SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
FNB Rochester Corp.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a- 6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
[ ] 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.
<PAGE>
FNB ROCHESTER CORP.
35 STATE STREET
ROCHESTER, NEW YORK 14614
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1996
NOTICE IS HEREBY GIVEN THAT the ANNUAL MEETING OF SHAREHOLDERS of
FNB ROCHESTER CORP. (the "Company") will be held at the
STRATHALLAN, 550 EAST AVENUE, ROCHESTER, NEW YORK 14607, ON MAY
28, 1996 AT 10:00 A.M., local time, for the following purposes:
(1) To elect EIGHT (8) Directors to hold office for the
ensuing year, and until their successors have been duly
elected and qualified.
(2) To consider and act upon a proposal to approve and
ratify an amendment to the Company's 1992 Stock Option
Plan to increase the number of shares of the Company's
common stock authorized for purchase under the Plan by
100,000 to an aggregate of 325,000, effective as of
October 3, 1995.
(3) To consider and act upon a proposal to approve and
ratify the adoption of the Company's 1995 Non-Employee
Director Stock Option Plan, including grants thereunder
to each non-employee director on October 30, 1995 of
options to purchase 2,500 shares of the Company's
common stock.
(4) To transact such other business as may properly come
before the Meeting.
The holders of record of common shares at the close of business
on April 10, 1996 are entitled to notice of and to vote at the
Annual Meeting.
PLEASE INDICATE YOUR INSTRUCTIONS FOR VOTING ON THE ENCLOSED
PROXY CARD, DATE AND SIGN IT, AND MAIL IT IN THE ENCLOSED
ENVELOPE AS PROMPTLY AS POSSIBLE. IF YOU ATTEND THE MEETING, YOU
MAY VOTE IN PERSON AND THE PROXY WILL NOT BE USED.
Dated: April 24, 1996
BY ORDER OF THE BOARD OF DIRECTORS,
Timothy P. Johnson
Assistant Secretary
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
FNB ROCHESTER CORP.
35 STATE STREET
ROCHESTER, NEW YORK 14614
TO BE HELD AT THE
STRATHALLAN
550 EAST AVENUE, ROCHESTER, NEW YORK
ON MAY 28, 1996
THIS PROXY STATEMENT IS FURNISHED TO THE HOLDERS OF COMMON STOCK
OF FNB ROCHESTER CORP. (THE "COMPANY") IN CONNECTION WITH THE
SOLICITATION OF PROXIES ON BEHALF OF THE BOARD OF DIRECTORS FOR
USE AT THE ANNUAL MEETING OF SHAREHOLDERS OF THE COMPANY TO BE
HELD ON MAY 28, 1996, or any adjournments thereof. This Proxy
Statement and form of proxy are first being sent or given to
shareholders on or about April 24, 1996.
Shareholders who execute proxies retain the right to revoke them
at any time before they are exercised. If you sign and return
the enclosed proxy, the shares represented thereby will be voted
for the nominees of the Board of Directors and for Proposals 2
and 3, unless otherwise indicated on the proxy.
VOTING
Under the New York Business Corporation Law ("BCL") and the
Company's by-laws, the presence, in person or by proxy, of a
majority of the outstanding common shares is necessary to
constitute a quorum of the shareholders to take action at the
Annual Meeting. The shares which are present, or represented by
a proxy, will be counted for quorum purposes regardless of
whether or not a broker with discretionary authority fails to
exercise its discretionary voting authority with respect to any
particular matter. Once a quorum is established, under the BCL
and the Company's by-laws, the Directors standing for election
must be elected by a plurality of the votes cast. For voting
purposes, all votes cast "for", "against", "abstain", or
"withhold authority" will be counted in accordance with such
instruction as to each item. Broker non-votes will not be
counted for any item.
The cost of solicitation of proxies by the Board of Directors
will be borne by the Company. The Company has retained Regan &
Associates, Inc. to assist in the solicitation of proxies under a
contract providing for payment of $2,250, plus reimbursement of
reasonable out-of-pocket expenses. In addition to solicitations
by mail, Regan & Associates, Inc. and regular employees of the
Company and its subsidiaries may solicit proxies in person, by
facsimile transmission, or by telephone, but no employee of the
Company or its subsidiaries will receive any compensation for
their solicitation activities in addition to their regular
compensation. The Company will reimburse the reasonable expenses
of brokerage houses and other custodians, nominees, and
fiduciaries for forwarding solicitation material to the
beneficial owners of Company stock held of record by such
persons.
The Board of Directors has fixed the close of business on April
10, 1996 as the time as of which shareholders entitled to notice
of and to vote at the Annual Meeting shall be determined. There
were 3,570,563 shares of the Company's common stock, par value
$1.00 per share, outstanding and entitled to vote at the close of
business on April 10, 1996.
BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
BY CERTAIN PERSONS AND BY MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows the name, address, and beneficial
ownership of the Company's common stock as of April 10, 1996 of
each person known to the Company to be a beneficial owner,
directly or indirectly, of more than 5% of any class of its
outstanding securities entitled to vote:
<TABLE>
<CAPTION>
Name and Address of Common Shares
Beneficial Owner (1) Beneficially Owned Percent of Class
____________________ __________________ ________________
<S> <C> <C>
Laurie Kuskin 227,056 (2) 6.4%
c/o Kravetz Realty, Inc.
150 Linden Oaks Drive
Rochester, New York 14625
William Levine 320,957 (3) 9.0%
c/o Alleson of Rochester
2921 Brighton-Henrietta
Town Line Road
Rochester, New York 14623
</TABLE>
(1) Information presented in this table has been obtained from
the respective shareholder, from filings made with the
Securities and Exchange Commission or from the Company's
transfer agent. Except as otherwise indicated, each
holder has sole voting and investment power with respect
to the shares indicated.
(2) Includes 86,085 shares held as Executrix of the Estate of
Fred B. Kravetz, 10,932 shares held as Executrix of the
Estate of Arline Kravetz, and 33,000 shares held as
Trustee for the benefit of certain members of her
immediate family.
(3) Includes 340 shares held by Mr. Levine's wife and 98,343
shares held by Mr. Levine as Trustee for the benefit of
certain members of his family.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table shows the name, address, and beneficial
ownership of the Company's common stock as of April 10, 1996, of
each Director of the Company and nominee for director, of each
executive officer who is named in the Summary Compensation Table
(Named Officer) and of all directors, nominees for director, and
executive officers of the Company as a group, respectively:
<TABLE>
<CAPTION>
Name and Address* Shares owned Percent of Class
_________________ ____________ ________________
<S> <C> <C>
R. Carlos Carballada 81,094 (1) 2.2%
Michael J. Falcone 129,049 3.6%
Joseph M. Lobozzo II 20,000 (2) **
Francis T. Lombardi 5,724 **
Carl R. Reynolds 23,607 (3) **
H. Bruce Russell 5,000 **
James D. Ryan 3,618 (4) **
Linda Cornell Weinstein 29,352 (5) **
Donald R. Aldred 16,482 (6) **
Robert B. Bantle 17,518 (6) **
Stacy C. Campbell 16,612 (6) **
All directors and executive
officers as a group
(13 persons) 381,813 (7) 10.2%
</TABLE>
* The address of each Director and Named Officer is c/o FNB
Rochester Corp., 35 State Street, Rochester, New York 14614.
** Less than 1%.
(1) Includes options to purchase 78,000 common shares that are
exercisable within 60 days.
(2) Held jointly with Mr. Lobozzo's wife.
(3) Includes 19,854 shares that are held jointly with Mr.
Reynolds' wife.
(4) Includes 2,559 shares held by Mr. Ryan's wife.
(5) Includes 14,852 shares held by the Cornell/Weinstein
Family Foundation, as to which shares Ms. Weinstein has
shared voting and investment power, and 5,000 shares held
by Ms. Weinstein's husband.
(6) Includes options to purchase 16,000 common shares that are
exercisable within 60 days.
(7) Except as otherwise indicated above, members of the group
have sole voting and investment power with respect to such
shares. Includes options exercisable within 60 days to
purchase 158,000 shares.
ITEM 1. ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
At the Annual Meeting, eight (8) Directors will be elected to
serve for the ensuing year, and until their successors are duly
elected and qualified. Each of the nominees named below is a
present member of the Board of Directors and was elected at the
Company's last Annual Meeting of Shareholders. All nominees have
consented to serve as directors, if elected. However, if at the
time of the meeting any nominee should be unable to stand for
election, it is the intention of the persons designated as
proxies to vote, in their discretion, for such other persons, if
any, as may be designated as nominees by the Board of Directors.
The Board of Directors proposes to nominate and recommends a vote
for election of the following persons.
<TABLE>
<CAPTION>
Director
Director's Name (age) Since Principal Occupation
_____________________ ________ ____________________
<S> <C> <C>
R. Carlos Carballada (61) 1992 President, Chief Executive
Officer, FNB Rochester
Corp.
Michael J. Falcone (60) 1978 Real Estate Developer,
Pioneer Group
Joseph M. Lobozzo II (52) 1993 President & CEO, JML
Optical Industries, Inc.
Francis T. Lombardi (64) 1978 Vice President, Syracuse
Tank & Mfg. Co. Inc.
Carl R. Reynolds (48) 1977 Attorney
H. Bruce Russell (58) 1993 Vice President, Corporate
Real Estate - Eastman
Kodak Company
James D. Ryan (63) 1992 President and Owner, RYCO
Management, Inc.
Linda Cornell Weinstein (51) 1993 Executive Director,
Cornell/Weinstein Family
Foundation
</TABLE>
Other than Mr. Carballada, each director of the Company has been
engaged in his or her principal occupation or employment as
specified above for five years or more.
Each director of the Company is also a director of First National
Bank of Rochester (the "Bank").
Mr. Carballada has been employed in the banking business since
1968. He was President and Chief Executive Officer of Citizens
Central Bank in Arcade, New York from June, 1975 until August,
1981, and was President and Chief Executive Officer of Central
Trust Company in Rochester, New York, from September, 1981 until
May, 1992. Mr. Carballada became the President and Chief
Executive Officer of the Company in June of 1992. Mr. Carballada
also serves as President and Chief Executive Officer of the Bank
and until its sale on April 1, 1994, served as President and
Chief Executive Officer of Atlanta National Bank.
Mr. Falcone is the Senior Partner of Pioneer Development Company,
a real estate development and management company headquartered in
Syracuse, New York. He has held that position since 1987. Since
1992, Mr. Falcone has served as Chairman of the Board of
Directors of the Company and the Bank.
Mr. Lobozzo has been the President, Chief Executive Officer, and
principal shareholder of JML Optical Industries, Inc., located in
Rochester, New York, since 1972. JML Optical Industries, Inc.
manufactures, designs, and imports precision optical systems.
Mr. Lombardi is Vice President of Syracuse Tank & Manufacturing
Company, Incorporated, a manufacturer of metal products in
Syracuse, New York, and has been associated with the
manufacturing company since 1957.
Mr. Reynolds has been an attorney engaged in the general practice
of law in Rochester, New York since 1975. Mr. Reynolds is also
President and a director of New Sky Communications, Inc., a
motion picture production company. Since 1992, Mr. Reynolds has
served as Vice Chairman of the Board Directors of the Company and
the Bank.
Mr. Russell joined the Finance and Administration Division of the
Eastman Kodak Company in Rochester in 1963. Since that time, Mr.
Russell has held a variety of positions there, each with
increasing responsibility. In 1986, he became a divisional Vice
President and Director, Corporate Real Estate Office, a position
he currently holds.
Mr. Ryan is a Rochester area real estate developer, and since
1969 has been the principal shareholder and president of RYCO
Management, Inc., a real property development and management
company.
Ms. Weinstein has served as Executive Director of the
Cornell/Weinstein Family Foundation, a private non-profit
foundation located in Rochester, New York, since 1986.
No family relationships exist among the above-named Directors or
Officers of the Company. None of the Directors of the Company
holds a directorship in any other publicly traded company, except
for Carl R. Reynolds, who is a director of New Sky
Communications, Inc., a company registered under Section 15(d) of
the Securities and Exchange Act of 1934, as amended.
INFORMATION ABOUT MANAGEMENT
COMMITTEES OF THE BOARD OF DIRECTORS
Among other committees, the Company has a Nominating and
Compensation Committee and an Audit and Examining Committee. The
defined purposes and current membership of these two committees
are as follows.
NOMINATING AND COMPENSATION COMMITTEE, chaired by Mr. Lobozzo,
met 4 times in 1995. The Nominating and Compensation Committee
was formed in 1993 and combines the previous Stock Option
Committee and Nominating Committee. The Committee selects and
recommends to the Board of Directors candidates for the Board of
Directors of the Company, evaluates the performance of the Chief
Executive Officer on an annual basis, makes recommendations
regarding executive officer compensation, and administers the
Company's employee Stock Option Plan. The Nominating and
Compensation Committee will review shareholders suggestions of
nominees for director that are submitted in writing to the
committee, at the address of the Company's principal executive
office, not less than 120 days in advance of the date the
Company's proxy statement is released to shareholders in
connection with the previous year's annual meeting of
shareholders. In addition to Mr. Lobozzo, Messrs. Falcone and
Ryan are members of this committee.
AUDIT AND EXAMINING COMMITTEE, chaired by Mr. Lombardi, met 4
times in 1995. The Audit and Examining Committee has
responsibility for general oversight of the Company's internal
auditors, reviewing the Company's annual audit plan with its
auditors, considering questions and issues arising during the
course of the audit, oversight of the Company's financial
reporting, and inquiring into related matters such as the
adequacy of internal controls. The Committee also has the
responsibility for making a recommendation to the Board of
Directors regarding the selection of the Company's independent
auditors. In addition to Mr. Lombardi, Messrs. Lobozzo and
Reynolds are members.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors held 13 meetings in fiscal year 1995, and
all of the Directors attended at least 75% of the aggregate of
(a) the total number of meetings of the Board of Directors held
during the period for which they served as Director, and (b) the
total number of meetings held by all committees of the Board of
Directors on which they served.
DIRECTOR COMPENSATION
All Directors receive compensation of $300 for attendance at each
Board of Directors' meeting of the Company or any Board of
Directors' meeting of any subsidiary. All directors receive $200
for each meeting of any committee of the Board or committee
meeting of the Board of Directors of any subsidiary of the
Company. No executive officer of the Company who also serves as
a director receives fees for Board or committee meetings
attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, all of the Nominating and Compensation Committee
members, or members of their immediate families, borrowed or had
outstanding, either directly or indirectly, loans in excess of
$60,000 from the Bank. In each instance the loans (a) were made
in the ordinary course of business, (b) were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons, and (c) did not involve more
than the normal risk of collectibility or present other
unfavorable features.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company maintains a Directors' and Officers' liability
insurance policy written by the Aetna Casualty and Surety
Company. The policy is for a one-year period expiring April 30,
1996, at an annual premium of $77,430.00, and is expected to be
renewed for an additional year at an annual premium that is still
to be determined. The policy provides for indemnification
benefits and the payment of expenses in actions instituted
against any director or officer of the Company or any subsidiary,
for claimed liability arising out of their conduct in such
capacities.
EXECUTIVE OFFICERS
The following current officers of the Company or the Bank
("Executive Officers") are deemed to be "executive officers" for
purposes of the federal securities laws.
R. Carlos Carballada (61), President and Chief Executive Officer
of the Company and the Bank, commencing June 8, 1992. See the
information provided under "Nominees for Director," above, for a
description of employment history and business experience of Mr.
Carballada.
Donald R. Aldred (53), Senior Vice President, Business and
Professional Banking Division of the Bank, commencing June 23,
1992. From 1987 to 1992, he was Senior Vice President and
Manager of the Commercial Banking Division at Central Trust
Company. Prior to his time with Central Trust Company, he spent
21 years with Manufacturers and Traders Trust Company progressing
through numerous lending/credit functions to the position of Vice
President and Manager of Commercial Finance.
Robert B. Bantle (44), Senior Vice President, Community Banking
Division of the Bank, commencing July 1, 1992. He was Senior
Vice President, Human Resources, at Central Trust Company from
1989 until 1992. Prior to joining Central Trust Company, he
spent 15 years with Security Trust/Fleet Bank in various areas,
including Human Resources, Branch Administration, and Strategic
Planning.
Stacy C. Campbell (59), Senior Vice President and Chief Financial
Officer of the Company and the Bank, commencing July 1, 1992.
From 1976 to 1992, Mr. Campbell was Senior Vice President and
Chief Financial Officer at Central Trust Company. Prior to
joining Central Trust Company, he was employed by Marine Midland
Bank N.A. in Commercial Lending, Treasury, and Financial
positions.
Robert E. Gilbert (48), Senior Vice President, Operations
Division of the Bank, commencing June 29, 1992. From 1990 to
1992, he was a Managing Agent at the Resolution Trust
Corporation. From 1975 to 1989, he worked in various capacities
with Irving Bank Corporation including Executive Vice President
and General Manager of Irving Services Corporation, Senior Vice
President of Operations at Central Trust Company, and Vice
President of Operations at Citizens Central Bank of Arcade, New
York.
Theresa B. Mazzullo (43), Senior Vice President, Trust &
Investment Division of the Bank, commencing March 10, 1993. She
was Vice President and Manager of the Personal Trust and
Investment Estate Planning and New Business Department of The
Chase Manhattan Bank, N.A. in Rochester from March 1992 until
March 1993. From 1978 until 1992 she progressed through various
trust positions at Central Trust Company to the level of Vice
President and Manager of Trust Marketing Sales.
EXCHANGE ACT COMPLIANCE
Under Section 16 of the Securities and Exchange Act of 1934, as
amended, Directors, Executive Officers, and certain other persons
are required to report their ownership of equity securities of
the Company, and any changes in that ownership, to the Securities
and Exchange Commission and the Company. Based solely upon a
review of reports furnished to the Company by such persons on
Forms 3, 4, or 5 for the year ended December 31, 1995 (the
"Section 16(a) Reports"), the only omissions from or late filings
of Section 16(a) Reports known to the Company was one late filing
of Form 4 by Mr. Ryan with respect to two transactions in the
Company's stock.
EXECUTIVE COMPENSATION
Shown below is information concerning annual and long-term
compensation to certain Executive Officers for services to the
Company for the years ended December 31, 1995, 1994, and 1993.
The table includes information on the Company's Chief Executive
Officer, Mr. Carballada, and its Chief Financial Officer, Mr.
Campbell, and also on Mr. Aldred and Mr. Bantle, two of the
Bank's Senior Vice Presidents (the "Named Officers"). No other
current Executive Officer earned more than $100,000 in salary and
bonus in 1995.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term (1)
Name and Compensation All
Principal Position Other
Compen-
Year Salary Bonus Options sation
(Shares)
<S> <C> <C> <C> <C> <C>
R. Carlos Carballada, 1995 $196,618 $5,899 7,000 $ 7,435
President & Chief 1994 $190,692 $ 0 8,000 $ 5,190
Executive Officer 1993 $185,000 $ 0 10,000 $ 4,062
Donald R. Aldred, 1995 $106,174 $5,185 5,000 $ 1,323
Senior Vice President, 1994 $102,974 $ 0 4,000 $ 1,189
Business & 1993 $99,900 $ 0 5,000 $ 1,048
Professional Banking
Robert B. Bantle, 1995 $95,548 $4,866 5,000 $ 1,857
Senior Vice President, 1994 $92,666 $ 0 4,000 $ 1,655
Community Banking 1993 $89,900 $ 0 5,000 $ 901
Stacy C. Campbell, 1995 $95,548 $4,866 5,000 $ 2,839
Senior Vice President 1994 $92,666 $ 0 4,000 $ 2,631
& Chief Financial 1993 $89,900 $ 0 5,000 $ 2,113
Officer
</TABLE>
(1) Includes for 1995: $2,310, $350, $1,556, and $1,556 for
Company contributions to the Company's 401(k) plan on
behalf of Messrs. Carballada, Aldred, Bantle, and
Campbell, respectively, and $5,125, $973, $301, and $1,283
in group term life insurance premiums for Messrs.
Carballada, Aldred, Bantle, and Campbell, respectively
OPTION GRANTS
The following table details the number and terms of options
granted during the last fiscal year to Named Officers.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Realizable Value of
Individual Grants Assumed Annual
Rates of Stock
Price Appreciation
for Option Term
% of Total
(1) Options
Name Options Granted to Exercise Expiration 5% 10%
Granted Employees Price Date
in Fiscal
Year
<S> <C> <C> <C> <C> <C> <C>
R. Carlos 7,000 11.6% $7.88 10/30/05 $89,880 $143,080
Carballada
Donald R. 5,000 8.3% $7.88 10/30/05 $64,200 $102,200
Aldred
Robert B. 5,000 8.3% $7.88 10/30/05 $64,200 $102,200
Bantle
Stacy C. 5,000 8.3% $7.88 10/30/05 $64,200 $102,200
Campbell
</TABLE>
(1) Granted October 30, 1995 at fair market value with one-half
exercisable per year commencing October 30, 1996. All option
grants in 1995 are subject to approval by shareholders of the
proposed amendment to the 1992 Stock Option Plan at the Annual
Meeting of Shareholders on May 28, 1996. Assuming 5% and 10%
compounded annual appreciation of the stock price over the term
of the option, the price per share of common stock would be
$12.84 and $20.44 respectively, on October 30, 2005.
NEW PLAN BENEFITS
Subject to shareholder approval of the Amendment to the 1992
Stock Option Plan, on October 30, 1995, the Nominating and
Compensation Committee granted options to purchase 7,000 shares
to Mr. Carballada, options to purchase 25,000 shares to other
Executive Officers as a group, and options to purchase 17,000
shares to other key, full-time salaried employees of the Company.
For all such options granted, the exercise price on the date of
grant was $7.88. Subject to shareholder approval of the
Amendment to the Option Plan, on December 8, 1995, the Committee
granted options to purchase 11,500 shares to other key, full-time
salaried employees of the Company. For the December 8, 1995
grant, the exercise price on the date of grant was $8.32.
Provided that the Amendment is approved, specific vesting
schedules for such options, commencing on October 30, 1996 with
respect to the first grant date and December 8, 1996 with respect
to the second grant date, will be determined by the Committee,
and will be set forth in the respective option agreements with
the optionees. The Director Plan, which is subject to
shareholder approval, provides for the grant of options to
purchase 2,500 shares of the Company's common stock by each
person who was serving as a non-employee director of the Company
on October 3, 1995, with a vesting schedule of 50% on October 30,
1996 and 50% on October 30, 1997. The following table specifies
the amounts that will be received by, or allocated to, the
following groups under the 1992 Plan, as amended, and under the
Director Plan.
NEW PLAN BENEFITS
1995 Non-Employee
Name and 1992 Stock Option Director Stock
Principal Position Plan Option Plan
Dollar Number Dollar Number
Value (1) of Units Value (1) of Units
R. Carlos $55,160 7,000 N/A N/A
Carballada,
President & Chief
Executive Officer
Donald R. Aldred, $39,400 5,000 N/A N/A
Senior Vice
President, Business
& Professional
Banking
Robert B. Bantle, $39,400 5,000 N/A N/A
Senior Vice
President,
Community Banking
Stacy C. Campbell, $39,400 5,000 N/A N/A
Senior Vice
President & Chief
Financial Officer
Executive Group $252,160 32,000 N/A N/A
Non-Executive N/A N/A $137,900 17,500
Director Group
Non-Executive $229,640 28,500 N/A N/A
Officer Key
Employee Group
(1) "Dollar Value" refers to the market value of securities
underlying options granted on the date options were
granted and is the same as the exercise price required to
purchase shares on exercise of the options.
OPTION EXERCISES
The following table summarizes aggregate exercises of options by
Named Officers, and the number of and the spread on unexercised
options that they hold:
OPTION EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Aggregated Options Exercised in Last Fiscal Year and FY-End Option Value
(1)
(1) Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares FY-End FY-End
Acquired
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
R. Carlos 0 0 59,000/ $138,740/
Carballada 41,000 $89,330
Donald R. Aldred 0 0 14,000/ $53,210/
7,000 $17,470
Robert B. Bantle 0 0 14,000/ $53,210/
7,000 $17,470
Stacy C. 0 0 14,000/ $53,210/
Campbell 7,000 $17,470
</TABLE>
(1) Includes options granted in 1995 that are subject to
approval by shareholders of the proposed amendment to the
1992 Stock Option Plan at the Annual Meeting of
Shareholders on May 28, 1996.
RETIREMENT PLAN
The following table shows the estimated retirement benefits
payable under the Bank's plan with the New York State Bankers
Retirement System (the "Plan") to Named Officers based upon
hypothetical compensation and years of service levels:
Pension Plan Table
Annual Benefits Per Number of Years of Service
Average (1)
Compensation
5 8 10 12
$100,000 $7,500 $12,000 $15,000 $18,000
$125,000 $9,375 $15,000 $18,750 $22,500
$150,000 $11,250 $18,000 $22,500 $27,000
$175,000 $13,125 $21,000 $26,250 $31,500
(1) Annual benefits equal 1.5% of Average Compensation at time
of retirement multiplied by years of creditable service
commencing on or after April 1, 1993. For the purposes of
determining benefits under the Plan, Average Annual
Compensation is the average annual compensation during
the highest five consecutive years in all of the years of
creditable service including salary, bonus, and other
taxable compensation. Effective October 1, 1994, the
maximum amount of annual compensation that is taken into
account in determining benefits is $150,000. Because Mr.
Carballada presently has 1.5 years of credited service at
higher compensation levels, he may be entitled to benefits
at retirement based on more than $150,000 of Average
Compensation. The annual benefits are not subject to
deduction for social security or other offsets. As of
April 1, 1996, all of the Named Officers had three years
of credited service. Mr. Carballada's normal retirement
date under the Plan would be approximately July 1, 1997.
The Plan would allow him to continue accruing years of
creditable service after that time so that a full five
years of creditable service is possible.
FNBR STOCK PERFORMANCE
As part of the executive compensation information presented in
this proxy statement, the Securities and Exchange Commission
requires a five-year comparison of stock performance for the
Company with stock performance by a broad equity market index and
with a line-of-business market index. The Company's common stock
is traded in the over-the-counter market and listed on NASDAQ, so
that a broad market index comparison with the NASDAQ Stock Market
Total Return Index (U.S. Companies) is presented. A peer group
index, on a line-of-business basis, is the NASDAQ Bank Stock
index, which is the other comparison presented in this proxy
statement.
The annual change for the five-year period shown in the graph is
based (as required by SEC rules) on the assumption that $100 had
been invested in the Company's stock on December 31, 1990 and
that all dividends had been re-invested quarterly during the
period. The total cumulative dollar returns shown on the graph
represents the value that the investments would have had on
December 31, 1995. The calculations exclude trading commissions
and taxes. The following graph shows the performance of the
Company's stock compared to the performance of stocks quoted on
the NASDAQ National Market System and the performance of Bank
Stocks quoted on the NASDAQ National Market System:
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FNBR vs NASDAQ Market (US) and NASDAQ Bank Stocks
<CAPTION>
Measurement Period NASDAQ NASDAQ
(Fiscal Year Covered) FNBR Stock Market (US) Bank Stocks
<S> <C> <C> <C>
Measurement Pt-12/31/90 $100 $100 $100
YE 12/31/91 $167.9 $160.6 $164.1
YE 12/31/92 $129.5 $186.9 $238.9
YE 12/31/93 $110.3 $214.5 $272.4
YE 12/31/94 $100.7 $209.7 $271.4
YE 12/31/95 $187.0 $296.3 $404.4
* Assumes reinvestment of dividends
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Nominating and Compensation Committee (the "Committee") of
the Board of Directors, each member of which is a non-employee
director, is responsible for approving executive management
compensation and for administering the Company's employee stock
option plan.
The senior management of the Company was hired in 1992 in
conjunction with the entry of Consent Orders between the Company
and the Federal Reserve Board and between the Bank and the Office
of the Comptroller of the Currency. At that time, the Company
sought to attract and retain a capable and experienced management
team that would stabilize and reorganize the Company's banking
operations during a period of regulatory and financial disarray.
The basic salary arrangements between the Company (and the Bank)
and the Chief Executive Officer and the other Named Officers were
established under employment agreements entered into at the time
the management team was hired. Except in the case of Mr.
Carballada (see "Employment Agreement," below), all of these
employment agreements have expired in accordance with their
terms.
After making no salary or bonus adjustments for executives in
1993, the Committee included the Executive Officers of the
Company and the Bank in a 4% salary increase that was given to
all employees in 1994 and in a 3% salary increase given to all
employees in 1995. In addition, the Company maintains a profit
sharing program applicable to all staff members which provides
bonuses of specific percentages of wage base if the Bank obtains
specific returns on assets during the fiscal year, and all staff
members including the Executive Officers received a "profit
sharing" bonus for 1995 of 3% of base wages under this program.
The Committee also awarded to Executive Officers, other than the
Chief Executive Officer, a $2,000 bonus in recognition of the
Company's financial results for 1995 exceeding amounts targeted
under the Company's business plan.
Except as described above, the Committee's evaluation of
management's performance has not been reduced to a formula of
specific objective criteria but has included a general review of
the Company's development and performance in many areas.
Although the Committee believes that the Chief Executive Officer
and the rest of the management team have been highly successful
in resolving the Company's regulatory problems and have
established a commendable record of continuing increases in the
Company's assets and profitability, the Company's ability to
reward these efforts with increases in salary and bonuses have
been constrained by the Company's own needs to continuously
improve its financial position.
The Company's policy has been to try to create long term
incentives that link compensation with performance and
shareholder return. Under the circumstances, the Committee has
viewed the award of stock options as a particularly appropriate
means of providing compensation and incentive since the value of
awards will normally increase in direct relation to the success
of management in enhancing corporate performance in a manner that
will be reflected in shareholder returns. For this reason, the
Compensation Committee and the Board have adopted and recommended
for shareholder approval the increases in the number of options
available and the grants of options described under "Proposal to
Amend the FNB Rochester Corp. 1992 Stock Option Plan."
In general terms, the Committee believes the grant of options
under the 1992 Stock Option Plan allows the Company to reward
senior management in a form that does not reduce the cash
resources of the Company. The grant of options also promotes the
goal of the Committee to encourage participation by management in
ownership of the Company. Mr. Carballada has expressed to the
Committee his firm commitment to implement future programs which
will enable senior management, over the next five to eight years,
to own Company Stock in an amount valued at greater than 50% of
their base annual salary. In the view of this Committee, such a
program will align management with the interests of the
shareholders, and help to promote the long-term performance goals
that will enhance shareholder returns.
Members of the Compensation Committee:
Joseph M. Lobozzo II, Chairman
Michael J. Falcone
James D. Ryan
EMPLOYMENT AGREEMENT
On June 8, 1992, the Company entered into a three-year
employment agreement with Mr. Carballada, which was extended by
the mutual consent of the parties on February 22, 1994 until June
30, 1997. This agreement provides for an initial annual base
salary of $185,000 plus benefits, with the base amount subject to
increases by the Board of Directors based on performance,
inflation and other factors. The agreement is terminable by the
Company at the direction of the Board of Directors. Under such
circumstances, Mr. Carballada would be entitled to salary,
benefits, and other compensation for the greater of one year or
the remainder of the term unless his employment has been
terminated for "cause" as defined in the agreement. If Mr.
Carballada resigns for "good reason" as defined in the agreement,
he is entitled to salary, benefits, and other compensation for
the lesser of one year or the remainder of the term. Payments
after termination will cease if Mr. Carballada accepts employment
with any other financial institution directly in competition with
the Company in one or more contiguous counties. Certain change
of control provisions contained in the agreement have been
superseded by a Change of Control Employment Agreement entered
into between Mr. Carballada and the Company (see "Change of
Control Employment Agreements," below).
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
On February 1, 1996, the Company entered into Change of Control
Employment Agreements (the "Agreements") with Mr. Carballada and
with each of eight other senior executive officers of the
Company. The Agreements provide that in the event a "Change of
Control" of the Company occurs, the Agreements will become
effective and govern the terms and conditions under which the
executive will continue to be employed by the Company. The
Agreements provide that each executive will then be employed by
the Company for a period of 18 months (24 months in the case of
Mr. Carballada) in the same position, with the same compensation
and benefits, that applied to the executive immediately prior to
the Change of Control.
Under the Agreements, a Change of Control is generally defined
as: (i) the acquisition by any person of beneficial ownership of
35% or more of the combined voting power of the Company's voting
securities, (ii) individuals who are on the Board of Directors,
or who are nominated by the Board of Directors, ceasing to
constitute a majority of the Board, (iii) approval by the
shareholders of the Company of a reorganization, merger or
consolidation unless following the transaction more than 65% of
the common stock and combined voting power of voting stock of the
surviving corporation is owned in substantially the same
proportions by persons who were stockholders of the Company
immediately prior to the transaction, or (iv) approval by the
Company's stockholders of any sale, lease, exchange or other
transfer of all or substantially all of the assets of the Company
other than to a controlled entity.
Generally, the Agreements provide that, if the executive is
actually or constructively terminated from his or her position
during the employment period, the executive will be entitled to
receive a severance payment equal to the executive's annual
compensation (1.67 times annual compensation in the case of Mr.
Carballada). In addition, if the executive is still employed by
the Company 12 months after the date of the Change of Control,
the Employee may during a 30 day "Window Period" voluntarily
terminate his or her employment and receive a severance payment
equal to one-half of annual compensation (full annual
compensation in the case of Mr. Carballada).
The Agreements are not intended to deter combinations, but to
reduce the uncertainty and stress attendant upon a potential
change of control and thereby help to retain the Company's key
executives and help to assure the full and impartial
consideration of any acquisition proposal by the Company's
officers. The Window Period provision is intended to help hold
together an effective management team for a one year period
during which an acquisition may be pending but before it has been
completed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank leases the Henrietta Community Banking Office (South
Town Plaza), at an annual rental of $100,667, from a partnership
that includes a member of the immediate family of William A.
Levine, who beneficially owns more than 5% of the Company's
outstanding common stock. This lease terminates on January 31,
2016. The lease is believed to be on comparable terms for
agreements for similar space similarly situated, and the space is
adequate for the Company's needs.
The Bank loaned $100,000 to Mr. Reynolds in April 1989 under a
home equity line of credit at an interest rate of Prime + 1.5%.
Throughout 1995 the loan had a principal balance of $65,000. The
loan proceeds were used to acquire a subordinated debenture of
the Company that converted to common stock, and, in order to
comply with applicable federal banking regulations, the Bank
reduces its capital and amount of outstanding loans by the amount
of this outstanding loan.
The Bank has from time to time made and has outstanding other
loans to executive officers, directors and shareholders owning in
excess of 5% of the outstanding shares of the Company, and
entities related to such persons, which loans (a) were made in
the ordinary course of business, (b) were made on substantially
the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
persons, and (c) did not involve more than the normal risk of
collectibility or present other unfavorable features. It is
anticipated that the Bank will continue to make such loans from
time to time in the future.
ITEM 2. PROPOSAL TO AMEND THE FNB ROCHESTER CORP.
1992 STOCK OPTION PLAN
At the annual meeting, shareholders are being asked to consider
and to take action upon a proposal to approve an amendment to the
FNB Rochester Corp. 1992 Stock Option Plan (the "Option Plan").
The amendment will increase the number of shares available for
grants of options under the Option Plan by 100,000 shares. The
full text of the Option Plan is attached to the end of this Proxy
Statement as Appendix A, and shareholders are urged to refer to
it for a complete description of the Option Plan, as amended.
The following summary is qualified in its entirety by reference
to the full text of the Option Plan.
The purpose of the Option Plan is to encourage employees of the
Company and its wholly owned subsidiaries, who are largely
responsible for the management, growth and protection of the
Company's business and who are making and can continue to make
substantial contributions to the success of its business, to
acquire a larger stock ownership in the Company, thus increasing
their proprietary interest in the Company's business, providing
them with greater incentive for their continued employment and
promoting the interests of the Company and all of its
stockholders.
As originally approved by the Company's shareholders, on August
5, 1992, options covering 125,000 shares of common stock could be
granted under the Option Plan. On June 25, 1993, the Company's
shareholders approved an amendment to the Option Plan that
increased the number of shares for which options could be granted
to 225,000. The amendment to the Option Plan which is being
submitted for shareholder approval will increase the number of
shares issuable under the plan from 225,000 to 325,000 shares.
From the inception of the Option Plan to date, eligible
participants have received options covering 225,000 shares of
common stock. The Company has approximately 90 full-time
salaried employees who are, therefore, potential participants in
the Option Plan. See "New Plan Benefits," above.
The Option Plan is administered by the Nominating and
Compensation Committee (the "Compensation Committee"). The
Option Plan provides that the Board of Directors may at any time
terminate, amend, modify or suspend the Option Plan provided
that, without the approval of the shareholders of the Company, no
amendment or modification may be made by the Board of Directors
which: (i) increases the maximum number of shares as to which
options may be granted under the Plan; (ii) alters the method by
which the option price is determined; (iii) extends any option
for a period longer than 10 years after the date of grant; (iv)
materially modifies the requirements as to eligibility for
participation under the Option Plan; or (v) alters the Option
Plan to defeat its purpose.
Pursuant to the Option Plan, the option exercise price is equal
to 100% of the fair market value of the Company's common stock on
the date of grant, with fair market value based upon the last
reported sale price for the Company's common stock as quoted on
the NASDAQ system on the day of grant. The option exercise price
for an option is payable in cash upon the exercise of the option,
or in lieu of cash and with the approval of the Compensation
Committee at or prior to the exercise, by tendering to the
Company shares of common stock owned by the optionee having a
fair market value equal to the cash exercise price of the option.
Under the Option Plan, the Compensation Committee is authorized
to designate an option as an "incentive stock option", or as a
"nonqualified" stock option, under the Internal Revenue Code of
1986, as amended (the "Code"), In order to be eligible under
the Code, incentive stock options granted to individuals who own
more than 10% out of the total combined voting power of all
classes of outstanding stock must have an option exercise price
of 110% of fair market value of the stock at the date of grant.
Options to such individuals, by their terms, may not be
exercisable more than 5 years from the date of grant.
The Option Plan provides that options granted to full-time
salaried employees of the Company will terminate on such date as
determined by the Compensation Committee, and as set forth in an
option agreement executed at the time of the grant. If an
incentive stock option is held by an employee who is terminated,
and if at the time of termination such employee is not
permanently and totally disabled, such incentive stock option
shall terminate not more than 3 months after termination of
employment. In the case of an employee holding an incentive
stock option who at the time of termination of employment is
permanently or totally disabled, such incentive stock option
shall terminate more than 12 months after the termination of
employment. Termination of nonqualified stock options shall be
governed by applicable rules as adopted from time to time by the
Compensation Committee; provided, however, that if no such rules
are adopted then the nonqualified stock options shall terminate
no later than 3 months after termination of the option holder's
employment.
If the holder of an incentive stock option dies, then the
executor or administrator of the optionee's estate or any person
or persons who have acquired the option directly from the
optionee by bequest or inheritance may exercise the option within
12 months after the date of death. The same provisions apply for
nonqualified stock options, except that the effective period
shall be as described by the Compensation Committee. In no
event, however, shall either an incentive stock option or a
nonqualified stock option be exercisable after its respective
expiration date. No option granted under the Option Plan is
exercisable more than 10 years from the date of the grant, nor is
it assignable or transferrable by the optionee to any other
party. Options granted to eligible individuals under the Option
Plan do not confer any right to continue in the employ of the
Company.
The aggregate fair market value (determined at the time the
option is granted) of the Company's common stock subject to
incentive stock options granted under the Option Plan which are
exercisable for the first time by an individual optionee during
any calendar year may not exceed $100,000.
To the extent that options qualify as incentive stock options
under Section 422 of the Code, there is no taxable income to the
recipient when the option is granted or exercised. If a
recipient exercises an incentive stock option and does not
dispose of those shares within one year of the date the shares
were transferred to him or her, or within two years from the date
of the granting of the option (the "Waiting Period"), any gain
realized upon disposition may be taxable to the recipient as
long-term capital gain. If a recipient disposes of incentive
stock option shares prior to the expiration of the Waiting
Period, he or she will generally recognize ordinary income in the
year of sale in an amount equal to the excess, if any, of (i) the
lesser of (a) the fair market value of the shares as of the date
of exercise or (b) the amount realized on the sale, over (ii) the
option exercise price. Any additional amount realized on the
disposition during such time period may be treated as either
long-term or short-term capital gain depending on the length of
time the recipient held the shares. The Company will not be
entitled to a deduction as a result of the grant of an incentive
stock option, the exercise of such an option or the sale of the
underlying shares after the Waiting Period. If a recipient
disposes of the underlying shares prior to the expiration of the
Waiting Period, the Company may be entitled to deduct an amount
equal to the ordinary income recognized by the recipient.
To the extent options are treated as nonqualified stock options,
there is no taxable income to the recipient at the time of grant.
A recipient will recognize income on the date of exercise of a
nonqualified stock option equal to the difference between (i) the
fair market value on the date of exercise and (ii) the exercise
price. The income recognized by a recipient on the exercise of
the option is subject to withholding taxes. The Company may be
entitled to a deduction equal to the amount of ordinary income
recognized by a recipient on the exercise of a nonqualified stock
option.
The foregoing is merely a summary and does not purport to be a
complete description of the federal income tax aspects of the
Option Plan.
The favorable vote of the holders of a majority of all
outstanding shares entitled to vote at the meeting is required
for adoption of the of the amendment to the Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
AMENDMENT TO THE OPTION PLAN.
ITEM 3. PROPOSAL TO ADOPT THE FNB ROCHESTER CORP. 1995 STOCK
OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On October 3, 1995, subject to shareholder approval, the Board of
Directors adopted the FNB Rochester Corp.1995 Non-Employee
Director Stock Option Plan (the "Director Plan"). The full text
of the Director Plan is attached to the end of this Proxy
Statement as Appendix B, and shareholders are urged to refer to
it for a complete description of the Director Plan. The
following summary is qualified in its entirety by reference to
the full text of the Director Plan.
The purpose of the Director Plan is to attract and retain highly
qualified persons to serve as directors, to solidify the common
interests of directors and stockholders in enhancing the value of
the Company's common stock, and to secure for the Company and its
stockholders the benefits arising from stock ownership and
participation in stock appreciation by non-employee directors of
the Company.
The Director Plan provides for the grant of options to purchase
up to 25,000 shares of the Company's common stock. Options are
granted under the Director Plan to non-employee directors
pursuant to a formula as follows: (i) options to purchase 2,500
shares were granted to each non-employee director then in office
on the fifth business day following the release of the Company's
quarterly financial results for the period ended September 30,
1995 (i.e., October 30, 1995) (the "Commencement Date"); and (ii)
options to purchase 2,500 shares will be granted to each non-
employee director who first becomes a director after the
Commencement Date on the date of his or her election and
qualification as a director. If the Director Plan is approved,
such approval will also constitute approval of the grant of
options under the formula made to incumbent directors on October
30, 1995, which vest 50% on October 30, 1996 and 50% on October
30, 1997. See "New Plan Benefits," above.
Under the Director Plan, the option exercise price is equal to
100% of the fair market value of the Company's common stock on
the date of grant, with fair market value based upon the last
reported sale price for the Company's common stock as quoted on
the NASDAQ system on the day of grant. The Director Plan is
administered by a committee consisting of the Company's Chief
Executive Officer, Chief Financial Officer and Counsel (the
"Director Plan Committee"). The option exercise price for
exercise of an option is payable in cash upon the exercise of the
option, or in lieu of cash and with the approval of the Director
Plan Committee at or prior to exercise of an option, by tendering
to the Company shares of common stock owned by the optionee
having a fair market value equal to the cash exercise price of
the option.
The Director Plan provides the Director Plan Committee may at any
time terminate, amend, modify or suspend the Director Plan
provided that, without the approval of the shareholders of the
Company, no amendment or modification may: (i) increase the
maximum number of shares which may be acquired pursuant to the
exercise of options, or the maximum number of options to acquire
shares which may be granted under the Director Plan; (ii) change
the option exercise price, (iii) increase the term of options
beyond 10 years, or change the designation of persons authorized
to receive options, or (iv) otherwise materially increase the
cost of the Director Plan to the Company or materially increase
the benefits to participants in the Director Plan.
Options granted under the Director Plan may not be exercised
after the first to occur of: (i) the expiration of 10 years from
the date of grant; (ii) the expiration of six months from the
termination of the optionee's service as a director; (iii) one
year from the date of the optionee's death or disability; or (iv)
the effective date of a merger or consolidation of the Company.
The Director Plan Committee may designate vesting periods for
options.
All options granted under the Director Plan are "nonqualified
stock options" under the Code. To the extent options are treated
as nonqualified stock options, there is no taxable income to the
recipient at the time of grant. A recipient will recognize
income on the date of exercise of a nonqualified stock option
equal to the difference between (i) the fair market value on the
date of exercise and (ii) the exercise price. The income
recognized by a recipient on the exercise of the option is
subject to withholding taxes. The Company may be entitled to a
deduction equal to the amount of ordinary income recognized by a
recipient on the exercise of a nonqualified stock option.
The foregoing is merely a summary and does not purport to be a
complete description of the federal income tax aspects of the
Director Plan.
The favorable vote of the holders of a majority of all
outstanding shares entitled to vote at the meeting is required
for adoption of the Director Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
DIRECTOR PLAN.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in the proxy
statement for the next annual meeting must be submitted on a
timely basis for the 1997 Annual Meeting of Shareholders and must
be received by the Company at its principal executive offices no
later than December 26, 1996. Any such proposals, as well as any
questions related thereto, should be directed to the Secretary of
the Company.
INDEPENDENT AUDITORS
A representative of KPMG Peat Marwick LLP, the Company's
independent auditors for 1995, is expected to attend the annual
meeting. The representative will have an opportunity to make a
statement, if desired, and will be provided with time to respond
to appropriate questions by Shareholders concerning the financial
statements. As described under the caption "Board of Directors
and Committee Meetings," the Audit and Examining Committee will
recommend to the Board of Directors a firm of independent
auditors for selection as auditors of the Company's 1996
financial statements.
OTHER MATTERS
Except for the matters set forth above, the Board knows of no
other matters which may be presented at the Annual Meeting of
Shareholders, but if any other matters properly come before the
Annual Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote such proxies in accordance
with their judgment in such matters.
The Company's 1995 Annual Report to Shareholders, although not a
part of this Proxy Statement, is enclosed.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL
YEAR 1995 (WITHOUT EXHIBITS 10.4 AND 10.5), AS WELL AS ADDITIONAL
COPIES OF THE COMPANY'S ANNUAL REPORT, MAY BE OBTAINED WITHOUT
CHARGE BY ANY SHAREHOLDER OF RECORD BY WRITTEN REQUEST TO MARIANN
JOYAL, SECRETARY OF THE COMPANY, FNB ROCHESTER CORP., 35 STATE
STREET, ROCHESTER, NEW YORK 14614. EXHIBITS TO THE ANNUAL REPORT
ON FORM 10-K MAY BE OBTAINED ON PAYMENT OF A NOMINAL CHARGE.
Dated: April 24, 1996
BY ORDER OF THE BOARD OF DIRECTORS,
Timothy P. Johnson, Assistant Secretary
<PAGE>
APPENDIX A
FNB ROCHESTER CORP. 1992 STOCK OPTION PLAN
1. Purposes of the Plan The purpose of the FNB Rochester
Corp. 1992 Stock Option Plan ("Plan") is to provide a method by
which those employees of FNB Rochester Corp. and its wholly owned
subsidiaries ("the Corporation") who are largely responsible for
the management, growth and protection of the Corporation's
business, and who are making and can continue to make substantial
contributions to the success of such business, may be encouraged
to acquire a larger stock ownership in the Corporation, thus
increasing their proprietary interest in such business, providing
them with greater incentive for their continued employment, and
promoting the interests of the Corporation and all its
stockholders. Accordingly, the Corporation will from time to
time during the term of the Plan grant to such employees as may
be selected in the manner provided in the Plan options to
purchase shares of Common Stock of the Corporation, subject to
the conditions provided in the Plan.
2. Definitions Unless the context clearly indicates
otherwise, the following terms have the meanings set forth below.
"Board of Directors" or "Board" means the Board of
Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986.
"Common Stock" means the Common Stock of the Corporation,
$1 par value.
"Corporation" means FNB Rochester Corp. and its wholly owned
subsidiaries.
"Grant Date" as used with respect to a particular option,
means the date as of which such option is granted by the
Committee pursuant to the Plan.
"Grantee" means an individual to whom an Incentive Stock
Option or Nonqualified Stock Option is granted by the
Committee pursuant to the Plan.
"Option" means an option, granted by the Committee pursuant
to Section 5 of the Plan, to purchase shares of Common Stock
and which shall be designated as either an "Incentive Stock
Option" or a "Nonqualified Stock Option."
"Incentive Stock Option" means an option that qualified as
an Incentive Stock Option as described in Section 422 of
the Code.
"Nonqualified Stock Option" means any option granted under
the Plan, other than an Incentive Stock Option.
"Plan" means this Stock Option Plan as set forth herein and
as may be amended from time to time.
"Total and Permanent Disability" as applied to a Grantee,
means that the Grantee; (i) has established to the
satisfaction of the Corporation that the Grantee is unable
to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of
not less than 12 months (all within the meaning of Section
22(e)(3) of the Code); and (ii) has satisfied any
requirement imposed by the Committee.
3. Administration of the Plan The Plan shall be administered
by a Committee (the "Committee") composed of three or more
members who are appointed by the Board of Directors. The
Committee shall select one of the Committee's members as
Chairman. The Committee shall hold meetings at such times and
places as it may determine, subject to such rules as to
procedures to the extent not inconsistent with the provisions of
the Plan as are prescribed by the Board or by the Committee. A
majority of the authorized number of members of the Committee
shall constitute a quorum for the transaction of business. Acts
reduced to or approved in writing by a majority of the members of
the Committee then serving shall be the valid acts of the
Committee. No member of the Committee shall be eligible to be
granted options under the Plan while a member of the Committee.
The Committee shall be vested with full authority to make such
rules and regulations as it deems necessary or desirable to
administer the Plan and to interpret the provisions of the Plan.
Any determination, decision or action of the Committee in
connection with the construction, interpretation, administration
or application of the Plan shall be final, conclusive and binding
upon all optionees and any person claiming under or through an
optionee unless otherwise determined by the Board.
Any determination, decision or action of the Committee provided
for in the Plan may be made or taken by action of the Board if it
so determines, with the same force and effect as if such
determination, decision or action had been made or taken by the
Committee. No member of the Committee or of the Board shall be
liable for any determination, decision or action made in good
faith with respect to the Plan or any option granted under the
Plan. The fact that a member of the Board shall at the time be,
or shall theretofore have been or thereafter may be, a person who
has received or is eligible to receive an option shall not
disqualify him or her from taking part in and voting at any time
as a member of the Board in favor of or against any amendment or
repeal of the Plan.
4. Stock Subject to the Plan
(a). The stock to be issued upon exercise of options
granted under the Plan shall be the Corporation's Common
Stock, which shall be made available, at the discretion of
the Board, either from authorized but unissued Common Stock
or from Common Stock reacquired by the Corporation,
including shares purchased in the open market. The
aggregate number of shares of Common Stock which may be
issued under options granted under the Plan (as adjusted in
a manner equivalent to the adjustments made under Section 15
of the Plan) shall not exceed 325,000 shares. The
limitation established by the preceding sentence shall be
subject to adjustment as provided in Section 15 of the Plan.
(b). In the event that any outstanding option under the
Plan for any reason expires or is terminated, the shares of
Common Stock allocable to the unexercised portion of such
option may again be made subject to another option granted
under the Plan.
5. Grant of Options The Committee may from time to time,
subject to the provisions of the Plan, grant options to key
employees of the Corporation to purchase shares of Common Stock
allotted in accordance with Section 4. The Committee may
designate any option granted as either an Incentive Stock Option
or a Nonqualified Stock Option, or the Committee may designate a
portion of the option as an "Incentive Stock Option" and the
remaining portion as a "Nonqualified Stock Option." Any portion
of an option that is not designated as an "Incentive Stock
Option" shall be a "Nonqualified Stock Option."
6. Option Price The purchase price per share shall be 100
percent of the fair market value of one share of Common Stock as
reported for trading on the national securities exchange on which
the Common Stock may be principally traded on the date the option
is granted, except that the purchase price per share shall be 110
percent of such fair market value (or the fair market value as
determined below) in the case of an Incentive Stock Option
granted to an individual described in Section 7(b) of this Plan.
The fair market value of a Share on any day shall be: (i) if the
Shares are traded in the over-the-counter market, the mean
between the bid and the asked prices of the Shares in the over-
the-counter market as reported on the National Association of
Security Dealers Automatic Quotation System (NASDAQ); (ii) if the
Shares are traded in the over-the-counter market and are
designated as National Market System securities, the reported
last sale price of the Shares, or (iii) if the Shares are traded
on one or more securities exchanges, the average of the closing
prices on all such exchanges on such day; or in the event that
there are no reports for such day, the preceding day for which
there is such a report. The purchase price shall be subject to
adjustment only as provided in Section 15 of the Plan.
7. Eligibility of Optionees
(a). Options shall be granted only to persons who are key
full time salaried employees of the Corporation, as
determined by the Committee. The term "key employees" shall
include officers as well as other employees of the
Corporation, but shall not include members of the Committee.
(b). Any other provision of the Plan notwithstanding, an
individual who owns more than 10 percent of the total
combined voting power of all classes of outstanding stock of
the Corporation, shall not be eligible for the grant of an
Incentive Stock Option unless the special requirements set
forth in Sections 6 and 9(a) of the Plan are satisfied. For
purposes of this subsection (b), in determining stock
ownership, an individual shall be considered as owning the
stock owned, directly or indirectly, by or for his or her
brothers and sisters, spouse, ancestors and lineal
descendants. Stock owned, directly or indirectly, by or for
a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its
shareholders, partners or beneficiaries. Stock with respect
to which such individual holds an option shall not be
counted. "Outstanding stock" shall include all stock
actually issued and outstanding immediately after the grant
of the option. "Outstanding stock" shall not include shares
authorized for issue under outstanding options held by the
optionee or by any other person.
(c). Subject to the terms, provisions and conditions of the
Plan and subject to review by the Board, the Committee shall
have exclusive jurisdiction (i) to select the employees to
be granted options (it being understood that more than one
option may be granted to the same person); (ii) to determine
the number of shares subject to each option; (iii) to
determine the date or dates when the options will be
granted; (iv) to determine the purchase price of the shares
subject to each option in accordance with Section 6 of the
Plan; (v) to determine the date or dates when each option
may be exercised within the term of the option specified
pursuant to Section 9 of the Plan; (vi) to determine whether
or not an option constitutes an Incentive Stock Option; and
(vii) to prescribe the form, which shall be consistent with
the Plan, of the documents evidencing any options granted
under the Plan.
(d). Neither anything contained in the Plan or in any
document under the Plan nor the grant of any option under
the Plan shall confer upon any optionee any right to
continue in the employ of the Corporation or limit in any
respect the right of the Corporation to terminate the
optionee's employment at any time and for any reason.
8. Non-Transferability of Options No option granted under the
Plan shall be assignable or transferable by the optionee other
than by will or the laws of descent and distribution, and during
the lifetime of an optionee the option shall be exercisable only
by such optionee.
9. Term and Exercise of Options
(a). Each option granted under the Plan shall terminate on
the date determined by the Committee and specified in the
option agreement; provided that each Incentive Stock Option
granted to an individual described in Section 7(b) of the
Plan shall terminate not later than five years after the
date of grant, and each other option shall terminate not
later than 10 years after the date of grant. The Committee
at its discretion may provide further limitations on the
exercisability of options granted under the Plan. An option
may be exercised only during the continuance of the
optionee's employment, except as provided in Sections 10 and
11 of the Plan.
(b). A person electing to exercise an option shall give
written notice to the Corporation of such election and of
the number of shares he or she has elected to purchase, in
such forms as the Committee shall have prescribed or
approved, and shall at the time of exercise tender the full
purchase price of the shares he or she has elected to
purchase. The purchase price shall be paid in full in cash
upon the exercise of the option; provided, however, that in
lieu of cash, with the approval of the Committee at or prior
to exercise, an optionee may exercise his or her option by
tendering to the Corporation shares of Common Stock owned by
him or her and having a fair market value equal to the cash
exercise price applicable to his or her option, with the
fair market value of such stock to be determined in the
manner provided in Section 6 of the Plan (with respect to
the determination of the fair market value of Common Stock
on the date an option is granted).
(c). An optionee or a transferee of an option shall have no
rights as a stockholder with respect to any shares covered
by his or her option until the date the stock certificate is
issued evidencing ownership of the shares. No adjustments
shall be made for dividends (ordinary or extraordinary),
whether in cash, securities or other property, or
distributions or other rights, for which the record date is
prior to the date such stock certificate is issued, except
as provided in Section 15 hereof.
(d). A person may, in accordance with the other provisions
of the Plan, elect to exercise options in any order,
notwithstanding the fact that options granted to him or her
prior to the grant of the options selected for exercise are
unexpired.
(e). The aggregate fair market value (determined on the
date the option is granted) of the stock with respect to
which Incentive Stock Options are exercisable for the first
time by an individual grantee during any calendar year shall
not exceed $100,000.
10. Termination of Employment If an optionee's employment with
the Corporation is terminated for any reason other than death,
any option granted to him or her under the Plan shall terminate,
and all rights under the option shall cease, in accordance with
rules adopted by the Committee. In any event:
(a). In the case of an Incentive Stock Option held by an
optionee who is not permanently and totally disabled (within
the meaning of Section 22(e)(3) of the Code), such Incentive
Stock Option shall terminate no more than three months after
the termination of employment.
(b). In the case of an Incentive Stock Option held by an
optionee who is permanently and totally disabled (within the
meaning of Section 22(e)(3) of the Code), such Incentive
Stock Option shall terminate 12 months after the termination
of employment.
(c). In the case of a Nonqualified Option, if the Committee
has not adopted an applicable rule concerning such
termination, such Option shall terminate no later than three
months after termination of employment.
(d). The foregoing notwithstanding, no option shall be
exercisable after its expiration date.
(e). All options shall provide that in the case of the
exercise of an option, the stock so purchased shall be
redeemable by the Corporation at the option price thereof in
the event of the termination of employment for any reason of
such optionee/purchaser within one year of the exercise of
such option.
Whether an authorized leave of absence or an absence for military
or governmental service shall constitute termination of
employment, for the purposes of the Plan, shall be determined by
the Committee, which determination shall be final, conclusive and
binding upon the affected optionee and any person claiming under
or through such optionee.
11. Death of Optionee If an optionee dies while in the employ
of the Corporation or after cessation of such employment but
within the period during which he or she could have exercised the
option under Section 10 of the Plan, then the option may be
exercised by the executors or administrators of the optionee's
estate or by any person or persons who have acquired the option
directly from the optionee by bequest or inheritance, within 12
months after the termination of the optionee's employment for
Incentive Stock Options and within a period prescribed by the
Committee for Nonqualified Options; provided, however, that no
option shall be exercisable after its expiration date.
12. Modification, Extension and Renewal of Options Subject to
the terms and conditions and within the limitations of the Plan,
the Committee may modify, extend or renew outstanding options
granted under the Plan or accept the surrender of outstanding
options (to the extent not theretofore exercised) and authorize
the granting of new options in substitution therefor. Without
limiting the generality of the foregoing, the Committee may grant
to an optionee, if he or she is otherwise eligible and consents
thereto, a new or modified option in lieu of an outstanding
option for a number of shares, at an exercise price and for a
term which are greater or lesser than under the earlier option,
or may do so by cancellation and regrant, amendment, substitution
or otherwise, subject only to the general limitations and
conditions of the Plan. The foregoing notwithstanding, no
modification of an option shall, without the consent of the
optionee, alter or impair any rights or obligations under any
option theretofore granted under the Plan.
13. Period in Which Options May Be Granted Options may be
granted pursuant to the Plan at any time on or before the tenth
anniversary of the Effective Date of the Plan, as defined in
Section 17 herein.
14. Amendment or Termination of the Plan The Board may at any
time terminate, amend, modify or suspend the Plan provided that,
without the approval of the stockholders of the Corporation, no
amendment or modification shall be made by the Board which:
(a). Increases the maximum number of shares as to which
options may be granted under the Plan;
(b). Alters the method by which the option price is
determined;
(c). Extends any option for a period longer than 10 years
after the date of grant;
(d). Materially modifies the requirements as to eligibility
for participation in the Plan; or
(e). Alters this Section 14 so as to defeat its purpose.
Further, no amendment, modification, suspension or termination of
the Plan shall in any manner affect any option theretofore
granted under the Plan without the consent of the optionee or any
person validly claiming under or through the optionee.
15. Changes in Capitalization
(a). In the event that the shares of the Corporation, as
presently constituted, shall be changed into or exchanged
for a different number or kind of shares of stock or other
securities of the Corporation or of another corporation
(whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of
shares or otherwise) or if the number of such shares of
stock shall be increased through the payment of a stock
dividend, then subject to the provisions of subsection (c)
below, there shall be substituted for or added to each share
of stock of the Corporation which was theretofore
appropriated, or which thereafter may become subject to an
option under the Plan, the number and kind of shares of
stock or other securities into which each outstanding share
of stock of the Corporation shall be so changed or for which
each such share shall be exchanged or to which each such
share shall be entitled, as the case may be. Outstanding
options shall also be appropriately amended as to price and
other terms, as may be necessary to reflect the foregoing
events.
(b). If there shall be any other change in the number of
kind of the outstanding shares of the stock of the
Corporation, or of any stock or other securities into which
such stock shall have been changed, or for which it shall
have been exchanged, and if the Board or the Committee (as
the case may be), shall in its sole discretion, determine
that such change equitably requires an adjustment in any
option which was theretofore granted or which may thereafter
be granted under the Plan, then such adjustment shall be
made in accordance with such determination.
(c). A dissolution or liquidation of the Corporation, or a
merger or consolidation in which the Corporation is not the
surviving corporation, shall cause each outstanding option
to terminate, except to the extent that another corporation
may and does in the transaction assume and continue the
option or substitute its own options. In either event, the
Board or the Committee (as the case may be) shall have the
right to accelerate the time within which the option may be
exercised.
(d). Fractional shares resulting from any adjustment in
options pursuant to this Section 15 may be settled as the
Board or the Committee (as the case may be) shall determine.
(e). To the extent that the foregoing adjustments relate to
stock or securities of the Corporation, such adjustments
shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. Notice of
any adjustment shall be given by the Corporation to each
holder of an option which shall have been so adjusted.
(f). The grant of an option pursuant to the Plan shall not
affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge, to
consolidate, to dissolve, to liquidate or to sell or
transfer all or any part of its business or assets.
16. Transfer of Option Shares Shares acquired by persons
subject to Section 16(b) of the Securities Exchange Act of 1934,
as amended, pursuant to the exercise of an option or portion
thereof, shall not be sold or transferred for at least six months
after the date of grant.
17. Plan Effective Date The "Effective Date" of the Plan is the
date on which it was first approved by the Corporation's
shareholders, namely August 5, 1992. Unless sooner terminated by
the Board, the Plan will terminate 10 years from its Effective
Date and no options may be granted under the Plan after such
termination date.
<PAGE>
APPENDIX B
FNB ROCHESTER CORP.
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1.0 PURPOSE
The purpose of the FNB Rochester Corp. 1995 Non-Employee
Director Stock Option Plan (the "Plan") is to attract and retain
in the service of FNB Rochester Corp. (the "Company") Outside
Directors (as defined below) who are considered essential to the
long-range success of the Company by providing them an
opportunity to become owners of stock of the Company through
options, and to solidify the common interests of directors and
stockholders in enhancing the value of the Company's common stock
so as to benefit directly from the Company's growth, development
and financial success.
Stock options granted under this Plan (the "Options") are
not intended to qualify as incentive stock options under section
422A of the Internal Revenue Code of 1986 (the "Code").
2.0 ADMINISTRATION OF THE PLAN
2.01 The Plan shall be administered by a committee
consisting of the Company's Chief Executive Officer, Chief
Financial Officer and Counsel (the "Committee"), which shall have
full authority to construe and interpret the Plan, to establish,
amend and rescind rules and regulations relating to the Plan, and
to take all such actions and make all such determinations in
connection with the Plan as it may deem necessary or desirable.
All determinations and interpretations made by the Committee
shall be binding and conclusive on all Plan Participants and
their legal representatives and beneficiaries.
2.02 Administrative costs in connection with the Plan shall
be paid by the Company.
2.03 The provisions of the Plan shall not apply to or
affect any option hereafter granted under any other stock option
plan of the Company, and all such options shall be governed by
and subject to the applicable provisions of the stock option plan
pursuant to which they were granted.
3.0 SHARES SUBJECT TO THE PLAN
3.01 Options may be granted by the Company from time to time
under the Plan to purchase up to an aggregate of 25,000 of the
Company's common shares, par value $1.00 per share ("Shares").
Shares may consist either in whole or in part of either shares of
the Company's authorized but unissued common shares or shares of
the Company's authorized and issued common shares reacquired by
the Company and held by its treasury, as may from time to time be
determined by the Committee. If an Option granted under the Plan
for any reason ceases to be exercisable in whole or in part, the
Shares which were subject to any such Option but as to which the
Option so ceases to be exercisable shall be available for further
Options to be granted under the Plan. Any Shares subject to an
Option granted under the plan which for any reason expires or is
terminated unexercised as to such Shares shall not be charged
against such number and shall again be available for issuance
under the Plan.
3.02 If there is any change in the shares of the Company as
a result of reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or such
shares, the Committee may make such adjustments, if any,
proportionate to such change, in the number and kind of Shares
authorized by the Plan and in the number and kind of Shares under
outstanding awards as it shall deem appropriate to preserve the
relative value of awards to be granted and shall make such
adjustments and changes in the price of Shares under outstanding
awards to preserve the relative value of outstanding awards under
the Plan. The determination of the Committee as to whether any
adjustments are required under the terms of this Section 3.03 and
the determination of the Committee as to the extent and nature of
any such adjustment shall be final and binding upon all persons.
4.0 DIRECTORS ELIGIBLE FOR OPTIONS
Awards may be granted by the Company from time to time only
to Outside Directors of the Company. An Outside Director is any
Director who is not then a full-time employee (as defined in
section 3401(c) of the Code) of the Company or a subsidiary.
5.0 GRANTING OF OPTIONS
5.01 Persons to whom Options shall be granted. Subject to
Section 3.01, Options shall be granted to each person who (a) is
an Outside Director on the fifth business day following the
public release of the Company's quarterly financial results for
the period ended September 30, 1995 (the "Commencement Date"), or
(b) first becomes an Outside Director after the Commencement
Date.
5.02 When Options shall be granted. Each person who is an
Outside Director on the Commencement Date shall be granted, as of
the Commencement Date, an Option to purchase 2,500 Shares.
Subject to the limitations on the maximum number of Shares
available for purchase under the Plan, each person who is elected
to serve as an Outside Director after the Commencement Date,
shall receive, as of the date of his or her election and
qualification as a director, an Option to purchase 2,500 Shares.
6.0 OPTION TERMS AND CONDITIONS
All Options granted under this Plan shall be on the
following terms and conditions:
6.01 Price. The Option Price per Share shall be determined
by the Committee from time to time, subject to the limitations
set forth in this Section. The Option price shall not be less
than the fair market value of the Shares on the date the Option
is granted. In no event shall the purchase price for Shares
purchased under an Option be less than the par value thereof.
6.02 Fair Market Value. The fair market value of a Share on
any day shall be: (i) if the Shares are traded in the over-the-
counter market, the mean between the bid and asked prices of
Shares in the over-the-counter market as reported on the National
Association of Security Dealers Automatic Quotation System
(NASDAQ); (ii) if the Shares are traded in the over-the-counter
market and are designated as National Market System securities,
the reported last sale price of Shares, or (iii) if the Shares
are traded on one or more securities exchanges, the average of
the closing prices on all such exchanges on such day; or, in the
event that there are no such reports for such day, the fair
market value shall be such price based on the first preceding day
for which there is such a report.
6.03 Period of Option. Each Option shall expire at such
time as the Committee may determine when such Option is granted,
and no Option shall have a term which shall extend more than 10
years from the date such Option is granted. Subject to the
preceding sentence, terms established by the Committee for
exercise of an Option may be modified or waived by the Committee
in his sole discretion. Each Option shall be subject to earlier
termination as provided elsewhere in the Plan. The instrument
evidencing the Option shall be signed by an officer of the
Company. The Commencement Date or respective anniversary thereof
on which Options are issued shall be the date on which the Option
is considered granted.
6.04 Restrictions on Exercise of Option. The Committee may
at its discretion establish the time or times within the Option
period when the Options may be exercised in whole or in part. In
addition, the Committee may require the satisfaction of such
other conditions, as the Committee may stipulate in the Option,
prior to the exercise of the Option in whole or in part.
Notwithstanding any other provision of this Plan, no Option shall
be exercisable in a manner that would disqualify the Plan from
satisfying the requirements of Rule 16b-3 of the Securities and
Exchange Commission, and, to the extent necessary, no Option
shall be exercisable for at least six months after the date the
Option is granted, and no Share may be sold until at least six
months after it is purchased by the Optionee (or such other
periods as may be specified from time to time by such Rule).
6.05 Exercise of Option. After the satisfaction of all
conditions which may be prescribed by, or in accordance with, the
Plan, the Option may be exercised during the balance of the
Option period according to its terms. Receipt by the Company of
written notice from the Grantee specifying the number of Shares
to be purchased, accompanied by payment in full of the purchase
price for such Shares, shall constitute exercise of the Option as
to such Shares.
The Committee, in its discretion, may determine that payment
upon the exercise of an Option may be made with Shares of the
Company owned by the Option holder having a fair market value on
the exercise date equivalent to the amount which would otherwise
be payable, or any combination of cash and such Shares equivalent
to such amount. Until Shares are purchased and issued upon
exercise of an Option, the Option holder shall not have any
rights of a shareholder with respect thereto.
6.06 Termination of Service.
(a) If the service of the Grantee with the Company as
a Director shall have terminated for any reason (other than
death, disability, or termination for cause), the Grantee or
his or her legal representative may exercise the Option to
the extent it was exercisable on the date when the Grantee's
service terminated, at any time prior to the expiration date
of the Option or within six months of the date of
termination of service, whichever is earlier. For all
purposes of this Plan, termination of service shall be the
effective time at which a person serving as a Director
ceases to be a member of the Board for any reason.
(b) If the service of the Grantee with the Company
shall have terminated due to disability, the Grantee or his
or her legal representative may exercise the Option to the
extent it was exercisable on the date when the Grantee's
service terminated, at any time prior to the expiration date
of the Option or within one year of the date of termination
of service, whichever is earlier.
(c) If the service of the Grantee with the Company
shall have terminated for cause, the Option shall terminate
upon receipt by the Grantee of notice of such termination or
the effective date of the termination, whichever is earlier.
The Committee shall have the right to determine whether the
Grantee has been terminated for cause for purposes of the
Plan and the date of such termination.
(d) No Option shall be exercised after the effective
date of any merger or consolidation of the Company with or
into another corporation, the acquisition by another
corporation or person of substantially all the Company's
assets or the liquidation or dissolution of the Company.
6.07 Death of Grantee. If the Grantee dies while in the
service of the Company, the person or persons to whom the
Grantee's rights under the Option shall pass by will or by the
applicable laws of descent and distribution may exercise the
Option, in whole or in part at any time, prior to the expiration
date of the Option or within one year of the date of death of the
Grantee, whichever is earlier.
6.08 Other Provisions. The Option may contain such other
terms, provisions and conditions not inconsistent with the Plan
as shall be determined by the Committee.
7.0 MISCELLANEOUS PROVISIONS
7.01 A Grantee shall not have any rights as a shareholder
with respect to any Shares of the Company covered by an Option
until the Shares are purchased and the stock certificates
therefor are transferred to the Grantee.
7.02 Nothing in this Plan or in any Option granted under it
shall confer any right upon the Grantee to continue in the
service of the Company or interfere in any way with the right of
the Company to terminate the service of the Grantee pursuant to
law and the By-laws of the Company.
7.03 In no event shall a Grantee be entitled to fractional
Shares, whether upon exercise of an Option or otherwise. The
Committee in its sole discretion may elect to round to the
nearest whole Share or to settle fractional Shares in cash.
7.04 No Option or any rights or interest therein of the
Grantee thereof shall be assignable or transferrable by such
recipient except by will or the laws of descent and distribution.
During the lifetime of the Grantee, the Option shall be exercised
only by him or her by his or her legal representative, and any
rights and privileges pertaining thereto shall not be
transferred, assigned, pledged or hypothecated by the Grantee in
any way, whether by operation of law or otherwise, and shall not
be subject to execution, attachment or similar process.
7.05 No Shares shall be issued or transferred upon the
exercise of any Option granted hereunder unless and until (a) all
legal requirements applicable to the issuance or transfer of such
Shares have been complied with, and (b) all requirements of any
national securities exchange or association upon which or by
which the Company's shares of common stock are listed, traded or
quoted have been met, in each case to the satisfaction of the
Committee and free of any conditions not acceptable to the
Committee. The Committee shall have the right to condition any
issuance of any Shares made to any person hereunder on such
persons undertaking in writing to comply with such restrictions
on his or her subsequent disposition of such Shares as the
Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof,
and certificates representing such Shares may be legended to
reflect any such restriction.
7.06 The Company shall have the right to deduct from all
awards or any other compensation paid to the Grantee from the
Company and Federal, state or local taxes required by law to be
withheld with respect to the granting or exercise of any awards
under this Plan.
7.07 Except as specifically provided in this Plan, no
person shall have any claim or right to be granted any award
under this Plan.
7.08 This Plan and the awards issued pursuant thereto shall
be governed by and construed in accordance with the laws of the
State of New York.
8.0 AMENDMENT, SUSPENSION OR DISCONTINUANCE OF PLAN
8.01 The Committee may amend, suspend or discontinue the
Plan, in whole or in part, at any time and from time to time. In
no event, however, shall any amendment, without the approval of
the shareholders of the Company:
(a) increase the number of Shares as to which awards
may be granted as nonqualified stock options under the Plan;
(b) change the minimum Option exercise price;
(c) increase the maximum period during which Options
may be exercised;
(d) extend the effective period of the Plan;
(e) otherwise materially increase the benefits
accruing to participants under the Plan;
(f) materially modify the requirements as to
eligibility for participation in the Plan;
(g) result in a material increase in the cost of the
Plan to the Company; and
(h) no amendment, modification or termination of the
Plan shall in any manner adversely affect any Option then
outstanding under the Plan without the consent of the holder
of such Option.
8.02 Articles 4.0 and 5.0 of this Plan shall not be amended
more than once every six months other than to comport with the
Code and the rules thereunder.
8.03 With the consent of the affected Grantee, the Committee
may amend any outstanding Option so as to incorporate in respect
of the same any terms that could have been incorporated in such
award at the time of the original grant.
9.0 EFFECTIVE DATE AND DURATION OF THE PLAN
9.01 The Plan shall become effective upon approval by a
majority of all directors and approval by a majority of the
Directors of the Company who are not eligible for the grant of
options under the Plan, provided, however, that, notwithstanding
anything to the contrary provided in the Plan, no options granted
under the Plan shall become exercisable until after the Plan has
been approved and ratified at a meeting of shareholders of the
Company by the vote of the holders of a majority of all
outstanding shares entitled to vote thereon.
9.02 Unless the Plan is discontinued earlier pursuant to
Article 8.0, the Plan shall expire at the close of business on
October 3, 2005. No grants shall be made under this Plan after
the close of business on October 3, 2005. However, Options
granted under the Plan at any time on or prior to October 3, 2005
shall remain in effect until they have been fully exercised, are
surrendered, or by their terms expire.
FNB ROCHESTER CORP.
By s/ R. Carlos Carballada
R. Carlos Carballada, President &
Chief Executive Officer
<PAGE>
PROXY PROXY
FNB ROCHESTER CORP.
35 STATE STREET, ROCHESTER, NEW YORK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders
To Be Held On Tuesday, May 28, 1996
at 10:00 a.m. at the Strathallan,
550 East Avenue, Rochester, New York 14607
The undersigned hereby appoints Michael J. Falcone and Carl R.
Reynolds, each of them, as attorneys and proxies, each with full
power of substitution, to vote all shares of common stock of FNB
Rochester Corp. held by the undersigned and entitled to vote at
the Annual Meeting of Shareholders to be held on May 28, 1996 and
at all adjournments thereof, as designated in Items 1, 2, 3 and 4
on the reverse of this Proxy Card, and confers upon each such
proxy discretionary authority to vote upon any other matter
properly brought before the meeting or any adjournment thereof.
It is understood that this proxy may be revoked at any time
insofar as it has not been exercised, and that the shares may be
voted in person if the undersigned attends the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED ON
THE REVERSE, OR IF NO DIRECTION IS GIVEN, THEY WILL BE VOTED FOR
ALL NOMINEES LISTED IN ITEM 1. ELECTION OF DIRECTORS, AND FOR
ITEMS 2 AND 3 AND TO GIVE DISCRETION TO THE PROXIES ON ALL OTHER
MATTERS PROPERLY BROUGHT BEFORE THE MEETING.
(Continued on reverse side)
_________________________________________________________________
FOLD AND DETACH HERE
<PAGE>
[X] PLEASE MARK YOUR VOTES
AS INDICATED IN THIS EXAMPLE.
1. Election of Directors.
[__] FOR all nominees listed to the right
(except as marked to the contrary)
[__] WITHHOLD AUTHORITY
to vote for all nominees listed to the right
Directors:
R. Carlos Carballada, Michael J. Falcone, Joseph M. Lobozzo
II, Francis T. Lombardi, Carl R. Reynolds, H. Bruce Russell,
James D. Ryan, Linda Cornell Weinstein
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in the space
provided below.)
________________________________________________________________
2. Approval of amendment to 1992 Stock Option Plan and option
grants thereunder.
[__] FOR [__] AGAINST [__] ABSTAIN
3. Approval of 1995 Stock Option Plan for Non-Employee
Directors and of option grants thereunder.
[__] FOR [__] AGAINST [__] ABSTAIN
4. Approval to vote upon such other business as may properly
come before the meeting.
[__] FOR [__] AGAINST [__] ABSTAIN
Please DATE and SIGN your name below as it appears on this PROXY.
Joint owners should each sign. If the signer is a corporation,
please sign by a duly authorized officer. Executors, trustees,
administrators, etc. should give full title as such. If a
partnership, please sign in partnership name by authorized
person.
Dated: __________________________________, 1996
_________________________________________________________________
Signature
_________________________________________________________________
Signature, if held jointly
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
PLEASE RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
THANK YOU.
