pension plan for its
employees (the "Pension Plan"). The Pension Plan is funded solely through
contributions made by the Bank.
The following table sets forth information showing the annual benefit payable
under the Pension Plan based upon average annual compensation ("Remuneration" in
the table) and years of service as described below.
<TABLE>
<CAPTION>
Pension Plan Table
Years of Credited Service
-----------------------------------------------------------------------------------
Remuneration 15 20 25 30
- --------------------- --------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 75,000 $22,500 $30,000 $37,500 $45,000
100,000 30,000 40,000 50,000 60,000
125,000 37,500 50,000 62,500 75,000
150,000 45,000 60,000 75,000 90,000
175,000 48,000 64,000 80,000 96,000
200,000 48,000 64,000 80,000 96,000
225,000 48,000 64,000 80,000 96,000
</TABLE>
The benefit provided to a participant at normal retirement age (generally age
65) is based on the participant's average annual compensation during the 36
consecutive months within the final 120 months of service affording the highest
such average ("average annual compensation"). Compensation for this purpose is
the participant's base annual salary, including any contributions through a
salary reduction arrangement to a cash or deferred plan under Section 401(k) of
the Code, but exclusive of overtime, bonuses or any other special payments.
Compensation in excess of $160,000 in the 1999 plan year may not be used to
determine average annual compensation. The annual benefit provided to a
participant who retires at age 65 is equal to 2% of average annual compensation
for each year of service, not to exceed 30 years. Pension benefits are computed
on a straight life annuity basis. The Pension Plan also provides for disability
and death benefits.
The annual benefit provided to participants (i) at "early retirement age"
(generally age 60) with at least five years of service who elect to defer the
payment of their benefits to normal retirement age; (ii) at early retirement age
with at least 30 years of service who elect to receive payment of their benefits
prior to normal retirement age; or (iii) who commence receipt of their benefits
beyond normal retirement age, are calculated basically in the same way as the
benefits for normal retirement age, with average annual compensation being
multiplied by 2% for each year of such individual's actual years of service, not
to
11
<PAGE>
exceed 30 years. A participant eligible for early retirement benefits who does
not meet the requirements set forth above will have his or her benefits adjusted
as further described in the Pension Plan.
Mr. Cross, Ms. Henderson and Mr. DeLuca had 37, 25 and 2 years of service,
respectively, under the Pension Plan at September 30, 1999.
Supplemental Executive Retirement Plan. The Company adopted a Supplemental
Executive Retirement Plan (the "SERP") effective as of April 1, 1998. The SERP
is an unfunded, nonqualified deferred compensation plan. Participation in the
SERP is presently limited to Mr. Cross, but the Company may designate other
Company and/or Bank employees as participants. Benefit accruals under the SERP
are in the form of either elective deferred compensation or nonelective deferred
compensation. Elective deferred compensation is compensation which a participant
elects to defer under the SERP by reducing the participant's pay from the
Company or the Bank. Nonelective deferred compensation is compensation which the
Company or the Bank grants to the participant under the SERP, in their
discretion. Presently, Mr. Cross has been granted nonelective deferred
compensation under the Plan. Specifically, Mr. Cross' nonelective account under
the SERP was credited with $40,000 during fiscal 1998, $80,000 during fiscal
1999 and will be credited with $40,000 during the period beginning October 1,
1999, and ending March 31, 2000. In addition, the SERP provides for the
crediting of an investment return on his deferred compensation account. The
Company has elected to credit interest quarterly, based on the prevailing prime
rate. Interest earned in fiscal 1999 and 1998 was $5,725 and $428, respectively.
The grant of nonelective deferred compensation to Mr. Cross was intended to
restore certain benefits which Mr. Cross was unable to accrue under the Bank's
defined benefit pension plan because of certain limitations imposed by
applicable law. In addition, Mr. Cross no longer earns a credited service
benefit, because his length of service already exceeds the plan maximum. Mr.
Cross is 100% vested in the nonelective deferred compensation described above.
Employee Stock Ownership Plan. The Company established an Employee Stock
Ownership Plan (the "ESOP"), effective as of April 1996, which invests primarily
in Common Stock, and is designed to qualify as a stock bonus plan under Section
401(a) of the Code and also to meet the requirements of Section 4975(e)(7) of
the Code and Section 407(d)(6) of the Employee Retirement Income Security Act of
1974 ("ERISA"). The ESOP was initially funded with a loan from the Company (the
"ESOP Loan") and the ESOP used the proceeds of that loan to acquire 454,940
shares of Common Stock in the Company's initial public offering.
For the fiscal year ended September 30, 1999, the Bank contributed $405,661 to
the ESOP, which was used to pay interest and principal on the ESOP Loan. As a
result, 22,755 shares of Common Stock were released from the lien of the ESOP
Loan and were available for allocation to the accounts of individual
participants. Of the shares allocated, 2,289 shares were allocated to Mr. Cross,
2,257 were allocated to Mr. DeLuca, 1,500 were allocated to Ms. Henderson and
8,089 shares were allocated to the other executive officers of the Company and
the Bank as a group.
Director Death Benefit Plan. The Bank established a Director Death Benefit Plan,
effective as of May 18, 1999. Directors of the Bank as of the effective date of
the plan, who, on the effective date had completed, or thereafter complete, five
consecutive years of service as a director of the Bank, are eligible for
benefits under the plan, which are payable: (i) during the director's service in
office; (ii) following voluntary resignation; or (iii) following failure to be
elected as a director, but not in the event of removal for cause. The plan
provides for a cash payment upon the death of an eligible director, to the
director's estate or designated beneficiary, in the amount of $200,000, if the
director held his or her office at the time
12
<PAGE>
of death or $100,000, if the director did not serve as such at the time of
death. The plan may not be terminated or amended following a change in control
of the Bank or the Company. Change in control has the same meaning in the plan
as it does in the executive officers' agreements with the Bank.
Compensation Committee Report on Executive Compensation
In fulfillment of the SEC requirements for disclosure in proxy materials of the
Compensation Committee's policies regarding compensation of executive officers,
the committee has prepared the following report for inclusion in this proxy
statement.
General Policy Considerations. The Board of Directors of the Bank has delegated
to the Compensation Committee the responsibility and authority to oversee the
general compensation policies of the Bank and to establish compensation plans
and specific compensation levels for executive officers. The SOP and MRP
Committee of the Company has been delegated the responsibility and authority to
oversee the implementation of, and approve grants and awards under, the Stock
Option Plan and MRP. Because the SOP and MRP Committee is composed of the same
directors as the Compensation Committee (other than Mr. Cross who is a
non-voting ex-officio member of the Compensation Committee), decisions of the
two committees should be viewed together, and for the purposes of this
discussion they will be referred to as the "Compensation Committees." From time
to time, the Board of Directors as a whole participates in decisions regarding
executive compensation and benefit plans.
The Compensation Committees have developed an executive compensation policy
designed to: (i) offer competitive compensation to attract, motivate, retain and
reward executive officers who are crucial to the long-term success of the
Company; and (ii) encourage decision-making that maximizes long-term stockholder
value. The Compensation Committees have sought to consider a multitude of
factors in establishing appropriate levels of compensation for executive
officers, with no one factor clearly overshadowing all the others.
The compensation package provided to the executive officers of the Bank is
composed principally of base salary and stock-based incentive awards. Executive
officers also participate in other benefit plans available to all eligible
employees, including the ESOP.
The Compensation Committees consider a variety of factors in determining
executive compensation. These factors generally fall into two categories, those
that relate to specific work performed and expected of the officer and those
that relate to the Company, the Bank, the local business economic conditions and
other general matters. In the former category, the Committees consider, among
other factors, the level of responsibility of each officer; the expertise and
skill level required to perform the position; satisfaction of prior period goals
and objectives; length of service; the complexity of work that may be required
in connection with strategic plans or special projects; and prior compensation
history. In the latter category, the Committees consider, among other factors,
the Bank's earnings, capital and asset size; the results of government
regulatory examinations; the Bank's regulatory ratings on safety and soundness,
compliance and Community Reinvestment Act examinations; and performance and
compensation programs of peer group banks.
Employee benefit plans represent an important component of any compensation
package. The defined benefit pension plan and health insurance benefits
available to all employees, including executive officers, provide competitive
benefits comparable to those available at other institutions. Stock-based
compensation
13
<PAGE>
plans, including the ESOP, the Stock Option Plan and the MRP, provide employees,
including executive officers, with additional equity-based incentives to
maximize long-term shareholder value.
The Compensation Committees' decisions are discretionary and are based upon
subjective factors. No mathematical or similar objective formula is utilized to
determine any compensation package. The Compensation Committee believes that a
competitive employee benefit package is essential to achieving the goals of
attracting and retaining highly qualified employees.
Chief Executive Officer Compensation. Total annual compensation paid to Wilbur
J. Cross, Chief Executive Officer, for fiscal 1999 was $196,623, as detailed in
the above compensation table, and reflects a 2.2% increase from fiscal 1998. In
determining total compensation paid to the Chief Executive Officer, including
his benefits under the SERP, the Compensation Committee considered the factors
discussed above and also considered a number of specific matters including
stock-based compensation and benefit plans awarded or made available to chief
executive officers of other converted thrift institutions, who have comparable
length of service and senior management experience. In connection with its
decision to adopt the SERP, the Compensation Committee recognized that Mr. Cross
continues to work for the Bank but no longer earns benefits under the Bank's
retirement plan because his length of service exceeds the maximum number of
years that may be included in the benefit calculation under the Pension Plan and
his salary exceeds the maximum amount that may be used for determining average
annual compensation under the Pension Plan. The SERP was adopted to correct the
unfairness of this situation. The Committee also concluded that it is fair and
appropriate to include Mr. Cross in the Director's Death Benefit Plan, along
with the non-employee directors. Mr. Cross does not participate in decisions
regarding his own compensation.
This report is included herein at the direction of the Compensation Committee
members, directors Wilbur J. Cross (ex-officio), Richard A. Marshall, Allan D.
Oren, and Edward P. Stiefel.
14
<PAGE>
Shareholder Return Performance Graph
Set forth below is a line graph comparing the cumulative total shareholder
return on Catskill Financial Corporation Common Stock with the cumulative total
shareholder return of (i) the NASDAQ total return for the U.S. Stock Market;
(ii) SNL's total return index for All Thrift stocks; and (iii) as a peer group
comparison SNL's total return index for Thrifts with assets less than $500
million. In accordance with the SEC guidelines, the stock price on April 18,
1996, which was the date the Company's Common Stock commenced public trading,
was used to establish the initial point in the following performance graph. The
closing price on that date was $10.375. If the initial offering price of $10.00
were used, the cumulative shareholder return index would have been 159.99 as of
September 30, 1999. Total return assumes the reinvestment of cash dividends.
[GRAPHIC OMITTED -- GRAPH PLOTTED TO POINTS IN CHART BELOW]
<TABLE>
<CAPTION>
Period Ending
----------------------------------------------------------------------------------------
Index 4/18/96 9/30/96 9/30/97 9/30/98 9/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Catskill Financial Corporation 100.00 115.66 164.82 140.78 154.21
NASDAQ - Total US* 100.00 108.45 148.90 151.42 246.02
SNL Thrift Index 100.00 114.55 199.05 178.45 169.98
SNL <$500M Thrift Index 100.00 107.56 167.98 157.11 177.37
</TABLE>
15
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Bank and the SOP and MRP Committee of the
Company consists of Richard A. Marshall, Allan D. Oren and Edward P. Stiefel,
all of whom are directors of the Company and the Bank but none of whom are or
have been officers or employees of the Company or the Bank. Wilbur J. Cross, who
is President, Chairman and Chief Executive Officer of the Company and the Bank,
is an ex-officio, non-voting member of the Compensation Committee.
Edward P. Stiefel, Esq., is a partner in the law firm of Stiefel & Winans. That
firm was retained by the Bank to provide legal services and received legal fees
aggregating $17,850 during fiscal 1999 from the Company and the Bank, and
$44,525 representing fees paid directly by borrowers on loan closings in which
the firm represented the Bank.
Transactions with Directors and Officers
Some of the directors and executive officers of the Bank, as well as firms and
companies with which they are associated, are and have been customers of the
Bank. All of the Bank's transactions with such persons and entities were
completed in the ordinary course of business and were on substantially the same
terms as those prevailing at the time for comparable transactions with the
general public.
In addition to such normal customer relationships, none of the directors or
executive officers of the Company (or members of their immediate families)
maintained, directly or indirectly, any significant business or personal
relationship with the Company or the Bank during the 1999 fiscal year, other
than as might arise by virtue of a position with or ownership interest in the
Company, except as set forth in the preceding section.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Company's Board of Directors appointed KPMG LLP as independent public
accountants to audit the books of the Company for the fiscal year ended
September 30, 2000, subject to ratification by the stockholders at the meeting.
KPMG LLP has been employed regularly by the Company since it was formed in 1995
and by the Bank for more than twenty years to examine their books and accounts
and for other purposes.
Representatives of KPMG LLP are expected to be present at the meeting and will
have an opportunity to make such statements as they may desire. Such
representatives are expected to be available to respond to appropriate questions
from stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE IN FAVOR OF THE
RATIFICATION OF THE APPOINTMENT OF AUDITORS
OTHER BUSINESS
Management has no reason to believe that any other business will be presented at
the meeting, but if any other business shall be presented, the proxies will vote
on such matters in accordance with their judgment in the best interests of the
Company.
16
<PAGE>
In order for a stockholder of the Company to properly bring business before an
annual meeting, such stockholder must first deliver notice thereof in writing to
David L. Guldenstern, Secretary, at the Company's address, not less than 60 days
prior to the anniversary of the preceding year's annual meeting. In the event
that the date of the annual meeting is advanced by more than twenty days, or
delayed by more than 60 days from such anniversary, notice by the stockholder
must be delivered to the Company not later than the close of business on the
later of the 60th day prior to such annual meeting or the tenth day following
the day on which the notice of the meeting was mailed or public announcement
made. The notice must set forth, in addition to the name of such stockholder and
the class and number of shares of the Company stock owned by such stockholder, a
brief description of the business desired to be brought, the reasons therefor
and any material interest such stockholder has in such business.
GENERAL
The Company's Annual Report to its Stockholders for the fiscal year ended
September 30, 1999, including financial statements, is being concurrently
furnished with this Proxy Statement to stockholders of record on the Record
Date. The Annual Report is not part of the proxy solicitation material.
All shares represented by valid proxies sent to the Company to be voted at the
meeting will be voted if received in time. Each proxy will be voted in
accordance with the directions of the stockholder executing such proxy. If no
directions are given, such proxy will be voted "FOR" the nominees presented
herein and "FOR" the ratification of the appointment of auditors.
The cost of soliciting proxies relating to the meeting will be borne by the
Company. In addition, directors, officers and regular employees of the Company
and the Bank may solicit proxies personally, by telephone or by other means
without additional compensation. The Company will, upon the request of brokers,
dealers, banks and voting trustees, and their nominees, who were holders of
record of shares of the Company's Common Stock or participants in depositories
on the Record Date, bear their reasonable expenses for mailing copies of this
Proxy Statement, the form of proxy and the Notice of the Annual Meeting, to the
beneficial owners of such shares.
2001 ANNUAL MEETING
The Company's Board of Directors will establish the date for the 2001 Annual
Meeting of Stockholders. In order for a stockholder to be entitled, under the
regulations of the SEC, to have a stockholder proposal included in the Company's
Proxy Statement for the 2001 meeting, the proposal must be received by the
Company at its principal executive offices, 341 Main Street, Catskill, New York
12414, Attention: David L. Guldenstern, Secretary, not less than 120 days in
advance of the date in 2001 which corresponds to the date in 2000 on which these
proxy materials are released to stockholders. The stockholder must also satisfy
the other requirements of SEC Rule 14a-8.
THE COMPANY WILL FURNISH, WITHOUT CHARGE TO ANY STOCKHOLDER SUBMITTING A WRITTEN
REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1999 REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH WRITTEN REQUEST
SHOULD BE DIRECTED TO DAVID L. GULDENSTERN, SECRETARY, AT THE COMPANY'S ADDRESS
STATED HEREIN. THE FORM 10-K REPORT IS NOT A PART OF THE PROXY SOLICITATION
MATERIALS.
PLEASE SIGN, DATE AND MAIL YOUR PROXY NOW
Catskill, New York
January 14, 2000
17
<PAGE>
REVOCABLE PROXY
CATSKILL FINANCIAL CORPORATION
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
The undersigned hereby appoints the Board of Directors of Catskill Financial
Corporation, or their successors in office, Proxies, with full power of
substitution, to represent and vote all stock that the undersigned is entitled
to vote at the Annual Meeting of Stockholders of Catskill Financial Corporation,
to be held on February 15, 2000 at 7:00 p.m. at Catskill Savings Bank, 341 Main
Street, Catskill, New York, or at any adjournments thereof upon the matters
described in the accompanying Proxy Statement and upon other business that may
properly come before the meeting or any adjournment thereof. Said Proxies are
directed to vote or refrain from voting as marked hereon upon the matters listed
herein, and otherwise in their discretion.
1. ELECTION OF TWO DIRECTORS FOR THREE YEAR TERMS.
Nominees: George P. Jones Hugh J. Quigley
[ ] For [ ] Withhold [ ] For All Except
INSTRUCTION:To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. Proposal to approve the appointment OF KPMG LLP as the independent auditors
for the current fiscal year.
[ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ABOVE
PROPOSALS. PLEASE SIGN, DATE AND RETURN THIS PROXY.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE NOMINEES NAMED ABOVE AND ITEM 2.
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED. PLEASE DATE, SIGN AND
RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
______________________________________
Date
______________________________________
Stockholder sign above
______________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
CATSKILL FINANCIAL CORPORATION
Please sign exactly as your name appears on this card. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
