______________
Notice of 1999 Annual Meeting and Proxy Statement
______________
April 6, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders to be held on Wednesday, May 12, 1999, at 7:00 p.m.,
local time, at the National Warplane Museum, Town of Big Flats,
Elmira-Corning Regional Airport, 17 Aviation Drive, Horseheads,
NY 14845 (map provided below). Following the meeting, desserts,
coffee, tea and other refreshments will be served.
The single item on the agenda requiring Shareholders' vote
will be to elect six directors - the candidates nominated for
three-year terms, all currently serving, are: Robert E. Agan,
Donald L. Brooks, Jr., Stephen M. Lounsberry III, Thomas K.
Meier, Charles M. Streeter, Jr. and Nelson Mooers van den Blink.
The attached Proxy Statement sets forth in detail the nominated
candidates and those directors continuing in office, and
additional information relating to the management of the
corporation.
In addition to the above-noted election, we will review our
financial performance for the past year and discuss our plans for
1999.
It is important that you be represented at the meeting
whether or not you plan to attend in person. Accordingly, we
urge you to mark, sign and date the proxy card enclosed in the
mailing envelope sleeve and return it in the envelope provided.
Also, if you plan to attend the meeting, please mark the proxy
card where indicated and include the number in your group. Your
directors and management look forward to seeing you on May 12.
Sincerely yours,
Jan P. Updegraff
President and
Chief Executive Officer
One Chemung Canal Plaza
P.O. Box 1522
Elmira, New York 14902
Parent Company of
Chemung Canal Trust Company
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
As directed by the Board of Directors of Chemung Financial
Corporation, NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of the Corporation will be held at the National
Warplane Museum, Elmira-Corning Regional Airport, 17 Aviation
Drive, Horseheads, NY 14845, on Wednesday, May 12, 1999, at 7:00
p.m. for the following purposes:
1. to elect six (6) directors, each to hold office for
a term of three years and until their respective
successors have been elected and qualified; and
2. to transact such other business as may properly
come before the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
March 26, 1999, as the record date for determination of
Shareholders entitled to notice of and to vote at this meeting.
Shareholders are requested to date, sign and mail the
enclosed proxy in the envelope provided at their earliest
convenience. A prompt response will be appreciated and will save
the Corporation additional time and expense.
BY ORDER OF THE BOARD OF DIRECTORS
Donna C. Denton
Secretary
April 6, 1999
CHEMUNG FINANCIAL CORPORATION
ONE CHEMUNG CANAL PLAZA, P.O. BOX 1522, ELMIRA, NEW YORK
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 12, 1999
_______________________________________________________________
Chemung Financial Corporation and its wholly-owned
subsidiary, Chemung Canal Trust Company, are incorporated under
the laws of the State of New York. For purposes of this proxy
statement, unless otherwise stated, financial and other
information is presented on a consolidated basis for Chemung
Financial Corporation ("Corporation") and Chemung Canal Trust
Company ("Bank").
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors for use at the
Annual Meeting of Shareholders (the "Annual Meeting") of Chemung
Financial Corporation to be held on Wednesday, May 12, 1999, at
7:00 p.m., local time, at the National Warplane Museum, Elmira-
Corning Regional Airport, 17 Aviation Drive, Horseheads, New
York. This Proxy Statement and the accompanying Proxy and Notice
of Annual Meeting of Shareholders are being mailed to
Shareholders on or about April 6, 1999. A Shareholder granting a
proxy has the right to revoke it by a duly executed Proxy bearing
a later date, by attending the Annual Meeting and voting in
person, or by otherwise notifying the Secretary of the
Corporation in writing prior to the Annual Meeting.
Only Shareholders of record at the close of business on
March 26, 1999 are entitled to receive notice of and to vote at
the Annual Meeting. As of March 11, 1999, there were 4,098,154
shares of Common Stock outstanding and entitled to vote. Each
share of Common Stock is entitled to one vote. There are no
cumulative voting rights. Nominees for director will be elected
by a plurality of votes cast at the Annual Meeting by holders of
Common Stock present in person or by proxy and entitled to vote
on such election. Any other matter requires the affirmative vote
of a majority of votes cast at the meeting, except as otherwise
provided in the Corporation's Certificate of Incorporation or By-
laws. Only shares affirmatively voted in favor of a nominee will
be counted toward the achievement of a plurality. Votes withheld
(including non-broker votes) and abstentions are counted as
present for the purpose of determining a quorum but are not
counted as votes cast.
The cost of soliciting proxies will be borne by the
Corporation and the Bank. In addition to solicitations by mail,
some of the directors, officers, and regular employees of the
Corporation and the Bank may conduct additional solicitations by
telephone and personal contacts without remuneration. American
Stock Transfer & Trust Company, the Corporation's transfer agent,
will aid the Corporation in the solicitation of proxies and proxy
vote tabulations. Nominees, brokerage houses, custodians and
fiduciaries will be requested to forward soliciting material to
beneficial owners of stock held of record and the Corporation
will reimburse such persons for their reasonable expenses.
ACTION TO BE TAKEN UNDER PROXY:
It is proposed that at the Annual Meeting action will be
taken on the matters set forth in the accompanying Notice of
Annual Meeting and described in this Proxy Statement. Proxies
returned by Shareholders and not revoked will be voted for the
election of the nominees for directors unless Shareholders
instruct otherwise on the Proxy. A Shareholder granting a proxy
has the right to revoke it by filing with the Secretary of the
Corporation prior to the time such proxy is voted a duly executed
proxy bearing a later date, by attending the Annual Meeting and
voting in person, or by otherwise notifying the Secretary of the
Corporation in writing of such Shareholder's intention to revoke
such proxy prior to the time such proxy is voted. The Board of
Directors does not know of any other business to be brought
before the Annual Meeting, but it is intended that, as to any
such other business, a vote may be cast pursuant to the Proxy in
accordance with the judgment of the person or persons acting
thereunder. Should any nominee for the office of director become
unable to accept nomination or election, which is not
anticipated, it is intended that the persons acting under the
Proxy will vote for the election in the stead of such nominee of
such other person as the Board of Directors may recommend.
BOARD OF DIRECTORS:
Nominees For Election as Directors
Those persons serving as directors of the Corporation and
the Bank, being the same individuals, normally serve three-year
terms of office, with approximately one-third of the total number
of each such Board of Directors to be elected at each Annual
Meeting of each such entity. The number of directors to be
elected at the 1999 Annual Meeting of Shareholders is six (6) for
three-year terms, each to serve for such term and until their
respective successors are elected and qualified.
The following table sets forth information concerning the
nominees for election as directors and each director continuing
in office:
<TABLE>
<CAPTION>
Length of Principal Occupation
Name and Age Service During
<S> As Director Past 5 Years
<S> <S>
NOMINEES WITH TERMS
EXPIRING IN 2002
Robert E. Agan Since 1986 Chairman of the Board,
Age 60 Chief Executive Officer
and President of Hardinge
Inc., a world-wide machine
tool manufacturer.
Donald L. Brooks, Since 1985 Retired physician;
Jr. Director of Arnot Ogden
Age 70 Medical Center.
Stephen M. Since 1995 President of Applied
Lounsberry Technology Manufacturing
Age 45 since July 17, 1996, a
manufacturer of machined
industrial and railroad
component parts; formerly
President of Moore &
Steele Corp.
Thomas K. Meier Since 1988 President of Elmira
Age 58 College.
Charles M. Since 1985 President of Streeter
Streeter, Jr. Associates, Inc., a
Age 59 general building
contractor.
Nelson Mooers van Since 1985 Chairman of the Board,
den Blink Chief Executive Officer
Age 64 and Treasurer of The
Hilliard Corporation, a
motion control equipment,
oil reclaimer and filter
manufacturer.
DIRECTORS
CONTINUING IN
OFFICE WITH TERMS
EXPIRING IN 2000
David J. Dalrymple Since 1993 President of Dalrymple
Age 45 Holding Corporation,
parent company for several
construction materials and
highway construction
companies.
Edward B. Hoffman Since 1993 Partner with the law firm
Age 67 of Sayles, Evans, Brayton,
Palmer & Tifft.
John F. Potter Since 1991 President of Seneca
Age 53 Beverage Corporation, a
wholesale distributor of
beer and water products.
William C. Ughetta Since 1985 Lawyer, of Counsel to the
Age 66 law firm of Sayles, Evans,
Brayton, Palmer & Tifft.
Retired since June 1, 1998
from Corning Incorporated;
formerly Senior Vice
President and General
Counsel of Corning
Incorporated, a
diversified manufacturing
company. Director of
Covance, Inc. and
GlobalLift Technologies,
Inc.
Jan P. Updegraff Since 1996 President and Chief
Age 56 Executive Officer of the
Corporation and Bank;
formerly Vice President
and Treasurer of the
Corporation and Chief
Operating Officer and
Executive Vice President
of the Bank.
DIRECTORS
CONTINUING IN
OFFICE WITH TERMS
EXPIRING IN 2001
John W. Bennett Since 1988 Retired since June 30,
Age 65 1998; formerly Chairman of
the Board, President and
Chief Executive Officer of
the Corporation and Bank.
Director of Hardinge Inc.
Robert H. Dalrymple Since 1995 Secretary of Dalrymple
Age 48 Holding Corporation, a
parent company for several
construction materials and
highway construction
companies.
Frederick Q. Falck Since 1997 President of L.M. Trading
Age 50 Company, an agricultural
investment corporation;
Vice President of Arnot
Realty Corporation;
Chairman of The Rathbone
Corporation.
Ralph H. Meyer Since 1985 Retired since August 1,
Age 59 1998. Formerly President
and Chief Executive
Officer of Guthrie
Healthcare System, a
vertically integrated
health care delivery
system.
Richard W. Swan Since 1985 President of Swan & Sons-
Age 50 Morss Co., Inc., an
insurance brokerage
agency.
William A. Tryon Since 1987 Chairman of the Board and
Age 68 Chief Executive Officer of
Trayer Products, Inc., an
automotive, truck and
other industrial parts
manufacturer; President of
Perry & Carroll, Inc., an
insurance brokerage
agency; formerly a
director of the Bank from
1964 to 1976.
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
The following table sets forth information, as of January
31, 1999, with respect to any person who is known by the
Corporation to be the beneficial owner of more than five percent
of the Corporation's Common Stock:
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percent of
Beneficial Owner of Common Stock Shares
Beneficially Outstanding
<S> Owned
<C> <C>
Chemung Canal Trust
Company 748,595-1 18.2%
One Chemung Canal
Plaza
Elmira, NY 14902
Chemung Canal Trust
Company 453,698-2 11.1%
Profit-Sharing,
Savings and
Investment Plan
One Chemung Canal
Plaza
Elmira, NY 14902
David J. Dalrymple
274 Upper Coleman Avenue 617,556-3,5,6 15.1%-6
Elmira, NY 14905
Robert H. Dalrymple
875 Upland Drive 595,324-4,5,6 14.5%-6
Elmira, NY 14905
1 Held by the Bank in various fiduciary capacities,
either alone or with others. Includes 26,144 shares
held with sole voting and dispositive powers, 722,451
shares held with shared power to vote and 375,822
shares held with shared dispositive power. Shares held
in a co-fiduciary capacity by the Bank are voted by the
co-fiduciary or fiduciaries in the same manner as if
the co-fiduciary or fiduciaries were the sole
fiduciary. Shares held by the Bank as sole trustee are
voted by the Bank only if the trust instrument provides
for voting of the shares at the direction of the donor
or a beneficiary and such direction is in fact
received.
2 Voted by the Bank as trustee as directed by the Plan
participants.
3 Includes 86,922 shares held directly, 3,808 shares held
as custodian for Mr. Dalrymple's children under the New
York State Uniform Gifts to Minors Act, 448,510 shares
held by Dalrymple Family Limited Partnership of which
David J. Dalrymple and Robert H. Dalrymple are sole
general partners (see footnotes 5 and 6), and 78,316
shares held by Dalrymple Holding Corporation, of which
David J. Dalrymple and Robert H. Dalrymple are
officers, directors and principal shareholders (see
footnote 4). Excludes 6,776 shares held by Mr.
Dalrymple's spouse as to which shares Mr. Dalrymple
disclaims beneficial ownership.
4 Includes 64,690 shares held directly, 3,808 shares held
as custodian for Mr. Dalrymple's children under the New
York State Uniform Gifts to Minors Act, 448,510 shares
held by Dalrymple Family Limited Partnership of which
David J. Dalrymple and Robert H. Dalrymple are sole
general partners (see footnotes 5 and 6), and 78,316
shares held by Dalrymple Holding Corporation (see
footnote 3). Excludes 2,690 shares held by Mr.
Dalrymple's spouse as to which shares Mr. Dalrymple
disclaims beneficial ownership.
5 Excludes 30,230 shares held by Susquehanna Supply
Company of which David J. Dalrymple and Robert H.
Dalrymple each own 23.1% of the outstanding common
stock.
6 Because of the definition of "beneficial ownership"
under Section 13 of The Exchange Act, and the rules and
regulations promulgated thereunder, David and Robert
Dalrymple are each listed as beneficial owners of
526,826 of the same shares. Without such multiple
counting, David and Robert Dalrymples' total aggregate
beneficial ownership is 16.7% of the outstanding shares
of Common Stock of the Corporation and if deemed to be
a member of a "group" within the meaning of Section
13(d)(3) of The Exchange Act, such group would be
deemed to hold said percentage of the outstanding
shares of Common Stock of the Corporation. Nothing
described herein shall infer or be deemed an admission
by such person that such a group exists.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT:
As of January 31, 1999, each director or nominee and each
Executive Officer named in the Summary Compensation Table herein,
individually, and all directors, nominees and Executive Officers
as a group beneficially owned Common Stock as reported to the
Corporation as of said date as follows (unless otherwise
indicated, each of the persons named has sole voting and
investment power with respect to the shares listed):
<TABLE>
<CAPTION>
Directors, Nominees and Amount and Percent of
Executive Officers Nature Shares
of Beneficial Outstanding*
<S> Ownership
<C> <C>
Robert E. Agan 12,336A *
John W. Bennett 14,377B *
Donald L. Brooks, Jr. 14,288A *
James E. Corey III 6,696B *
David J. Dalrymple 617,556C 15.1%C
Robert H. Dalrymple 595,324C 14.5%C
Frederick Q. Falck 127,505A,D 3.1%
Edward B. Hoffman 8,919A *
Stephen M. Lounsberry 18,434A *
III
Thomas K. Meier 4,287A *
Ralph H. Meyer 13,622A *
John F. Potter 27,301A,E *
Charles M. Streeter, 23,958A,F *
Jr.
Richard W. Swan 71,876G 1.8%
Joseph J. Tascone 3,681B *
William A. Tryon 22,179 *
William C. Ughetta 25,995A *
Jan P. Updegraff 8,597B *
Nelson Mooers van den 3,375 *
Blink
All Directors, Nominee 1,090,219H 26.6%
and Executive Officers
as a group (25 persons)
* Unless otherwise noted, less than 1% per individual.
A Includes shares that Messrs. Agan (11,436), Brooks
(1,788), Falck (963), Hoffman (4,658), Lounsberry
(3,356), Meier (287), Meyer (8,432), Potter (8,605),
Streeter (3,532), and Ughetta (5,995) have credited to
their accounts the equivalent of that number of shares
shown in parenthesis following their names of Common
Stock in valuation entry form under the Bank's Deferred
Directors Fee Plan. Such deferred fees will be paid
solely in shares of the Corporation's Common Stock
pursuant to the terms of the Plan and the election of the
Plan participants. Said share equivalencies have no
voting rights until shares are actually issued to said
directors under the terms of the Plan.
B Includes all vested shares of Common Stock of the
Corporation held for the benefit of each Executive
Officer by the Bank as trustee of the Bank's Profit-
Sharing, Savings and Investment Plan, who may instruct
the trustee as to the voting of such shares. If no
instructions are received, the trustee votes the shares
in the same proportion as it votes all of the shares for
which instructions were received from all Plan
participants. The power to dispose of shares is held by
Plan participants subject to certain restrictions.
Messrs. Bennett, Updegraff, Corey and Tascone have a
vested interest in 12,272, 8,395, 4,204 and 3,680 such
shares held by the Plan, respectively. Under the
provisions of the Plan, the trustee holds for the benefit
of all employees who participate in the Plan 453,698
shares of the Corporation's Common Stock.
C See Footnotes 3 - 6 of the SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS table for further explanation of shares
beneficially owned.
D Includes 200 shares held directly and 126,342 shares held
in various trusts of which Mr. Falck is a co-trustee or
income beneficiary. Excludes 147,990 shares owned by The
Rathbone Corporation of which Mr. Falck is an officer,
director and co-trustee of various trusts which are
shareholders of said corporation.
E Includes 12,464 shares owned by Seneca Beverage
Corporation, of which corporation Mr. Potter is an
officer, director and the principal shareholder.
F Includes 10,836 shares owned by Streeter Associates,
Inc., of which corporation Mr. Streeter is an officer,
director and the principal shareholder.
G Includes 11,700 shares owned by Swan & Sons-Morss Co.,
Inc., of which corporation Mr. Swan is an officer,
director and one of the principal shareholders, 33,480
shares held in trusts over which Mr. Swan has voting and
dispositive power, and 429 shares held by Mr. Swan as
custodian for his minor children. Does not include 4,316
shares held by others as trustees for a trust of which
Mr. Swan is an income beneficiary or 4,011 shares held by
Mr. Swan's spouse, as to which shares Mr. Swan disclaims
beneficial ownership.
H Does not include 24,179 shares owned by spouses of
certain officers and directors as to which shares such
officers and directors disclaim beneficial ownership and
does not include 526,826 shares included under each of
David J. Dalrymple and Robert H. Dalrymple (see footnote
6 under SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS).
In addition, does not include 112 shares of preferred
stock owned, by certain officers, directors and their
spouses of CCTC Funding Corp., a subsidiary of Chemung
Canal Trust Company, which qualifies as a Real Estate
Investment Trust under the Internal Revenue Code.
</TABLE>
COMPENSATION OF MANAGEMENT:
Directors' Personnel Committee Report on Executive Compensation
Under the supervision of the Personnel Committee of the
Board of Directors composed entirely of outside directors, the
Bank has developed and implemented compensation policies which
seek to enhance the profitability of the Bank and the Corporation
and thus, Shareholder value while at the same time providing fair
and competitive compensation which will attract and retain well-
qualified executives. Based upon recommendations of the
Personnel Committee, the Board of Directors sets the annual
compensation of the Chief Executive Officer. The Committee also
reviews and recommends to the Board of Directors compensation of
other senior management as first recommended by the Chief
Executive Officer based upon performance and other relevant
factors. Aside from the fringe benefit programs in which all
Bank employees participate, compensation of all Bank officers and
exempt non-officers consists of an annual salary and a management
incentive bonus. The management incentive bonus is subject to
the terms and conditions of the Management Incentive Plan adopted
by the Board of Directors, which provides for the payment of
bonuses to participants in accordance with an allocation formula
based in part on the Corporation's attainment of specific
operating objectives and in part on a subjective review of the
participant's individual performance. Additionally, those
officers who play a major role in setting and implementing long-
term strategies, currently being the Chief Executive Officer, may
receive a long-term incentive award. Payment of the long-term
incentive award will be deferred for three years following the
accrual year and may be further deferred at the election of the
participant. The incentive bonus may or may not be deferred at
the officer's election. For 1998, Mr. Updegraff received an
incentive bonus of $40,000. No long-term awards were issued.
Senior Officer participants as a group, including Mr. Updegraff,
received incentive bonus awards totaling $191,332 for 1998.
In evaluating the performance and recommending the
compensation of the Chief Executive Officer and the compensation
guidelines for the Bank's other senior management, the Committee
has taken particular note of management's ability during 1998 in
achieving certain profit, growth, and operational objectives
which were established by the Board of Directors in the Bank Plan
at the beginning of 1998 and compared the Corporation's financial
results against the results reported by similar banks in New York
and Pennsylvania. The financial and operational measurements
considered by the Board were: net profit, return on assets,
return on equity, new market penetration, new product
development, cost control, asset growth, non-interest income,
asset quality and asset liability management. There is no
specific weight given to any of these factors and there is no
formula whereby a certain performance will result in a certain
salary. The Committee considers total performance and the total
financial and operating conditions of the Bank in making its
compensation recommendations.
Also, in considering the compensation of the Chief Executive
Officer, the Committee periodically reviews reports prepared by
various organizations which provide comparative information on
Executive compensation for a nationwide peer group of independent
banks and bank holding companies having similar asset size. From
this review it was determined that the performance of the Bank
was within the range reported by its peers and that the
compensation paid by the Bank was appropriate in comparison to
the peer group.
In its review of management performance and compensation,
the committee has also taken into account management's consistent
commitment to the long-term success of the Corporation and Bank.
The committee has recognized that profitability in any one year
is considerably impacted by the general economic conditions
nationally and in its market areas, over which management has
little or no control, and the Committee's policy, therefore, is
to not over-emphasize, either positively or negatively, a single
year's results at the expense of significant, sustained, long-
term earnings growth.
Based on their evaluation, the Committee believes that the
executive management of the Corporation is dedicated to achieving
significant improvements in long-term financial performance and
that the compensation policies, plans and programs the Committee
has implemented and administered have contributed to achieving
this management focus.
SUBMITTED BY THE DIRECTORS' PERSONNEL COMMITTEE
Thomas K. Meier, Chairman Richard H. Evans Richard W. Swan
Donald L. Brooks, Jr. Frederick Q. Falck William A. Tryon
David J. Dalrymple Ralph H. Meyer William C. Ughetta
Executive Officers
During 1998, the names and positions of the executive
officers of the Corporation and the Bank, all serving one-year
terms, were as follows:
<TABLE>
<CAPTION>
Name Age Position (served since)
<S> <C> <S>
John W. Bennett 65 Retired as of June 30, 1998;
formerly Chairman of the Board
and Chief Executive Officer of
the Corporation and the Bank
(1996); formerly President and
Chief Executive Officer of the
Corporation and the Bank
(1991); and prior thereto
President and Chief Operating
Officer of the Corporation and
the Bank (1988).
Jan P. Updegraff 56 President and Chief Executive
Officer of the Corporation and
the Bank (1998); formerly
President and Chief Operating
Officer of the Corporation and
the Bank (1996); and prior
thereto Vice President and
Treasurer of the Corporation
and Executive Vice President of
the Bank (1990).
Daniel F. Agan1 65 Vice President of the
Corporation (1988) and Senior
Vice President of the Bank
(1984).
James E. Corey III 52 Vice President of the
Corporation (1993) and
Executive Vice President of the
Bank (1998); formerly Senior
Vice President of the Bank
(1993).
Joseph J. Tascone 51 Vice President of the
Corporation and Senior Vice
President of the Bank (1995);
and prior thereto Vice
President of the Bank (1987).
Jerome F. Denton 47 Vice President of the
Corporation (1997); formerly
Secretary (1986); and Executive
Vice President of the Bank
(1998); formerly Senior Vice
President of the Bank (1996).
Thomas C. Karski 53 Vice President of the
Corporation (1998) and Senior
Vice President of the Bank
(1998); formerly Vice President
of the Bank (1987).
Joseph P. Manning 60 Vice President of the
Corporation (1998) and Senior
Vice President of the Bank
(1998); formerly Vice President
of the Bank (1993).
John R. Battersby 48 Treasurer of the Corporation
Jr. and Senior Vice President,
Chief Financial Officer and
Treasurer of the Bank (1998);
formerly Treasurer of the
Corporation and Vice President
and Treasurer of the Bank
(1995); prior thereto Assistant
Treasurer of the Corporation
and Assistant Vice President
and Treasurer of the Bank.
Donna C. Denton 43 Secretary of the Corporation
(1998) and Vice President and
Secretary of the Bank (1998);
formerly Vice President of the
Bank (1996) and Senior Pension
Officer (1991).
1 Mr. Daniel F. Agan is a brother of Board member, Robert
E. Agan.
</TABLE>
Executive Compensation
The following information indicates compensation paid or
accrued by the Bank during 1998 for services rendered by each of
the Chief Executive Officer and the highest-paid executive
officers of the Corporation and the Bank whose total compensation
exceeded $100,000.
At present, the officers of the Corporation are not
separately compensated for services rendered by them to the
Corporation. It presently is contemplated that such will continue
to be the policy of the Corporation.
<TABLE>
<CAPTION>
Summary Compensation Table
<S>
Annual Compensation
<S>
Name and Principal All Other
Position Held Year Salary($) Bonus($)1 Compensation($)2
<S> <C> <C> <C> <C>
John W. Bennett3 1998 135,865 - 7,670
Former Chairman of
the Board of the 1997 209,308 40,000 9,218
Corporation and
the Bank 1996 200,308 25,000 8,541
Jan P. Updegraff 1998 175,577 40,000 10,513
President and
Chief Executive 1997 128,846 20,000 8,463
Officer of the
Corporation and 1996 114,039 15,000 7,342
the Bank
James E. Corey III 1998 91,210 12,000 8,096
Vice President of
the Corporation 1997 85,462 11,500 7,162
and Executive Vice
President of the 1996 80,385 12,167 6,333
Bank
Joseph J. Tascone 1998 90,900 12,700 5,814
Vice President of
the Corporation 1997 87,569 18,000 6,127
and Senior Vice
President of the 1996 82,685 12,790 5,575
Bank
1 Includes amounts allocated for the year indicated,
whether paid or deferred, to such person under the Bank-
Wide and Management Incentive Bonus Plans.
2 Includes amounts allocated for the year indicated to such
person under the Bank's Profit-Sharing, Savings and
Investment Plan.
3 Mr. Bennett retired as an officer and employee effective
June 30, 1998.
</TABLE>
Pension Plan
The Bank maintains a non-contributory, defined benefit
Pension Plan trusteed and administered by the Bank. The Plan
covers all employees who have attained age 20 with one or more
years of service and who have one thousand hours of service
during the plan year. Under the Plan, the annual benefit payable
to qualifying employees upon their retirement is based on the
average of their five highest paid consecutive years out of the
last ten calendar years of employment. Normal retirement age
under the Plan is 65. The Plan also provides for reduced benefit
payments for early retirement following age 55. Compensation
under the Plan is limited to all of an employee's salary, wages,
or other regular payments from the Bank, excluding bonuses,
commissions, overtime pay, or other unusual payments.
The Pension Plan provides an annual benefit of 1.2% for each
year of credited service to a maximum of 25 years and for each
additional year to a maximum of 10 years, 1% times the above
average compensation, plus for each year of credited service to a
maximum of 35 years, .65% of the above average compensation to
the extent it exceeds the average of the taxable wage base in
effect under Section 230 of the Social Security Act for each year
in the 35 - year period ending with the year in which the
participant attains social security retirement age (which base
was $31,128 for a participant attaining age 65 in 1998).
Due to a full funding limitation, the Bank has made no
contributions to the Pension Plan for the years 1996, 1997 and
1998.
Effective January 1, 1994, the Bank established a non-
qualified Executive Supplemental Pension Plan designed to provide
a benefit which, when added to other retirement income, will
ensure the payment of a competitive level of retirement income in
order to attract, retain and motivate selected executives of the
Bank. From time to time the Board of Directors may select
executives as participants in the plan. Currently, Mr. Updegraff
is the only active employee participating.
This Plan provides an annual benefit equal to the amount, if
any, that the benefit which would have been paid under the terms
of the Bank's Pension Plan, computed as if the basic Pension Plan
benefit formula administered and payable without regard to the
special benefit limitations required to comply with Sections 415,
401(a)(17) and other governing sections of the Internal Revenue
Code, exceeds the benefit which is payable to the participant
under the terms of the Pension Plan on the date of the
participant's termination.
The following table sets forth the estimated annual benefits
under both plans, based upon a straight-life annuity form of
pension, payable on retirement at age 65 by a participating
employee, assuming final average earnings as shown. Employees
become fully vested following 5 years of service.
<TABLE>
<CAPTION>
Average Annual Annual Benefits upon Retirement with Years of
Earnings Service Indicated
<C> <C>
15 20 25 30 351
<C> <C> <C> <C> <C>
$100,000 24,715 32,953 41,192 48,430 55,668
$120,000 30,265 40,353 50,442 59,330 68,218
$150,000 38,590 51,453 64,317 75,680 87,043
$190,000 49,690 66,253 82,817 97,480 112,143
$200,000 52,465 69,953 87,442 102,930 118,418
1Maximum number of years allowed under the terms of the
Pension Plan.
</TABLE>
The previously-noted executive officers of the Corporation
and the Bank had the following credited full years of service
under the Plan, as of December 31, 1998: Jan P. Updegraff (28),
James E. Corey III (11), and Joseph J. Tascone (12). Mr. Bennett
retired June 30, 1998, and is receiving benefits under both
plans.
Employment Contracts
The Bank has employment contracts with twenty-three of its
senior officers, all vice president level and above. The
contracts provide that in the event of termination of any of
these officers' employment without cause, the officer shall
continue to receive his or her salary at the level then existing
and the customary fringe benefits which he or she is then
receiving for a period ending December 31, 2000, except for
Messrs. Battersby, Corey, Denton, Karski, Manning, Tascone and
Updegraff whose guaranteed terms end December 31, 2001, and Mr.
Agan whose guaranteed term ends March 1, 1999. The contracts
further provide that they may be extended by the Board of
Directors on a year-to-year basis and also may be terminated for
cause upon thirty days' notice.
Other Compensation Agreements
The Bank maintains several contributory and non-contributory
medical, life and disability plans covering all officers and full-
time employees. The Bank does not maintain any stock option,
stock appreciation rights or stock purchase or award plans for
officers or directors.
Comparative Return Performance Graph
Comparison of Five-Year Cumulative Total Returns For Fiscal Years
Ending December 31, 1994 - 1998 Among Chemung Financial
Corporation,
CRSP Total Returns Index for NASDAQ Stock Market (US Companies)
and NASDAQ - Bank Stocks Index
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Chemung Financial
Corporation 100.00 114.94 129.69 164.16 209.22 289.09
CRSP NASDAQ
Composite 100.00 97.80 138.30 170.0 208.60 293.20
NASDAQ - Bank 100.00 99.60 148.40 195.90 328.00 324.90
Stocks
</TABLE>
The cumulative total return includes (i) dividends paid and
(ii) changes in the share price of the Corporation's Common
Stock and assumes that all dividends were reinvested. The above
graph assumes that the value of the investment in Chemung
Financial Corporation and each index was $100 on December 31,
1993.
The CRSP Total Returns Index for NASDAQ Stock Market (US
Companies) and Bank Stocks indices were obtained from the Center
for Research in Security Prices (CRSP), University of Chicago,
Chicago, Illinois.
Compensation of Directors and Committee Meetings
The Board of Directors of the Corporation held ten (10)
regularly scheduled meetings during the year ended December 31,
1998. The Corporation has no standing committees.
The Board of Directors of the Bank held twelve (12)
regularly scheduled meetings and one special meeting during the
year ended December 31, 1998. Among its standing committees, the
Board of Directors of the Bank has an Examining Committee and a
Personnel Committee.
The Examining Committee makes an annual examination of the
Bank as a whole, reviews the Bank's internal audit and loan
review procedures and recommends to the Board of Directors the
engagement and dismissal of independent auditors. During 1998
this Committee held three (3) meetings. On December 31, 1998,
its members were Messrs. Lounsberry (Chairperson), Agan, Brooks,
R. Dalrymple, Falck, Potter, Streeter and Mrs. van den Blink.
The Personnel Committee is responsible for the nomination of
officers, recommendation of Executive Officer compensation plans,
and establishment of guidelines for setting all other officers'
salaries. Additional responsibilities include the review and
approval of employee benefit programs and employee relation
policies and procedures. The Committee held two (2) meetings in
1998 and on December 31, 1998, its members were Messrs. Meier
(Chairperson), Brooks, D. Dalrymple, Evans, Falck, Meyer, Swan,
Tryon and Ughetta.
During the year ended December 31, 1998, each director of
the Corporation and the Bank attended at least 75% of the
aggregate of the number of Board Meetings held and the number of
meetings held by all committees of which such director was a
member.
Each director of the Bank who is not an officer or employee
of the Bank receives an annual retainer of $5,000 and a fee of
$300 for each meeting of the Board of Directors attended. Those
directors who are members of one or more committees of the Board
of Directors also receive a fee of $300 for each meeting of each
committee attended, with the exception of the Chairperson of each
committee who receives $350. The aggregate amount of directors'
retainers and fees paid or deferred under the Deferred Directors
Fee Plan during 1998 was $249,250.
Directors who are not officers or employees of the
Corporation receive a fee of $300 for attendance at meetings of
the Board of the Corporation which are held on days when there is
no meeting of the Board of Directors of the Bank. There were no
such meetings held during 1998. Otherwise, directors of the
Corporation are not compensated for services rendered by them to
the Corporation and no change is presently contemplated in this
policy.
The Deferred Director Fee Plan for non-employee Directors
provides that Directors may elect to defer receipt of all or any
part of their fees until a date or dates determined under the
Plan. Cash deferrals are credited with interest compounded
quarterly at the Applicable Federal Rate for short-term debt
instruments while phantom units (fees deferred into the
Memorandum Unit Value Account), appreciate or depreciate as would
an actual share of the Corporation's common stock purchased on
the deferral date. Cash deferrals will be paid in cash and
phantom units will be paid in shares of the Corporation's common
stock.
Certain Transactions
Some of the Bank's directors and officers, and entities of
which they are associated, are customers of the Bank in the
ordinary course of business, or are indebted to the Bank in
respect to loans of $60,000 or more, and it is anticipated that
some of these directors, officers and entities will continue to
be customers of and indebted to the Bank on similar terms in the
future. All loans to these individuals and entities are made in
the ordinary course of business, involve no more than a normal
risk of collectibility and were made on substantially the same
terms, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with
unaffiliated persons.
The Bank has purchased insurance from a Continental Casualty
Company, a member of the CNA Group, providing for reimbursement
of directors and officers of the Corporation and the Bank for
their costs and expenses for claims based on "wrongful acts" in
connection with their duties as directors or officers, including
actions as fiduciaries of the Bank's Pension and Profit-Sharing
Plans under the Employee Retirement Income Security Act of 1974.
The insurance coverage, which expires in April 1999, costs
$16,800 on an annual basis, and has been paid by the Bank.
The Bank retained Sayles, Evans, Brayton, Palmer & Tifft, a
law firm of which Mr. Hoffman is a partner and of which Mr.
Ughetta is of counsel, for legal services during the last two
years and expects to retain Sayles, Evans, Brayton, Palmer &
Tifft for legal services during the current year.
INDEPENDENT PUBLIC ACCOUNTANTS:
The accounting firm of KPMG LLP, 113 South Salina Street,
Syracuse, New York 13202 has acted as the Bank's and the
Corporation's independent auditors and accountants since 1990 and
will so act in 1999. Representatives of KPMG LLP will be present
at the Annual Meeting of Shareholders with the opportunity to
make a statement. The representatives will respond to
appropriate questions.
OTHER BUSINESS:
Management knows of no business which will be presented for
consideration, other than the matter described in the Notice of
Annual Meeting. If other matters are properly presented, the
persons designated as proxies intend to vote thereon in
accordance with their best judgment.
SHAREHOLDER PROPOSALS:
Qualified Shareholders desiring to present a proposal at the
2000 Annual Meeting of Shareholders, including a notice of intent
to make a nomination at said Meeting, must submit such proposal
to the Corporation on or before December 3, 1999. Such proposals
must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's directors, certain executive officers,
and more than ten percent owners of a registered class of the
Corporation's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and changes in
beneficial ownership. Directors, executive officers, and
greater than ten percent shareholders are required by SEC
regulation to furnish the Corporation with copies of all Section
16(a) forms they file.
To the Corporation's knowledge, based on review of the
copies of such reports furnished to the Corporation and written
representations that no other reports were required for the year
ended December 31, 1998, all Section 16(a) filing requirements
applicable to its executive officers, directors and any ten
percent shareholder were complied with, except that one change in
beneficial ownership was not reported on a timely basis by Mr.
Swan.
OTHER MATTERS:
Financial statements for the Corporation and its
consolidated subsidiaries are included in Chemung Financial
Corporation's Annual Report to stockholders for the year 1998
which was mailed to the stockholders beginning April 6, 1999.
A COPY OF CHEMUNG FINANCIAL CORPORATION'S 1998 ANNUAL REPORT
ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
AVAILABLE WITHOUT CHARGE TO THOSE STOCKHOLDERS WHO WOULD LIKE
MORE DETAILED INFORMATION CONCERNING THE CORPORATION. TO OBTAIN
A COPY, PLEASE WRITE TO: DONNA C. DENTON, VICE PRESIDENT AND
SECRETARY, CHEMUNG CANAL TRUST COMPANY, ONE CHEMUNG CANAL PLAZA,
ELMIRA, NY 14902.
BY ORDER OF THE BOARD OF DIRECTORS
Donna C. Denton
Secretary
Date: April 6, 1999
One Chemung Canal Plaza
Elmira, New York 14902
CHEMUNG FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - MAY 12, 1999
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CHEMUNG FINANCIAL CORPORATION
John R. Battersby and John B. Hintz, each with power of
substitution and with all powers and discretion the undersigned
would have if personally present, are hereby appointed the Proxy
Agents to represent the undersigned at the Annual Meeting of
Shareholders of Chemung Financial Corporation, to be held on May
12, 1999 (including any adjournments or postponements thereof)
and to vote all shares of Common Stock of Chemung Financial
Corporation which the undersigned is entitled to vote on all
matters that properly come before the meeting, subject to any
directions indicated.
(To be signed on Reverse Side)
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED.
IF NO DIRECTIONS TO THE CONTRARY ARE GIVEN, THE PROXY AGENTS
INTEND TO VOTE FOR THE NOMINEES.
NOMINEES: 3-year term:
FOR WITHHELD
Robert E. Agan
1. Election of Donald L. Brooks, Jr.
Directors. Stephen M. Lounsberry III
Thomas K. Meier
Charles M. Streeter, Jr.
Nelson Mooers van den Blink
For, except vote withheld from the following nominee(s):
______________________________________________
I/We will attend the Meeting
Number in group____
_____________ DATE_________ _______________DATE__________
Signature Signature If Held Jointly
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee, custodian or guardian, please give full
title as such.
