<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission Only (as
permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (s) 240.14a-11(c) or (s) 240.14a-12
TOMPKINS COUNTY TRUSTCO, INC.
(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)(1) 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 previously paid 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:
Notes:
<PAGE>
[TOMPKINS COUNTY TRUSTCO, INC. LOGO]
March 31, 1997
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF TOMPKINS COUNTY TRUSTCO, INC.
The Annual Meeting of Stockholders (the "Meeting") of Tompkins County
Trustco, Inc. ("the Company") will be held on Wednesday, April 30, 1997 at 7:30
p.m., in the ballroom, Triphammer Lodge & Conference Center, One Sheraton Drive,
Ithaca, New York, for the following purposes:
1. To elect five (5) Directors for a term of three years expiring in the
year 2000; and
2. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 12, 1997 as
the record date for determining stockholders entitled to notice of and to vote
at the Meeting. Only stockholders of record at the close of business on that
date are entitled to vote at the Meeting.
Enclosed with this notice are the attached proxy statement, a proxy card
and return envelope, and our 1996 Annual Report.
Your vote is important regardless of the number of shares you own. WE URGE
YOU TO READ AND CAREFULLY CONSIDER THE ATTACHED PROXY STATEMENT AND TO MARK,
SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING. A self-addressed postage prepaid envelope is
enclosed for your convenience. You may vote personally on each matter at the
Meeting even though you have returned the proxy card.
By Order of the Board of Directors,
/s/ James J. Byrnes /s/ James W. Hulbert
James J. Byrnes, Chairman, James W. Hulbert
President & Chief Executive Officer Vice President & Corporate Secretary
P.O. BOX 460, ITHACA, NEW YORK, 14851 (607) 273-3210
<PAGE>
[TOMPKINS COUNTY TRUSTCO, INC. LOGO]
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 30, 1997
This Proxy Statement is being mailed to stockholders on or about March 31,
1997 in connection with the solicitation by the Board of Directors of TOMPKINS
COUNTY TRUSTCO, INC. (the "Company") of proxies to be used at the Annual Meeting
of Stockholders (the "Meeting") of the Company to be held Wednesday, April 30,
1997 and any adjournment thereof.
VOTING
Only stockholders of record at the close of business on March 12, 1997 will
be entitled to vote. On March 12, 1997, there were 3,315,490 shares of Common
Stock of the Company, par value $0.10 per share (the"Common Stock"),
outstanding. Each share of Common Stock is entitled to one vote on each matter
to be voted on at the Meeting.
Shares covered by any proxy that is properly executed and received prior to
the close of business on the day of the Meeting will be voted and, if the
stockholder who executes such proxy shall specify in the manner therein how such
shares shall be voted on such proposals as referred to therein, the shares will
be voted as so specified. Executed proxies with no instructions will be voted
"FOR" each proposal for which no instruction is given. It is not anticipated
that any matters other than as set forth in the Notice of Annual Meeting will be
brought before the Meeting, but the persons named in the accompanying proxy will
vote the shares represented by all properly executed proxies on any such matters
that may come before the Meeting in such manner as shall be determined by the
majority of the Board of Directors of the Company.
The presence of a stockholder at the Meeting will not automatically revoke
the stockholder's proxy. A stockholder may, however, revoke a proxy at any time
prior to its exercise by: (1) delivering to the Corporate Secretary a written
notice of revocation prior to the Meeting, (2) delivering to the Corporate
Secretary a duly executed proxy bearing a later date, or (3) attending the
Meeting and filing a written revocation with the Corporate Secretary at the
Meeting prior to the vote and voting in person.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock outstanding and entitled to vote is necessary
to constitute a quorum for the conduct of business, and in the event there are
not sufficient votes on any matter, the Meeting may be adjourned. Directors
shall be elected by a plurality of the eligible votes cast and such other
business, not set forth in this Proxy Statement as may properly come before the
Meeting, will be determined by a majority of the eligible votes cast.
Abstentions, in person or by proxy, shall be counted toward a quorum, but
abstentions are not deemed to be votes cast and therefore abstentions have no
effect on the outcome of the vote, which requires either a plurality or majority
of the "votes cast," depending upon the proposal. Votes withheld in connection
with the election of one or more of the nominees for director will not be
counted as votes cast. Accordingly, votes withheld will have a negative impact
on the outcome of the vote.
The items on the agenda for stockholders approval are deemed
"discretionary" items upon which brokerage firms or other record holders may
vote in their discretion on behalf of beneficial owners who have not furnished
voting instructions within ten days of the Meeting. For those agenda items,
"broker non-votes" which occur when "non-discretionary" items on which brokers
cannot vote without beneficial owners' instruction by proxy, will not be a
factor.
1
<PAGE>
SOLICITATION OF PROXIES
The total cost of solicitation of proxies in connection with this Meeting
will be borne by the Company. In addition to solicitation by mail, directors,
officers and employees of the Company, and its wholly-owned subsidiary, Tompkins
County Trust Company ("Trust Company"; as the context may require, references
herein to the "Company" include the Trust Company) may solicit proxies for the
Meeting personally or by telephone or electronic communication without
additional remuneration. The Company will also provide brokers and other record
owners holding shares in their names or in the names of nominees, in either case
which are beneficially owned by others, proxy material for transmittal to such
beneficial owners and will reimburse such record owners for their expenses in
doing so. Although the Company has not yet retained a proxy soliciting firm to
aid in the solicitation of proxies for the Meeting, it may do so at any time
prior to the Meeting or any adjournment thereof. In such event, the Company will
pay the fees and expenses of any such proxy solicitation firm.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information with
respect to the beneficial ownership of Common Stock of the Company as of March
12, 1997 by (i) each of the chief executive officer and the Company's four other
most highly compensated executive officers (the "Named Executive Officers") and
each director of the Company, (ii) all executive officers and directors of the
Company as a group and (iii) all beneficial owners of 5% or more of the Common
Stock of the Company. Except as otherwise indicated, each of the stockholders
named below has sole voting and investment power with respect to the outstanding
shares of Common Stock beneficially owned:
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
------------------
Percent of
Number of Outstanding
Names Shares Shares(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
John A. Alexander+ 5,348 (2) **
Wendell L. Bryce+ 4,011 (2) (3) **
James J. Byrnes*+ 41,705 (4) 1.25
Reeder D. Gates+ 51,750 (2) (5) 1.56
William W. Griswold+ 398 (2) **
Carl E. Haynes+ 367 (2) **
Edward C. Hooks+ 2,401 (2) (6) **
Robert T. Horn, Jr.+ 1,946 (2) (7) **
Bonnie H. Howell+ 2,322 (2) **
Lucinda A. Noble+ 1,530 (2) **
Hunter R. Rawlings, III+ 302 (2) **
Frank H. T. Rhodes+ 1,169 (2) **
Thomas R. Salm+ 927 (2) (8) **
Michael D. Shay+ 3,412 (2) **
Francis E. Benedict* 41,099 (9) 1.24
Richard D. Farr* 10,203 (10) **
Thomas J. Smith* 12,541 (11) **
Donald S. Stewart* 28,262 (12) **
All Directors and executive
officers as a group (19 persons) 225,166 6.68
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
------------------
Percent of
Number of Outstanding
Names Shares Shares(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
Trust and Investment Services
Department of the Trust Company
in the fiduciary
capacity indicated:
- - Trustee or Co-Trustee 712,778 (13) 21.50
- - Trustee for the Company Investment
and Stock Ownership Plan 281,181 (13) 8.48
- - Agent or Custodian 75,507 (13) 2.28
</TABLE>
- ------------------
* Named Executive Officer
+ Director of the Company
** Less than 1 percent
(1) The number of shares of Common Stock deemed outstanding includes: (i)
3,315,490 of Common Stock outstanding as of March 12, 1997 and (ii) shares
of Common Stock subject to outstanding stock options which are exercisable
by the named individual or group in the next 60 days.
(2) Includes 82 shares held in trust pursuant to the Company's 1996 Stock
Retainer Plan for Non-Employee Directors. Directors have no voting or
investment power with respect to such shares.
(3) Includes 993 shares which Dr. Bryce holds jointly with his spouse.
(4) Includes 24,320 shares issuable upon the exercise of exercisable stock
options.
(5) Includes 43,255 shares held in the R. D. Gates, Ltd. Employee Profit
Sharing Fund and 1,325 shares owned by the spouse of Mr. Gates.
(6) Includes 212 shares which Mr. Hooks holds as Custodian, under the UGMA for
his children.
(7) Includes 452 shares which Dr. Horn holds as Trustee for his children.
(8) Includes 318 shares owned by the spouse of Mr. Salm.
(9) Includes 6,669 shares issuable upon the exercise of exercisable stock
options. Includes 2,420 shares owned by the spouse of Mr. Benedict.
(10) Includes 5,261 shares issuable upon the exercise of exercisable stock
options.
(11) Includes 6,116 shares issuable upon the exercise of exercisable stock
options. Includes 23 shares owned by the children of Mr. Smith.
(12) Includes 6,116 shares issuable upon the exercise of exercisable stock
options. Includes 7,011 shares owned by the spouse of Mr. Stewart.
(13) As of March 12, 1997, the Trust and Investment Services Department of the
Trust Company held 1,069,466 shares representing 32.26% of the Common
Stock of the Company. Of such shares, 712,778 shares are held in a
fiduciary capacity as Trustee or Co-Trustee. Where the Trust Company is
sole trustee, such shares will be voted only if the trust instrument
provides for voting the stock at the direction of the donor or a
beneficiary and such direction is in fact received. When acting in a
co-fiduciary capacity, such shares will be voted by the co-fiduciary or
fiduciaries in the same manner as if the co-fiduciary or fiduciaries were
the sole fiduciary. Of the 1,069,466 shares mentioned above, 281,181
shares or 8.48% of the outstanding stock is held by the Company's
Investment and Stock Ownership Plan, with 260,071 shares or 7.84%
allocated to participant accounts. These shares are voted by individual
plan participants. In addition, 75,507 shares are held as Agent or
Custodian with the voting power retained by the owner. Such shares
represent 2.28% of the Common Stock outstanding.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The purpose of the Meeting is the election of five directors for a term of
three years expiring in the year 2000. The Bylaws of the Company provide that
the stockholders elect directors to serve a three year term to succeed those
directors in the class whose terms of office expire at the Meeting or for a
shorter period as the Board of Directors determines for the purposes of
equalizing the classes of directors.
The persons named in the Proxy to represent stockholders at the Meeting
are: DOROTHY B. BOOTH, ANTON J. EGNER and WILLIAM T. PRITCHARD, all of Ithaca,
N.Y. They will vote Proxies as directed and in the absence of instructions, will
vote the shares represented by the Proxies in favor of the election of nominees
named below. If any one or more of such nominees should become unavailable for
election by reason of death, or unexpected occurrence, they will vote the shares
for the election of such substitute nominees as the Board of Directors may
propose.
The following table sets forth each nominee and continuing director's
name, age, the year he or she first became a director and the year in which such
term will expire. Biographies of the nominees and the directors continuing in
office follow the table.
<TABLE>
<CAPTION>
Year First
Elected Term to
Name Age Director Expire
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Board Nominees For Terms To Expire In 2000
- -------------------------------------------------------------------------------
William W. Griswold 39 1996 2000
Carl E. Haynes 51 1996 2000
Robert T. Horn, Jr. 49 1995 2000
Frank H. T. Rhodes 70 1984 2000
Thomas R. Salm 56 1981 2000
- -------------------------------------------------------------------------------
Directors Continuing In Office
- -------------------------------------------------------------------------------
Wendell L. Bryce 69 1978 1998
James J. Byrnes 55 1989 1998
Reeder D. Gates 51 1985 1998
Bonnie H. Howell 49 1982 1998
Lucinda A. Noble 65 1985 1998
John E. Alexander 44 1993 1999
Edward C. Hooks 47 1990 1999
Hunter R. Rawlings, III 52 1996 1999
Michael D. Shay 55 1989 1999
</TABLE>
4
<PAGE>
William W. Griswold was elected a director of the Company and the Trust Company
effective July 10, 1996. He is President and Chief Operating Officer of the
Ontario Telephone Company, Inc. and the Trumansburg Home Telephone Company where
he has been employed since 1979. Mr. Griswold serves on the Board of the New
York State Telephone Association.
Carl E. Haynes was elected a director of the Company and the Trust Company
effective July 10, 1996. He is President of Tompkins Cortland Community College
having been appointed to that position in May, 1995. Dr. Haynes has been with
the College in various capacities for the past 26 years.
Robert T. Horn, Jr. has served as a director of the Company and the Trust
Company since 1995. Dr. Horn is a physician and has a private practice in
dermatology.
Frank H. T. Rhodes has served as a director of the Trust Company since 1984 and
of the Company since 1995. Mr. Rhodes retired from his position as President of
Cornell University in 1995. He is a director of General Electric Company,
National Broadcasting Corporation and Dyson Charitable Fund. He is also a
Trustee of the Andrew W. Mellon Foundation.
Thomas R. Salm has served as a director of the Trust Company since 1981 and of
the Company since 1995. Mr. Salm is Vice President for Business Affairs at
Ithaca College.
Wendell L. Bryce has served as a director of the Trust Company since 1978 and
of the Company since 1995. Dr. Bryce is a physician and retired from general
practice in 1995.
James J. Byrnes has been the President and Chief Executive Officer and a
director of the Trust Company since 1989. Mr. Byrnes has also served as the
Chairman of the Board of Directors since 1992. He was elected to serve in the
same capacities for the Company in 1995.
Reeder D. Gates has served as a director of the Trust Company since 1985 and of
the Company since 1995. Mr. Gates is President of R.D. Gates, Ltd., a company
engaged in community pharmacies.
Bonnie H. Howell has served as a director of the Trust Company since 1982. She
has also served as Vice Chair of the Board of Directors since 1992. She was
elected to serve in the same capacities for the Company in 1995. Ms. Howell is
President and Chief Executive Officer of Cayuga Medical Center at Ithaca. She is
also a Trustee of the Hospital Association of New York State and a member of the
Board of Directors of Central New York Hospital Association.
Lucinda A. Noble has served as a director of the Trust Company since 1985 and of
the Company since 1995. Ms. Noble is a retired Director of the Cooperative
Extension System at Cornell University.
John E. Alexander has served as a director of the Trust Company since 1993 and
of the Company since 1995. He is President of The CBORD Group, Inc., a computer
software company.
Edward C. Hooks has served as a director of the Trust Company since 1990 and of
the Company since 1995. He is an attorney and a partner of Harris Beach &
Wilcox, LLP. Mr. Hooks also serves as counsel to the Company.
Hunter R. Rawlings, III was elected a director of the Company and the Trust
Company effective January 23, 1996. He was inaugurated as the 10th President of
Cornell University in 1995. Mr. Rawlings was previously President of the
University of Iowa.
Michael D. Shay has served as a director of the Trust Company since 1989 and
of the Company since 1995. Mr. Shay is Chairman of the Board and President
of Evaporated Metal Films Corp., a company engaged in optical coatings.
5
<PAGE>
BOARD OF DIRECTORS
The corporate reorganization pursuant to which the Company became the
parent bank holding company of the Trust Company (the "Reorganization") was
consummated on January 1, 1996. The Boards of Directors of the Company and the
Trust Company are identical, and consequently, in an effort to provide
stockholders with meaningful disclosure, set forth below is information with
respect to the meetings of the Board of Directors and committees thereof of the
Company and the Trust Company during the fiscal year ended December 31, 1996.
The Board of Directors held 16 meetings during 1996. Each director
attended 75% or more of the aggregate number of meetings of the Board of
Directors and the committees of which such director was a member, except for
Directors Rawlings with 66% and Rhodes with 56%.
During 1996, directors who were not employees of the Company received for
their services a quarterly cash retainer of $750, for the quarters ended March
31 and June 30, 1996, and a Common Stock retainer (as described below) for
subsequent quarters, plus a fee of $400 for each Directors meeting attended.
Directors who are also committee members received $275 for each committee
meeting attended. Directors who chaired a board committee received an additional
annual fee of $1,000. Members of the Board who are salaried employees of the
Trust Company are not compensated for their service on the Board or any Board
committee. Aggregate fees paid to the twelve non-employee directors in 1996 were
$123,000. Director Howell does not receive the fees described above, but instead
receives an annual retainer for her services as Vice Chair. The amount paid to
her in 1996 was $20,993.
Under the 1985 Deferred Compensation Plan for Directors, each director may
elect to defer all or a portion of his or her cash compensation until the
individual ceases to be a director. During 1996, four directors elected to
participate in such plan.
The 1996 Stock Retainer Plan for Non-Employee Directors (the "Plan") was
approved by the Company's stockholders on April 24, 1996. Since that date,
non-employee directors of the Company have received, in lieu of the $750
quarterly cash retainer referenced above (the "Quarterly Fee"), that number of
whole shares of Common Stock (rounded up to the nearest whole number) equal to
the Quarterly Fee divided by the fair market value of the Common Stock on the
date the Quarterly Fee was otherwise payable. At their election, each director
participating in the Plan may defer receipt of the stock retainer. During 1996,
767 shares of Common Stock were issued to non-employee directors or placed in a
trust account with respect to deferred shares.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Executive Committee, Audit/Examining Committee,
Compensation/Personnel Committee and Nominating Committee, each of which was
constituted after the consummation of the Reorganization on January 1, 1996.
Consequently, set forth below is information with respect to the committees of
the Company and the Trust Company and meetings thereof held during the fiscal
year ended December 31, 1996.
Tompkins County Trustco, Inc.
Executive Committee
The Executive Committee serves as the long-range planning, compliance
and marketing committee of the Board of Directors.
The Committee held 8 meetings in 1996, and its members at the close of
business on December 31, 1996 were: Bonnie H. Howell, Chair; James J.
Byrnes; John E. Alexander; Reeder D. Gates; Edward C. Hooks and Thomas
R. Salm.
6
<PAGE>
Audit/Examining Committee
The Audit/Examining Committee represents the Board of Directors in
supervising audit activities and is responsible for conducting an annual
examination of the Company.
The Committee held 7 meetings in 1996, and its members at the close of
business on December 31, 1996 were: Thomas R. Salm, Chairman; John E.
Alexander; Wendell L. Bryce and Lucinda A. Noble.
Compensation/Personnel Committee
The Compensation/Personnel Committee reviews employee compensation and
benefit policies. Annual compensation and benefit actions are reviewed
and recommended for action by the Board. The Committee also administers
the Company's equity-based plans.
The Committee held 4 meetings in 1996, and its members at the close of
business on December 31, 1996 were: John E. Alexander, Chairman; Reeder
D. Gates and Lucinda A. Noble.
Nominating Committee
The Nominating Committee recommends to the Board of Directors nominees
for election as directors. The Committee will consider recommendations
from stockholders if submitted in a timely manner and will apply the
same criteria to all persons being considered.
The Committee held 4 meetings in 1996, and its members at the close of
business on December 31, 1996 were: Reeder D. Gates, Chairman; James J.
Byrnes and Bonnie H. Howell.
Tompkins County Trust Company
Trust Committee
The Trust Committee has general supervision of the Trust and Investment
Services Department, including its general and operating policies.
The Committee held 10 meetings in 1996, and its members at the close of
business on December 31, 1996 were: Reeder D. Gates, Chairman; James J.
Byrnes; Robert T. Horn, Jr. and Michael D. Shay.
Credit Committee
The Credit Committee reviews credit applications presented to it by
management and makes recommendations to the Board on credit policies.
The Committee also monitors the Trust Company's Community Reinvestment
Act Plan.
The Committee held 18 meetings in 1996, and its members at the close of
business on December 31, 1996 were: Edward C. Hooks, Chairman; Wendell
L. Bryce, James J. Byrnes; Lucinda A. Noble and Michael D. Shay.
Pension Administration Committee
The Pension/Administration Committee is appointed by the Board and is
responsible for the implementation, operation and administration of
employee pension plans and trusts.
The Committee held 4 meetings in 1996, and its Board members at the
close of business on December 31, 1996 were: James J. Byrnes, Chairman;
Wendell L. Bryce and Thomas R. Salm.
7
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation/Personnel Committee of the Board of Directors
The Compensation/Personnel Committee (the "Committee") is composed of three
outside directors. Among its duties, the Committee is responsible for monitoring
the compensation of the Company's executive officers. A goal of the Committee is
to maintain executive compensation which is fair and reasonable, given the size,
nature and performance goals of the Company. The Committee also strives to see
that compensation and benefits are competitive in order to attract and retain
qualified management. The financial services industry is increasingly
competitive and the board believes that strong management is essential for
continuing the Company's record of financial performance.
The Committee regularly surveys compensation practices, base salary, and
total compensation, including incentives, in the banking industry. In 1996, the
Committee utilized a self selected survey of ten comparable banks, mostly in New
York, as well as surveys conducted by KPMG Peat Marwick LLP and Ben S. Cole
Financial, Inc. These surveys provide the Committee with comparable information
regarding the three compensation components used by the Company to motivate
executive performance, namely annual base salary, incentive bonuses and equity-
based incentive compensation. Based upon these surveys, the committee believes
that the Company's compensation practices are well within normal range,
particularly given the Company's historical and 1996 record of results.
Each of the Named Executive Officers has an annual base salary at a level
the Committee believes is comparable to companies in the commercial banking
industry with similar marketplace geography and demographics. In addition to
base salary, each executive officer participates in the Company's profit sharing
plan and receives an incentive cash bonus at the end of each fiscal year based
upon corporate performance and that officer's individual performance. Corporate
performance is measured by the Company's strategic and financial performance in
that fiscal year, with particular reference to net income and profitability for
the year. In making recommendations to the Board, the Committee does not
emphasize year-to-year changes in stock price in its evaluation of corporate
performance because the Committee does not believe that short-term fluctuations
in stock price necessarily reflect the underlying strength or future prospects
of the Company. Individual performance is measured by the strategic and
financial performance of the particular officer's operational responsibility in
comparison to targeted performance criteria. As reported in the Summary
Compensation Table, the bonuses granted with respect to 1996 to the Named
Executive Officers, including Mr. Byrnes, reflect the Company's strong 1996
results.
While the Committee recognizes that the Company can exert very little
influence on short-term fluctuations in stock price, the Committee does believe
that long-term stock price appreciation reflects achievement of strategic goals
and objectives. Accordingly, the Company seeks to create long-term performance
incentives for its key employees by aligning their economic interests with the
interests of long-term stockholders through the equity-based component of its
compensation program. Stock options are granted periodically to key employees at
a price equal to the fair market value on the date of grant, and awards are
based on the performance of such employees and anticipated contributions by such
employees to the achievement of strategic goals and objectives. In addition to
stock options, employees, including the Named Executive Officers, are given
incentives to invest in Common Stock through the profit sharing component of the
Company's Investment and Stock Ownership Plan. During 1996, as reflected in the
Summary Compensation Table, the options granted to the Named Executive Officers,
including Mr. Byrnes, reflect the Company's strong 1996 results.
With respect to the above matters, the Compensation/Personnel Committee
submits this report.
Compensation/Personnel Committee
John E. Alexander, Chairman
Reeder D. Gates
Lucinda A. Noble
8
<PAGE>
The following tables set forth information concerning compensation of the
Chief Executive Officer and the four most highly compensated executive officers
for services in all capacities to the Trust Company during the years indicated.
In connection with the consummation of the Reorganization, the Named Executive
Officers were elected to identical positions of the Company. However, all of the
Named Executive Officers receive compensation only from the Trust Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Name and ------------------------------------ ------------
Principal Other Annual All Other
Position Year Salary(1) Bonus(2) Compensation(3) Options(#) Compensation(4)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JAMES J. BYRNES 1996 $250,000 $85,000 $7,276 15,000 $37,435
Chairman of the Board, 1995 235,000 65,000 6,464 -- 35,185
President & Chief 1994 220,000 60,000 4,000 -- 32,935
Executive Officer
FRANCIS E. BENEDICT 1996 $105,500 $26,000 $7,111 4,500 $15,779
Executive Vice President, 1995 101,000 24,000 5,225 -- 15,160
Senior Banking and 1994 96,500 22,500 3,511 1,650 14,433
Investment Officer
DONALD S. STEWART 1996 $100,000 $27,000 $6,416 4,200 $14,957
Senior Vice President & 1995 95,000 25,000 6,420 - 14,209
Senior Trust Officer 1994 90,000 23,500 3,359 1,540 13,461
THOMAS J. SMITH 1996 $100,000 $23,000 $4,800 4,200 $14,957
Senior Vice President & 1995 95,000 23,000 4,329 -- 14,209
Senior Credit Officer 1994 90,000 21,000 2,479 1,540 13,461
RICHARD D. FARR 1996 $ 90,000 $20,700 $1,086 4,000 $13,461
Senior Vice President & 1995 85,000 20,000 746 -- 12,713
Chief Financial Officer 1994 80,000 17,000 795 1,320 11,965
</TABLE>
(1) Includes amounts deferred by the Named Executive Officer pursuant to the
Company's Investment and Stock Ownership Plan.
(2) These amounts represent cash awards made under the Senior Officer Incentive
Compensation Plan, which may be deferred under the Deferred Compensation
Plan for Senior Officers.
(3) Includes amounts for cost of applicable Group Term Life Insurance, club
dues and use of company vehicle or reimbursement for use of personal
vehicle.
(4) Includes amounts paid by the Trust Company and deferred pursuant to the
Company's Investment and Stock Ownership Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential realizable value at
assumed annual rate of
Individual Grants stock price appreciation
for option term
---------------------------------------------------------------------------------------
Number of Percent of
securities total options
underlying granted to Exercise
Options employees in or base Expiration
Name granted (#) fiscal year price ($/Sh) date 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James J. Byrnes 15,000 25.04 $28.90 2/13/06 $272,626 $690,887
Francis E. Benedict 4,500 7.51 $28.90 2/13/06 81,788 207,266
Donald S. Stewart 4,200 7.01 $28.90 2/13/06 76,335 193,448
Thomas J. Smith 4,200 7.01 $28.90 2/13/06 76,335 193,448
Richard D. Farr 4,000 6.69 $28.90 2/13/06 72,700 184,236
</TABLE>
9
<PAGE>
AGGREGATED OPTION EXERCISES IN 1996
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at Year End (#) at Year End ($)
--------------- ----------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable (1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James J. Byrnes -0- -0- 20,570/15,000 $300,701/$67,125
Francis E. Benedict -0- -0- 5,544/ 5,930 $ 67,933/$27,865
Donald S. Stewart -0- -0- 5,066/ 5,514 $ 62,002/$25,800
Thomas J. Smith -0- -0- 5,066/ 5,514 $ 62,002/$25,800
Richard D. Farr -0- -0- 4,261/ 5,113 $ 52,051/$23,771
</TABLE>
(1) The average price for the the Company's Common Stock on the Nasdaq National
Market on December 31, 1996, the last trading day of the year, was $33.375
per share.
None of the Named Executive Officers elected to exercise any options during the
fiscal year ended December 31, 1996.
EMPLOYMENT ARRANGEMENTS
The Company has an agreement with James J. Byrnes, Chairman, President and
Chief Executive Officer, which provides for severance payments equal to
approximately three times his annualized tax-includable compensation under
certain circumstances. This agreement would be operable should certain events
take place which seek to effect a change of control (as defined in the
agreement) of the Company. Payments would be due to Mr. Byrnes in the event of
his termination (as defined in the agreement) within two years of a change of
control.
DEFERRED PROFIT-SHARING PLAN
The Company has an Investment and Stock Ownership Plan (the "ISOP"), which
covers substantially all employees and has an employer funded profit sharing
component and an employee funded 401(k) component. The ISOP allows employees to
elect to defer a portion of their profit-sharing, as well as receive monetary
contributions as determined by the Board of Directors. The ISOP further allows
for contributions in the form of Common Stock of the Company. Contributions are
determined by the Board of Directors and are limited to a maximum amount as
stipulated in the ISOP. Amounts accrued for the accounts of the Named Executive
Officers are included in the Summary Compensation Table.
RETIREMENT PLANS
The Company has a noncontributory defined benefit pension plan covering
substantially all of its employees. The assets of the plan are held in a
separate trust and administered by the Pension/Administration Committee
appointed by the Board of Directors.
The benefits are based on years of service and a percentage of the
employees' average compensation for the five highest consecutive years in the
last ten years of employment. Under the plan, normal retirement age is 65 with
reduced benefit payments for early retirement following age 55 through 61.
Currently, Messrs. Byrnes, Benedict, Smith, Stewart and Farr have 8, 39, 32, 25
and 12 years of service under the plan, respectively.
10
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
- --------------------------------------------------------------------------------
Average Final
Earnings 15 20 25 30 35
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 50,000.00 $12,846 $17,128 $21,410 $25,692 $29,974
$ 75,000.00 $20,346 $27,128 $33,910 $40,692 $47,474
$100,000.00 $27,846 $37,128 $46,410 $55,692 $64,974
$125,000.00 $35,346 $47,128 $58,910 $70,692 $82,474
$150,000.00 $42,846 $57,128 $71,410 $85,692 $99,974
</TABLE>
The Company also has a Supplemental Employee Retirement Plan (SERP)
covering James J. Byrnes. The Plan provides for a retirement benefit at age 65
equal to 50% of earnings as defined in the SERP, averaged over the highest five
consecutive years. Benefits under the SERP are reduced by payments due under the
Company's basic pension plan and Social Security. Reduced benefits are payable
in the event of retirement prior to age 65.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission ("SEC") initial reports of ownership
and reports of changes in ownership of Common Stock of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were satisfied.
In making the above statements, the Company has relied on the written
representations of its directors and officers and copies of the reports that
have been filed with the SEC.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors and officers of the Company and the Trust Company and their
affiliated companies were customers of, and had other transactions with, the
Company in the ordinary course of business during 1996. All loans, commitments
and deposits included in such transactions were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and did not involve more than
normal risk of collectibility or present other unfavorable features. As of
December 31, 1996, the balance of such loans included in total loans was
$2,937,603, and borrowings of a director or officer did not exceed 10% of
stockholders equity.
Edward C. Hooks, a director of the Company and the Trust Company, is a
partner of Harris Beach & Wilcox, LLP, a law firm which provides legal services
to the Company.
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return
(assuming reinvestment of dividends) to stockholders of the Company during the
ten year period ended December 31, 1996, as well as an overall stock market
index (Nasdaq Stock Market Index) and the Company's peer group index (Nasdaq
Bank Stock Index). On February 3, 1997, the Company's Common Stock began listing
on the American Stock Exchange, Inc.
The stock prices on the Performance Graph are not necessarily indicative of
future stock price performance. Each of the Report of the Compensation/Personnel
Committee of the Board of Directors and the Performance Graph shall not be
deemed incorporated by reference by any general statement incorporating this
proxy statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such acts.
DECEMBER 31, 1991 - DECEMBER 31, 1996
(assumes $100 invested on December 31, 1991)
<TABLE>
<CAPTION>
Market Value of ADJUSTED ADJUSTED
the Company's NASDAQ NASDAQ
Share(s) Bank Stocks Stock Market
Year ($100.00 Basis) Composite (U.S. Companies)
---- --------------- ----------- ----------------
<S> <C> <C> <C>
1991 $100.000 $100.000 $100.000
1992 $131.130 $145.551 $116.378
1993 $210.773 $166.255 $133.595
1994 $217.967 $165.385 $130.587
1995 $163.026 $246.319 $184.674
1996 $219.978 $325.600 $227.164
</TABLE>
12
<PAGE>
INDEPENDENT AUDITORS
On recommendation of its Audit/Examining Committee, at its board meeting
held on March 14, 1995, the Board of Directors of the Trust Company engaged the
firm of KPMG Peat Marwick LLP ("KPMG") as its independent auditors for the year
ended December 31, 1995 to replace the firm of Ernst & Young LLP ("E&Y"), who
were dismissed as auditors of the Trust Company effective upon the filing by the
Trust Company of its Annual Report on Form F-2 with the Federal Deposit
Insurance Corporation on March 30, 1995.
The Report of E&Y on the Trust Company's financial statement for the year
ended December 31, 1994 did not contain an adverse opinion of a disclaimer of
opinion, and were not qualified or modified as to uncertainty, audit scope or
accounting principles.
In connection with the audit of the Trust Company's financial statements
for the year ended December 31, 1994, there were no disagreements with E&Y on
any matters of accounting principles or practices, financial statement
disclosure or auditing scope and procedures which, if not resolved to the
satisfaction of E&Y, would have caused E&Y to make reference to the matter in
their reports,
KPMG has served as the independent auditors of the Company since 1995. The
Board of Directors has retained KPMG to continue as independent auditors and to
audit the consolidated financial statements of the Company for the year ending
December 31, 1997, and further to report the results of their examination.
A representative of KPMG is expected to attend the Meeting and will have an
opportunity to make statements and respond to appropriate questions from
stockholders.
STOCKHOLDER PROPOSALS
If any stockholder desires to have a proposal formally considered at the
1998 Annual Meeting and included in the Proxy Statement for that meeting, the
proposal must be received in writing by the Corporate Secretary no later than
December 1, 1997.
FORM 10-K
A copy of the the Company's annual report on Form 10-K filed with the SEC
is available without charge by writing to: Tompkins County Trustco, Inc., ATTN:
Richard D. Farr, Senior Vice President & Chief Financial Officer, P.O. Box 460,
Ithaca, New York 14851.
OTHER MATTERS
The management knows of no business which will be presented for
consideration at the Meeting other than that stated in the Notice of Annual
Meeting. If any additional matters should be presented, it is intended that the
enclosed proxy will be voted in accordance with the judgment of the person or
persons acting under the proxy.
It is important that proxies be returned promptly. Therefore, stockholders
who do not expect to attend in person are urged to MARK, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD in the accompanying postage prepaid envelope.
Dated: March 31, 1997 By Order of the Board of Directors
/s/ James W. Hulbert
James W. Hulbert
Vice President & Corporate Secretary
13
<PAGE>
[TOMPKINS COUNTY TRUSTCO, INC. LOGO]
Tompkins County Trustco, Inc.
P.O. Box 460, Ithaca, New York 14851
(607) 273-3210
