SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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 Rule 14a-11(c) or Rule 14a-12
TROY FINANCIAL CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_________________________________________________________________________
5) Total fee paid:
_________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________________________________________
2) Form, Schedule or Registration Statement No.: __________________________
3) Filing Party: __________________________________________________________
4) Date Filed: ____________________________________________________________
<PAGE>
TROY FINANCIAL CORPORATION
[GRAPHIC OMITTED]
January 10, 2000
TO THE SHAREHOLDERS OF
TROY FINANCIAL CORPORATION:
You are cordially invited to attend the annual meeting of shareholders (the
"Annual Meeting") of Troy Financial Corporation ("Troy") to be held on Thursday,
February 10, 2000, at 10:00 a.m. Eastern Time, at The Century House, 997 New
Loudon Road, Route 9, Latham, NY 12110.
At the Annual Meeting, you will be asked: (i) to elect three directors,
each to serve for a three-year term and (ii) to transact such other business as
may properly come before the Annual Meeting or any adjournments of the meeting.
The Board of Directors unanimously recommends that you vote FOR the
election of all the Board's nominees for election as directors. We encourage you
to read the accompanying Proxy Statement, which provides information regarding
Troy and the matters to be voted on at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, you are requested to
complete, date, sign and return the enclosed proxy card in the enclosed postage
paid envelope.
Sincerely,
/s/ Daniel J. Hogarty, Jr.
-------------------------------
Daniel J. Hogarty, Jr.
Chairman, President and Chief
Executive Officer
<PAGE>
TROY FINANCIAL CORPORATION
32 SECOND STREET
TROY, NEW YORK 12180
(518) 270-3211
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 10, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Troy
Financial Corporation (the "Company") will be held at The Century House, 997 New
Loudon Road, Route 9, Latham, NY 12110 on February 10, 2000, at 10:00 a.m.,
Eastern Time, and at any adjournment thereof, for the following purposes, all of
which are more completely set forth in the accompanying Proxy Statement:
1. To elect three directors for a term of three years, or until their
successors have been elected and qualified;
2. To transact such other business as may properly come before the Annual
Meeting. Except with respect to procedural matters incident to the conduct of
the meeting, the Board of Directors is not aware of any other matters which
may properly come before the Annual Meeting.
Shareholders of the Company of record at the close of business on December
27, 1999 are entitled to notice of and to vote at the Annual Meeting and at any
adjournment thereof.
By Order of the Board of Directors
/s/ Daniel J. Hogarty, Jr.
----------------------------------------
Daniel J. Hogarty, Jr.
Chairman, President and Chief
Executive Officer
Troy, New York
January 10, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE
REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE
THEREOF.
<PAGE>
TROY FINANCIAL CORPORATION
32 SECOND STREET
TROY, NEW YORK 12180
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 10, 2000
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement, which is first being mailed on or about January 10,
2000, is furnished to shareholders of Troy Financial Corporation (the "Company")
in connection with the solicitation of proxies on behalf of the Board of
Directors to be used at the 2000 Annual Meeting of Shareholders (the "Annual
Meeting"). The Annual Meeting will be held at The Century House, 997 New Loudon
Road, Route 9, Latham, NY 12110 on February 10, 2000 at 10:00 a.m., Eastern
Time, and at any adjournment thereof. The Annual Meeting has been called for the
purposes set forth in the Notice of Annual Meeting.
The proxies solicited hereby, if properly signed and returned to the
Company and not revoked prior to their use, will be voted in accordance with the
instructions contained therein by a member of the law firm of Pattison, Sampson,
Ginsberg & Griffin, PC, which has been duly appointed by the Board of Directors
to vote such proxies. If no contrary instructions are given, each proxy will be
voted FOR the election of the nominees of the Board of Directors, and, upon the
transaction of such other business as may properly come before the Annual
Meeting, in accordance with the best judgment of the person appointed as proxy.
Any shareholder giving a proxy has the power to revoke it any time before
it is exercised by (i) filing with the Corporate Secretary of the Company
written notice thereof (Kevin M. O'Bryan, Senior Vice President and Secretary,
Troy Financial Corporation, 32 Second Street, Troy, New York 12180), (ii)
submitting a duly executed proxy bearing a later date, or (iii) appearing at the
Annual Meeting and giving the Corporate Secretary notice of his or her intention
to vote in person. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournment thereof and will not be used for any other meeting.
The securities which can be voted at the Annual Meeting consist of shares
of the Company's common stock, par value $0.0001 per share (the "Common Stock"),
with each share entitling its owner to one vote on each matter presented. The
close of business on December 27, 1999 has been fixed by the Board of Directors
as the record date for determination of shareholders entitled to notice of and
to vote at the Annual Meeting. The number of shares of Common Stock outstanding
on December 27, 1999 was 11,219,921. The presence, in person or by proxy, of a
majority of the total number of outstanding shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum at the Annual
Meeting. Shareholders' votes will be tabulated by the person appointed by the
Board of Directors to act as inspector of election of the Annual Meeting. Under
Delaware corporate law, directors are elected by a plurality of the votes of the
shares present (in person or represented by proxy) at the Annual Meeting and
entitled to vote at the Annual Meeting. Unless otherwise required by law or the
Company's Certificate of Incorporation or Bylaws, any other matter put to a
shareholder vote will be decided by the affirmative vote of a majority of the
shares present (either in person or represented by proxy) at the Annual Meeting
and entitled to vote on the matter at the Annual Meeting.
Abstentions and broker non-votes will be treated as shares that are
present, or represented, and entitled to vote for purposes of determining the
presence of a quorum at the Annual Meeting. Broker non-votes will not be counted
as a vote cast or entitled to vote on any matter presented at the Annual
Meeting. Abstentions will not be counted in determining the number of votes cast
in connection with any matter presented at the Annual Meeting.
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL 1)
At the Annual Meeting, three directors will be elected to serve for
three-year terms. Unless otherwise specified on the proxy, it is the intention
of the persons named in the proxy to vote the shares represented by each
properly executed proxy for the election as directors of the persons named below
as nominees. The Board of Directors believes that the nominees will stand for
election and will serve if elected as directors. If, however, any person
nominated by the Board fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other person as the
Board of Directors may recommend. Assuming the presence of a quorum at the
Annual Meeting, directors will be elected by a plurality of the votes of the
shares of Common Stock present in person or represented by proxy and entitled to
vote at the Annual Meeting. There are no cumulative voting rights in the
election of directors.
The Board of Directors currently consists of nine members, and is divided
into three classes, each of which is composed of three directors. The term of
office of only one class of directors expires in each year, and their successors
are elected for terms of up to three years and until their successors are
elected and qualified. Messrs. Daniel J. Hogarty, Jr., Willie A. Hammett and
Thomas B. Healy, whose terms expire at the 2000 Annual Meeting, have been
nominated to stand for reelection at the 2000 Annual Meeting for a term expiring
in 2003. Assuming election of all nominees, Troy's Board of Directors will
continue to consist of 9 directors in three classes which are composed of three
directors each.
INFORMATION AS TO NOMINEES AND OTHER DIRECTORS
The following table sets forth the names of the Board of Directors'
nominees for election as directors and the current directors of Troy whose
offices continue beyond the Annual Meeting. Also set forth is certain other
information with respect to each such person's age at December 31, 1999, the
periods during which such person has served as a director of Troy and positions
currently held with Troy.
<TABLE>
<CAPTION>
DIRECTOR NOMINEES FOR A AGE AT DIRECTOR EXPIRATION POSITIONS HELD WITH
THREE-YEAR TERM: DECEMBER 31, 1999 SINCE OF TERM TROY AND TROY BANK
- ------------------------- ------------------- ---------- ------------ --------------------
<S> <C> <C> <C> <C>
Daniel J. Hogarty, Jr. 60 1999 2000 Chairman,
President and
Chief Executive
Officer
Willie A. Hammett 55 1999 2000 Director
Thomas B. Healy 53 1999 2000 Director
</TABLE>
<TABLE>
<CAPTION>
AGE AT DIRECTOR EXPIRATION POSITIONS HELD WITH
CONTINUING DIRECTORS: DECEMBER 31, 1999 SINCE OF TERM TROY AND TROY BANK
- ----------------------- ------------------- ---------- ------------ --------------------
<S> <C> <C> <C> <C>
George H. Arakelian 65 1999 2001 Director
Richard B. Devane 65 1999 2001 Director
Michael E. Fleming 69 1999 2002 Director
Keith D. Millsop 73 1999 2002 Director
Edward G. O'Haire 68 1999 2001 Director
Marvin L. Wulf 74 1999 2002 Director
</TABLE>
BIOGRAPHICAL INFORMATION
Directors of Troy Financial
Daniel J. Hogarty, Jr. has been Chairman of the Board, President and Chief
Executive Officer of Troy Financial since its formation in 1998. He joined Troy
Savings in 1985 and has been Troy Savings' President, Chief Executive Officer
and a trustee since that time. Mr. Hogarty also serves as President and/or
Director of nine of Troy Savings' subsidiaries.
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<PAGE>
George H. Arakelian has been a Director of Troy Financial since its
formation in 1998. He has served as a trustee of Troy Savings since 1988. Mr.
Arakelian is President and Chairman of the Board of Standard Manufacturer Co.,
Inc., a manufacturer of outerwear and sportswear located in Troy, New York.
Richard B. Devane has been a Director of Troy Financial since its formation
in 1998. He has served as a trustee of Troy Savings since 1970. Mr. Devane is
President of Devane, Inc., a carpet and flooring contractor, and is a real
estate broker with Devane Realty, both of which are located in Troy, New York.
Michael E. Fleming, DDS has been a Director of Troy Financial since its
formation in 1998. He has served as a trustee of Troy Savings since 1980. Dr.
Fleming is a retired orthodontist in Troy, New York.
Willie A. Hammett has been a Director of Troy Financial since its
formation in 1998. He has served as a trustee of Troy Savings since 1990. Mr.
Hammett is Vice President of Student Services at Hudson Valley Community
College located in Troy, New York.
Thomas B. Healy has been a Director of Troy Financial since its formation
in 1998. He has served as a trustee of Troy Savings since 1995. Mr. Healy is
Senior Vice President of Investments at Prudential Securities, Inc., located in
Albany, New York.
Keith D. Millsop has been a Director of Troy Financial since its formation
in 1998. He has served as a trustee of Troy Savings since 1979. Mr. Millsop is
a retired Manager of Industrial Relations at Ford Motor Company's Plant in
Green Island, New York.
Edward G. O'Haire has been a Director of Troy Financial since its
formation in 1998. He has served as a trustee of Troy Savings since 1979. Mr.
O'Haire is President of Ryan & O'Haire Agency, Inc. located in Troy, New York.
Marvin L. Wulf has been a Director of Troy Financial since its formation
in 1998. He has served as a trustee of Troy Savings since 1973. Mr. Wulf is an
Economic Development Specialist for the City of Troy, New York.
CERTAIN BOARD COMMITTEES; NOMINATIONS BY SHAREHOLDERS
The entire Board of Directors, excluding Mr. Hogarty, serves as a standing
Audit Committee that oversees Troy Financial's financial reporting process, the
system of internal financial and accounting controls, the audit process and
compliance with applicable laws and regulations. The Audit Committee reviews
Troy Financial's annual financial statements, including management's discussion
and analysis and regulatory examination findings. The Audit Committee recommends
the appointment of independent auditors. During the fiscal year ended September
30, 1999, the Audit Committee held eight meetings.
The entire Board of Directors, excluding Mr. Hogarty, also serves as a
Compensation Committee that reviews and makes determinations as to employee and
executive officer compensation. The Compensation Committee also recommends
long-term incentive plan awards. During the fiscal year ended September 30,
1999, the Compensation Committee held one meeting.
The Board of Directors acts as the full Nominating Committee for selecting
nominees for election as directors. During 1999, the Nominating Committee held
one meeting. Troy's Bylaws also permit shareholders eligible to vote at the
Annual Meeting to make nominations for directors but only if such nominations
are made pursuant to timely notice in writing to the Secretary of Troy. To be
timely, notice must be delivered to, or mailed to and received at, the principal
executive offices of Troy not less than 60 days nor more than 90 days prior to
the date of the meeting, provided that at least 70 days' notice or prior public
disclosure of the date of the Annual Meeting is given or made to shareholders.
If less than 70 days' notice or prior public disclosure of the date of the
Annual Meeting is given or made to shareholders, notice by the shareholder to be
timely must be received by Troy not later than the close of business on the 10th
day following the day on which such notice of the date of the Annual Meeting was
mailed or such public disclosure was made. A shareholder's notice of nomination
must also set forth certain information specified in Section 3.5 of the
Corporation's Bylaws concerning each person the shareholder proposes to nominate
for election and the nominating shareholder.
3
<PAGE>
During 1999, Troy Financial held 15 meetings of its Board of Directors.
Each incumbent director attended at least 75% of the aggregate of (i) the total
number of meetings held by the Board of Directors during the period that such
individual served and (ii) the total number of meetings held by all committees
of the Board on which the director served during the period that such individual
served.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF ALL OF ITS DIRECTOR NOMINEES.
MANAGEMENT
EXECUTIVE OFFICERS OF TROY FINANCIAL
The executive officers of Troy Financial are the same as the executive
officers of Troy Savings Bank. They are appointed annually and hold office until
their respective successors are chosen and qualified or until their death,
earlier resignation or removal from office. The following table shows
information regarding the executive officers.
<TABLE>
<CAPTION>
AGE AS OF POSITION(S) HELD
NAME DECEMBER 31, 1999 WITH TROY FINANCIAL AND THE BANK
- ----------------------------- ------------------- ----------------------------------------
<S> <C> <C>
Daniel J. Hogarty, Jr. 60 Chairman of the Board of Troy
Financial; Director of Troy Savings;
President and Chief Executive Officer
Kevin M. O'Bryan 50 Senior Vice President; Secretary
Michael C. Mahar 52 Senior Vice President
Edward M. Maziejka, Jr 40 Vice President; Chief Financial Officer
</TABLE>
Executive Officers of Troy Financial
Kevin M. O'Bryan, Senior Vice President and Secretary of Troy Financial
since its formation in 1998, he joined Troy Savings in 1976 and is a Senior Vice
President and Troy Savings' Chief Credit Officer and Secretary. Mr. O'Bryan's
primary responsibilities include oversight of all of Troy Savings' lending
departments. Prior to his appointment as Senior Vice President and Chief Credit
Officer in 1992, Mr. O'Bryan held numerous positions in Troy Savings' commercial
mortgage department. Mr. O'Bryan is also Secretary and Director of FMB, Troy
S.B. Real Estate Co., Inc., The Family Advertising Co., T.S. Real Property,
Inc., Realty Umbrella, Ltd., and 32 Second Street, Inc., all of which are
subsidiaries of Troy Savings. Mr. O'Bryan is also President and Director of
Camel Hill Corporation, 507 Height, and T.S. Capital Corp., which are also
subsidiaries of Troy Savings.
Michael C. Mahar, Senior Vice President of Troy Financial since its
formation in 1998, he joined Troy Savings in 1988 and is a Senior Vice President
of Troy Savings. Mr. Mahar's primary responsibilities include oversight of Troy
Savings' retail banking, deposit services, sales and marketing, and operations.
Prior to that appointment in 1992, Mr. Mahar was the director of Troy Savings'
commercial lending program.
Edward M. Maziejka, Jr., Vice President and Chief Financial Officer of
Troy Financial since its formation in 1998, he joined Troy Savings in 1988 and
is Troy Savings' Chief Financial Officer. Prior to that appointment in 1993,
Mr. Maziejka was Vice President of Financial Administration of Troy Savings.
Mr. Maziejka is also Treasurer and Director of FMB, Troy S.B. Real Estate Co.,
Inc., The Family Advertising Co., T.S. Real Property, Inc., Realty Umbrella,
Ltd., and 32 Second Street, Inc., all of which are subsidiaries of Troy
Savings. Mr. Maziejka also serves as Assistant Treasurer of The Family
Insurance Agency, Inc., as Treasurer and Secretary of T.S. Capital Corp., and
as Secretary, Treasurer and Director of Camel Hill Corporation, which are also
subsidiaries of Troy Savings.
EXECUTIVE COMPENSATION
The following table sets forth the cash and certain other compensation paid
by Troy Savings for services rendered in all capacities during 1999, 1998 and
1997, to the President and Chief Executive Officer and all executive officers
who received compensation in excess of $100,000. The Company has not
4
<PAGE>
granted any stock appreciation rights to its executive officers. No options were
granted in the 1999 fiscal year; however, options were granted to executive
officers after October 1, 1999 as part of Troy Financial's Long-Term Equity
Compensation Plan.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
----------------------------- --------------------
NAME AND PRINCIPAL RESTRICTED ALL OTHER
POSITIONS YEAR SALARY BONUS STOCK AWARDS OPTIONS COMPENSATION
- ------------------------- ------ ----------- ---------- -------------------- --------- -------------
($) ($) ($) (#) (1)
----------- ---------- -------------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel J. Hogarty, Jr 1999 $603,074 -- -- -- $11,160
President and Chief 1998 $577,967 -- -- -- $11,128
Executive Officer 1997 $487,038 -- -- -- $10,628
Kevin M. O'Bryan 1999 $169,348 $ 5,000 -- -- $ 5,068
Senior Vice President, 1998 $151,048 -- -- -- $ 8,574
Chief Credit Officer 1997 $134,663 -- -- -- $ 4,990
and Secretary
1999 $104,979 $ 7,500 -- -- $ 4,160
Michael C. Mahar 1998 $ 94,885 -- -- -- $ 4,128
Senior Vice President 1997 $ 84,884 -- -- -- $ 1,128
1999 $ 90,072 $12,500 -- -- $ 2,230
Edward M. Maziejka, Jr. 1998 $ 83,384 -- -- -- $ 3,340
Chief Financial Officer 1997 $ 74,903 -- -- -- $ 3,292
</TABLE>
- ----------
(1) Includes life insurance premiums of $1,160, $1,160, $1,160 and $1,160 on
behalf of Messers. Hogarty, O'Bryan, Mahar and Maziejka, 401(k) plan
contributions of $10,000, $908 and $1,070, on behalf of Messrs. Hogarty,
O'Bryan and Maziejka, and an automobile allowance of $3,000, for each of
Messrs. O'Bryan and Mahar.
COMPENSATION OF DIRECTORS
Directors of Troy Savings receive fees of $1,375 per board meeting attended
and fees ranging from $250 to $850 per committee meeting attended, depending on
the type of committee. No separate fees are paid to directors in their role as
directors of Troy Financial. Troy Financial and Troy Savings intend to engage a
compensation consultant to study the level and structure of compensation paid to
the directors, as compared to similarly situated publicly traded financial
institutions and, upon review of such study, may revise the amount of fees paid
to such directors.
In addition, Troy Savings has implemented a Trustees Deferred Compensation
Plan (the "Deferred Compensation Plan") that allows its directors to make
pre-tax contributions to any of the following benefit accounts: retirement,
education or fixed period. Retirement benefits can be paid in one lump sum
payment, in installments for up to 10 years or as a life annuity. The payments
may be deferred for up to 10 years beyond a participant's retirement date.
Education accounts can be opened for up to four students, who are 13 years old
or younger. Payments are made in four installments beginning after January 1 of
the year in which the student turns 18. Fixed period distributions are made as
soon as possible after January 1 of the year in which the account matures. The
minimum maturity date is five years.
Troy Savings retains the right to contribute additional funds to a
participant's account. All amounts contributed to the Deferred Compensation Plan
are always 100% vested. In the event of termination, death, or disability, a
participant or his beneficiary will receive a lump sum payment distribution from
his accounts.
EMPLOYMENT AGREEMENTS
Troy Financial has entered into employment agreements with Messrs.
Hogarty, O'Bryan and Mahar (the "Employment Agreements"). These Employment
Agreements have an initial term of three years, with possible year-to-year
renewals. In addition, Messrs. Hogarty, O'Bryan and Mahar are entitled to
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<PAGE>
specified annual salary, plus annual cost of living and merit increases,
discretionary bonuses, participation in all benefit and compensation plans and
car or automobile allowance. As of October 1, 1999, Troy Financial entered into
a similar agreement with Mr. Maziejka.
As of September 30, 1999, the base salaries for Messrs. Hogarty, O'Bryan
and Mahar are $600,000, $160,000 and $100,000 respectively.
Troy Financial and Troy Savings may terminate an executive officer's
employment at any time during the term of an Employment Agreement. Unless the
termination is for "cause" (as defined in the Employment Agreement), Troy
Financial and Troy Savings will be required to pay each executive officer three
times his annual base salary plus bonus and the value of the additional
retirement benefits that the executive officer would have been entitled to
receive under Troy Savings' qualified benefit plans and Supplemental Retirement
and Benefits Restoration Plan ("Supplemental Plan") if the executive officer had
continued to be employed for three years. These amounts will be paid in a lump
sum.
Troy Financial and Troy Savings will also provide the terminated executive
with insurance and other non-pension benefits for three years, outplacement
services indemnification and director and officer liability insurance.
In addition, following a termination without cause or if an executive
officer terminates his employment agreement with "good reason" (as defined in
the Employment Agreements), the executive officer will be fully vested, except
to the extent limited by applicable regulations, in stock options, Restricted
Stock, the Supplemental Plan and any other benefit that would otherwise be
forfeited.
If the executive officer is subject to the federal excise tax imposed on
excess parachute payments, Troy Financial and Troy Savings will pay to the
executive officer a gross-up amount sufficient, after all taxes, to pay the
excise tax and any interest and penalties. However, if making the gross-up
payment would not produce a net after-tax benefit to the executive officer of at
least $50,000 more than the amount the executive officer could receive without
triggering the excise tax, the amounts payable to the executive officer will be
reduced as necessary to avoid the excise tax.
After termination, the executive officer cannot be employed during a
specified noncompetition period with a substantial competitor (as defined in the
Employment Agreements) of Troy Savings or Troy Financial if the executive
officer terminates his employment without consent and without good reason or if
Troy Financial and Troy Savings terminate the officer's employment for cause.
The noncompetition period is one year or the remaining term of the
agreement plus six months, whichever is less. The Employment Agreements also
contain provisions relating to unauthorized disclosure of confidential
information and return of written materials upon termination of employment.
DEFINED BENEFIT PENSION PLAN
Troy Savings maintains a non-contributory defined benefit pension plan
covering substantially all of its full-time salaried employees (the "Pension
Plan"). A participant is 100% vested after five years of service, upon attaining
normal retirement age or upon a change of control.
The normal retirement benefit (generally at age 65) is based on the
participant's highest three-year average annual base earnings during the
participant's final 10-years of participation, subject to a limitation on the
amount of compensation that can be taken into account under the Internal Revenue
Code (the "IRC"). The annual benefit provided to a participant at normal
retirement age is:
o 2% of average annual earnings, times years of credited service, up to
32.5 years, plus
o .4% of average annual earnings that exceed 50% of the Social Security
wage base, times years of credited service, up to 30 years.
An unreduced annual retirement benefit, calculated in the same manner as
described above, will be provided to a participant who:
o is eligible for an early retirement benefit (generally age 60 with five
years of service or age 55 with 10 years of service) and elects to defer the
payment of the benefit to normal retirement age;
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<PAGE>
o has attained age 60 and completed 30 years of service, or attained age 62
and completed 25 years of service, and elects to receive payment of the benefit
before normal retirement age; or
o postpones annual benefits beyond normal retirement age.
If a participant begins receiving early retirement benefits before satisfying
the foregoing age and service requirements, his benefits will be actuarially
reduced.
The Pension Plan also provides a surviving spouse benefit if the
participant dies before retirement or other termination of employment with a
vested retirement benefit.
SUPPLEMENTAL RETIREMENT AND BENEFIT RESTORATION PLAN
Troy Savings has implemented a non-tax qualified Supplemental Retirement
and Benefit Restoration Plan (the "Supplemental Plan") to provide additional
benefits to designated employees. Messrs. Hogarty, O'Bryan, and Mahar
participate in the Supplemental Plan. Participants receive additional retirement
benefits that cannot be provided under Troy Savings' qualified retirement plans,
because of limitations in effect under the IRC. In addition, the Supplemental
Plan makes up for benefits lost under the Employee Stock Ownership Plan ("ESOP")
allocation procedures if participants retire or otherwise terminate employment
before the ESOP has repaid the funds it borrowed to purchase common stock.
Each participant in the Supplemental Plan is entitled to an annual pension
amount at age 65 equal to 65% of his average annual earnings (the "Pension
Amount"), reduced by any amounts actually payable under the Pension Plan and an
offset amount. The benefit will be fully vested upon completion of five years of
service, including service before adoption, and will be reduced in proportion to
years of service if the participant retires or terminates employment before age
65. No more than $500,000 of Mr. Hogarty's annual compensation will be counted.
In the event of the participant's death, the Pension Amount (reduced by the
death benefit payable under the Pension Plan) will be paid to his surviving
spouse for life, beginning when the participant would have reached age 65. The
Pension Amount will be actuarially reduced if benefits are paid before the
participant attains age 65, unless the participant is eligible for an unreduced
early retirement benefit under the Pension Plan, and will be reduced by the
benefit payable at that time under the Pension Plan.
Each participant in the Supplemental Plan is also entitled to an annual
defined contribution amount, based on the matching contribution Troy Savings
would make to the 401(k) Plan, if any, if the participant made the maximum
allowable pre-tax contribution, and there were no nondiscrimination limitations,
reduced by the maximum matching contribution that could actually be made under
such circumstances, but applying existing nondiscrimination provisions. The
defined contribution amounts are reflected in a bookkeeping account on Troy
Savings' books, which are credited with earnings based on the performance of
investments selected by the participant. The defined contribution amounts are
fully vested and are paid in a lump sum upon the participant's retirement or
other termination of employment.
Each participant in the Supplemental Plan is also entitled, at retirement
or other termination of employment, to an additional benefit if shares have not
been allocated under the ESOP because the ESOP has not repaid its loan. The
benefit will be based on the number of shares of common stock that were
allocated to the participant under the ESOP during the last plan year before the
retirement, termination of employment or change of control, multiplied by the
number of years remaining in the term of the ESOP loan. The vesting provisions
of the ESOP apply to the ESOP Replacement Benefit.
Participants' rights to benefits under the Supplemental Plan are limited to
those of general unsecured creditors of Troy Savings. Troy Savings may establish
a trust to provide funds to pay benefits under the Supplemental Plan, but the
assets of the trust will be subject to claims of Troy Savings' creditors in the
event of insolvency and, if the trust invests in Troy Financial's common stock,
Troy Savings will have the right to substitute other assets for the common
stock.
7
<PAGE>
The following table sets forth, as of September 30, 1999, estimated annual
Supplemental Plan benefits, including benefits received under the Pension Plan,
for individuals at age 65 for various levels of compensation. The figures in
this table are based upon the assumption that the Supplemental Plan continues in
its present form and do not reflect Social Security benefits and benefits
payable under the ESOP.
<TABLE>
<CAPTION>
FINAL AVERAGE SALARY PENSION AMOUNT
- ---------------------- ---------------
<S> <C>
$ 75,000 $ 48,750
100,000 $ 65,000
125,000 $ 81,250
150,000 $ 97,500
200,000 $130,000
300,000 $195,000
400,000 $360,000
500,000 or more $325,000
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors comprises eight
non-employee directors. The Committee determines, executive officer salaries,
bonuses and certain other forms of compensation, and as of the beginning of
fiscal 2000, recommends long-term incentive awards. In fiscal 1999, in
connection with the conversion of The Troy Savings Bank to the stock form
organization, Troy Financial retained an independent compensation consultant,
and in that regard received an opinion that the total compensation is reasonable
in comparison to the total compensation provided by similarly situated
publicly-traded financial institutions. The Compensation Committee also sought
the advice of that consultant in connection with the grant of options in fiscal
2000, and is further studying the compensation of the Chief Executive Officer.
Set forth below is a report addressing Troy Financial's compensation
policies for fiscal year 1999 as they affected Troy Financial's executive
officers.
Compensation Policies for Executive Officers. Troy Financial's executive
compensation policies are designed to provide competitive levels of
compensation, to assist Troy Financial in attracting and retaining qualified
executives and to encourage superior performance. In determining levels of
executive officers' overall compensation, the Compensation Committee considers
the qualifications and experience of the persons concerned, the size of the
institution and the complexity of its operations, the financial condition,
including income, of the institution, the compensation paid to other persons
employed by the institution and the compensation paid to persons having similar
duties and responsibilities in comparable financial institutions. The
Compensation Committee employs outside consultants and refers to published
survey data in establishing compensation.
Relationship of Performance to Executive Compensation. Compensation paid or
awarded to Troy Financial's executive officers in 1999 consisted of the
following components: base salary and bonuses. While each of these components
has a separate purpose and may have a different relative value to the total, a
significant portion of the total compensation package is highly dependent on the
financial success of Troy Financial and total return to shareholders. Generally,
base salaries for executive officers are at or below the average salaries paid
for comparable positions at other financial institutions.
Base Salary. The Compensation Committee reviews executive base salaries
annually. Base salary is intended to signal the internal value of the position
and to track with the external marketplace. All executive officers presently
serve pursuant to employment agreements that provide for a minimum base salary
that may not be reduced without the consent of the executive officer. In
establishing the 1999 salary for each executive officer, the Compensation
Committee considered the officer's responsibilities, qualifications and
experience, the size of the institution and the complexity of its operations,
the financial condition of the institution (based on levels of income, asset
quality and capital), and compensation paid to persons having similar duties and
responsibilities in comparable financial institutions.
8
<PAGE>
Stock Compensation Plans. Troy Financial approved a Long-Term Equity
Compensation Plan in October, 1999 that provides directors, officers, employees
and independent contractors with a proprietary interest in Troy Financial as an
incentive to contribute to its success. Because Troy Financial's fiscal year
ends on September 30, 1999, no options or shares of restricted stock were
granted to employees during the 1999 fiscal year.
Other. In addition to the compensation paid to executive officers as
described above, executive officers received, along with and on the same terms
as other employees, certain benefits pursuant to a 401(k) Savings Plan and the
ESOP. All salaried or commissioned employees who have attained age 21 and
completed one year of employment are eligible to participate in the 401(k)
Savings Plan. Participants may contribute from 2% to 15% of their base
compensation to the 401(k) Savings Plan on a pre-tax basis. Participants are
permitted to borrow against their account balances in the 401(k) Savings Plan
and are eligible to receive hardship distributions from their pre-tax
contributions. For the year ended September 30, 1999, Troy Savings'
contributions to the 401(k) Savings Plan on behalf of Messrs. Hogarty, O'Bryan
and Maziejka were $10,000, $908 and $1,070 respectively.
In addition, Troy Savings has implemented the ESOP, which is a
noncontributory, tax-qualified stock purchase plan that invests primarily in
common stock of Troy Financial. The ESOP is designed to meet the applicable
requirements of a leveraged employee stock ownership plan as described in the
IRC and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and, as such, the ESOP is permitted to borrow in order to finance
purchases of common stock.
CEO Compensation. The Compensation Committee, in determining the
compensation for the Chief Executive Officer, considers Troy Financial's size
and complexity, financial condition and results and progress in meeting
strategic objectives. The Chief Executive Officer's 1999 cash compensation was
$603,074 compared to $577,967 in fiscal 1998. As noted above, Troy Financial
retained an independent compensation consultant, and in that regard received an
opinion that the total compensation is reasonable in comparison to the total
compensation provided by similarly situated publicly-traded financial
institutions. The Compensation Committee also sought the advice of that
consultant in connection with the grant of options in fiscal 2000, and is
further studying the compensation of the Chief Executive Officer. For the year
1999, the Compensation Committee intended that total compensation for the Chief
Executive Officer be reasonable in comparison to similarly situated
publicly-traded financial institutions.
Internal Revenue Code Section 162(m). In 1993, the IRC was amended to
disallow publicly traded companies from receiving a tax deduction on
compensation paid to executive officers in excess of $1 million (section 162(m)
of the IRC), unless, among other things, the compensation meets the requirements
for performance-based compensation. In structuring Troy Financial's compensation
programs and in determining executive compensation, the Committee takes into
consideration the deductibility limit for compensation.
COMPENSATION COMMITTEE
----------------------
Willie A. Hammett
Thomas B. Healy
George H. Arakelian
Richard B. Devane
Michael E. Fleming
Keith D. Millsop
Edward G. O'Haire
Marvin L. Wulf
9
<PAGE>
Compensation Committee Interlocks and Insider Participation
From time to time Troy Financial makes loans to its directors and executive
officers and related persons and entities for the financing of homes, as well as
home improvement, consumer and commercial loans. It is the belief of management
that these loans are made in the ordinary course of business, are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and
neither involve more than normal risk of collectibility nor present other
unfavorable features.
CERTAIN RELATIONSHIPS
Directors, officers and employees of Troy Financial or Troy Savings are
permitted to borrow from Troy Savings to the extent permitted by New York law
and the regulations of the Board of Governors of the Federal Reserve System.
Under applicable New York law, Troy Savings may make first or second mortgage
loans to officers provided that each such loan is secured by the officer's
primary residence and is authorized in writing by the Board of Directors. In
addition, Troy Savings makes consumer loans and commercial real estate and
commercial business loans to officers and directors and related persons
consistent with applicable law. Except as described below, all loans made by
Troy Savings to directors and executive officers or their associates and related
entities have been made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons. It is the belief of
management that, at the time of origination, these loans neither involved more
than the normal risk of collectability nor presented any other unfavorable
features.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Troy Financial's directors and officers, and persons who own more than 10% of
its Common Stock, to file with the Securities and Exchange Commission initial
reports of ownership of Troy Financial's equity securities and to file
subsequent reports when there are changes in such ownership. Based on a review
of reports submitted to Troy Financial, the Corporation believes that during the
fiscal year ended September 30, 1999 all Section 16(a) filing requirements
applicable to Troy's officers, directors, and more than 10% owners were complied
with on a timely basis.
STOCK OWNED BY MANAGEMENT
The following table sets forth information as of December 27, 1999 with
respect to the amount of Troy Common Stock beneficially owned by each director
of Troy, each nominee for election as a director, each of the named executive
officers and by all directors and executive officers of Troy Financial as a
group.
10
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES AND NATURE OF PERCENT OF COMMON STOCK
NAME AND POSITION WITH TROY BENEFICIAL OWNERSHIP OUTSTANDING
- ----------------------------------------- ------------------------------- -------------------------
<S> <C> <C>
Daniel J. Hogarty, Jr. 100,440 0.90
Chairman, President and
Chief Executive Officer
George H. Arakelian 120,000 1.07
Director
Richard B. Devane 2,000 0.02
Director
Michael E. Fleming 30,000 0.27
Director
Willie A. Hammett 17,646 0.16
Director
Thomas B. Healy 50,000 0.45
Director
Keith D. Millsop 40,000 0.36
Director
Edward G. O'Haire 40,136 0.36
Director
Marvin L. Wulf 16,349 0.15
Director
Michael C. Mahar 6,265 0.06
Senior Vice President
Edward M. Maziejka, Jr. 7,795 0.07
Vice President, Chief Financial Officer
Kevin M. O'Bryan 10,369 0.09
Senior Vice President, Secretary
All Directors and 441,000 3.93
Executive Officers
as a Group (12 persons)
</TABLE>
COMPARATIVE COMPANY PERFORMANCE
The following graph sets forth comparative information regarding Troy
Financial's cumulative shareholder return on its Common Stock over the last
three fiscal quarters. Total shareholder return is measured by dividing total
dividends (assuming dividend reinvestment) for the measurement period plus share
price change for a period by the share price at the beginning of the measurement
period. Troy Financial's cumulative shareholder return over a two-quarter period
is based on an investment of $100 on March 31, 1999 and is compared to the
cumulative total return of the Standard & Poor's 500 Index ("S&P 500 Index") and
the NASDAQ Bank Index.
11
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
TROY, S&P 500 INDEX AND NASDAQ BANK INDEX
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------
INDEX 3/31/99 6/30/99 9/30/99
- ----------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
TROY FINANCIAL CORPORATION 100.00 104.38 108.13
S&P 500 100.00 106.71 99.72
NASDAQ BANK 100.00 106.67 96.15
</TABLE>
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
FOR INCLUSION IN PROXY STATEMENT
Any proposal that a Troy shareholder wishes to have included in Troy's
proxy statement and form of proxy relating to Troy's 2001 annual meeting of
shareholders under Rule 14a-8 of the Securities and Exchange Commission must be
received by Troy's secretary at Troy Financial Corporation, 32 Second Street,
Troy, New York 12180 by September 30, 2000. Nothing in this paragraph shall be
deemed to require Troy to include in its proxy statement and form of proxy for
such meeting any shareholder proposal that does not meet the requirements of the
Securities and Exchange Commission in effect at the time. Any other proposal for
consideration by shareholders at Troy's 2001 annual meeting of shareholders must
be delivered to, or mailed to and received by, the secretary of Troy not less
that 60 days nor more than 90 days prior to the date of the meeting if Troy
gives at least 70 days' notice or prior public disclosure of the meeting date to
shareholders.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report to Shareholders for the year ended
September 30, 1999 accompanies this Proxy Statement.
12
<PAGE>
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
SHAREHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1999 AND THE EXHIBITS THERETO REQUIRED TO BE
FILED WITH THE COMMISSION UNDER THE EXCHANGE ACT. SUCH WRITTEN REQUEST SHOULD BE
DIRECTED TO:
KEVIN M. O'BRYAN
SENIOR VICE PRESIDENT AND CORPORATE SECRETARY
TROY FINANCIAL CORPORATION
32 SECOND STREET
TROY, NEW YORK 12180
THIS FORM 10-K IS NOT PART OF THE PROXY SOLICITATION MATERIALS.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters to be presented for action by the shareholders at the
Annual Meeting. If, however, any other matters not now known are properly
brought before the meeting, the persons named in the accompanying proxy will
vote such proxy in accordance with the determination of a majority of the Board
of Directors.
By order of the Board of Directors
/s/ Daniel J. Hogarty, Jr.
---------------------------------------
Daniel J. Hogarty, Jr.
Chairman, President and Chief
Executive Officer
Troy, New York
January 10, 2000
13
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
[X] PLEASE MARK VOTES REVOCABLE PROXY With- For all
AS IN THIS EXAMPLE TROY FINANCIAL CORPORATION For hold Except
ANNUAL MEETING OF SHAREHOLDERS 1. To elect three directors for three-year [ ] [ ] [ ]
February 10, 2000 terms (Proposal 1)
The undersigned shareholder of Troy Financial Corporation Nominees: Daniel J. Hogarty, Jr.
("Troy" or the "Corporation") hereby appoints Lambert L. Willie A. Hammett
Ginsberg and F. Redmond Griffin, as proxies, such persons Thomas B. Healy
being duly appointed by the Board of Directors with the
power to appoint an appropriate substitute, to cast all INSTRUCTION: To withhold authority to vote for any individual
votes that the undersigned shareholder is entitled to cast nominee(s), mark "For All Except" and write the name of the
at the annual meeting of the shareholders (the "Annual nominee(s) in the space provided below.
Meeting") to be held at 10:00 a.m. Eastern Time, on
Thursday, February 10, 2000, at The Century House, 997 New
Loudon Road, Route 9, Latham, NY 12110 and at any adjourn- ------------------------------------------------------------------
ments thereof, upon the following matters. The undersigned
shareholder hereby revokes any proxy or proxies heretofore
given.
2. The Proxies are authorized to vote upon such other business as
may properly come before the Annual Meeting, or any adjourn-
ments of the meeting, in accordance with the determination of a
majority of the Corporation's Board of Directors.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE
FEBRUARY 10, 2000 ANNUAL STOCKHOLDERS MEETING [ ]
The proxy will be voted as directed by the undersigned share-
holder. Unless contrary direction is given, this proxy will be
voted FOR the election of the nominees listed in Proposal 1, and
Please be sure to sign and date ------------------------- in accordance with the determination of a majority of the Board of
this Proxy in the box below. Date Directors as to any other matters. The undersigned shareholder may
- ------------------------------------------------------------ revoke this proxy at any time before it is voted by delivering to
the Secretary of the Corporation either a written revocation of
he proxy or a duly executed proxy bearing a later date, or by
appearing at the Annual Meeting and voting in person. The under-
signed shareholder hereby acknowledges receipt of the Notice of
- ---Stockholder sign above---Co-holder (if any) sign above--- Annual Meeting and Proxy Statement.
- ------------------------------------------------------------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
TROY FINANCIAL CORPORATION
- ------------------------------------------------------------------------------------------------------------------------------------
Please date and sign exactly as your name(s) appear(s) hereon. Each executor, administrator, trustee, guardian, attorney-in-fact,
and any other fiduciary should sign and indicate his or her full title. When stock has been issued in the name of two or more
persons, all should sign.
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN ALL CARDS IN THE ACCOMPANYING ENVELOPE.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
