Letterhead of Gouverneur Bancorp, Inc.
January 11, 2000
Dear Fellow Stockholder:
On behalf of our Board of Directors, I cordially invite you to attend
the first Annual Meeting of Stockholders of Gouverneur Bancorp, Inc. The meeting
will be held at the main office of Gouverneur Savings and Loan Association, 42
Church Street, Gouverneur, New York, on Tuesday, February 15, 2000 at 3:00 p.m.
At the meeting, stockholders will be asked to elect three members to our Board
of Directors. Please read the accompanying proxy statement carefully before you
decide how to vote.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY RECOMMENDED THAT STOCKHOLDERS
VOTE "FOR" THE THREE NOMINEES DESCRIBED IN THE PROXY STATEMENT.
We appreciate your continued support of Gouverneur Bancorp, Inc. and
its subsidiary, Gouverneur Savings and Loan Association.
Sincerely,
/s/ RICHARD F. BENNETT
-----------------------------------------
Richard F. Bennett
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
GOUVERNEUR BANCORP, INC.
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42 Church Street
Gouverneur, New York 13642
(315) 287-2600
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PROXY STATEMENT
WITH NOTICE OF SPECIAL MEETING
GENERAL INFORMATION AND NOTICE OF MEETING
Gouverneur Bancorp, Inc., the holding company for Gouverneur Savings
and Loan Association, will be holding its first annual meeting of stockholders
on February 15, 2000. The meeting will be held at the main office of Gouverneur
Savings and Loan Association, 42 Church Street, Gouverneur, New York 13642,
beginning at 3:00 p.m. At the meeting, we will ask stockholders to vote on the
election of three members to our Board of Directors.
The Board of Directors is soliciting your proxy to vote at the meeting
and at any adjournments of the meeting. Please complete the enclosed proxy card
and return it in the enclosed return envelope as soon as possible. Each of our
stockholders has one vote for each share of common stock owned. On the election
of directors, each stockholder may vote for up to three directors, but may not
cast more votes for any one nominee than the number of shares owned by that
stockholder.
Stockholders of record on December 23, 1999 are entitled to receive
notice of the meeting and are entitled to vote at the meeting, or at an
adjournment of the meeting. This is known as the "Record Date." Please read this
Proxy Statement carefully before you decide how to vote. We encourage you to
return the proxy card even if you plan to attend the meeting. This will save us
additional expense in soliciting proxies and will ensure that your vote is
counted. You may still vote in person at the meeting even if you return the
proxy card.
On the Record Date, there were 2,384,040 shares of Gouverneur Bancorp,
Inc. common stock, par value $.01 per share, issued and outstanding.
In this Proxy Statement, the terms "Company," "we," "our," "us," or
similar terms refer to Gouverneur Bancorp, Inc. References to the "Bank" mean
Gouverneur Savings and Loan Association, our wholly owned subsidiary.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
THREE NOMINEES DESCRIBED IN THIS PROXY STATEMENT.
This Proxy Statement and Notice of Special Meeting is first being made
available to stockholders on or about January 11, 2000.
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE US THE EXPENSE OF FURTHER
REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. WE HAVE ENCLOSED A SELF
ADDRESSED ENVELOPE WHICH YOU CAN USE TO RETURN YOUR PROXY CARD. NO POSTAGE IS
REQUIRED IF YOU MAIL THE ENVELOPE IN THE UNITED STATES.
<PAGE>
VOTING AND PROXY CARDS
If you sign and return a proxy card in the form which the Board of
Directors is soliciting so we receive it before the polls close at the meeting,
your votes will be cast as you have marked on the proxy card, unless you revoke
your proxy before the polls close. If you properly sign and return our proxy
card but you do not mark on it how you want to vote on any matter, then the
Board of Directors as your proxy will vote your shares in favor of the nominees
for director named in this Proxy Statement. We do not know of any other matters
that stockholders may present for a vote at the meeting. If any stockholder
properly presents any other matter for a vote, including a proposal to adjourn
the meeting, the Board of Directors as the holder of your proxy may vote on
those matters based on its judgment.
If you sign and return the enclosed proxy card, you may revoke it at
any time before the polls are closed. If you want to revoke your proxy card, you
must: (i) sign and deliver a written notice to the Secretary of the Company, at
or before the meeting, dated after the date of your proxy stating that you want
to revoke the proxy, (ii) sign and deliver to the Secretary of the Company at or
before the meeting another proxy card relating to the same shares with a later
date, or (iii) attend the meeting and vote in person. Attending the meeting does
not automatically revoke a proxy unless you also take one of the three actions
described in the prior sentence. Any written notice revoking a proxy must be
delivered to Charles Van Vleet, Secretary, Gouverneur Bancorp, Inc., 42 Church
Street, Gouverneur, New York 13642.
If 1,192,021 shares of our common stock are present in person or
represented by proxy at the meeting, there will be a quorum which will allow the
meeting to commence. Once a quorum is present, the meeting can continue even if
some stockholders leave the meeting. If a stockholder is present in person or by
proxy but abstains from voting any shares, or if a broker submits a proxy for
shares but does not vote those shares, then the shares are counted as present
for purposes of determining a quorum.
A plurality of the votes cast will determine who will be elected as
director. Our bylaws provide that, at an annual meeting, a stockholder may
nominate a person for election as a director only if advance notice of intent to
nominate the person is given to the Company. The notice must be received by the
Company at least five days before the date of the meeting. Our bylaws require
similar advance notice if a stockholder wants to make any other proposal at an
annual meeting of stockholders.
IMPORTANT INFORMATION FOR STOCKHOLDERS WHOSE STOCK IS HELD IN STREET NAME
If you hold your stock in street name, which means that your stock is
held for you in a brokerage account and is not registered on our stock records
in your own name, please tell your broker as soon as possible how to vote your
shares to make sure that your broker votes your shares before the polls close at
the meeting. If your stock is held in street name, you do not have the direct
right to vote your shares or revoke a proxy for your shares unless your broker
gives you that right in writing.
PRINCIPAL OWNERS OF OUR COMMON STOCK
The following table provides you with information, to the best of our
knowledge, about stock ownership by directors, executive officers, and any
person or group known by us to own beneficially more than 5% of our outstanding
common stock. The information is as of the Record Date. We know of no person or
group, except as listed below, who beneficially owned more than 5% of our common
stock as of the Record Date. Information about persons or groups who own
beneficially more than 5% of our common stock is based on filings with the
Securities and Exchange Commission on or before the Record Date.
2
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<TABLE>
<CAPTION>
Percent of total
Shares Beneficially Owned shares
Beneficial Owner at December 23, 1999(1) outstanding(2)
- ---------------- ------------------------- ----------------
<S> <C> <C>
Cambray Mutual Holding Company 1,311,222 55%
42 Church Street, Gouverneur, New York 13642
Richard F. Bennett, President and Chief Executive 19,600(3) *
Officer and Director
Charles E. Graves, Director and Chairman of Board 2,000 *
Richard E. Jones, Director 2,000(4) *
Frank Langevin, Director 30,000 1.26%
Robert J. Leader, Director 32,000 1.34%
Timothy J. Monroe, Director 2,000 *
Joseph C. Pistolesi, Director 4,000 *
Larry A. Straw, Director 15,000 *
Directors and Executive Officers of the Company, as 106,600 4.47%
a group (9 persons)
</TABLE>
- --------------------------
(1) Amount includes shares held directly and other shares with respect to which
a person may be deemed to have sole or shared voting or investment power. Amount
shown excludes 85,825 shares owned by our Employee Stock Ownership Plan, which
owns 3.6% of our outstanding common stock. None of the shares owned by the ESOP
have been allocated to the accounts of employees, so employees generally have
the right to vote all shares owned by the ESOP in proportion to their last
year's compensation.
(2) Based upon 2,384,040 shares outstanding on the Record Date. An asterisk
("*") means that the percentage is less than 1%.
(3) Includes 6,600 shares owned by Mr. Bennett's spouse's Individual Retirement
Account.
(4) Includes 1,000 shares owned by Mr. Jones' spouse.
- --------------------------
THE ELECTION OF DIRECTORS
Our Board of Directors has eight members. Directors generally are
elected for three year terms. At this meeting, stockholders will elect three
directors. The Board of Directors has nominated Richard F. Bennett, Timothy J.
Monroe and Joseph C. Pistolesi for election as directors at the meeting.
Stockholders elect directors by a plurality of the votes cast, which means that
the three nominees with the highest vote totals will be elected. There is no
cumulative voting in the election of directors, which means that no stockholder
may cast more votes in favor of any one nominee than the number of shares owned
of record by that stockholder.
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Each person who the stockholders elect at the meeting will serve for a
three year term of office which expires at the annual meeting of stockholders to
be held in the year 2003 and until their successors are elected and qualify.
Each of the nominees named below has consented to being named in this Proxy
Statement and to serve, if elected. If any nominee becomes unavailable for
election for any presently unforeseen reason, the Board of Directors, as the
holder of your proxy, will have the right to use its discretion to cast your
votes for a substitute. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE IN FAVOR OF THESE THREE NOMINEES.
THE BOARD OF DIRECTORS AND NOMINEES
We are providing the following information regarding the nominees and
other directors who will continue in office after the meeting. There are no
arrangements or understandings by which any director was selected to serve as
such. All directors of the Company are also directors of the Bank. There are no
family relationships among directors and executive officers of the Company and
the Bank. Ages are as of the Record Date. All directors and nominees have been
directors since the Company was formed in March 1999, except for Mr. Monroe and
Mr. Pistolesi who were both elected as directors in May 1999.
NOMINEES
RICHARD F. BENNETT, age 55, has been the President and Chief Executive
Officer of the Bank since 1988 and has held the same positions with the Company
since its formation in March 1999. Mr. Bennett joined the Bank in December 1986.
Mr. Bennett is a Director of the Community Bankers Association of New York State
and was formerly chairman of its Regional Group II. He is also the Treasurer and
Chairman of the Finance Committee of the Gouverneur EJ Noble Hospital. Mr.
Bennett was a member of the Gouverneur Rotary Club and has served as a member of
the board of directors of a local non-profit organization which provides
rehabilitation financing for low income housing.
TIMOTHY J. MONROE, age 47, is a veterinarian in private practice in
Gouverneur and the proprietor of the Northland Veterinary Hospital. Mr. Monroe
is also an elected councilman on the Town Council in Gouverneur, Chairman of the
Board of Gouverneur EJ Noble Hospital, a Trustee of the St. James Parish Council
and a member of the Board of Directors of a local public television station.
JOSEPH C. PISTOLESI, age 51, is the owner and operator of the Clearview
Restaurant and the Clearview Motel in Gouverneur. He is also the owner of
Pistolesi Rentals, a company engaged in the ownership and rental real estate in
the Gouverneur area. Mr. Pistolesi is a member and the former President of the
St. Lawrence County Hotel and Restaurant Association, and is also a wrestling
coach at the local high school in Gouverneur.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE IN FAVOR OF THESE THREE NOMINEES
CONTINUING DIRECTORS
The following persons are existing directors whose terms of office will
continue after the meeting. Ages are as of the Record Date.
CHARLES E. GRAVES, age 74, is the former President and Chief Executive
Officer of the Bank, a position which he held from 1966 until his retirement in
1988. Mr. Graves serves as a Director of the Gouverneur Foundation, Inc., the
Gouverneur Historical Association and as a Vice President and Director of the
Gouverneur and St. Lawrence County Fair. His term as a director of the Company
expires in 2002.
RICHARD E. JONES, age 58, has been the owner and operator of J&H Feed &
Farm Store since 1978. He is also active in the Gouverneur Elks Lodge. His term
as a director of the Company expires in 2001.
4
<PAGE>
ROBERT J. LEADER, age 66, has been a Partner in Case & Leader LLP, a
law firm in Gouverneur, New York, since 1966. Mr. Leader has served as Chairman
of the Board (and currently as Trustee) of the Gouverneur EJ Noble Hospital;
Secretary and Trustee of North Country Hospitals; President (and currently as
Director) of Kinney Nursing Home Co., Inc.; and as a Director of B-S Industrial
Contractors, Inc. Mr. Leader has served as counsel to the Villages of Gouverneur
and Herman; the Towns of Fowler, Pitcairn, Rossie and Edwards and the Gouverneur
Central School. Mr. Leader is a member and President of the Gouverneur Rotary
Club and President of the Gouverneur Development Corporation. His term as a
director of the Company expires in 2002.
FRANK LANGEVIN, age 66, was, until his retirement in 1993, the owner
and operator of P.A. Langevin Inc., a commercial buildings contracting company.
Mr. Langevin is a Director of the Gouverneur Country Club and was a member of
the Gouverneur Board of Education for 17 years. His term as a director of the
Company expires in 2001.
LARRY A. STRAW, age 49, has been a Project Engineer of Cives, Inc., a
steel fabrication company, since August 1999. He was previously Vice President
and Division Manager of the Balmat Mining Division of Zinc Corporation of
America. Mr. Straw has been a member of the Board of Trustees of the Gouverneur
EJ Noble Hospital since 1989. His term as a director of the Company expires in
2002.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The Board of Directors elects executive officers for one year terms and
they serve at the pleasure of the Board. Provided below is certain information
regarding the executive officer of the Company and the Bank who is not a
director. His age is as of the Record Date.
ROBERT TWYMAN, age 52, has been the Chief Financial Officer of the Bank
and the Company since October 1999. Mr. Twyman previously held the position of
Vice President and Comptroller of First National Bank of Northern New York from
March 1989 until October 1999.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
Our Board of Directors held four meetings during fiscal 1999. The Board
of Directors has an Audit Committee and a Personnel Committee, neither of which
held any meetings in fiscal 1999. Our Board of Directors does not presently have
a nominating committee.
Our Audit Committee consists of directors Jones (Chairman), Leader,
Monroe, Pistolesi and Straw. The committee functions on matters related to the
accounting, bookkeeping and auditing functions of the Company and meets
periodically with the Company's independent public accountants to arrange for
the audit of the Company's annual financial statements and to review and
evaluate recommendations made during the annual audit. The Audit Committee also
reviews, approves and supervises the internal auditing procedures of the
Company.
Our Personnel Committee consists of directors Jones, Langevin, Leader
(Chairman) and Straw. The committee functions on compensation matters for the
Company. The committee is also responsible for overseeing the Company's
activities related to the Employee Stock Ownership Plan, and for administering
and making awards under the Stock Option Plan and the Management Recognition
Plan.
COMPENSATION
DIRECTORS' COMPENSATION
Directors who are not also employees of the Company or the Bank or any
of their subsidiaries receive an annual retainer of $4,800, plus $400 for each
Bank Board of Directors' meeting and $100 for each committee meeting they
attend. There is no separate compensation paid for meetings of the Board of
Directors of the Company. Directors are also eligible to participate in the
5
<PAGE>
Company's compensation plans. All of the directors of the Company are also
directors of the Bank.
EXECUTIVE OFFICER COMPENSATION
None of our officers receives compensation directly from the Company.
Their compensation is paid by the Bank. We do not expect that we will pay
separate compensation to officers or employees unless and until we engage in
material business activities separate from the Bank.
The following table includes information about compensation paid Mr.
Bennett, who was the only executive officer of the Company or the Bank with
total salary and bonus in excess of $100,000 in fiscal 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------
Annual Compensation
---------------------------------------------
Other Annual All Other
Salary Bonus Compensation(1) Compensation(2)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard F. Bennett, 1999 $105,000 $8,157 None $ 3,468
President and Chief 1998 $ 81,569 $8,846 None $ 2,635
Executive Officer 1997 $ 77,760 None None $ 242
- --------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------
(1) Mr. Bennett did not receive additional benefits or perquisites totaling more
than 10% of salary and bonus.
(2) Other Compensation includes: (i) the Bank's matching contribution under its
401(k) Plan of $2,786 in fiscal 1999, $1,656 in fiscal 1998 and $242 in fiscal
1997; and life insurance premium payments of $682 in fiscal 1999 and $979 in
fiscal 1998.
- --------------------------
EMPLOYEE BENEFIT PLANS
401(K) PLAN. The Bank maintains a tax-qualified savings and profit
sharing plan under Section 401(k) of the Internal Revenue Code. Salaried
employees with at least one year of service who are at least age 21 and have
completed at least 1,000 hours of service may make pretax salary deferrals and
after tax contributions under the 401(k) Plan. The Bank contributes 3% of base
salary for each employee participating in the 401(k) Plan without regard to any
employee matching contribution. Participating employees may make voluntary
contributions to the 401(k) Plan up to 15% of their base salary. The Bank may,
from time to time, make additional voluntary contributions. Employees are fully
vested in their salary deferrals and after tax contributions, and are gradually
vested in the Bank's contribution after one year of service and fully vested
after six years.
EMPLOYEE STOCK OWNERSHIP PLAN. In 1999, we established an Employee
Stock Ownership Plan ("ESOP"). When the Bank converted to the stock form of
ownership, the ESOP purchased 85,825 shares of our common stock. The Company
loaned $429,125 to the ESOP to purchase that stock. Substantially all employees
of the Bank or the Company who have attained age 21 and have completed one year
of service become participants in the ESOP.
The Company and the Bank intend to contribute to the ESOP enough money
to cover the payments due by the ESOP on the loan from the Company. The loan
requires annual principal and interest payments which repay the loan over 10
years. The loan permits optional pre-payment. The Company and the Bank may
contribute more to the ESOP than is necessary to repay the loan.
6
<PAGE>
The ESOP pledged the shares it purchased as collateral for the loan.
The ESOP allocates those shares among participants as the loan is repaid. If the
Bank repays the ESOP loan as scheduled, an equal number of shares per year will
be released for allocation over the ten year term of the loan. The ESOP
allocates shares among participants, as they are released from the lien of the
ESOP loan, generally based on each participant's share of total taxable
compensation for the year. Benefits generally vest at the rate of 20% per year
beginning after the participant's first year of service, with 100% vesting after
five years of service. Employees receive credit for service prior to the Bank's
mutual holding company reorganization for vesting purposes. Participants are
immediately vested upon termination of employment due to death, retirement at
age 65 or older, permanent disability or upon the occurrence of a change of
control. Forfeitures (shares allocated to an employee which are not yet vested
when such employee's employment terminates) will generally be reallocated among
remaining participating employees, in the same proportion as contributions, or
used to repay the ESOP loan. Vested benefits may be distributed in a single sum
or installment payments and are payable upon death, termination of employment or
attainment of age 65, subject to certain rights to elect to defer the
distribution of benefits.
HSBC Bank is the trustee for the ESOP. The ESOP has not yet allocated
any shares to employee accounts, but once that occurs, the trustee, subject to
its fiduciary duty, must vote all allocated shares held in the ESOP as the
employees to whom the shares have been allocated instruct the trustee. Allocated
shares for which no instructions are received and shares not yet allocated are
voted generally in the same proportion as allocated shares for which voting
instructions are received. Until the ESOP first allocates shares, employees
control the voting of the ESOP's shares generally based upon their relative last
year's compensation. The Personnel Committee of the Company oversees the
Company's activities related to the ESOP.
The ESOP may purchase additional shares of our stock in the future, in
the open market or otherwise, and may do so either with borrowed funds or with
cash dividends, employer contributions or other cash flow.
STOCK OPTION PLAN. The Stock Option Plan was approved by stockholders
at a special meeting held in October 1999. The Stock Option Plan provides for
awards to directors, executive officers and employees of the Company and the
Bank in the form of stock options, representing a right to purchase our common
stock. The plan permits the award of options to purchase up to $107,281 shares
of our common stock. The Personnel Committee may award either "incentive stock
options" as defined under Section 422 of the Internal Revenue Code, or stock
options not intended to qualify as such ("non-qualified options"). The term of
the stock options may not exceed ten years for incentive stock options, and
fifteen years for non-qualified options. Options can only be exercised before
they expire. No options may be granted after August 17, 2009, which is ten years
after the Board of Directors approved the plan. No options were awarded during
fiscal 1999. Upon stockholder approval of the plan in October 1999, each of the
seven non-employee directors of the Company and the Bank received an award of
4,500 options, and Mr. Bennett received an award of 26,750 options. The exercise
price of those options is $4.75 which represents the market value of the stock
on the date of the stockholder approval of that plan. The exercise price for
future awards of options will not be less than this market value.
The exercise price must be paid in full in cash or, if the Personnel
Committee permits, with the shares of our stock, or a combination of both. The
right to purchase option shares fully vests over a period of five years from the
date of the grant, subject to accelerated vesting upon death or disability of a
participant.
The plan provides that after a participant dies, the Personnel
Committee may permit options of a deceased participant to be settled in cash
instead of by the delivery of shares. An option will automatically terminate
when a participant is notified of termination for cause. Our Board of Directors
may amend, suspend or terminate the plan, but only after complying with any
applicable state and federal banking regulations.
MANAGEMENT RECOGNITION PLAN. The Management Recognition Plan ("MRP")
was approved by the stockholders at a special meeting held in October 1999. The
MRP permits the outright award of up to 42,912 shares of our common stock to
employees and directors of the Company, the Bank and related companies. The
recipient of an award is not required to make any payment to the Company or the
7
<PAGE>
Bank in exchange for the shares and as the award vests, the vested shares will
be the same as any other issued and outstanding shares of common stock of the
Company. No shares had been awarded as of the end of fiscal 1999. Upon
stockholder approval of the plan in October 1999, each of the seven non-employee
directors received an award of 1,800 MRP shares and Mr. Bennett received an
award of 10,500 MRP shares.
MRP awards are held by the trust until they vest. As an award vests,
the trustee distributes the shares to the participant and the shares are then
like all other issued and outstanding shares, without limits imposed by the MRP.
An individual with unvested shares may vote and participate in dividends on
those shares. The trustee will vote shares which have not yet been awarded in
the same proportions as unvested shares which have been awarded and voted. Each
participant who has an unvested award under the MRP may direct the response to
any tender offer, exchange offer or other made to shareholders with respect to
those shares. If no direction is given, the trustee will not tender or exchange
the shares. The trustee will generally tender or exchange shares which have not
yet been awarded in the same proportion as the directions received on awarded
but unvested shares.
The Board of Directors of the Company may amend, suspend or terminate
the MRP at any time, but no amendment or termination may affect outstanding
awards. In addition, federal or state banking regulations may require that
amendments be approved by stockholders. If the MRP is terminated, any remaining
assets of the MRP trust will be returned to the Company after making such
distributions as the Personnel Committee directs.
PENSION PLAN. Neither the Bank nor the Company maintains a defined
benefit pension plan for eligible employees.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In fulfillment of Securities and Exchange Commission requirements for
disclosure in proxy materials of the Personnel Committee's policies regarding
compensation of executive officers, the committee has prepared the following
report for inclusion in this proxy statement.
GENERAL POLICY CONSIDERATIONS. For fiscal 1999, the compensation of Mr.
Bennett, the sole executive officer that fiscal year, was determined by the
Personnel Committee of the Bank. The committee, in evaluating compensation for
Mr. Bennett, considered the nature of his responsibilities, length of service,
competitive salaries in banking and other industries, quality of performance,
the performance of the Bank officers and employees working under his
supervision, and special projects or unusual difficulties affecting work load
and performance. The Board also created bonus guidelines at the beginning of the
fiscal year which provided for the payment of bonuses to all employees,
including executive officers, if specified goals were met. Improved financial
performance is both an indirect compensation factor, as it affects base salary
decisions, and a direct factor, as it affects bonus levels. The committee also
considered the additional difficulties faced by Mr. Bennett as a result of
burdens placed upon him with respect to the reorganization of the Bank and the
Bank's plans for growth. The committee also evaluated the Bank's performance
during fiscal 1998.
This report is included herein at the direction of the members of the
Personnel Committee, directors Jones, Langevin, Leader, (Chairman) and Straw.
SHAREHOLDER RETURN PERFORMANCE GRAPH
No stock performance graph is included in this proxy statement because
the Company first issued stock on March 23, 1999 and thus an annual return graph
would be meaningless.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Personnel Committees of the Bank and the Company consist of
directors Jones, Langevin, Leader and Straw. None of these individuals is or has
been an officer or employee of the Company or the Bank, nor has any other
director of the Company or the Bank other than Messrs. Bennett and Graves. When
the Board of Directors functions on matters pertaining to the compensation of
Mr. Bennett, he does not participate in the deliberations or vote by the Board.
TRANSACTIONS WITH DIRECTORS AND OFFICERS.
The directors and the executive officers of the Bank maintain normal
deposit account relationships with the Bank on terms and conditions no more
favorable than those available to the general public. In the ordinary course of
business, the Bank may make loans to directors, officers and employees. All
loans to directors, executive officers and related parties are on substantially
the same terms, including interest rate and collateral, as the prevailing at the
same time for comparable loans to other customers and do not involve more than
normal risk of collectibility or present other unfavorable features.
Director Robert J. Leader is a Partner of the law firm of Case & Leader
LLP, which provides legal services to the Bank on a variety of lending,
litigation and other general banking matters. The total amount paid to Mr.
Leader by the Bank was approximately $50,891 during fiscal 1999, which
represents fees on most loan closings handled by Case & Leader LLP paid directly
by the Bank on behalf of the borrower.
SELECTION OF NEW ACCOUNTANTS
Effective January 6, 2000, the Executive Committee of the Board of
Directors of the Company, upon the recommendation of the Audit Committee,
approved Fust Charles Chambers LLP of Syracuse, New York to replace KPMG LLP as
the independent public accountants to audit the financial statements of the
Company for fiscal year 2000.
The Company and the Bank believe, and have been advised by KPMG LLP
that it concurs with such belief, that, for the years ended September 30, 1999
and September 30, 1998 (regarding the Bank only, as the Company was formed in
March 1999), the Company and the Bank and KPMG LLP did not have any disagreement
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which disagreement, if not resolved
to the satisfaction of KPMG LLP would have caused it to make reference in
connection with its report on the financial statements of the Company and the
Bank to the subject matter of the disagreement.
The report of KPMG LLP on the financial statements of the Company and
the Bank for the years ended September 30, 1999 and September 30, 1998 did not
contain an adverse opinion or a disclaimer of opinion, and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
A representative of Fust Charles Chambers LLP is expected to be present
at the meeting and will have an opportunity to make a statement if he or she
wishes to do so. We also expect that the representative will be available to
answer appropriate questions. It is not anticipated that a representative of
KPMG LLP will be present at the meeting.
OTHER BUSINESS
We have no reason to believe that any other business will be presented
at the meeting, but if any other business shall be presented, the Board of
Directors, as the holder of the proxies solicited by this Proxy Statement, will
vote on such matters in accordance with its judgment.
9
<PAGE>
GENERAL
We are distributing our Annual Report for fiscal 1999 with this Proxy
Statement to stockholders of record on the Record Date. The Annual Report is not
part of the proxy solicitation material.
If you submit a properly completed proxy card to the Company on the
form distributed with this Proxy Statement, it will be voted if received before
the voting is closed at the meeting. The proxy will be voted in the manner
directed on the proxy card. If the proxy card is signed and returned but no
directions are given, the proxy will be voted "FOR" the director nominees.
The cost of this proxy statement and the related proxy solicitation
will be borne by the Company. In addition, directors, officers and regular
employees of the Company and the Bank may solicit proxies personally, by
telephone or by other means without additional compensation. The Company will,
upon the request of brokers, dealers, banks and voting trustees, and their
nominees, who were holders of record of shares of the Company's capital stock or
participants in depositories on the Record Date, bear their reasonable expenses
for mailing copies of this Proxy Statement with Notice of Annual Meeting and the
form of proxy card to the beneficial owners of such shares. The Company has
retained the services of Regan & Associates, Inc., a firm experienced in the
solicitation of proxies on behalf of public companies, for a fee of $2,500 plus
expenses of not more than $1,250, to assist in the proxy solicitation process.
STOCKHOLDER PROPOSALS AT THE ANNUAL MEETING IN THE YEAR 2001
The Company's Board of Directors will establish the date for the 2001
Annual Meeting of Stockholders. In order for a stockholder to be entitled, under
the regulations of the Securities and Exchange Commission, to have a stockholder
proposal included in the Company's Proxy Statement for the 2001 meeting, the
proposal must be received by the Company at its principal executive offices, 42
Church Street, Gouverneur, New York 13642, Attention: Charles Van Vleet,
Secretary, at least 120 days in advance of the date in the year 2001 which
corresponds to the date in the year 2000 when we first release this proxy
statement to stockholders. The stockholder must also satisfy the other
requirements of SEC Rule 14a-8. Note that this filing requirement is separate
from the notice requirements described above regarding the advance notice that
is required before a stockholder is permitted to offer a proposal for a vote at
any stockholders' meeting.
THE COMPANY WILL FURNISH, WITHOUT CHARGE TO ANY STOCKHOLDER SUBMITTING
A WRITTEN REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL
1999 REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH
WRITTEN REQUEST SHOULD BE DIRECTED TO CHARLES VAN VLEET, SECRETARY, AT OUR
ADDRESS STATED ABOVE. THE FORM 10-K REPORT IS NOT A PART OF THE PROXY
SOLICITATION MATERIALS.
PLEASE SIGN, DATE AND MAIL YOUR PROXY NOW
Gouverneur, New York
January 11, 2000
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