SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Landmark Financial Corp.
----------------------------------------
(Name of Registrant as Specified in its Charter)
Alan Schick, Esq.
Luse Lehman Gorman Pomerenk & Schick
5335 Wisconsin Avenue, N.W., Suite 400
Washington, D.C. 20015
----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3)
[ ] 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 identifying value of
transaction computed pursuant
to Exchange Act Rule 0-11:
______________________________
4) Proposed maximum aggregate value of transaction:
______________________________
[ ] 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 offset 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 Number:
_____________________
3) Filing Party:
____________________
4) Date Filed:
06/19/98
<PAGE>
June 19, 1998
Dear Shareholder:
We cordially invite you to attend the first Annual Meeting of
Shareholders of Landmark Financial Corp. (the "Company"). The
Annual Meeting will be held at the Fort Rensselaer Club, 4 Moyer
Street, Canajoharie, New York 13317, at 11:00 a.m., Eastern
Standard Time, on July 22, 1998.
The enclosed Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted. During the Annual
Meeting we will also report on the operations of the Company.
Directors and officers of the Company, as well as a
representative of our independent auditors, will be present to
respond to any questions that shareholders may have.
The Annual Meeting is being held so that stockholders may
consider the election of directors, the adoption of the Landmark
Financial Corp. 1998 Stock Option Plan, the adoption of the
Landmark Financial Corp. 1998 Recognition and Retention Plan and
the ratification of the appointment of Harvazinski & Montanye,
L.L.P. as the Company's auditors for fiscal year 1999.
The Board of Directors of the Company has determined that the
matters to be considered at the Annual Meeting are in the best
interest of the Company and its shareholders. For the reasons
set forth in the Proxy Statement, the Board of Directors
unanimously recommends a vote "FOR" each matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date
and return the enclosed proxy card as soon as possible, even if
you currently plan to attend the Annual Meeting. This will not
prevent you from voting in person, but will assure that your vote
is counted if you are unable to attend the meeting. Your vote is
important, regardless of the number of shares that you own.
Sincerely,
Gordon E. Coleman
President and Chief Executive Officer
<PAGE>
Landmark Financial Corp.
26 Church Street
Canajoharie, New York 13126
(518) 673-2012
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On July 22, 1998
Notice is hereby given that the Annual Meeting of Landmark
Financial Corp. (the "Company") will be held at the Fort
Rensselaer Club, 4 Moyer Street, Canajoharie, New York 13317, on
July 22, 1998 at 11:00 a.m., Eastern Standard Time.
A Proxy Card and a Proxy Statement for the Annual Meeting
are enclosed.
The Annual Meeting is for the purpose of considering and
acting upon:
1. Election of three Directors to the Board of Directors;
2. The adoption of the Landmark Financial Corp. 1998 Stock
Option Plan;
3. The adoption of the Landmark Financial Corp. 1998
Recognition and Retention Plan; and
4. The ratification of the appointment of Havarzinski &
Montanye L.L.P. as auditors for the Company for the fiscal year
ending March 31, 1999; and
such other matters as may properly come before the Annual
Meeting, or any adjournments thereof. The Board of Directors is
not aware of any other business to come before the Annual
Meeting.
Any action may be taken on the foregoing proposals at the
Annual Meeting on the date specified above, or on any date or
dates to which the Annual Meeting may be adjourned. Shareholders
of record at the close of business on June 12, 1998, are the
shareholders entitled to vote at the Annual Meeting, and any
adjournments thereof.
EACH SHAREHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE
ANNUAL MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. ANY PROXY GIVEN BY THE SHAREHOLDER MAY BE REVOKED AT
ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY
FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR
A DULY EXECUTED PROXY BEARING A LATER DATE. ANY SHAREHOLDER
PRESENT AT THE ANNUAL MEETING MAY REVOKE HIS OR HER PROXY AND
VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL MEETING.
HOWEVER, IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED
IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER IN ORDER TO VOTE PERSONALLY AT THE ANNUAL
MEETING.
By Order of the Board of Directors
Secretary
June 19, 1998
- -----------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
- -----------------------------------------------------------------
<PAGE>
PROXY STATEMENT
Landmark Financial Corp.
26 Church Street
Canajoharie, New York 13126
(518) 673-2012
ANNUAL MEETING OF SHAREHOLDERS
July 22, 1998
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
Landmark Financial Corp. (the "Company") to be used at the Annual
Meeting of Shareholders of the Company (the "Annual Meeting"),
which will be held at the Fort Rensselaer Club, 4 Moyer Street,
Canajoharie, New York 13317, on July 22, 1998, at 11:00 a.m.,
Local Time, and all adjournments of the Annual Meeting. The
accompanying Notice of Annual Meeting of Shareholders and this
Proxy Statement are first being mailed to shareholders on or
about June 19, 1998.
REVOCATION OF PROXIES
Shareholders who execute proxies in the form solicited
hereby retain the right to revoke them in the manner described
below. Unless so revoked, the shares represented by such proxies
will be voted at the Annual Meeting and all adjournments thereof.
Proxies solicited on behalf of the Board of Directors of the
Company will be voted in accordance with the directions given
thereon. Where no instructions are indicated, validly executed
proxies will be voted "FOR" the proposals set forth in this Proxy
Statement for consideration at the Annual Meeting.
Proxies may be revoked by sending written notice of
revocation to the Secretary of the Company, at the address shown
above. The presence at the Annual Meeting of any shareholder who
had returned a proxy shall not revoke such proxy unless the
shareholder delivers his or her ballot in person at the Annual
Meeting or delivers a written revocation to the Secretary of the
Company prior to the voting of such proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record of the Company's common stock, par value
$0.10 per share (the "Common Stock") as of the close of business
on June 12, 1998 (the "Record Date") are entitled to one vote for
each share then held. As of the Record Date, the Company had
152,000 shares of Common Stock issued and outstanding. The
presence in person or by proxy of a majority of the outstanding
shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. Directors are elected
by a plurality of votes cast, without regard to either broker
non-votes, or proxies as to which the authority to vote for the
nominees being proposed is withheld. The affirmative vote of
holders of a majority of the total votes present at the Annual
Meeting in person or by proxy is required for the adoption of the
Landmark Financial Corp. 1998 Stock Option Plan, Landmark
Financial Corp. 1998 Recognition and Retention Plan and the
ratification of Havarzinski & Montanye L.L.P. as the Company's
auditors. Abstentions and broker non-votes will be counted for
purposes of determining that a quorum is present, but will not
be counted as votes in favor of Proposals II, III or IV.
Persons and groups who beneficially own in excess of five
percent of the Common Stock are required to file certain reports
with the Securities and Exchange Commission (the "SEC") regarding
such ownership. The following table sets forth, as of the Record
Date, the shares of Common Stock beneficially owned by Directors
individually, by executive officers individually, by executive
officers and Directors as a group and by each person who was the
beneficial owner of more than five percent of the Company's
outstanding shares of Common Stock.
<PAGE>
<TABLE>
<CAPTION>
Amount of Shares
Name Owned and Nature Percent of Shares
and Address of of Beneficial of Common Stock
Beneficial Owner Ownership Outstanding
- ---------------- ---------------- -----------------
<S> <C> <C>
Gordon E. Coleman 3,075 2.02%
John R. Francisco 5,000 3.29
F. Richard Ferraro 200 .13
Federick P. LaCoppola 500 .33
Carl J. Rockefeller 500 .33
Carl S. Salmon, III 5,000 3.29
Patricia A. Symolon 500 .33
John F. Von Ahn, Jr. 50 .03
H. Stuart Larson 500 .33
All Directors and Executive
Officers as a Group
(9 persons) 15,325 10.08
Landmark Community Bank 12,160 8.00%
Employee Stock Ownership Plan
26 Church Street
Canajoharie, New York 13126
</TABLE>
- -----------------
(1) The address of all named persons is 26 Church Street,
Canajoharie, New York.
PROPOSAL I--ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of
seven members. The Company's bylaws provide that approximately
one-third of the Directors are to be elected annually. Directors
of the Company are generally elected to serve for a three-year
period or until their respective successors shall have been
elected and shall qualify. Two Directors will be elected at the
Annual Meeting to serve for a three-year period and until their
respective successors shall have been elected and shall qualify.
The Board of Directors has nominated to serve as Directors, John
R. Francisco, Gordon E. Coleman and Carl S. Salmon, III, who are
currently members of the Board of Directors.
Ownership Reports by Officers and Directors
The Common Stock of the Company is registered with the
Securities and Exchange Commission (the "SEC") pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (the
"Exchange Act"). The officers and directors of the Company and
beneficial owners of greater than 10% of the Company's Common
Stock ("10% beneficial owners") are required to file reports on
Forms 3,4 and 5 with the SEC disclosing beneficial ownership and
changes in beneficial ownership of the Common Stock. SEC rules
require disclosure in the Company's Proxy Statement or Annual
Report on Form 10-K of the failure of an officer, director or 10%
beneficial owner of the Company's Common Stock to file a Form 3,
4, or 5 on a timely basis. All of the Company's officers and
directors filed these reports on a timely basis.
<PAGE>
Personnel Committee Interlocks and Insider Participation
The full Board of Directors of the Company determines the
salaries to be paid each year to the officers of the Company.
Gordon E. Coleman is a Director of the Company and Landmark
Community Bank (the "Bank") in addition to being the President
and Chief Executive Officer of the Company and the Bank. Mr.
Coleman does not participate in the Board of Directors'
determination of compensation for the President and Chief
Executive Officer.
Report of the Board of Directors on Executive Compensation
Under rules established by the Securities and Exchange
Commission, the Company is required to provide certain data and
information in regard to the compensation and benefits provided
to its Chief Executive Officer and other executive officers. The
Company's only executive officer is Mr. Coleman. The disclosure
requirements for the Chief Executive Officer include the use of
tables and a report explaining the rationale and considerations
that led to fundamental executive compensation decisions
affecting Mr. Coleman. In fulfillment of this requirement, the
Company's Board of Directors has prepared the following report
for inclusion in this proxy statement.
The Board of Directors annually reviews the performance of
the Chief Executive Officer and approves changes to base
compensation as well as the level of bonus, if any, to be
awarded. In determining whether the base salary of the Chief
Executive Officer should be increased, the Board of Directors
takes into account individual performance, performance of the
Company, the size of the Company and the complexity of its
operations, and information regarding compensation paid to
executives performing similar duties for financial institutions
in the Bank's market area.
While the Board of Directors does not use strict numerical
formulas to determine changes in compensation for the Chief
Executive Officer and while it weighs a variety of different
factors in its deliberations, it has emphasized and will continue
to emphasize earnings, profitability, capital position and asset
quality, and return on tangible equity as factors in setting the
compensation of the Chief Executive Officer. Other non-
quantitative factors considered by the Board of Directors in
fiscal 1998 included general management oversight of the Company,
the quality of communication with the Board of Directors, and the
productivity of employees. Finally, the Board of Directors
considered the standing of the Company with customers and the
community, as evidenced by the level of customer/community
complaints and compliments. While each of the quantitative and
non-quantitative factors described above was considered by the
Board of Directors, such factors were not assigned a specific
weight in evaluating the performance of the Chief Executive
Officer. Rather, all factors were considered, and based upon the
effectiveness of such officers in addressing each of the factors,
and the range of compensation paid to officers of peer
institutions, the Board of Directors approved an increase in the
base salary of the Chief Executive Officer. Accordingly, the
Board of Directors approved a salary increase totaling $15,000
for the Company's and Bank's Chief Executive Officer, bringing
1998 total base compensation for Mr. Coleman to $60,000 from
$45,000 in 1997. This report is submitted by F. Richard Ferraro,
Frederick P. LaCoppola and Carl J. Rockefeller.
Directors' Compensation
Each non-employee Director receives a meeting fee of $300
for each Board meeting attended. Employee directors do not
receive monthly meeting fees. The Company and the Bank paid a
total of $23,900 in Director fees during the year ending March
31, 1998.
Executive Compensation
The following table sets forth for the years ended March 31,
1997 and 1998, certain information as to the total remuneration
paid by the Company to Mr. Coleman, the Company's chief executive
officer. No other officer of the Company received cash
compensation exceeding $100,000 in 1998.<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
Restricted
Other Annual Stock Options/ All Other
Name and Year Ended Salary Bonus Compensation Award(s) SARs Compensation
Principal Position December 31, ($) ($) ($)(2) ($) (#) Payout ($)(3)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gordon E. Coleman 1998 $54,600 $4,400 $1,940 -- -- -- -
President and 1997 45,000 3,600 - -- -- -- -
Chief Executive
Officer
- -------------------
(1) No other executive officer received salary and bonuses
that in the aggregate exceeded $100,000.
(2) Includes 120 shares allocated to Mr. Coleman under the
Company's Employee Stock Ownership Plan.
(3) The aggregate amount of such benefits did not exceed the
lesser of $50,000 or 10% of cash compensation for the named individuals.
/TABLE
<PAGE>
Directors of the Company
The Board of Directors of the Company currently consists of
seven directors. The directors are divided into three classes.
Approximately one-third of the directors will be elected at each
annual meeting of stockholders.
The following table sets forth certain information regarding
the directors of the Company:<PAGE>
<TABLE>
<CAPTION>
Positions Held Director Current Term
Name with the Bank Age(1) Since To Expire
- ------------------------------------------------------------------------------
NOMINEES
<S> <C> <C> <C> <C>
John R. Francisco Chairman of the Board 47 1981 1998
Gordon E. Coleman President, Chief 43 1997 1998
Executive Officer and
Director
Carl S. Salmon, III Director 47 1997 1998
OTHER BOARD MEMBERS
F. Richard Ferraro Director 73 1972 1999
Frederick P. LaCoppola Director and Treasurer 55 1986 2000
Carl J. Rockefeller Director 46 1994 2000
Patricia A. Symolon Director 63 1994 1999
- --------------------
(1) At March 31, 1998.
/TABLE
<PAGE>
The business experience of each director is set forth below.
All directors have held their present position for at least the
past five years, except as otherwise indicated.
<PAGE>
John R. Francisco is the Chairman of the Board of the
Company. Mr. Francisco is a practicing attorney in the town of
St. Johnsville, New York.
Gordon E. Coleman is the President and Chief Executive
Officer of the Company. Prior to joining the Bank in 1996, Mr.
Coleman was the Agricultural Loan Officer for Central National
Bank from 1993 until 1996. Prior to that time Mr. Coleman was an
Assistant Vice President of Citizens National Bank of Malone.
Carl S. Salmon, III is retired. Mr. Salmon was the
president of KCS Abstract and Service Co. Ltd.
F. Richard Ferraro is a Leasing Manger for R. Brown & Sons,
Inc., an automobile dealership.
Frederick P. LaCoppola is the Bank's Treasurer. Mr.
LaCoppola is a District Agent for Presidential Insurance Corp.
Carl J. Rockefeller serves as the business manager of the
Fort Plain Central School in Ft. Plain, New York. Mr.
Rockefeller is also bookkeeper for the town of Minden.
Patricia A. Symolon is retired. Until her retirement in
1996, she was the former Chief Executive Officer of Canajoharie
Buildings Savings and Loan Association.
There are no executive officers of the Company that are not
also directors of the Company.
Benefits
Employee Stock Ownership Plan and Trust. The Company has
established an Employee Stock Ownership Plan and Related Trust
("ESOP") for eligible employees. The ESOP is a tax-qualified
plan subject to the requirements of ERISA and the Code.
Employees with a 12-month period of employment with the Company
during which they worked at least 1,000 hours and who have
attained age 21 are eligible to participate. The ESOP has
borrowed funds and has purchased 12,160 shares. The Common
Stock purchased by the ESOP serves as collateral for the loan.
The loan will be repaid principally from the Company's
contributions to the ESOP over a period of up to seven years.
The interest rate for the loan is the prime rate minus 1 point.
Shares purchased by the ESOP will be held in a suspense account
for allocation among participants as the loan is repaid.
Contributions to the ESOP and shares released from the
suspense account in an amount proportional to the repayment of
the ESOP loan will be allocated among participants on the basis
of compensation in the year of allocation, up to an annual
adjusted maximum level of compensation. Benefits generally
become vested after five years of credited service. Forfeitures
will be reallocated among remaining participating employees in
the same proportion as contributions. Benefits may be payable
upon death, retirement, early retirement, disability or
separation from service. The Company's contributions to the ESOP
will not be fixed, so benefits payable under the ESOP cannot be
estimated.
In connection with the establishment of the ESOP, a
committee consisting of all nonemployee Directors was selected by
the Company to administer the ESOP and the Company's other stock
benefit plans (the "Stock Benefits Committee"). An unrelated
corporate trustee for the ESOP initially was appointed. The
Stock Benefits Committee may instruct the trustee regarding
investment of funds contributed to the ESOP. The ESOP trustee
generally will vote all shares of Common Stock held under the
ESOP in accordance with the written instructions of the Stock
Benefits Committee. In certain circumstances, however, the ESOP
trustee must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees,
and unallocated shares and shares held in the suspense account in
a manner calculated to most accurately reflect the instructions
the ESOP trustee has received from participants regarding the
allocated stock, subject to and in accordance with the fiduciary
duties under ERISA owed
<PAGE>
by the ESOP trustee to the ESOP participants. Under ERISA, the
Secretary of Labor is authorized to bring an action against the
ESOP trustee for the failure of the ESOP trustee to comply with
its fiduciary responsibilities.
Stock Option Plan. The Board of Directors of the Company
has adopted subject to stockholder approval the Landmark
Financial Corp. 1998 Stock Option Plan for its officers,
employees and nonemployee directors. See Proposal III for a
summary of the material terms of the Landmark Financial Corp.
1998 Stock Option Plan.
Recognition and Retention Plan. The Board of Directors of
the Company has adopted subject to stockholder approval the
Landmark Financial Corp. 1998 Recognition and Retention Plan as a
method of providing officers, employees and nonemployee directors
of the Company with a proprietary interest in the Company in a
manner designed to encourage such persons to remain with the
Company. See Proposal IV for a summary of the material terms of
the Landmark Financial Corp. 1998 Recognition and Retention Plan.
Transactions With Certain Related Persons
All transactions between the Company and its executive
officers, directors, holders of 10% or more of the shares of its
Common Stock and affiliates thereof, are on terms no less
favorable to the Company than could have been obtained by it in
arm's-length negotiations with unaffiliated persons. Such
transactions must be approved by a majority of independent
outside directors of the Company not having any interest in the
transaction.
PROPOSAL II--THE ADOPTION OF 1998 STOCK OPTION PLAN
General
Establishment and implementation of the Landmark Financial
Corp. 1998 Stock Option Plan are subject to approval by
stockholders and the satisfaction of certain other conditions.
The Landmark Financial Corp. 1998 Stock Option Plan (the
"Stock Option Plan") has been adopted by the Board of Directors
of the Company, subject to ratification by stockholders at the
Annual Meeting. Pursuant to the Stock Option Plan, 15,200 shares
of the Company's Common Stock (or 10% of the shares outstanding)
are reserved for issuance by the Company under the Stock Option
Plan. Since stockholders do not have preemptive rights, to the
extent the Company issues all shares reserved for issuance under
the Stock Option Plan from authorized but unissued shares, the
interests of current stockholders will be diluted 9.09%.
The Board of Directors believes that it is appropriate for
the Company to adopt a flexible and comprehensive stock option
plan which permits the granting of a variety of long-term
incentive awards to directors, officers and employees as a means
of enhancing and encouraging the recruitment and retention of
those individuals on whom the continued success of the Company
most depends. However, because the awards are granted only to
persons affiliated with the Company, the adoption of the Stock
Option Plan could make it more difficult for a third party to
acquire control of the Company and therefore could discourage
offers for the Company's stock that may be viewed by the
Company's stockholders to be in their best interest.
Attached as Appendix A to this Proxy Statement is the
complete text of the Stock Option Plan. The principal features
of the Stock Option Plan are summarized below.
Principal Features of the Stock Option Plan
The Stock Option Plan provides for awards in the form of
stock options, reload options, limited stock appreciation rights
("Limited Rights") and dividend equivalent rights. Each award
shall be on such terms and conditions, consistent with the Stock
Option Plan and applicable OTS Regulations, as the committee
administering the Stock Option Plan may determine.
<PAGE>
The term of stock options generally will not exceed ten
years from the date of grant. Stock options granted under the
Stock Option Plan may be either "Incentive Stock Options" as
defined under Section 422 of the Code or stock options not
intended to qualify as such ("non-qualified stock options").
Shares issued upon the exercise of a Stock Option may be
either authorized but unissued shares or reacquired shares held
by the Company in its treasury. Any shares subject to an award
which expires or is terminated unexercised will again be
available for issuance under the Stock Option Plan. Generally,
in the discretion of the Board, all or any non-qualified stock
options granted under the Stock Option Plan may be transferable
by the Participant but only to the persons or classes of persons
determined by the Board. No other award or any right or interest
therein is assignable or transferable except under certain
limited exceptions set forth in the Stock Option Plan.
The Stock Option Plan is administered by a committee of the
Board (the "Committee") consisting of either two or more "non-
employee directors" (as defined in the Stock Option Plan), or the
entire Board. The members of the Committee shall be appointed by
the Board. Currently, the Committee is comprised of the entire
Board of Directors. Pursuant to the terms of the Stock Option
Plan, any director, officer or employee of the Company or its
affiliates is eligible to participate. Subject to OTS regulation
and policy, the Stock Option Committee will determine to whom the
awards will be granted, in what amounts, and the period over
which such awards will vest. In granting awards under the Stock
Option Plan, the Committee considers, among other things,
position and years of service, value of the individual's services
to the Company and the Bank and the added responsibilities of
such individuals as employees, directors and officers of a public
company.
Stock Options
All stock options will be exercisable in five equal annual
installments of 20% commencing with the vesting of the first
installment one year from the date of grant, and succeeding
installments on each anniversary of the date of grant. If an
individual to whom an option or right was granted ceases to
maintain continuous service for any reason (excluding death or
disability, and termination of employment by the Company or any
affiliate for cause), such individual may, but only for a three
month period immediately following cessation of continuous
service and in no event after the expiration date of such option
or right, exercise such option or right to the extent that such
individual was entitled to exercise such option or right at the
date of cessation. If an individual to whom an option or right
was granted ceases to maintain continuous service by reason of
death or disability, then, unless the Committee provides
otherwise in the instrument evidencing the grant, all options and
rights granted and not fully exercisable shall become exercisable
in full upon the happening of such event and shall remain
exercisable in the event of death for the period described below
and in the event of disability for a period of one year following
such date. In the event of the death of an individual while in
the continuous service of the Company or an affiliate or within
three months of termination of employment or service, the person
to whom any option or right is transferred by will or the laws of
descent and distribution, may exercise such option or right but
only to the extent such individual was entitled to exercise such
option or right immediately prior to his death.
Following the disability or death of any individual who has
received an option, the Committee may, upon request by the option
holder, elect to pay to the holder an amount of cash equal to the
amount by which the market value of the shares covered by the
option on the date of termination of employment or service
exceeds the exercise price, multiplied by the number of shares
with respect to which such option is properly exercised. If the
continuous service of an individual to whom an option or right
was granted by the Company is terminated for cause, all rights
under such option or right shall expire immediately upon the
effective date of such termination.
The exercise price for the purchase of shares subject to a
stock option may not be less than 100% of the market value of the
shares on the date of grant. The exercise price must be paid in
full in cash or shares of Common Stock, or a combination of both.
Subject to stockholder approval of the Stock Option Plan, the
Committee intends to provide for the grant of a non-qualified
stock option to purchase 760, 400, 700, 400, 400 and 400 shares
of Common Stock to directors Francisco, Rockefeller, Salmon,
Ferraro, LaCoppola and Symolon, respectively.
<PAGE>
Limited Stock Appreciation Rights
The Committee may grant Limited Rights simultaneous with the
grant of any option. A Limited Right gives the option holder the
right, upon a change in control of the Company or the Bank, to
receive the excess of the market value of the shares represented
by the Limited Rights on the date exercised over the exercise
price. Limited Rights generally will be subject to the same
terms and conditions and exercisable to the same extent as stock
options, as described above. Payment upon exercise of a Limited
Rights will be in cash, or in the event of a change in control in
which pooling accounting treatment is a condition to the
transaction, for shares of stock of the Company, or in the event
of a merger transaction, for shares of the acquiring corporation
or its parent, as applicable.
Limited Rights may be granted at the time of, and must be
related to, the grant of a stock option. The exercise of one
will reduce to that extent the number of shares represented by
the other. If a Limited Rights is granted with and related to an
Incentive Stock Option the Limited Rights must satisfy all the
restrictions and limitations to which the related Incentive Stock
Option is subject.
Dividend Equivalent Rights
Dividend equivalent rights may also be granted at the time
of the grant of a stock option. Dividend equivalent rights
entitle the option holder to receive an amount of cash at the
time that certain extraordinary dividends are declared equal to
the amount of the extraordinary dividend multiplied by the number
of options that the person holds. For these purposes, an
extraordinary dividend is defined under the Stock Option Plan as
any dividend paid on shares of Common Stock where the rate of
dividend exceeds the Bank's weighted average cost of funds on
interest-bearing liabilities for the current and preceding three
quarters.
Reload Options
Reload options may also be granted at the time of the grant
of a stock option. Reload options entitle the option holder, who
has delivered shares that he or she owns as payment of the
exercise price for option stock, to a new option to acquire
additional shares equal in amount to the shares he or she has
traded in. Reload options may also be granted to replace option
shares retained by the employer for payment of the option
holder's withholding tax. The option price at which additional
shares of stock can be purchased by the option holder through the
exercise of a reload option is equal to the market value of the
previously owned stock at the time it was surrendered to the
employer. The option period during which the reload option may
be exercised expires at the same time as that of the original
option that the holder has exercised in which market value
consideration is received in exchange for such issuance.
Effect of Adjustments
Shares as to which awards may be granted under the Stock
Option Plan, and shares then subject to awards, will be adjusted
by the Stock Option Committee in the event of any merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares or other change in
the corporate structure of the Company.
In the case of any merger, consolidation or combination of
the Company with or into another holding company or other entity,
whereby either the Company is not the continuing holding company
or its outstanding shares are converted into or exchanged for
securities, cash or other property, or any combination thereof,
any individual to whom a stock option or Limited Rights has been
granted at least six months prior to such event will have the
right (subject to the provisions of the Stock Option Plan and any
applicable vesting period) upon exercise of the option or Limited
Rights to an amount equal to the excess of fair market value on
the date of exercise of the consideration receivable in the
merger, consolidation or combination with respect to the shares
covered or represented by the stock option or Limited Rights over
the exercise price of the option multiplied by the number of
shares with respect to which the option or Limited Rights has
been exercised.
<PAGE>
Amendment and Termination
The Board may at any time, subject to OTS regulations and
policy, amend, suspend or terminate the Stock Option Plan or any
portion thereof, provided, however, that no such amendment,
suspension or termination shall impair the rights of any
individual, without his consent, in any Award made pursuant to
the Plan. Unless previously terminated, the Stock Option Plan
shall continue in effect for a term of ten years, after which no
further awards may be granted under the Stock Option Plan.
Federal Income Tax Consequences
Under present federal income tax laws, awards under the
Stock Option Plan will have the following consequences:
(1) The grant of an Award, by itself, will neither result in the
recognition of taxable income to the Individual nor entitle the
Company to a deduction at the time of such grant.
(2) The exercise of a stock option which is an "Incentive Stock
Option" within the meaning of Section 422 of the Code will
generally not, by itself, result in the recognition of taxable
income to the Individual nor entitle the Company to a deduction
at the time of such exercise. However, the difference between
the exercise price and the fair market value of the option shares
on the date of exercise is an item of tax preference which may,
in certain situations, trigger the alternative minimum tax. The
alternative minimum tax is incurred only when it exceeds the
regular income tax. The alternative minimum tax will be payable
at the rate of 26% to the first $175,000 of "ordinary income" in
excess of $33,750 (single person) or $45,000 (married person
filing jointly). This tax applies at a flat rate of 28% of so
much of the taxable ordinary income in excess of $175,000. The
alternative minimum tax will be payable at a maximum rate of 20%
on net capital gain. If a taxpayer has alternative minimum
taxable income in excess of $150,000 (married persons filing
jointly) or $112,500 (single person), the $45,000 or $33,750
exemptions are reduced by an amount equal to 25% of the amount by
which the alternative minimum taxable income of the taxpayer
exceeds $150,000 or $112,500, respectively. The Individual will
recognize long term capital gain or loss upon the resale of the
shares received upon such exercise, provided the Individual holds
the shares for more than eighteen months from the date of
exercise.
(3) The sale of an Incentive Stock Option share prior to the
applicable holding period, i.e., the longer of two years from
the date of grant of the Incentive Stock Option or one year from
the date of exercise, will cause any gain to be taxed at ordinary
income tax rates, with respect to the spread between the exercise
price and the fair market value of the share on the date of
exercise and at short term capital gains rates with respect to
any post exercise appreciation in the value of the share.
(4) The sale of an Incentive Stock Option share after one year
from the date of exercise, will generally result in mid or
long term capital gain or loss.
(5) The exercise of a stock option which is not an Incentive
Stock Option, i.e., a non-qualified stock option, will result in
the recognition of ordinary income on the date of exercise in an
amount equal to the difference between the exercise price and the
fair market value on the date of exercise of the shares acquired
pursuant to the stock option.
(6) The exercise of a Limited Rights will result in the
recognition of ordinary income by the individual on the date of
exercise in an amount of cash, and/or the fair market value on
that date of the shares, acquired pursuant to the exercise.
<PAGE>
(7) Reload options are of the same type (nonstatutory or
incentive stock option) as the option that the option holder
exercised. Therefore, the tax consequences of the reload option
are determined under the applicable tax rules for non-qualified
or incentive stock options.
(8) The receipt of a cash payment pursuant to a dividend
equivalent right will result in the recognition of
compensation or self-employment income by the recipient.
(9) The Company will be allowed a deduction at the time, and in
the amount of, any ordinary income recognized by the Individual
under the various circumstances described above, provided that
the Company meets its federal withholding tax obligations.
Awards Under the Stock Option Plan
The following table presents information with respect to the
number of awards of options which are intended to be granted
under the Stock Option Plan, subject to stockholder approval of
the Stock Option Plan, to the Company's Chief Executive Officer,
to all executive officers as a group, to directors who are not
executive officers of the Company and the Bank as a group, and to
non-executive employees as a group. All options will be granted
at the fair market value on the date of grant.
<TABLE>
STOCK OPTION PLAN
Dollar
Name and Position Value Number of Units
- -----------------------------------------------------------------
<S> <C> <C>
Gordon E. Coleman, Chief Executive Officer $ - 3,800
Executive Officers as a Group (3 persons) - 3,800
Non-Executive Director Group (6 persons) - 3,060
Non-Executive Employer Group (6 persons) - -
</TABLE>
__________________________
(1) Any value realized will be the difference between the
exercise price and the market value upon exercise. Since the
options have not been granted, there is no current value.
Subject to the conditions of the Stock Option Plan described
herein, the proposed awards to be made in 1998 described herein
will vest in five equal annual installments with the first
installment generally vesting one year from the date of
stockholder ratification of the Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE ADOPTION OF THE STOCK OPTION PLAN.
PROPOSAL III--ADOPTION OF THE 1998 RECOGNITION AND RETENTION PLAN
General
Establishment and implementation of the RRP are subject to
approval by stockholders, and the satisfaction of certain other
conditions.
Subject to ratification by stockholders, the Board of the
Company has adopted a Recognition and Retention Plan (the "RRP")
as a method of providing key officers and directors with a
proprietary interest in the Company in a manner designed to
encourage such individuals to remain with the Company. Pursuant
to the RRP, restricted stock
<PAGE>
awards covering 6,080 shares or 4% of the shares issued in the
Stock Conversion, have been reserved for issuance under the RRP.
Attached as Appendix B to this Proxy Statement is the
complete text of the form of the RRP. The principal features of
the RRP are summarized below.
Principal Features of the RRP
The RRP provides for the award of shares of Common Stock
("RRP Shares") subject to the restrictions described below. Each
award under the RRP will be made on terms and conditions,
consistent with the RRP.
The RRP is administered by a committee of the Board
consisting of either (i) at least two "non-employee directors"
(as defined in the RRP) or (ii) the entire Board. (the "RRP
Committee"), The members of the RRP Committee shall be appointed
by the Board. Currently, the RRP Committee is comprised of the
entire Board of Directors. The RRP Committee will select the
recipients and terms of awards pursuant to the RRP. Pursuant to
the terms of the RRP, any director, officer or employee of the
Company or its affiliates may be selected by the RRP Committee to
participate in the RRP. In determining to whom and in what
amount to grant awards, the RRP Committee considers the position
and responsibilities of eligible employees, the value of their
services to the Company and the Bank and other factors it deems
relevant. As of June 12, 1998, there were six non-employee
directors eligible to participate in the RRP.
The RRP provides that RRP Shares used to fund awards under
such plan may be either authorized but unissued shares or issued
shares heretofore or hereafter reacquired by the Company in the
open market and held as treasury shares. To the extent the
Company utilizes authorized but unissued shares to fund the RRP,
the interests of the current stockholders will be diluted by
approximately 3.83%.
RRP Shares to be awarded in 1998 to directors, officers and
employees will vest in five equal annual installments, with the
first installment vesting one year from the date of shareholder
approval, in each case subject to the conditions described below.
RRP Shares are subject to forfeiture if the recipient fails to
remain in the continuous service (as defined in the RRP) as an
employee, officer, or director of the Company or the Bank for a
stipulated period (the "restricted period").
In the event a recipient ceases to maintain continuous
service with the Company or the Bank by reason of death or
disability, RRP Shares still subject to restrictions will vest
and be free of these restrictions. In the event of termination
for any other reason, all nonvested shares will be forfeited and
returned to the Company. Prior to vesting of the nonvested RRP
shares, a recipient will have the right to vote the nonvested RRP
Shares which have been awarded to the recipient and will receive
any dividends declared on such RRP Shares.
Effect of Adjustments
Restricted stock awarded under the RRP will be adjusted by
the RRP Committee in the event of a reorganization,
recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or other change in
corporate structure.
Federal Income Tax Consequences
Holders of restricted stock will recognize ordinary income
on the date that the shares of restricted stock are no longer
subject to a substantial risk of forfeiture, in an amount equal
to the fair market value of the shares on that date. In certain
circumstances, a holder may elect to recognize ordinary income
and determine such fair market value on the date of the grant of
the restricted stock. Holders of restricted stock will also
recognize ordinary income equal
<PAGE>
to their dividend or dividend equivalent payments when such
payments are received. Generally, the amount of income
recognized by individuals will be a deductible expense for tax
purposes by the Bank.
Amendment to the RRP
The Board of Directors of the Company may at any time,
subject to OTS regulations and policy, amend, suspend or
terminate the RRP or any portion thereof, provided, however, that
no such amendment, suspension or termination shall impair the
rights of any award recipient, without his consent, in any award
therefore made pursuant to the RRP.
Awards Under the RRP
The following table presents information with respect to the
number of awards of restricted stock which are intended to be
granted under the RRP, subject to stockholder approval of the
RRP, to the Company's Chief Executive Officer, to all executive
officers as a group, to directors who are not executive officers
of the Company and the Bank as a group and to all non-executive
employees as a group. Subject to stockholder ratification of the
RRP, the Committee intends to provide for the award of 304 and
304 shares of restricted stock to directors Francisco and
Rockefeller, respectively.<PAGE>
<TABLE>
RECOGNITION AND RETENTION PLAN
Dollar Shares of
Name and Position Value Restricted Stock
- ------------------------------------------------------------------
<S> <C> <C>
Gordon E. Coleman, Chief Executive Officer $19,471 1,520
Executive Officers as a Group (3 persons) 24,339 1,900
Non-Executive Director Group (6 persons) 7,788 608
Non-Executive Employer Group (6 persons) - -
</TABLE>
________________________
(1) Assumes an aggregate market value of the shares of
restricted stock based on the closing sales price of the
Company's Common Stock of $12.81 per share on June 12, 1998.
PROPOSAL IV--RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has approved the
engagement of Harvazinski & Montanye LLP, to be the Company's
auditors for the 1998 fiscal year, subject to the ratification of
the engagement by the Company's stockholders. At the Meeting,
stockholders will consider and vote on the ratification of the
engagement of Harvazinski & Montanye LLP, for the Company's
fiscal year ending March 31, 1998. A representative of
Harvazinski & Montanye LLP, is expected to attend the Meeting to
respond to appropriate questions and to make a statement if he so
desires.
In order to ratify the selection of Harvazinski & Montanye
LLP, as the auditors for the 1999 fiscal year, the proposal must
receive at least a majority of the votes cast, either in person
or by proxy, in favor of such ratification. The Board of
Directors recommends a vote "FOR" the ratification of Harvazinski
& Montanye LLP, as auditors for the 1999 fiscal year.
<PAGE>
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the proxy materials
for next year's Annual Meeting of Shareholders, any shareholder
proposal to take action at such meeting must be received at the
Company's executive office, 26 Church Street, Canajoharie, New
York 13126, no later than February 19, 1999. Any such proposals
shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934.
OTHER MATTERS
The Board of Directors is not aware of any business to come
before the Annual Meeting other than the matters described above
in the Proxy Statement. However, if any matters should properly
come before the Annual Meeting, it is intended that holders of
the proxies will act as directed by a majority of the Board of
Directors, except for matters related to the conduct of the
Annual Meeting, as to which they shall act in accordance with
their best judgment.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may
solicit proxies personally or by telegraph or telephone without
additional compensation.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1997, WILL BE FURNISHED WITHOUT
CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN OR
TELEPHONIC REQUEST TO GORDON E. COLEMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, LANDMARK FINANCIAL CORP., 26 CHURCH STREET,
CANAJOHARIE, NEW YORK 13126, OR CALL AT 518/673-2012.
BY ORDER OF THE BOARD OF DIRECTORS
Corporate Secretary
Canajoharie, New York
June 19, 1998
<PAGE>
REVOCABLE PROXY
LANDMARK FINANCIAL CORP.
ANNUAL MEETING OF SHAREHOLDERS
July 22, 1998
The undersigned hereby appoints the official proxy committee
consisting of the Board of Directors with full powers of
substitution to act as attorneys and proxies for the undersigned
to vote all shares of Common Stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of
Shareholders ("Annual Meeting") to be held at the Fort Rensselaer
Club, 4 Moyer Street, Canajoharie, New York on July 22, 1998, at
11:00 a.m. Local Time. The official proxy committee is
authorized to cast all votes to which the undersigned is entitled
as follows:
VOTE
FOR WITHHELD
--- --------
(except as
marked to
the contrary
below)
1. The election as Directors of all nominees / / / /
listed below each to serve for a
three-year term
INSTRUCTION: To withhold your vote for one
or more nominees, write the name of the nominee(s)
on the line(s) below.
- -------------------------------
- -------------------------------
FOR AGAINST ABSTAIN
2. The adoption of the Landmark / / / / / /
Financial Corp. 1998 Stock Option
Plan.
3. The adoption of the Landmark / / / / / /
Financial Corp. 1998 Recognition
and Retention Plan.
4. The ratification of Harvazinski & / / / / / /
Montanye L.L.P. as the Company's
independent auditor for the fiscal
year ended March 31, 1999.
The Board of Directors recommends a vote "FOR" each of the listed
proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS
STATED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH ANNUAL
MEETING, THIS PROXY WILL BE VOTED AS DIRECTED BY A MAJORITY OF
THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
ANNUAL MEETING.
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual
Meeting or at any adjournment thereof and after notification to
the Secretary of the Company at the Annual Meeting of the
shareholder's decision to terminate this proxy, then the power of
said attorneys and proxies shall be deemed terminated and of no
further force and effect. This proxy may also be revoked by
sending written notice to the Secretary of the Company at the
address set forth on the Notice of Annual Meeting of
Shareholders, or by the filing of a later proxy prior to a vote
being taken on a particular proposal at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to
the execution of this proxy of notice of the Annual Meeting, a
proxy statement dated June 19, 1998, and audited financial
statements.
Dated: -----------------, 1998
Check Box if You Plan
to Attend Meeting / /
- ------------------------- -------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
- ------------------------- -------------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
Please sign exactly as your name appears on this card. When
signing as attorney, executor, administrator, trustee or
guardian, please give your full title.
- -----------------------------------------------------------------
Please complete and date this proxy and return it promptly
in the enclosed postage-prepaid envelope.
- -----------------------------------------------------------------
