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 Section 240.14a-11(c) or Section 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: NA
(2) Aggregate number of securities to which transaction applies: NA
(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): NA
(4) Proposed maximum aggregate value of transaction: NA
(5) Total fee paid: NA
[ ] 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: NA
(2) Form, Schedule or Registration Statement No.: NA
(3) Filing Party: NA
(4) Date Filed: NA
<PAGE>
TOMPKINS COUNTY TRUSTCO, INC.
March 29, 1999
NOTICE OF 1999 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 28, 1999 at 7:30
p.m., in the ballroom, Clarion University Hotel & Conference Center, One
Sheraton Drive, Ithaca, New York, for the following purposes:
1. To elect four (4) Directors for a term of three years expiring in the year
2002 and one (1) Director for a term of one year expiring in the year 2000;
2. To approve the proposal to change the name of the Company to
TompkinsTrustco, Inc.;
3. To increase the number of authorized shares of the Company's common stock
from 7,500,000 shares to 15,000,000 shares, and
4. 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 15, 1999 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 1998 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,
James J. Byrnes, Chairman, John E. Butler
President & Chief Executive Officer Vice President & Corporate Secretary
<PAGE>
TOMPKINS COUNTY TRUSTCO, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 28, 1999
This Proxy Statement is being mailed to stockholders on or about March 29,
1999 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 28,
1999 and any adjournment thereof.
VOTING
Only stockholders of record at the close of business on March 15, 1999 will
be entitled to vote. On March 15, 1999, there were 4,857,984 shares of Common
Stock of the Company, par value $0.10 per share (the "Common Stock"),
outstanding. Unless otherwise noted, all share numbers and share prices
reflected in this Proxy Statement have been adjusted to reflect a 3-for-2 stock
split effective March 15, 1998 (the "Stock Split"). 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 therein how such shares shall
be voted on such proposals, 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, whether or 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, and broker non-votes shall be counted toward
a quorum, but abstentions and broker non-votes are not deemed to be votes cast
and therefore 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 proposed amendments to the Certificate of Incorporation changing the
name of the Company to Tompkins Trustco, Inc. and increasing the number of
authorized shares from 7,500,000 to 15,000,000, which are the other items
proposed for consideration and voting as set forth in the attached Notice of
Annual Meeting of Shareholders, each require the affirmative vote of at least a
majority of the shares outstanding and entitled to vote at the Annual Meeting.
<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 15, 1999
by (i) each of the chief executive officer and the Company's four other most
highly compensated executive officers in 1999 (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:
COMMON STOCK
BENEFICIALLY OWNED
------------------
PERCENT OF
NUMBER OF OUTSTANDING
NAMES SHARES SHARES(1)
- -------------------------------------------------------------------------------
John A. Alexander+ 8,221 (2) **
James J. Byrnes*+ 74,612 (3) 1.50
Reeder D. Gates+ 79,351 (2) (4) 1.59
William W. Griswold+ 2,270 (2) **
Carl E. Haynes+ 764 (2) **
Edward C. Hooks+ 3,920 (2) (5) **
Robert T. Horn, Jr.+ 3,210 (2) (6) **
Bonnie H. Howell+ 3,682 (2) **
Lucinda A. Noble+ 2,569 (2) **
Hunter R. Rawlings, III+ 652 (2) **
Thomas R. Salm+ 1,632 (2) (7) **
Michael D. Shay+ 5,626 (2) **
Peggy R. Williams+ 22 (8) **
Richard D. Farr* 22,370 (9) **
Thomas J. Smith* 22,718 (10) **
Donald S. Stewart* 44,105 (11) **
Lawerence A. Updike* 31,234 (12) **
All Directors and executive
officers as a group (19 persons) 327,138 6.56
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:
- Executor, Trustee or Co-Trustee 931,558 (13) 18.69
- Trustee for the Company Investment
and Stock Ownership Plan 433,290 (13) 8.69
- Agent or Custodian 143,045 (13) 2.87
* Named Executive Officer
+ Director of the Company
** Less than 1 percent
</TABLE>
(1) The number of shares of Common Stock deemed outstanding includes: (i)
4,857,984 of Common Stock outstanding as of March 15, 1999 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 322 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 42,792 shares issuable upon the exercise of exercisable stock
options.
(4) Includes 64,882 shares held in the R. D. Gates, Ltd. Employee Profit
Sharing Fund and 1,988 shares owned by the spouse of Mr. Gates.
(5) Includes 328 shares which Mr. Hooks holds as Custodian, under the UGMA for
his children.
(6) Includes 723 shares which Dr. Horn holds as Trustee for his children.
(7) Includes 493 shares owned by the spouse of Mr. Salm.
(8) Includes 22 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.
(9) Includes 10,141 shares issuable upon the exercise of exercisable stock
options. Includes 450 shares owned by the spouse of Mr. Farr.
(10) Includes 9,940 shares issuable upon the exercise of exercisable stock
options.
(11) Includes 6,038 shares issuable upon the exercise of exercisable stock
options. Includes 10,516 shares owned by the spouse of Mr. Stewart.
(12) Includes 13,499 shares issuable upon the exercise of exercisable stock
options. Includes 4,573 shares owned by the spouse of Mr. Updike.
(13) As of March 15, 1999, the Trust and Investment Services Department of the
Trust Company held 1,507,893 shares representing 30.26% of the Common
Stock of the Company. Of such shares, 931,558 shares are held in a
fiduciary capacity as Executor, Trustee or Co-Trustee. Where the Trust
Company is sole executor or trustee, such shares will be voted only if the
legal 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 1,507,893 shares mentioned above, 433,290
shares or 8.69% of the outstanding stock is held by the Company's
Investment and Stock Ownership Plan, with 424,373 shares or 8.52%
allocated to participant accounts. These shares are voted by individual
plan participants. In addition, 143,045 shares are held as Agent or
Custodian with the voting power retained by the owner. Such shares
represent 2.87% of the Common Stock outstanding.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The purpose of the Meeting is the election of four directors for a term of
three years expiring in the year 2002 and the election of one director for a
term of one year expiring in 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: ANTON J. EGNER and WILLIAM T. PRITCHARD, both 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.
YEAR FIRST
ELECTED TERM TO
NAME AGE DIRECTOR EXPIRE
- --------------------------------------------------------------------------------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2002
- --------------------------------------------------------------------------------
John E. Alexander 46 1993 2002
Edward C. Hooks 49 1990 2002
Hunter R. Rawlings, III 54 1996 2002
Michael D. Shay 57 1989 2002
- --------------------------------------------------------------------------------
BOARD NOMINEE FOR TERM TO EXPIRE IN 2000
- --------------------------------------------------------------------------------
Peggy R. Williams 51 1999 2000
- --------------------------------------------------------------------------------
DIRECTORS CONTINUING IN OFFICE
- --------------------------------------------------------------------------------
William W. Griswold 41 1996 2000
Carl E. Haynes 53 1996 2000
Robert T. Horn, Jr. 51 1995 2000
Thomas R. Salm 58 1981 2000
James J. Byrnes 57 1989 2001
Reeder D. Gates 53 1985 2001
Bonnie H. Howell 51 1982 2001
Lucinda A. Noble 67 1985 2001
4
<PAGE>
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 has served as a director of the Company and the Trust
Company since 1996. He is the 10th President of Cornell University. Dr. 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 of Evaporated Metal
Films Corp., a company engaged in optical coatings.
PEGGY R. WILLIAMS was elected a director of the Company and the Trust Company
effective January 26, 1999. She replaced Frank H. T. Rhodes who retired August
31, 1998. Dr. Williams is the seventh President of Ithaca College having assumed
the position on July 1, 1997. Previously, she was President of Lyndon State
College, Lyndonville, Vermont.
WILLIAM W. GRISWOLD has served as a director of the Company and the Trust
Company since 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 has served as a director of the Company and the Trust Company
since 1996. He is President of Tompkins Cortland Community College having been
appointed to that position in 1995. Dr. Haynes has been with the College in
various capacities since 1969.
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.
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.
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.
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, 1998.
The Board of Directors held 17 meetings during 1998. 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
Alexander with 70% and Rawlings with 58%.
During 1998, directors who were not employees of the Company received for
their services a quarterly retainer of $750 in the form of Common Stock (as
described below), plus a fee of $500 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 1998 were
197,850.43. 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 1998 was $25,500.
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 1998, 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 1998,
1,180 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. 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, 1998.
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 7 meetings in 1998, and its members at the close of
business on December 31, 1998 were: Bonnie H. Howell, Chair; John E.
Alexander; James J. Byrnes; Reeder D. Gates; William W. Griswold;
Edward C. Hooks; Thomas R. Salm and Michael D. Shay.
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 6 meetings in 1998, and its members at the close of
business on December 31, 1998 were: William W. Griswold, Chair; Carl E.
Haynes; Lucinda A. Noble and Michael D. Shay.
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 8 meetings in 1998, and its members at the close of
business on December 31, 1998 were: Thomas R. Salm, Chair; Reeder D.
Gates; William W. Griswold 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 3 meetings in 1998, and its members at the close of
business on December 31, 1998 were: John E. Alexander, Chair; 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 7 meetings in 1998, and its members at the close of
business on December 31, 1998 were: Reeder D. Gates, Chair; John E.
Alexander; James J. Byrnes; Carl E. Haynes and Robert T. Horn, Jr.
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 29 meetings in 1998, and its members at the close of
business on December 31, 1998 were: Michael D. Shay, Chair; James J.
Byrnes; Edward C. Hooks; Robert T. Horn, Jr. and Lucinda A. Noble.
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 1998, and its Board members at the
close of business on December 31, 1998 were: James J. Byrnes, Chair;
Hunter R. Rawlings,III 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 four
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 1998, the
Committee utilized a self selected survey of ten comparable banks, mostly in New
York, as well as the 1998 Northeast Banking Industry Compensation Survey and the
SNL Executive Compensation Review for Commercial Banks. 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 1998 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 1998 to the Named
Executive Officers, including Mr. Byrnes, reflect the Company's strong 1998
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 1998, no options were
granted to the Named Executive Officers.
With respect to the above matters, the Compensation/Personnel Committee
submits this report.
Compensation/Personnel Committee
Thomas R. Salm, Chair
Reeder D. Gates
William W. Griswold
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.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
NAME AND ANNUAL COMPENSATION COMPENSATION
---------------------------------------------------------------------------------
PRINCIPAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS(#) COMPENSATION(3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JAMES J. BYRNES 1998 $293,000 $130,000 $6,262 -0- $43,880
Chairman of the Board, 1997 273,000 115,000 4,785 18,000 40,812
President & Chief 1996 250,000 85,000 7,276 22,500 37,435
Executive Officer
DONALD S. STEWART 1998 $118,000 $36,000 $5,959 -0- $17,429
Executive Vice President & 1997 108,077 30,000 5,876 5,250 15,964
Senior Trust Officer 1996 100,000 27,000 6,416 6,300 14,957
THOMAS J. SMITH 1998 $110,250 $27,000 $4,490 -0- $16,284
Senior Vice President & 1997 105,000 25,000 4,665 3,750 15,509
Senior Credit Officer 1996 100,000 23,000 4,880 6,300 14,957
RICHARD D. FARR 1998 $100,000 $26,000 $1,870 -0- $14,771
Senior Vice President & 1997 95,000 22,500 1,771 3,750 14,032
Chief Financial Officer 1996 90,000 20,700 1,086 6,000 13,461
LAWRENCE A. UPDIKE 1998 $100,000 $26,000 $2,812 -0- $14,771
Senior Vice President 1997 95,000 21,500 2,801 3,750 14,032
Operations & Systems 1996 90,000 19,800 2,875 6,000 13,461
</TABLE>
(1) These amounts represent cash awards made under the Senior Officer
Incentive Compensation Plan, which may be deferred under the Deferred
Compensation Plan for Senior Officers.
(2) Includes amounts for cost of applicable life insurance, club dues and use
of company vehicle or reimbursement for use of personal vehicle.
(3) Includes amounts paid by the Trust Company and deferred pursuant to the
Company's Investment and Stock Ownership Plan.
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants to executive officers in the last fiscal year
9
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1998
AND YEAR-END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT YEAR END (#) AT YEAR END ($)
--------------- ---------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE (1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James J. Byrnes 9,438 $272,644 37,167/24,750 $683,736/$320,826
Donald S. Stewart 8,993 $157,607 5,040/ 7,087 $ 70,691/$ 91,553
Thomas J. Smith 5,293 $100,732 8,365/ 5,962 $134,788/$ 79,216
Richard D. Farr 3,358 $ 73,122 8,641/ 5,812 $135,419/$ 76,912
Lawrence A. Updike -0- -0- 11,999/5,812 $214,045/$ 76,912
</TABLE>
(1) The average price for the Company's Common Stock on the American Stock
Exchange on December 31, 1998, the last trading day of the year, was
$34.625 per share.
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, Stewart, Smith, Farr, and Updike have 10, 27, 34, 14,
and 31 years of service under the plan, respectively.
10
<PAGE>
PENSION PLAN TABLE
Years of Service
- --------------------------------------------------------------------------------
Average Final
Earnings 15 20 25 30 35
- --------------------------------------------------------------------------------
$ 50,000.00 $12,572 $16,762 $20,953 $25,143 $29,334
$ 75,000.00 $20,072 $26,762 $33,453 $40,143 $46,834
$100,000.00 $27,572 $36,762 $46,953 $55,143 $64,334
$125,000.00 $35,072 $46,762 $58,453 $70,143 $81,834
$150,000.00 $42,572 $56,762 $70,953 $85,143 $99,334
- --------------------------------------------------------------------------------
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, 1998, 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 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 1998. All loans and
commitments 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, 1998, the balance of such
loans included in total loans was $3,621,000, and borrowings of no director or
officer exceeded 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 comparative information regarding the
Company's cumulative return on its common stock over the five year period ended
December 31, 1998. Total shareholder return is measured by dividing total
dividends (assuming dividend reinvestment) plus the change in share price during
the measurement period by the share price at the beginning of the measurement
period. The Company's cumulative shareholder return for the five year period
based upon an initial investment of $100 is compared to the cumulative return of
the Nasdaq Stock Market (U.S. Companies) and the SNL Securities L.P. Bank Index.
The stock prices on the performance graph are not necessarily indicative of
future stock price performance.
(INSERT GRAPH HERE]
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------------------------
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Tompkins County Trustco, Inc. $ 100.00 $ 105.65 $ 89.32 $ 113.10 $ 150.11 $ 186.55
NASDAQ - Total US 100.00 97.75 138.26 170.01 208.58 293.21
SNL Bank Index 100.00 97.73 152.16 212.31 321.73 348.02
</TABLE>
12
<PAGE>
PROPOSAL NO. 2
CHANGE OF COMPANY NAME
The Board of Directors of the Company proposes that the name of the Company
be changed from Tompkins County Trustco, Inc. to TOMPKINS TRUSTCO, INC. The
Board believes that this would better reflect the fact that many of the
Company's products and services are marketed outside of Tompkins County, and
that it would facilitate future expansion. The name of the Company's operating
subsidiary, Tompkins County Trust Company, will remain unchanged.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding and entitled to vote at the Meeting is required to approve the
proposed amendment to change the Company's name. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" ADOPTION OF PROPOSAL NO. 2. SHARES OF COMMON STOCK
COVERED BY EXECUTED PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE VOTED
"FOR" PROPOSAL NO. 2, UNLESS STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
Abstentions and broker non-votes will have the same effect as votes against the
proposal.
13
<PAGE>
PROPOSAL NO. 3
INCREASE IN NUMBER OF AUTHORIZED SHARES FROM
7,500,000 SHARES TO 15,000,000 SHARES
The Board of Directors recommends that the authorized number of shares of
Common Stock which may be issued by the Company be increased from 7,500,000
shares to 15,000,000 shares. As of March 15, 1999, there were 4,857,984 shares
of Common Stock issued and outstanding.
The Board has adopted a resolution seeking to amend the Certificate of
Incorporation of the Company for this purpose, and if this proposal is approved
Article IV of the Certificate of Incorporation will be amended to read as
follows:
"The aggregate total number of shares of capital stock which the
Corporation shall have authority to issue is 15,000,000 shares with a
par value of $0.10 each, all of which shall be common stock of the same
class."
The additional shares of Common Stock for which authorization is sought
will have the same rights and privileges as the shares of Common Stock now
authorized.
The Board of Directors believes that it is desirable and in the best
interests of the Company and its shareholders that there be a substantial number
of authorized but unissued shares of Common Stock in order to assure flexibility
of action in the future. The Board also believes that an increase in the number
of shares of Common Stock is necessary in order that a sufficient number of
shares is available for issuance from time to time if needed for such corporate
purposes as may be deemed appropriate by the Board. For example, such additional
authorized shares may become necessary in connection with acquisitions, the
declaration of stock dividends or stock splits, future financings, investment
opportunities, other distributions, or other corporate purposes. From time to
time in the course of its operations, the Company considers, investigates and
evaluates proposals for the acquisition of other banks, savings and loan
associations or other companies. It is possible that certain of the additionally
authorized shares of Common Stock may be issued in connection with any such
transactions.
The issuance of additional shares of Common Stock by the Company may have a
dilutive effect on earnings per share and book value per share, as well as a
dilutive effect on the voting power of existing shareholders. The Company would
expect that any such dilutive effect on earnings per share and/or book value
would be relatively short-term in duration. Shareholders do not possess
preemptive rights and thus will not have a first right or right of first refusal
to purchase any additional shares. Unless required by applicable law or the
American Stock Exchange (which effectively requires shareholder consent for
acquisition transactions involving a 20% or greater increase in the number of
the Company's listed shares), no further authorization or vote of the
shareholders will be solicited for the issuance of the additional shares of
Common Stock. The increase in the number of authorized shares will not affect
the preferences, qualifications, limitations, restrictions and the special and
relative rights of any shares of the Company.
The issuance of additional shares of Common Stock by the Company also may
potentially have an anti-takeover effect by making it more difficult to obtain
shareholder approval of various actions, such as a merger or other acquisition
of the Company. The proposed increase in the number of authorized shares of
Common Stock could enable the Board of Directors to render more difficult an
attempt by another person or entity to obtain control of the Company. The
proposed amendment to the Certificate of Incorporation is not being recommended
in response to any specific effort of which the Company or the Board is aware to
obtain control of the Company, nor does the Board of Directors presently intend
to issue additional shares to impede any such takeover efforts.
14
<PAGE>
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding and entitled to vote at the Meeting is required to approve the
proposed amendment to Article IV of the Articles of Incorporation. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF PROPOSAL NO. 3. SHARES OF COMMON
STOCK COVERED BY EXECUTED PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE
VOTED "FOR" PROPOSAL NO. 3, UNLESS STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
Abstentions and broker non-votes will have the same effect as votes against the
proposal.
15
<PAGE>
INDEPENDENT AUDITORS
On recommendation of its Audit/Examining Committee, the Board of Directors
of the Company engaged the firm of KPMG Peat Marwick LLP ("KPMG") as its
independent auditors for the year ended December 31, 1998.
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, 1999, 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
2000 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, 1999.
FORM 10-K
A COPY OF 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 29, 1999 By Order of the Board of Directors
John E. Butler
Vice President & Corporate Secretary
16
<PAGE>
- --------------------------------------------------------------------------------
1. Election of four (4) Directors for a term of three years expiring in the Year
2002 and one (1) Director for a term of one year expiring in the Year 2000.
___ FOR all nominees listed below
___ WITHHOLD AUTHORITY to vote for all nominees listed below.
___ *EXCEPTIONS
Nominees: John E. Alexander (3 yrs.), Edward C. Hooks (3 yrs.), Hunter R.
Rawlings, III (3 yrs.), Michael D. Shay (3 yrs.), Peggy R. Williams (1 yr.).
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions: __________________________________________________________________
2. To approve the proposal to change the name of the Company to Tompkins
Trustco, Inc.
_____ FOR _____ AGAINST _____ ABSTAIN
3. To increase the number of authorized shares of the Company's common stock
from 7,500,000 shares to 15,000,000 shares.
_____ FOR _____ AGAINST _____ ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
(Management at present knows of no other business to be presented at the
meeting.)
Change of Address and or Comments Mark Here _____
(Name of stockholder should be signed exactly as it appears to the left.)
Date _________________________________, 1999
____________________________________________
Signature
____________________________________________
Signature, if held jointly
Votes must be indicated
(x) in Black or Blue ink. [X]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
TOMPKINS COUNTY TRUSTCO, INC
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of common stock of Tompkins County Trustco,
Inc. hereby appoints Anton J. Egner and William T. Pritchard and each of
them his attorneys, agents and proxies to represent the undersigned and to
vote and act upon the shares of common stock standing in the name of the
undersigned which he/she would be entitled to vote if personally present,
as specified below, at the Annual Meeting of Stockholders to be held on
Wednesday, April 28, 1999 at 7:30 p.m. or at any adjournment thereof, with
full power of substitution and revocation.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED ON THE OTHER SIDE OF THIS CARD. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
(Signature on reverse side required)
TOMPKINS COUNTY TRUSTCO INC
P.O. BOX 11289
NEW YORK, N.Y. 10203-0289
