SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Confidential, for Use of the Com-
mission Only (as permitted by
|_| Definitive Proxy Statement Rule 14a-6(e)(2))
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TrustCo Bank Corp NY
(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 transactions 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.
<PAGE>
|_| 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>
TRUSTCO BANK CORP NY
320 State Street, Schenectady, New York 12305
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders Of
TrustCo Bank Corp NY:
Notice is hereby given that the Annual Meeting of Shareholders of
TrustCo Bank Corp NY ("TrustCo"), a New York corporation, will be held at Glen
Sanders Mansion, One Glen Avenue, Scotia, New York 12302, on May 18, 1998, at
10:00 a.m. local time for the purposes of voting upon the following matters:
1. Election of directors.
2. Adoption of an amendment to the Amended and Restated Certificate of
Incorporation ("Certificate of Incorporation") of TrustCo to change the
vote required for certain matters submitted to shareholders for their
consideration.
3. Adoption of amendments to the 1995 TrustCo Bank Corp NY Stock Option
Plan.
4. Ratification of the appointment of independent auditors for 1998.
5. Any other business that properly may be brought before the meeting or any
adjournment thereof.
By Order of the Board of Directors
/s/William F. Terry
William F. Terry
Secretary
April 3, 1998
YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT. YOU MAY WITHDRAW YOUR PROXY AT
ANY TIME PRIOR TO THE MEETING, OR, IF YOU DO ATTEND THE MEETING, YOU MAY
WITHDRAW YOUR PROXY AT THAT TIME, IF YOU WISH.
<PAGE>
TRUSTCO BANK CORP NY
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 18, 1998
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of TrustCo Bank Corp NY ("TrustCo"), a New York
corporation, of proxies to be voted at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at 10:00 a.m. local time on Monday, May 18, 1998,
at Glen Sanders Mansion, One Glen Avenue, Scotia, New York 12302. This proxy
statement and the form of proxy were first mailed to shareholders on April 3,
1998. Any shareholder executing a proxy which is solicited hereby has the power
to revoke it. Revocation may be made by giving written notice to the Secretary
of TrustCo at any time prior to the exercise of the proxy.
Proxies will be solicited by mail. They also may be solicited by
directors, officers, and regular employees of TrustCo and Trustco Bank, National
Association of Schenectady, New York ("Trustco Bank"), a wholly-owned subsidiary
of TrustCo, personally or by telephone, but such persons will receive no
additional compensation for such services. TrustCo has also retained Regan &
Associates, Inc. to aid in the solicitation of proxies for a solicitation
fee of $2,750 plus expenses. The entire cost of this solicitation will be paid
by TrustCo and Trustco Bank.
As of March 1, 1998, there were 23,375,602 outstanding shares of
Common Stock, $1.00 par value (the "Common Stock"), of TrustCo. Only
shareholders of record of such Common Stock at the close of business on March
30, 1998, are entitled to notice of and to vote at the Annual Meeting. Each
shareholder of record on that date is entitled to one vote for each share of
Common Stock held. With respect to each matter to be acted upon at the Annual
Meeting, abstentions on properly executed proxy cards will be counted for
purposes of determining a quorum at the meeting; however, such abstentions and
shares not voted by brokers and other entities holding shares on behalf of
beneficial owners will not be counted in calculating voting results on those
matters for which the shareholder has abstained or the broker has not voted.
Full shares of Common Stock held for the account of shareholders
participating in the Dividend Reinvestment and Stock Purchase Program will be
voted in the same manner as those shareholders have authorized their shares held
of record to be voted. If such shareholders fail to instruct how the shares
registered in their names shall be voted, the shares held in their dividend
reinvestment accounts will not be voted.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in a proxy
statement in connection with any forthcoming annual meeting must be submitted to
TrustCo on a timely basis. Proposals for inclusion in TrustCo's proxy statement
and form of proxy for the annual shareholders meeting to be held in May of 1999
must meet the requirements established by the Securities and Exchange Commission
(the "S.E.C.") for shareholder proposals and must be received by TrustCo at its
principal executive offices no later than December 4, 1998. Any such proposals,
together with any supporting statements, should be directed to the Secretary of
TrustCo.
<PAGE> 1
THE ANNUAL MEETING
A description of the items to be considered at the Annual Meeting and
other information is set forth below.
Item 1. Election of Directors
The first item to be acted upon at the Annual Meeting is the
election of four directors to serve on the TrustCo Board of Directors (the
"TrustCo Board") for a three year term until their successors shall have been
duly elected and qualified. The incumbent directors whose terms are currently
scheduled to expire at the Annual Meeting, and who have been nominated for
reelection as directors (collectively, the "TrustCo Director Nominees") are as
follows: M. Norman Brickman, Anthony J. Marinello, M.D., Ph.D., Robert A.
McCormick and Kenneth C. Petersen.
TrustCo's Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation") provides that the TrustCo Board shall
consist of not less than seven nor more than twenty members, and TrustCo's
Bylaws provide that the total number of directors may be fixed by resolution of
the TrustCo Board or the shareholders. The Certificate of Incorporation and the
Bylaws of TrustCo require the TrustCo Board to be divided into three classes, as
nearly equal in number as possible, with one class to be elected each year for a
term of three years.
The Bylaws also provide that newly created directorships
resulting from an increase in the number of directors and vacancies occurring in
the TrustCo Board for any reason may be filled by the vote of a majority of the
directors then in office, although less than a quorum, at any meeting of the
TrustCo Board. Directors who are elected by the TrustCo Board shall hold office
until the next meeting of shareholders at which the election of directors is in
the regular order of business. The affirmative vote of at least a majority of
the outstanding Common Stock is required to elect directors.
The pages that follow set forth information regarding the
TrustCo Director Nominees, as well as information regarding the remaining
members of the TrustCo Board whose terms of office do not expire this year.
Proxies will be voted in accordance with specific instructions contained
therein. Shares will be voted for the election of such TrustCo Director Nominees
unless contrary instructions are set forth on the enclosed TrustCo proxy card.
If any nominee shall be unavailable to serve, the shares represented by all
valid proxies will be voted for the election of such other person as the TrustCo
Board may recommend, or the TrustCo Board may reduce the number of directors to
eliminate the vacancy. Each of the TrustCo Director Nominees has consented to
being named in this Proxy Statement, and to serve if elected. The TrustCo Board
has no reason to believe that any TrustCo Director Nominee will decline or be
unable to serve if elected, unless he or she reaches the mandatory retirement
age of 75 during the term of office. In the event a vacancy is created by
retirement or otherwise, the TrustCo Board may fill the vacancy or may reduce
the number of directors to eliminate the vacancy. If the vacancy is filled, the
director so elected shall hold office until the next meeting of shareholders at
which the election of directors is in the regular order of business.
Information with regard to the business experience of each
director and the ownership of Common Stock on December 31, 1997, has been
furnished by such director, or has been obtained from the records of TrustCo.
The Common Stock is the only class of equity security outstanding.
<PAGE> 2
<TABLE>
INFORMATION ON TRUSTCO DIRECTORS AND NOMINEES
NOMINEES FOR ELECTION AS TRUSTCO DIRECTORS FOR
THREE-YEAR TERM TO EXPIRE IN 2001
<CAPTION>
Shares of TrustCo Common Stock
Beneficially Owned
Name and Principal Occupation(1) No. of Shares (2) Percent of Class
<S> <C> <C>
M. Norman Brickman, Age 72; President, 136,534 *
D. Brickman, Inc. (Wholesale fruits
and produce). Director of TrustCo
and Trustco Bank since 1985.
Anthony J. Marinello, M.D., Ph.D., 4,388 *
Age 42; Physician. Director of
TrustCo and Trustco Bank since 1996.
Robert A. McCormick, Age 61; President 976,224 4.2
of TrustCo and Trustco Bank since 1982.
President and Chief Executive Officer
of TrustCo and Trustco Bank since 1984.
Director of TrustCo and Trustco Bank
since 1980.
Kenneth C. Petersen, Age 61; President, 46,006 *
Schenectady International, Inc.
Inc. (Chemical manufacturer). Director
of TrustCo and Trustco Bank since 1982.
See footnotes on pages 5 & 6.
</TABLE>
3
<PAGE>
<TABLE>
TRUSTCO DIRECTORS CONTINUING IN OFFICE
Shares of TrustCo Common Stock
Beneficially Owned
<CAPTION>
Name and Principal Occupation(1) No. of Shares (2) Percent of Class
<S> <C> <C>
Barton A. Andreoli, Age 58; President, 9,493 *
Towne Construction & Paving Corp.
Director of TrustCo and of Trustco Bank
since 1993.
Lionel O. Barthold, Age 71; Chairman, 99,369 *
Power Technologies, Inc. (Consulting
engineers). Director of TrustCo from
1981 through 1985, and from 1989 to present.
Director of Trustco Bank since 1977.
Nancy A. McNamara, Age 48; Executive 295,730 1.3
officer of TrustCo (Vice President)
since 1992 and Trustco Bank (Senior
Vice President)since 1988. Joined
Trustco Bank in 1971. Director of TrustCo
and of Trustco Bank since 1991.
John S. Morris, Ph.D., Age 72; Interim 39,533 *
President, New England College, President
Emeritus and Research Professor Philosophy,
Union College and Former Chancellor, Union
University. Director of TrustCo since 1981 and
of Trustco Bank since 1980.
James H. Murphy, D.D.S., Age 69; Orthodontist. 18,166 *
Director of TrustCo and of TrustCo Bank
since 1991.
Richard J. Murray, Jr., Age 69; Chief 214,056 *
Executive Officer, R.J. Murray Co., Inc.
(Air-conditioning and heating distributors).
Director of TrustCo and of Trustco Bank
since 1985.
William D. Powers, Age 56; Chairman, New York 4,539 *
Republican State Committee. Director of
TrustCo and of Trustco Bank since 1995.
William J. Purdy, Age 63; President of 10,364 *
Welbourne & Purdy Realty, Inc.
Director of TrustCo and of Trustco Bank
since 1991.
William F. Terry, Age 56; Executive 306,420 1.3
Officer of TrustCo (Secretary) since 1990
and of Trustco Bank (Senior Vice President)
since 1987. Director of TrustCo and of
Trustco Bank since 1991.
See footnotes on page 5.
</TABLE>
4
<PAGE>
<TABLE>
INFORMATION ON TRUSTCO EXECUTIVE OFFICERS
NOT LISTED ABOVE
<CAPTION>
Shares of TrustCo Common Stock
Beneficially Owned
Name and Principal Occupation(1) No. of Shares (2) Percent of Class
<S> <C> <C>
Robert T. Cushing, Age 42; Executive 122,906 *
officer of TrustCo (Vice President
and Chief Financial Officer) and of
Trustco Bank (Senior Vice President
and Chief Financial Officer). Joined
Trustco Bank in May 1994, after serving
as a partner at KPMG Peat Marwick LLP
since 1987.
Ralph A. Pidgeon, Age 55; Executive 302,539 1.3
officer of TrustCo (Vice President
and Assistant Secretary) since 1995 and
of Trustco Bank (Senior Vice President)
since 1978. Joined Trustco Bank in 1964.
See footnotes listed below.
</TABLE>
TRUSTCO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (15 INDIVIDUALS)
BENEFICIALLY OWN 2,586,267 SHARES OF TRUSTCO COMMON STOCK, WHICH REPRESENT
11.1% OF THE OUTSTANDING SHARES.
(1) Each of the Directors has held, or retired from, the same position or
another executive position with the same employer during the past five
years, except John S. Morris, Ph.D., who accepted the position of
Interim President at New England College, Henniker, New Hampshire, in
1997.
(2) Each director and executive officer named herein has sole voting and
investment power with respect to the shares listed above, except that
voting and investment power over a total of 4,935 shares is shared with
their spouses and children, and a total of 105,855 are owned by spouses
and other family members. The shares shown include 1,555,278 shares of
TrustCo Common Stock with respect to which certain directors and
executive officers have a right to acquire beneficial ownership within
60 days of December 31, 1997.
* Less than 1%
5
<PAGE>
Director Fees, Committees and Attendance
The TrustCo Board held five meetings during 1997. Each director
attended all of the meetings of the TrustCo Board and its Committees on which he
or she served. Each Director who is not an employee of TrustCo or of Trustco
Bank currently receives for his services as Director a fee in the amount of
$2,300 per meeting attended of TrustCo's and Trustco Bank's Boards of Directors,
and $1,150 per meeting attended of any TrustCo or Trustco Bank committee of
which he is a member. TrustCo directors who are not also employees of TrustCo or
its subsidiaries are also eligible to participate in the TrustCo Bank Corp NY
Directors Performance Bonus Plan (the "Directors Performance Bonus Plan"), which
was adopted by the Board in 1997. Under the Directors Performance Bonus Plan,
non-employee Directors are eligible to be awarded "units," the value of which is
based upon the appreciation in value of TrustCo Common stock between the date of
the award and the occurrence of a "change in control" as defined in the Plan.
The units so awarded vest, and payments under the Directors Performance Bonus
Plan are to be made, only upon the occurrence of a change in control. Each
non-employee Director has been awarded 11,500 units under the Directors
Performance Bonus Plan at a base price of $18.10 per unit (after adjustment to
reflect the 15% stock split on November 14, 1997). Directors who are employees
of TrustCo or Trustco Bank do not receive Directors' fees or other additional
remuneration for TrustCo or Trustco Bank Board of Directors' meetings or for
special assignments.
TrustCo's Nominating Committee held no meetings in 1997. The four
Directors currently serving on the Nominating Committee are R. McCormick
(Chairman), B. Andreoli, R. Murray and W. Terry. The function of the Nominating
Committee is to consider and recommend to the TrustCo Board, nominees for
election to the TrustCo Board. Each of the nominees slated for election at this
year's Annual Meeting is an incumbent, and was considered and selected by the
TrustCo Board without action by the Nominating Committee. The Nominating
Committee will consider written recommendations by shareholders for nominees for
election to the TrustCo Board .
TrustCo's Audit Committee held one meeting in 1997. The four Directors
serving on the Audit Committee are R. Murray (Chairman), J. Murphy, K. Petersen
and W. Purdy. The function of the Audit Committee is to review TrustCo's and
Trustco Bank's internal audit procedures, and also to review the adequacy of
internal accounting controls for TrustCo and Trustco Bank.
TrustCo's Stock Option Committee held one meeting in 1997. The three
Directors serving on the Stock Option Committee are J. Morris (Chairman), B.
Andreoli and N. Brickman. The function of the Stock Option Committee is to
administer the 1995 TrustCo Bank Corp NY Stock Option Plan (the "1995 Stock
Option Plan"), the Directors Performance Bonus Plan and the TrustCo Bank Corp NY
Performance Bonus Plan (the "Officers Performance Bonus Plan"), which was
adopted by the Board in 1997.
The Personnel Advisory Committee of Trustco Bank held one meeting in
1997. The three Directors serving on the Personnel Advisory Committee are J.
Morris (Chairman), B. Andreoli and N. Brickman. The function of the Personnel
Advisory Committee is to review general compensation practices of Trustco Bank
and to recommend to the Board of Directors of Trustco Bank the salary and
benefits for Trustco Bank's three executive officers who are also Directors of
TrustCo, and the two executive officers of Trustco Bank who are not directors of
TrustCo.
TrustCo Executive Officers
Executive Officers of TrustCo are presently President and Chief
Executive Officer Robert A. McCormick, Vice President and Chief Financial
Officer Robert T. Cushing, Vice President Nancy A. McNamara, Vice President
and Assistant Secretary Ralph A. Pidgeon, and Secretary William F. Terry.
6
<PAGE>
Trustco Bank Executive Officers
Executive Officers of Trustco Bank are presently President and Chief
Executive Officer Robert A. McCormick, Senior Vice President and Chief Financial
Officer Robert T. Cushing, Senior Vice Presidents Nancy A. McNamara and Ralph
A. Pidgeon, and Senior Vice President and Secretary William F. Terry.
TrustCo and Trustco Bank Executive Officer Compensation
The following table sets forth for the fiscal year ended December 31,
1997, the compensation paid to or accrued on behalf of each of the five most
highly compensated Executive Officers of TrustCo and Trustco Bank. The value of
incidental personal benefits, which may not be directly related to job
performance, has been included, where applicable, according to the S.E.C.'s
required disclosure thresholds. Each of the following Executive Officers has an
employment contract and a supplemental retirement agreement described in
subsequent pages.
7
<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------------------------------------------- -------------------------
Securities
Other Underlying
Annual Options/
Salary Bonus Compensation SARs
Year ($) ($)(1) ($)(2) (#)(3)
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
<S> <C> <C> <C> <C> <C>
Robert A. McCormick 1997 $775,000 $968,750 $62,810 115,000
President and Chief 1996 750,000 787,500 66,813 132,250
Executive Officer, 1995 720,000 648,000 48,736 158,700
TrustCo and Trustco Bank
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
Robert T. Cushing 1997 275,000 343,750 22,552 46,000
Senior Vice President 1996 260,000 273,000 12,481 52,900
Cheif Financial Officer, 1995 240,000 216,000 10,302 39,675
Trustco Bank; Vice
President, Chief Financial
Officer, TrustCo
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
Nancy A. McNamara 1997 275,000 343,750 21,211 46,000
Senior Vice President 1996 260,000 273,000 14,181 52,900
Trustco Bank; Vice 1995 240,000 216,000 12,194 39,675
President, TrustCo
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
Ralph A. Pidgeon 1997 275,000 343,750 27,430 46,000
Senior Vice President 1996 260,000 273,000 15,892 52,900
Trustco Bank; Vice 1995 240,000 216,000 11,171 39,675
President, Assistant
Secretary, TrustCo
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
William F. Terry 1997 275,000 343,750 21,857 46,000
Senior Vice President 1996 260,000 273,000 14,659 52,900
and Secretary, Trustco 1995 240,000 216,000 10,556 39,675
Bank; Secretary, TrustCo
- --------------------------- -------------- ------------------ ----------------- ------------------------ -------------------------
(1) Bonus amounts include payments to senior executive officers of TrustCo as
short-term incentive compensation pursuant to the incentive program
described in greater detail herein under the caption "Personnel
Advisory Committee Report on Executive Compensation."
(2) Includes amounts reimbursed by TrustCo for the payment of taxes pursuant to
established benefit plans.
(3) Stock Option data has been adjusted to reflect the 15% stock splits on
November 14, 1997, and November 15, 1996, and the six-for-five stock
split on August 24, 1995
</TABLE>
8
<PAGE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realizable Value
Number of % of Total at Assumed Annual Rates
Securities Options/SARs of Stock Price Appreciation
Underlying Granted to Exercise or For Option Term(4)
Options/SARs Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year(2) ($/Sh)(3) Date
- ---------------------- ----------------- ---------------- ---------------- ---------------
5% 10%
- ---------------------- ----------------- ---------------- ---------------- --------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. McCormick 115,000 28.7% $18.17 6/17/2007 $1,314.450 $3,330,400
Robert T. Cushing 46,000 11.5% $18.17 6/17/2007 525,780 1,332,160
Nancy A. McNamara 46,000 11.5% $18.17 6/17/2007 525,780 1,332,160
Ralph A. Pidgeon 46,000 11.5% $18.17 6/17/2007 525,780 1,332,160
William F. Terry 46,000 11.5% $18.17 6/17/2007 525,780 1,332,160
(1) Options which were granted on June 17, 1997, become exercisable in five
annual installments beginning June 17, 1997. Stock Option data has been
adjusted for the 15% stock split on November 14, 1997.
(2) The total number of options granted in 1997 was 400,200, of which
299,000 (74.7%) were issued to the Executive group, 11,500 (2.9%) were
issued to the non-Executive Director group, and 89,700 (22.4%) to the
non-Executive Officer group.
(3) Exercise or base price is equal to the mean between the closing dealer
bid and asked price for the Common Stock as quoted by Nasdaq on the
date of the grant.
(4) The amounts included reflect pre-tax gain. The dollar amounts under
these columns are the result of calculations at the 5% and 10% rates
set by the S.E.C. and, therefore, are not intended to forecast possible
future appreciation, if any, of TrustCo's stock price, including any
appreciation in the event of a change in control. TrustCo's per share
stock price would be $29.60 and $47.13 if increased 5% and 10%
respectively, compounded annually over the option term.
</TABLE>
9
<PAGE>
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year, and Fiscal Year-End
Option/SAR Values
<CAPTION>
Number of
Securities Underlying
Unexercised Value of Unexercised
Options/SARs at In-the-Money
FY-End (#) Options/SARs at
FY-End ($)(3)
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise (#)(1) Realized($)(2) Unexercisable Unexercisable
- ---------------------- ------------------------ ---------------------- ----------------------- -----------------------------
<S> <C> <C> <C> <C>
Robert A. McCormick -- -- 742,503/269,744 $12,010,394/3,164,156
Robert T. Cushing 8,050 $107,660 101,977/98,376 1,400,673/1,140,365
Nancy A. McNamara 1,113 23,217 182,116/91,393 2,881,388/1,030,592
Ralph A. Pidgeon 6,648 104,342 237,591/91,393 3,986,548/1,030,592
William F. Terry 17,995 213,035 224,770/91,393 3,725,937/1,030,592
(1) Stock Option data has been adjusted for the 15% stock splits on
November 14, 1997, and November 15, 1996, and the six-for-five stock
split on August 24, 1995. Shares shown include SARs exercised.
(2) The amounts included reflect pre-tax gain. Amounts shown represent the
difference between the stock option grant price and the market value of
the stock on the date of exercise.
(3) The amounts included reflect pre-tax gain. Value of unexercised
in-the-money options and SARs is based on December 31, 1997, closing
trade price of $27.25
</TABLE>
TrustCo Retirement Plans
Trustco Bank has a defined benefit retirement plan (the "Trustco Bank
Retirement Plan") pursuant to which annual retirement benefits are based on
years of service to a maximum of 30 years and average annual earnings of the
highest five consecutive years during the final ten years of service. The
Trustco Bank Retirement Plan is fully funded by Trustco Bank contributions. In
addition, Trustco Bank has a supplemental retirement plan (the "Trustco Bank
Supplemental Retirement Plan"), which is an actuarial plan, under which
additional retirement benefits are accrued for eligible Executive and Senior
Officers. Under the Trustco Bank Supplemental Retirement Plan, the amount of
supplemental retirement benefits is based upon annual contributions which are
actuarially calculated to achieve a benefit at normal retirement which
approximates the differences between (i) the total retirement benefit the
participant would have received under the Trustco Bank Retirement Plan without
taking into account limitations on compensation, annual benefits and years of
service; and (ii) the retirement benefit the participant is projected to receive
under the Trustco Bank Retirement Plan at normal retirement. The Trustco Bank
Supplemental Retirement Plan provides benefits based on years of service to a
maximum of 40.
The following table shows the approximate retirement benefits which
would have been payable in 1997 to salaried employees, under both the Trustco
Bank Retirement Plan and the Trustco Bank Supplemental Retirement Plan, assuming
retirement of such person at age 65, and payment of benefits in the form of a
life annuity. Earnings used in calculating benefits under these Plans are
approximately equal to cash amounts reflected as Salary plus Bonus in the
Summary Compensation Table. These Plans permit service and earnings to continue
to be credited
10
<PAGE>
for employment after age 65. The benefits set forth in the following table
are in addition to those which may be received as Social Security benefits. The
years of service at normal retirement age 65 for the Executive Officers (other
than Mr. McCormick) named in the Cash Compensation Table would be as follows:
Mr. Cushing, 27 years; Ms. McNamara, 43 years; Mr. Pidgeon, 44 years; and Mr.
Terry, 20 years.
Robert A. McCormick is not a participant in the Trustco Bank
Supplemental Retirement Plan, but has a separate agreement with Trustco Bank
under which additional retirement benefits are accrued. Under the terms of Mr.
McCormick's agreement, benefits are calculated on the actuarial basis used in
the Trustco Bank Supplemental Retirement Plan, however, he will be entitled to
benefits equal to those to which he would have been entitled if he had been an
employee of Trustco Bank and a participant under its qualified plans since the
date he joined a former employer. The benefit will be reduced by the amount of
benefits actually paid him under Trustco Bank's qualified plans and by his
former employer's qualified plans. The years of credited service at normal
retirement age 65 for Mr. McCormick would be 47.
<TABLE>
Pension Plan Table
<CAPTION>
Annual Benefits for Years of Service
Remuneration 10 20 30 40
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 200,000 $36,700 $74,500 $113,100 $152,800
400,000 76,700 153,500 231,800 311,800
600,000 116,700 233,500 351,800 471,800
800,000 156,700 313,500 471,800 631,800
1,000,000 196,700 393,500 591,800 791,800
1,200,000 236,700 473,500 711,800 951,800
1,400,000 276,700 553,500 831,800 1,111,800
1,600,000 316,700 633,500 951,800 1,271,800
1,800,000 356,700 713,500 1,071,800 1,431,800
2,000,000 396,700 793,500 1,191,800 1,591,800
2,100,000 416,700 833,500 1,251,800 1,671,800
</TABLE>
Generally, an employee who has attained age 55 and has ten years of
service has the right to elect to immediately begin receiving adjusted
retirement benefits less than those indicated in the table upon any separation
from service with Trustco Bank. The Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), places a maximum limit on the benefits that can
be provided under qualified retirement plans such as the Trustco Bank Retirement
Plan. For 1997, the annual Internal Revenue Code limit for a straight-life
annuity benefit at normal retirement age was $125,000, which amount is
actuarially reduced for participants who retire and begin receiving benefits
early.
The Trustco Bank Supplemental Retirement Plan provides that Trustco
Bank, in its discretion, may at any time elect to make a lump sum distribution
of a participant's supplemental benefit. The amount of this single payment is
equal to the participant's Supplemental Account Balance. A participant may also
elect to be paid the supplemental benefits upon separation of service from
Trustco Bank in one of the benefit forms provided under the Trustco Bank
Retirement Plan or in a single lump sum or installments.
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The Trustco Bank Supplemental Retirement Plan and Mr. McCormick's
separate agreement are unfunded for tax purposes. However, Trustco Bank has
established an irrevocable trust (the "Rabbi Trust") to fund its obligations
under these and other executive compensation plans. Trustco Bank is required to
make annual contributions to the Rabbi Trust. However, the assets of the Rabbi
Trust remain subject to Trustco Bank's general creditors in the event of
insolvency.
Personnel Advisory Committee Report on Executive Compensation
The Personnel Advisory Committee of Trustco Bank determines
the compensation of employees and officers of TrustCo and Trustco Bank,
including the Named Executive Officers identified in the Summary Compensation
Table (the "Named Executive Officers") which appears elsewhere in this Proxy
Statement. Each of the Named Executive Officers in the Summary Compensation
Table has an employment agreement with each of TrustCo and Trustco Bank. These
employment agreements are described elsewhere in this Proxy Statement.
The Personnel Advisory Committee of the Board of Directors of Trustco
Bank, the present members of which are J. Morris (Chairman), B. Andreoli, and N.
Brickman (none of whom was an officer of TrustCo or Trustco Bank during fiscal
year 1997) furnished the following report on executive compensation to the Board
of Directors of Trustco Bank, which has been adopted by the TrustCo Board for
the year ended December 31, 1997:
Under the supervision and direction of the Personnel Advisory
Committee, TrustCo and Trustco Bank have developed compensation policies, plans
and programs which seek to enhance profitability of TrustCo and Trustco Bank,
and ultimately shareholder value, by aligning closely the financial interests of
TrustCo's senior management with those of its shareholders. It continues to be
the purpose and intent of the Personnel Advisory Committee to design a
compensation program which reflects the standards of performance of Trustco
Bank, with particular emphasis on setting goals tied to return on shareholder
equity previously defined by the Board of Directors of Trustco Bank.
The function of the Personnel Advisory Committee is to review
the general compensation structure for executive officers of Trustco Bank,
including the Named Executive Officers identified in the Summary Compensation
Table, and to recommend to the Board of Directors of Trustco Bank the salary and
benefits of such executive officers. The components of executive compensation
for the Named Executive Officers include salary, bonus, stock options, and cash
payments under the Trustco Bank Retirement Plan, Non-Qualified Supplemental
Retirement Plan, and Executive Officer Incentive Plan, and in Mr. McCormick's
case, in his separate agreement. The Personnel Advisory Committee evaluates
individual performance and corporate profitability to determine the level of any
compensation adjustment to take effect as of January of the following year. The
Personnel Advisory Committee also identifies persons within Trustco Bank
eligible to participate in the Executive Incentive Plan and the Nonqualified
Supplemental Retirement Plan.
The Personnel Advisory Committee met once during the course of
the year, on October 21, 1997. The Stock Option Committee, whose members are the
same as that of the Personnel Advisory Committee, met separately on June 17,
1997, to (1) identify eligible participants in the 1995 Stock Option Plan, and
(2) award option grants for the current plan year. The Stock Option Committee
considered discussions Coopers & Lybrand LLP had with management regarding
general stock option issues and trends when formulating its final decision on
grants awarded under the 1995 Stock Option Plan. Coopers & Lybrand LLP provided
information regarding industry trends for general compensation levels and option
levels in the industry. Coopers & Lybrand LLP is not the independent auditor for
TrustCo, but provides various consulting services for TrustCo from time to time.
While TrustCo does
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not have a target ownership level for equity holdings by its executives, the
Stock Option Committee does take into account the amount and value of options
currently held by eligible participants when granting option awards. Options
may be granted in varying amounts so as to create relative ownership parity
among the executive officers participating in the 1995 Stock Option Plan.
It is the aim of the Personnel Advisory Committee to determine salary
and benefit levels of executive compensation principally upon the basis of
overall corporate performance, although elements of corporate performance may
vary from year to year in the discretion of the Personnel Advisory Committee and
among executive officers. In making any such determination, the Personnel
Advisory Committee will consider a number of factors including, among others,
TrustCo's and Trustco Bank's return on equity, attainment of net income goals
and total asset targets, overall profitability from year to year, banking
experience of individual officers, scope of responsibility within the overall
organization, performance and particular contributions to Trustco Bank and
TrustCo during the course of the year, and other relevant factors, including
involvement in community matters which may better position the organization to
serve the immediate needs of TrustCo Bank's market. The Personnel Advisory
Committee uses broad discretion when determining compensation levels and
considers all of the above criteria. It does not assign a specific weight to any
of these factors when establishing salary and benefit levels. In addition,
compensation levels are established notwithstanding Trustco Bank's inability to
deduct all such compensation under provisions of the Internal Revenue Code.
The Personnel Advisory Committee may also consider
compensation programs offered to executives performing similar duties for
competing depository institutions and their holding companies, with a particular
focus on the level of compensation paid by comparable institutions. To assist in
this evaluation, an industry group of 11 regional bank holding companies, called
the Dow Jones Banks-Eastern U.S. Index , was identified by the Personnel
Advisory Committee for performance and compensation comparisons. This Index is
comprised of a broad-based group of banks on the East Coast and was chosen for
comparative purposes because of its members' geographic proximity to Trustco
Bank. This peer group consists of the same companies that comprise the published
industry index used in the performance graph that follows this report. While
Trustco Bank is comparatively smaller in terms of total asset size than the
members of this peer group, Trustco Bank favorably competes with these
institutions in terms of overall corporate performance. TrustCo's return on
asset and return on equity ratios ranked in the top 60% and top 40%,
respectively, when compared to the members of this peer group, yet the base
salary of TrustCo's Chief Executive Officer was below the mean and median base
salary of the peer group members' Chief Executive Officers. The Committee
further takes into consideration the unique size of TrustCo's executive group as
compared to other financial institutions. Trustco Bank and TrustCo currently
operate with five executive officers, whereas many institutions in this peer
group have a larger pool of executive officers.
During its meeting in 1997, the Personnel Advisory Committee
decided not to change the current basic salary structure, short-term incentive
compensation for executives or features of other employee benefits plans. The
Personnel Advisory Committee did, however, recommend the adoption of the
Officers Performance Bonus Plan and also recommended that the Stock Option Plan
be amended to, among other matters, increase the number of shares available for
grant to 1,500,000 and provide that the maximum aggregate number of shares of
stock with respect to which options may be granted in a calendar year to any
single employee shall be 500,000 shares.
The Personnel Advisory Committee continues to believe that Trustco
Bank is better able to attract, retain, and motivate Trustco Bank's executives
to achieve superior performance if a relatively large percentage of senior
executive compensation is at risk. In other words, Trustco Bank's compensation
for senior executives, including the Named Executive Officers identified in the
Summary Compensation Table, is designed with an objective of
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providing less total compensation when TrustCo's performance is poorer than a
peer group of companies, and providing superior total compensation when
performance is superior to that of the peer group.
In evaluating corporate performance for purposes of
establishing short-term incentive compensation awards for executive officers,
the Personnel Advisory Committee evaluated TrustCo's performance as compared
with TrustCo's profit plan for the year, and also evaluated financial results
(generally return on equity) as compared with peers for the current year. In the
opinion of the Personnel Advisory Committee, return on equity is the most
significant measure of performance of TrustCo and its relative importance to
shareholders. Therefore, the target pools were established to provide senior
executives with an incentive to increase return on equity performance. The
Personnel Advisory Committee then established a percentage of target pool to be
paid as short-term incentive compensation. The target pool payment would be made
to senior executives based on TrustCo's return on average equity for the year.
The range of target returns on average equity was from 14%, which equates to a
40% payout of base compensation, to 20% return on average equity, which equates
to a 125% payout of base compensation. In 1997, the Committee amended the
incentive plan to establish a 15 basis point increase in payout for each 1%
increase in average return on equity beyond 20%. Return on average equity in
1997 was 20.23%. Senior executives would receive no incentive compensation award
for return on average equity below 14%.
In consideration of the potential benefits payable under the
incentive program described above, senior executives ceased to be eligible for
contributions to Trustco Bank's Profit Sharing Plan beginning in 1994, which
qualifies for favorable tax treatment and to which Trustco Bank historically has
made contributions equal to 15% of compensation.
The Personnel Advisory Committee's actions concerning
compensation were ultimately judgements based upon the Committee's ongoing
assessment and understanding of TrustCo and its executive officers, performance
of its executive officers, and whether or not cash payments or incentive
payments would provide an appropriate award or incentive to the officers'
contribution to TrustCo's past and future performance.
With respect to total compensation paid to Mr. McCormick during 1997,
the Committee reviewed, among other criteria noted above, the consistent growth
in performance and shareholder equity since his appointment as President in 1982
and Chief Executive Officer in 1984, and his ability to effectively influence
and lead the executive team to attain this performance level. The Committee
exercises broad discretion when considering these criteria and does not assign a
specific weight to any of these factors. Mr. McCormick did not participate in
the discussions regarding his compensation.
The TrustCo Board of Directors
Barton A. Andreoli James H. Murphy, D.D.S.
Lionel O. Barthold Richard J. Murray, Jr.
M. Norman Brickman Kenneth C. Petersen
Anthony J. Marinello, M.D., Ph.D. William D. Powers
Robert A. McCormick William J. Purdy
Nancy A. McNamara William F. Terry
John S. Morris, Ph.D.
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Share Investment Performance
The following graphs show changes over five-year and ten-year
periods in the value of $100 invested in: (1) TrustCo Common Stock; (2) the
Standard & Poor's 500 index; and (3) an industry group of 11 other regional bank
holding companies, called the Dow Jones Banks-Eastern U.S. Index. TrustCo
management believes that longer term performance is of greater importance to
TrustCo shareholders. The ten-year period is presented in addition to the
five-year period required by the S.E.C. because it provides additional
perspective, and matches the longest period for which Dow Jones Banks-Eastern
U.S. Index information is available. The banks comprising the Dow Jones
Banks-Eastern U.S. Index are: BankBoston Corp., The Bank of New York Co.,
Corestates Financial Corp., Fleet Financial Group Inc., MBNA Corp., Mellon Bank
Corp., Mercantile Bankshares Corp., PNC Bank Corp., State Street Corp., Summit
Bancorp, and Wilmington Trust Corp.
The year-end pre-tax values of each investment are based on
share price appreciation plus dividends paid, with cash dividends reinvested the
date they were paid.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
[To be provided by TrustCo]
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COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN*
[To be provided by TrustCo]
Employment Contracts and Termination of Employment Arrangements
TrustCo and Trustco Bank have entered into agreements (individually, a
"TrustCo Employment Agreement" and, collectively, the "TrustCo Employment
Agreements") to engage the services of the five Named Executive Officers: Robert
A. McCormick, the President and Chief Executive Officer of TrustCo and Trustco
Bank (the "President"); Nancy A. McNamara, Vice President of TrustCo, Ralph A.
Pidgeon, Vice President and Assistant Secretary of TrustCo, William F. Terry,
Secretary of TrustCo, and Robert T. Cushing, Vice President and Chief Financial
Officer of TrustCo, each a Senior Vice President of Trustco Bank as well
(collectively, the "Vice Presidents").
(1) President's TrustCo Employment Agreement
The President's TrustCo Employment Agreement, dated as of January 1,
1992, and amended as of September 1, 1994, had an initial term expiring on
December 31, 1994. The Agreement automatically renewed on January 1, 1995, and
renews each year thereafter, for a succeeding three year term until the
President receives a non-renewal notice or he reaches the mandatory retirement
age of 70, or the then mandatory retirement age, whichever is greater.
The President's TrustCo Employment Agreement provides that his annual
compensation shall be his annual base salary plus his executive incentive bonus
("Annual Compensation"). Mr. McCormick's Annual Compensation in future years
will be negotiated with TrustCo and Trustco Bank and shall not be less than his
Annual Compensation for the preceding calendar year. As further compensation,
Mr. McCormick is entitled to participate fully in any disability, death benefit,
retirement, executive incentive compensation, or pension plans maintained by
TrustCo
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and/or Trustco Bank. Notwithstanding the foregoing, and as described in
greater detail herein under the caption "Personnel Advisory Committee Report on
Executive Compensation," Mr. McCormick has ceased to be eligible to participate
in the Trustco Bank Profit Sharing Plan in consideration of the potential
benefits under the short-term incentive plan described above. In the event there
is a termination of the President for any reason, other than good cause, or
retirement, then he shall receive upon his termination an amount equal to three
times his then Annual Compensation, to be paid at his election either (a) in a
single lump sum reduced to its present value, within ten days of his
termination, or (b) in three equal annual payments each in the amount of the
Annual Compensation then in effect with the first payment to be made within ten
days after his termination. The President's TrustCo Employment Agreement also
provides for a gross up payment in the event that the amounts payable to the
President upon his termination under the President's TrustCo Employment
Agreement or any other agreement are subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code.
Upon termination of the President's employment due to retirement or
disability, TrustCo and Trustco Bank shall provide to the President and his
wife, for the life of the President, the same health insurance benefits provided
to retirees by TrustCo and Trustco Bank under their medical insurance plan.
TrustCo and Trustco Bank will also provide to the President for his life the
same life insurance benefits provided to retirees by TrustCo and Trustco Bank
under their life insurance plan.
The President's TrustCo Employment Agreement defines termination to
include: (a) any reduction in the President's annual compensation (including
executive incentive compensation), disability, death, retirement, pension or
profit sharing benefits (unless such reductions shall be applied to all Trustco
Bank employees as part of a validly adopted plan of cost containment),
responsibilities or duties; or (b) either TrustCo's or Trustco Bank's relocation
or a change in the President's base location; or (c) receipt of a non-renewal
notice pursuant to the President's TrustCo Employment Agreement; or (d) the
unilateral election of the President to terminate his Agreement. Notwithstanding
the foregoing, the parties to the President's TrustCo Employment Agreement have
agreed that Mr. McCormick's ineligibility to participate in the Trustco Bank
Profit Sharing Plan, as aforesaid, shall not have effected a termination of such
employment agreement.
(2) Vice Presidents' TrustCo Employment Agreements
The TrustCo Employment Agreements for the Vice Presidents (except for
Robert T. Cushing, whose employment agreement was executed on June 21, 1994)
were restated effective as of June 21, 1994. These employment agreements have
one-year terms which automatically renew on January 1 of each year, unless a
Vice President receives a non-renewal notice or he or she reaches a specified
retirement age. The Vice Presidents' TrustCo Employment Agreements provide that
the annual compensation of each Vice President shall be his or her annual base
salary, which amount may be adjusted as agreed among the parties during each
renewal term. The Vice Presidents are also entitled to participate fully in any
disability, death benefit, retirement, executive incentive compensation, or
pension plans. Notwithstanding the foregoing, and as described in greater detail
herein under the caption "Personnel Advisory Committee Report on Executive
Compensation," the Vice Presidents ceased to be eligible to participate in the
Trustco Bank Profit Sharing Plan in consideration of the potential benefits
under the short-term incentive plan described above.
In the event there is a termination of a Vice President within two
years after a change in control of TrustCo or Trustco Bank, for any reason other
than for good cause, death, retirement at the mandatory retirement age, or
disability, then he or she shall receive, within ten days of his or her
termination, an amount equal to two times the Vice President's annual base
salary then in effect. The TrustCo Employment Agreements for the Vice Presidents
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also provide for a gross up payment in the event that the amounts payable to a
Vice President upon his or her termination under such Vice President's TrustCo
Employment Agreement or any other agreement involving such Vice President are
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code.
Upon termination of a Vice President's employment due to retirement or
disability, TrustCo and Trustco Bank shall provide to the Vice President and his
or her spouse, for the life of the Vice President, the same health insurance
benefits provided to retirees by TrustCo and Trustco Bank under their medical
insurance plan. TrustCo and Trustco Bank will also provide to the Vice President
for his or her life the same life insurance benefits provided to retirees by
TrustCo and Trustco Bank under their life insurance plan.
The TrustCo Employment Agreements for the Vice Presidents define
termination within two years after a change in control to include: (a) any
reduction in the executive's annual compensation, (including executive incentive
compensation), disability, death, retirement, pension or profit sharing benefits
(unless such reductions shall be applied to all Trustco Bank employees as part
of a validly adopted plan of cost containment), responsibilities or duties; or
(b) either TrustCo's or Trustco Bank's relocation or a change in the executive's
base location; or (c) receipt of a non-renewal notice pursuant to the Vice
President's TrustCo Employment Agreement; or (d) the unilateral election of the
executive to terminate his or her Agreement. Notwithstanding the foregoing, the
parties to the Vice Presidents' TrustCo Employment Agreements have agreed that
the Vice Presidents' ineligibility to participate in the Trustco Bank Profit
Sharing Plan, as aforesaid, shall not have effected a termination of such
employment agreements.
(3) General Provisions
In addition to termination payments for the President and Vice
Presidents described above, all TrustCo Employment Agreements provide for (a)
the payment in full of each employee's compensation due, including retirement,
pension and profit sharing plans, through the termination date, (b) the
continuation of health and group life insurance benefits for at least one year
following termination and (c) the cost of any legal expenses as a result of such
termination.
Performance Bonus Plan
Under the Officers Performance Bonus Plan, officers and key employees
of TrustCo are eligible to be awarded units, the value of which is based upon
the appreciation in value of TrustCo Common stock between the date of the award
and the occurrence of a "change in control" as defined in the Plan. The units so
awarded vest, and payments under the Officers Performance Bonus Plan are to be
made, only upon the occurrence of a change in control or upon a participant's
termination of employment with TrustCo within the year prior to a change of
control. On June 17, 1997, Mr. McCormick was awarded 460,000 units and Mr.
Cushing, Ms. McNamara, Mr. Pidgeon, and Mr. Terry each were awarded 172,500
units, all at a base price of $18.10 per unit (after adjustment for the 15%
stock split on November 14, 1997).
THE TRUSTCO BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE TRUSTCO DIRECTOR
NOMINEES AS TRUSTCO DIRECTORS, WHICH IS ITEM 1 ON THE TRUSTCO PROXY CARD
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Item 2. Amendment of TrustCo's Amended and Restated Certificate of Incorporation
The TrustCo Board has unanimously recommended that the shareholders
approve a proposal to amend TrustCo's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") to reduce the vote required
for certain matters submitted for shareholder approval. Currently, Article VIII
of TrustCo's Certificate of Incorporation provides that the affirmative vote of
at least a majority of TrustCo's outstanding voting stock is needed to approve
any matter on which shareholders are entitled to vote, except that the
affirmative vote of at least two-thirds of TrustCo's voting stock is needed to
effect a change, modification or repeal of any provision in the Certificate of
Incorporation or TrustCo's Bylaws. The proposed amendment would reduce the
minimum vote required to approve certain matters submitted to shareholders by
adding a new provision to Article VIII to the effect that the vote of only a
majority of the votes cast at a meeting of shareholders would be necessary to
authorize the issuance or sale by TrustCo of any shares, bonds, rights or
options to any of its Directors, officers or employees as an incentive to
service or to continued service with TrustCo.
Reasons for and Effect of the Certificate Amendment
The TrustCo Board believes that the change in the vote required to
approve issuances of shares, bonds, rights or options to Directors, officers or
employees of TrustCo is in the best interests of TrustCo and its shareholders.
The amendment will give TrustCo and the Board of Directors greater flexibility
in developing and implementing compensation programs to attract and retain
quality directors, officers and employees and is consistent with recent
revisions to the New York Business Corporation Law regarding shareholder
authorization of stock-based compensation. In the opinion of the Board of
Directors, the proposed amendment is also consistent with sound democratic
management principles. Other matters submitted to shareholders for their
considerations and approval will continue to have the higher voting requirements
imposed under the Certificate of Incorporation or applicable law.
The full text of Article VIII of the Certificate of Incorporation, as
currently in effect and as proposed to be amended, is set forth in Exhibit A to
this Proxy Statement.
Vote Required
The proposed amendment to Article VIII of the Certificate of
Incorporation will be adopted if approved by the affirmative vote of the holders
of at least two-thirds of the Common Stock. Abstentions on properly executed
proxy cards and shares not voted by brokers and other entities holding shares on
behalf of beneficial owners will not be counted and will therefore have the same
effect as a vote against this proposal. Dissenting votes give rise to no rights
on the part of dissenters.
THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE FOR THIS
PROPOSAL, WHICH IS ITEM 2 ON THE TRUSTCO PROXY CARD.
Item 3. Amendments to the 1995 TrustCo Bank Corp NY Stock Option Plan
The third item to be acted upon at the TrustCo Annual Meeting is a
proposal seeking shareholder approval of amendments to the 1995 Stock Option
Plan to (i) increase the aggregate number of shares of TrustCo Common Stock
available to be issued pursuant to the 1995 Stock Option Plan from 1,000,000 to
1,500,000 (1,587,000 to 2,087,000 after adjustment to reflect the 15% stock
splits onNovember 14, 1997, and November 15, 1996, and the six-for-five stock
split on August 24, 1995 (the Stock Splits")); and (ii) provide that the maximum
aggregate number of shares of Common Stock with respect to which stock options
may be granted in a calendar year to any single employee shall be 500,000
shares, in accordance
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with Section 162(m) of the Internal Revenue Code. Options have been granted
with respect to 1,182,885 of the shares previously authorized by the
shareholders.
The TrustCo Board, at its regular meeting duly called and held on
February 17, 1998, approved resolutions adopting the foregoing proposed
amendments to the 1995 Stock Option Plan, conditioned upon shareholder approval
and regulatory approval.
The purpose of the Stock Option Plan is to assist TrustCo in obtaining
and maintaining its executive force at the most efficient level.
The following is a brief description of the material features of the
1995 Stock Option Plan:
Administration
The 1995 Stock Option Plan is administered by the Stock Option
Committee of TrustCo's Board of Directors. The Stock Option Committee is
appointed from time to time by the TrustCo Board and is composed of three or
more members of the TrustCo Board who were not eligible to receive options under
the 1995 Stock Option Plan within the one year period immediately preceding
their appointment. The Stock Option Committee selects the employees eligible to
receive stock options and stock appreciation rights pursuant to the 1995 Stock
Option Plan, grants the stock options and stock appreciation rights and
determines when the stock options and stock appreciation rights will be granted,
the number of shares of TrustCo Common Stock to be granted to any individual,
the option price and term of each stock option and all of the other terms and
conditions of each stock option and stock appreciation right granted. The terms
and conditions of stock options and stock appreciation rights granted under the
1995 Stock Option Plan are reflected in individual option agreements and may not
be changed after execution except to the extent that the agreement may by its
terms be so amended. The Stock Option Committee is also authorized to determine,
for purposes of the 1995 Stock Option Plan, the duration and purpose of any
leave of absence which may be granted to an eligible employee without
constituting a termination of employment, and if TrustCo Common Stock previously
acquired by an optionee may be used in payment of an option price. No Stock
Option Committee member or other member of the TrustCo Board may participate in
a decision to award any stock option or stock appreciation right under the 1995
Stock Option Plan to himself or herself. The Stock Option Committee has full
authority to interpret and regulate the 1995 Stock Option Plan and stock options
and stock appreciation rights granted thereunder and to establish, amend and
rescind rules and regulations relating to the operation of the 1995 Stock Option
Plan. All determinations by the Stock Option Committee are conclusive. The
TrustCo Board reserves the right to prospectively terminate any and all powers
delegated to the Stock Option Committee by written resolution, in which event
all powers of the Stock Option Committee revert to the TrustCo Board.
Participants
Stock options and stock appreciation rights may be granted to any
person who, at the time of the grant, is a full-time, salaried executive or
other key managerial employee of TrustCo or a participating subsidiary. The
individuals and number of persons who may be selected to participate in the 1995
Stock Option Plan in the future are at the discretion of the Stock Option
Committee and, therefore, are not determinable at this time. (Please refer to
"Item 1. Election of Directors - TrustCo and Trustco Bank Executive Officer
Compensation" for a discussion of the past participation in the 1995 Stock
Option Plan by the TrustCo executive officers named herein.) Likewise, the
number of stock options and stock appreciation rights that will be granted to
eligible employees pursuant to the 1995 Stock Option Plan (if amended as
proposed hereby) are not determinable at this time.
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Stock Subject to the 1995 Stock Option Plan
If the 1995 Stock Option Plan is amended as proposed, 1,500,000 shares
(2,087,000 shares after giving effect to the stock splits) of TrustCo Common
Stock, which may be either authorized but unissued shares or treasury shares,
will be available for issuance under the 1995 Stock Option Plan (subject to
adjustment for future stock dividends, stock splits and other changes in
capitalization as described in the 1995 Stock Option Plan). The market value of
the shares of TrustCo Common Stock issuable under the 1995 Stock Option Plan is
$11,113,000 as of March 1, 1998. Currently, there is no maximum or minimum
number of shares for which a stock option may be granted. Under the proposed
amendments, however, the maximum number of shares of Common Stock with respect
to which stock options may be granted in a calendar year to any single employee
shall be 500,000 shares. This new limit is being imposed to further ensure that
the stock options granted under the 1995 Stock Option Plan are treated as
performance-based compensation, which can be excluded in calculating the
$1,000,000 limitation in Section 162(m) of the Internal Revenue Code on tax
deductions for compensation paid to the executives named in the Summary
Compensation Table. Stock options and SARs may qualify as performance-based
compensation if granted pursuant to a plan approved by shareholders that, among
other things, imposes a maximum limit on the number of shares underlying such
awards that may be granted to any participant over a specified period. If the
1995 Stock Option Plan is approved as proposed, TrustCo will be able to exclude
from the Section 162(m) limitation its compensation expenses incurred with
respect to options and SARs granted under the Plan. TrustCo does not expect to
change its practices with respect to determining grants of options and SARs. The
1995 Stock Option Plan also currently provides that the aggregate fair market
value of stock, determined as of the time of the grant, with respect to which
incentive stock options are exercisable for the first time by an optionee during
any calendar year under the 1995 Stock Option Plan or any other plan maintained
by TrustCo which grants incentive stock options may not exceed $100,000.
Option Price
The price at which shares may be purchased pursuant to each stock
option may not be less than 100% of the fair market value thereof on the date on
which the option is granted. If, however, any incentive stock option is granted
to an eligible employee who at the time of the grant owns more than 10% of the
combined voting power of all classes of TrustCo's stock or of its subsidiary
companies (a "Shareholder-Employee"), the option price may not be less than 110%
of the fair market value of the stock on the date on which the option is
granted.
Option Period
Options may be exercised at such times and for such number of shares
as the Stock Option Committee may determine. The period during which an option
may be exercised may not exceed 10 years from the date of grant of such option
or 5 years from the date of grant if to a Shareholder-Employee. Any stock
options or stock appreciation rights granted under the 1995 Stock Option Plan
will accelerate and become exercisable immediately upon a "change in control" of
TrustCo. A "change of control" is considered to have occurred if, among other
things (i) a contract is executed providing for a merger or consolidation of
TrustCo with or into another entity (unless TrustCo is the surviving entity and
the merger does not affect the TrustCo shareholders' stock interest) or for a
sale of substantially all the assets of TrustCo, (ii) a single entity or
individual (including any related parties to such entity or individual) acquires
20% or more of the outstanding TrustCo Common Stock, or (iii) within any
consecutive 12-month period, there is a change in a majority of the TrustCo
Board members unless the nomination or election of each new director was
approved by at least two-thirds of the TrustCo Board in office at the beginning
of the 12-month period. Upon the occurrence of a dissolution or liquidation of
TrustCo, a proposed sale of substantially all of TrustCo's assets or a merger or
consolidation in which TrustCo is not the survivor, each outstanding stock
option and stock appreciation right will terminate as of a date determined by
the TrustCo Board and optionees must be given not less than 30 days notice of
such termination date during which time the option may be exercised.
Upon the exercise of a stock option during the 60-day period from and
after a change in control of TrustCo, the optionee exercising such option may,
in lieu of receiving stock, elect by written notice to TrustCo to receive an
amount in cash equal to the excess of the aggregate value of the shares of stock
covered by the option or the portion thereof which is surrendered over the
aggregate exercise price of such option. However, if the end of the 60-day
period is within six months of the date of a grant of an option held by an
optionee who is an officer of
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TrustCo, such option will be canceled in exchange for a cash payment to the
optionee equal to the aggregate spread on the day which is six months and
one day after the date of the grant of such option. Stock will be substituted
for the cash payable as described immediately above if any right granted in
connection with this paragraph would make a change of control transaction
ineligible for pooling of interests accounting under APB No. 16.
Termination of Employment
Upon termination of an optionee's employment for any reason other than
death, disability or retirement, any stock option granted to such optionee will
terminate three months after the date his employment terminates. If an optionee
terminates employment as a result of disability or retirement, any stock option
granted to such optionee will terminate upon the date the option otherwise
terminates. In the case of death, any option previously granted will terminate
upon the date prescribed by the Stock Option Committee, provided that no such
option shall be exercisable after the applicable 10 year or 5 year time period
noted above. Furthermore, if an optionee's employment terminates by his death,
disability or retirement, the exercise of each stock option will accelerate and
become exercisable in full upon such termination. The period during which an
option may be exercised upon such termination is as discussed above.
If an optionee's employment terminates due to disability or
retirement, the tax treatment available pursuant to Section 422 of the Internal
Revenue Code upon the exercise of any incentive stock option will not be
available to an optionee who exercises any incentive stock option more than (a)
three months after the date of termination of employment due to retirement; or
(b) twelve months after the date of such termination of employment due to
disability.
Transferability
Stock options and any related stock appreciation rights issued under
the 1995 Stock Option Plan are not transferable by the optionee except by will
or by the laws of descent and distribution. During the lifetime of an optionee,
the option may be exercised only by the optionee and after his death only by his
heirs, legatees or personal representatives who succeed to his interest under
the option agreement. Notwithstanding the foregoing, in addition to
non-transferable stock options, the Stock Option Committee may grant
nonqualified stock options that are transferable, without payment of
consideration, to (i) revocable trusts for the benefit of immediate family
members which qualify as grantor trusts for Federal income tax purposes, (ii) by
gift to immediate family members, and (iii) to partnerships whose only partners
are immediate family members. The Stock Option Committee may also amend
outstanding nonqualified stock options to provide for such transferability.
Notwithstanding the foregoing, in the event that a transferable nonqualified
stock option is transferred as hereinbefore discussed, such nonqualified stock
option may be exercised by such transferee. The transferee of a transferable
nonqualified stock option is subject to all of the conditions applicable to the
transferable nonqualified stock option prior to its transfer.
Rights as a Shareholder
No optionee shall have any rights of a shareholder in respect of any
shares subject to option until certificates for such shares have been issued to
such optionee.
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Method of Exercise
Stock options and stock appreciation rights are exercisable in the
manner set forth in the option agreements. The option price for a stock option
may be paid in cash, certain cash equivalents or, if the Stock Option Committee
so determines, in whole or in part by an exchange of TrustCo Common Stock
previously acquired by the optionee based upon the fair market value of such
stock as of the date of exchange or by the simultaneous exercise of a stock
option and the sale of the stock represented thereby, as the Stock Option
Committee may allow in its discretion. If the optionee acquired the stock to be
exchanged by an exercise of an incentive stock option, said optionee must have
held such stock for more than two years after the date the previous option was
granted and for more than one year after the date the previous option was
exercised in order to retain the favorable tax treatment afforded incentive
stock options. In an effort to encourage ownership of TrustCo stock by
executives, the Stock Option Committee may, in certain cases, grant reload
options to optionees who have undertaken cashless option exercises in which the
optionee sells a portion of the option shares to pay the exercise price and the
taxes thereon. The reload options are intended to replace options exercised and
option shares sold to pay the exercise price. The Stock Option Committee may, in
its discretion, withhold shares upon the exercise of a stock option under the
1995 Stock Option Plan in respect to any tax or similar liability incurred with
respect to such exercise.
The 1995 Stock Option Plan may be amended, suspended, terminated or
reinstated, in whole or in part, at any time by the TrustCo Board. However, no
modification may be made without the approval of the TrustCo shareholders which
would (i) increase the maximum number of shares subject to options issued under
the 1995 Stock Option Plan, except for adjustments due to changes in
capitalization as noted above, (ii) extend the maximum period during which a
stock option may be exercised, (iii) extend the maximum period during which
incentive stock options may be granted under the 1995 Stock Option Plan, or (iv)
change the class of eligible employees.
Federal Income Tax Consequences of the Plan
Upon exercise of a non-qualified stock option, an optionee will
realize income in the year of exercise equal to the difference between the
exercise price and the value of the shares acquired and TrustCo may deduct an
amount equal to the income recognized by the optionee. TrustCo will not receive
a tax deduction at the time of a grant or exercise of an incentive stock option
and no income is recognized by an optionee when an incentive stock option is
granted or exercised pursuant to the 1995 Stock Option Plan. When an incentive
stock option is exercised, the difference between fair market value at the date
of exercise and the exercise price will be an item of adjustment for purposes of
calculating the optionee's alternative minimum tax for the year of exercise.
If the incentive stock option shares are disposed of after the later
of two years from the date of option grant or one year after the transfer of the
shares to the optionee (the "holding period") any gain or loss upon disposition
of the shares will be treated for federal income tax purposes as long-term
capital gain or loss, as the case may be. A disposition includes a sale,
exchange, gift or other transfer of legal title. In general, an optionee's basis
in the shares received upon exercise of an incentive option will be the exercise
price paid by him for the shares. If the option shares are disposed before the
expiration of the holding period, all or part of the gain, if any, will be
characterized as ordinary income depending upon the relative amount of the sale
price of the shares as compared with the exercise price of the shares, provided,
that the amount of ordinary income realized by an employee in a sale or exchange
with respect to which a loss would be recognized is limited to the excess of the
amount realized on the sale or exchange over the stock's adjusted basis.
Ordinary income received on account of a disposition of shares within
the holding period will be taxable as additional compensation and TrustCo may
treat such income as a deductible expense for federal income tax purposes.
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<PAGE>
Vote Required
The affirmative vote of a majority of all of TrustCo's issued and
outstanding shares of Common Stock is required to approve the foregoing
amendments to the 1995 Stock Option Plan. Dissenting votes give rise to no
rights on the part of dissenters.
The TrustCo Board believes the 1995 Stock Option Plan, as so amended,
will be in the best interests of TrustCo and its shareholders.
THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE FOR THIS
PROPOSAL, WHICH IS ITEM 3 ON THE TRUSTCO PROXY CARD.
Item 4. Ratification of the Appointment of Independent Auditors
KPMG Peat Marwick LLP, certified public accountants, were the
independent auditors for TrustCo for the year ended December 31, 1997, and the
TrustCo Board has again selected and appointed them as the independent auditors
for the year ending December 31, 1998. A resolution will be presented at the
Annual Meeting to ratify their appointment as independent auditors. The
independent auditors will report on the consolidated financial statements of
TrustCo for the current calendar year and will perform such other non-audit
services as may be required of them. Representatives of KPMG Peat Marwick LLP
are expected to be present at the Annual Meeting to make a statement if they so
desire and are also expected to be available to respond to appropriate questions
that may be raised.
During the year ended December 31, 1997, KPMG Peat Marwick LLP
provided various audit and non-audit professional services to TrustCo. Audit
services so provided included examination of the consolidated financial
statements of TrustCo, review, assistance and consultation in connection with
the filing of the Form 10-K Annual Report with the S.E.C., and assistance with
accounting and financial reporting requirements. Non-audit services so provided
included the preparation and planning of corporate tax returns.
Vote Required
The affirmative vote of a majority of all of TrustCo's issued and
outstanding shares of Common Stock is required to ratify the appointment of KPMG
Peat Marwick LLP as TrustCo's independent auditors for the year ending December
31, 1998. Dissenting votes give rise to no rights on the part of dissenters.
THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE FOR THIS
PROPOSAL, WHICH IS ITEM 4 ON THE TRUSTCO PROXY CARD.
24
<PAGE>
Item 5. Other Matters
The TrustCo Board is not aware of any other matters that may come
before the Annual Meeting. However, the proxies may be voted with discretionary
authority with respect to any other matters that may properly come before the
Annual Meeting.
SEC FORM 10-K:
TrustCo Bank Corp NY will provide without charge a copy of its Form
10-K upon written request. Requests and related inquiries should be directed to:
William F. Terry, Secretary, TrustCo Bank Corp NY, P.O. Box 1082, Schenectady,
New York 12301-1082.
Ownership of TrustCo Common Stock by Certain Beneficial Owners
TrustCo is not aware of any person who, as of the date hereof, is the
beneficial owner of more than 5% of the Common Stock.
At March 1, 1998, the Trust Department of Trustco Bank held 1,575,162
shares of TrustCo Common Stock as executor, trustee and agent (6.6% of
outstanding shares) not otherwise reported in this Proxy Statement. Neither
TrustCo nor Trustco Bank has any beneficial interest in these shares.
Transactions with TrustCo and Trustco Bank Directors, Executive Officers and
Associates
Some of the directors and executive officers of TrustCo and Trustco
Bank, and some of the corporations and firms with which these individuals are
associated, are also customers of Trustco Bank in the ordinary course of
business, or are indebted to Trustco Bank in respect to loans of $60,000 or
more, and it is anticipated that they will continue to be customers of and
indebted to Trustco Bank in the future. All such loans, however, were made in
the ordinary course of business, did not involve more than normal risk of
collectibility, do not present other unfavorable features, and were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable Trustco Bank transactions with
unaffiliated persons. As of March 1, 1998 the total amount of such loans
represented 3.41% of shareholders' equity of TrustCo.
During the previous calendar year, Trustco Bank has had commercial
transactions in the ordinary course of business with companies with which
certain of TrustCo's directors are affiliated. No significant business or
personal relationship with Trustco Bank existed by virtue of a person's position
in TrustCo or in Trustco Bank, or ownership interest in TrustCo.
25
<PAGE>
Insurance for Indemnification of Officers and Directors
TrustCo renewed insurance for the indemnification of its officers and
directors and officers and directors of Trustco Bank from the Progressive
Insurance Company effective for the one year period from October 10, 1997 to
October 10, 1998. The cost of this insurance was $90,000, and coverage is
provided to all officers and directors of TrustCo and Trustco Bank. The TrustCo
Board has no knowledge of any claims made or sum paid pursuant to such insurance
policy during 1997.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires TrustCo's directors and executive officers, and persons who own more
than 10% of a registered class of TrustCo's equity securities ("Reporting
Persons") to file initial reports of ownership and reports of changes of
ownership in TrustCo's Common Stock and other equity securities with the SEC.
Reporting Persons are required by SEC regulations to furnish TrustCo with copies
of all Section 16(a) reports they file.
To TrustCo's knowledge, based solely on a review of the copies of such
reports furnished to TrustCo, and written representations that no other reports
were required, during the fiscal year ended December 31, 1997, all Section 16(a)
filing requirements have been met.
TRUSTCO SHAREHOLDERS
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE TRUSTCO ANNUAL MEETING, PLEASE
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING TRUSTCO PROXY CARD IN THE
ENVELOPE PROVIDED. IF YOU PLAN TO ATTEND THE MEETING AND ARE A SHAREHOLDER OF
RECORD, PLEASE MARK THE PROXY CARD APPROPRIATELY AND RETURN IT. HOWEVER, IF YOUR
SHARES ARE NOT REGISTERED IN YOUR OWN NAME, PLEASE ADVISE THE SHAREHOLDER OF
RECORD (YOUR BANK, BROKER, ETC.) THAT YOU WISH TO ATTEND. THAT FIRM MUST PROVIDE
YOU WITH EVIDENCE OF YOUR OWNERSHIP WHICH WILL ENABLE YOU TO GAIN ADMITTANCE TO
THE MEETING.
26
<PAGE>
Exhibit A
The full text of Article VIII of the Certificate of Incorporation, as
currently in effect, is set forth below:
Article VIII
Shareholders - Quorum, Voting and Special Meetings
8. The holders of at least a majority of the outstanding
Voting Stock of the Corporation shall be present in person or by proxy
at any meeting of shareholders in order to constitute a quorum for the
transaction of any business, and the affirmative vote of at least a
majority of the Corporation's outstanding Voting Stock shall be needed
to approve any matter on which such shareholders are entitled to vote
except that the affirmative vote or request, as the case may be, of at
least two-thirds of the Corporation's Voting Stock shall be needed to
effect a change, modification or repeal of any provision in the
Certificate of Incorporation or Bylaws and to call a Special meeting of
shareholders. This provision does not affect those circumstances under
which shareholders may call a Special Meeting for the election of
directors as a matter of law and the right of management to call
shareholder meetings as set forth in the Bylaws.
The full text of Article VIII of the Certificate of Incorporation,
amended as proposed in this Proxy Statement, is set forth below:
Article VIII
Shareholders - Quorum, Voting and Special Meetings
8. The holders of at least a majority of the outstanding
Voting Stock of the Corporation shall be present in person or by proxy
at any meeting of shareholders in order to constitute a quorum for the
transaction of any business, and the affirmative vote of at least a
majority of the Corporation's outstanding Voting Stock shall be needed
to approve any matter on which such shareholders are entitled to vote
except that the affirmative vote or request, as the case may be, of at
least two-thirds of the Corporation's Voting Stock shall be needed to
effect a change, modification or repeal of any provision in the
Certificate of Incorporation or Bylaws and to call a Special meeting of
shareholders. This provision does not affect those circumstances under
which shareholders may call a Special Meeting for the election of
directors as a matter of law and the right of management to call
shareholder meetings as set forth in the Bylaws. Notwithstanding the
foregoing, the vote of only a majority of the votes cast at a meeting
of shareholders shall be required to authorize the issuance or sale of
any shares, bonds, rights or options by the Corporation, of any class
or series, to one or more Directors, Officers or employees of the
Corporation as an incentive to service or continue service with the
Corporation, all as permitted pursuant to Section 505 of the Business
Corporation Law of the State of New York.
<PAGE>
TRUSTCO BANK CORP NY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 18, 1998
The Board of Directors recommends a vote "FOR" proposals 1, 2, and 3 below
1. Election of Directors
[ ] FOR
[ ] WITHHELD
* FOR ALL EXCEPT the following nominees:
2. Approval of Amendment of Certificate of Incorporation
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
3. Adoption of Amendment to 1995 Stock Option Plan
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
4. Ratification of Appointment of Independent Auditors
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
SPECIAL NOTES
[ ] I plan to attens meeting [ ] I plan to bring a guest
[ ] Comments on reverse side
SIGNATURES________________________________________ DATE_____________,1998
Please sign and date this proxy card exactly as your name(s) appear above and
return it promptly whether or not you plan to attend the meeting. If signing
for a corporation or partnership or as an agent, attorney or fiduciary,
indicate the capacity in which you are signing. If you do attend the meeting
and decide to vote by ballot, such vote will supersede this proxy.
This Proxy is solicited on behalf of the Board of Directors of TrustCo Bank
Corp NY ("TrustCo") for the Annual Meeting of shareholders to be held at
TrustCo's Trust Building, Trust Building - 6th Floor,192 Erie Boulevard,
Schenectady, New York, on May 18, 1998.
The undersigned hereby appointsHarry E. Whittingham, Jr. and Anthony M. Salerno,
and each of them, the proxy or proxies of the undersigned, with full power of
substitution, to vote all shares of common stock of TrustCo which the
undersigned is entitled to vote at the Annual Meeting, and at any adjournments
or postponements thereof.
This proxy will be voted as directed, but if no direction is indicated, it will
be voted FOR Proposals 1 through 3 and in the discretion of the proxies on such
other matters as may properly come before the Annual Meeting or any adjournments
or postponements thereof.
Your vote for election of Directors may be indicted on the other side. Nominees
are : M. Norman Brickman, Anthony J. Marinello, MD, PhD., Robert A. McCormick,
and Kenneth C. Petersen.
Please sign and date this proxy card on the reverse side and mail promptly in
the enclosed postage-paid envelope. If you do not sign and return a proxy or
attend the meeting and vote by ballot, your shares cannot be counted.
Comments:_____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(If you have written in the abouve space, please mark the "Comments" box on the
other side of this card.)
AMENDMENT NO. 1
TO
1995 TRUSTCO BANK CORP NY
STOCK OPTION PLAN
WHEREAS, TrustCo Bank Corp NY, (hereinafter called "the Company"),
established the 1995 TrustCo Bank Corp NY Stock Option Plan (hereinafter called
"Plan"); and
WHEREAS,the Company desires to amend said Plan effective as of January
1, 1998;
NOW, THEREFORE, the Company does hereby amend the Plan effective
January 1, 1998 so that it will read as follows:
I.
Section 6 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"SECTION 6: SHARES SUBJECT TO THE PLAN
1. The total number of shares available for grants of
Stock Options under this Plan is 2,087,000, subject
to the adjustments under Section 9. The shares may be
either authorized but unissued shares or treasury
shares. If a Stock Option or a portion thereof
expires or terminates for any reason without being
exercised in full, the unpurchased shares covered by
the Option are to be available for future Stock
Option grants under this plan.
2. The maximum aggregate number of shares of Stock with
respect to which Stock Options may be granted in any
one fiscal year to any single Employee shall be
500,000."
II.
The following new Section 13 is hereby added immediately following
Section 12 of the Plan:
"SECTION 13: WITHHOLDING
The Company shall deduct from any payment, or otherwise
collect from the recipient, any taxes required to be withheld by
federal, state or local governments in connection with any Stock
Option. The recipient may elect, subject to approval by the
<PAGE>
Committee, to have shares of Stock withheld by the Company in
satisfaction of such taxes, or to deliver other shares of Stock owned
by the recipient in satisfaction of such taxes. The number of shares
to be withheld or delivered shall be calculated by reference to the
Fair Market Value of the appropriate class or series of Stock on the
date that such taxes are determined."
IN WITNESS WHEREOF, The Company has caused this Amendment No. 1 to be executed
by its duly authorized officer this 17th day of February, 1998.
TRUSTCO BANK CORP NY
By:/S/ William F. Terry
William F. Terry, Secretary
<PAGE>
