SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Cortland First Financial Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(i)(ii), or 14a-6(i)(1), or
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.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CORTLAND FIRST FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MARCH 25, 1996
SOLICITATION AND VOTING OF PROXIES
The accompanying Proxy is furnished in connection with the
solicitation on behalf of the Board of Directors of Cortland First
Financial Corporation (the "Company") of proxies for use at the Annual
Meeting of Shareholders to be held at the office of the corporation
at 65 Main Street, in the City of Cortland, Cortland County, New York,
on the 25th of March, 1996, at 1:00 p.m.
If the enclosed Proxy is properly executed and returned, all
shares represented thereby will be voted according to the instructions
set forth thereon. If no such instructions are specified, the Proxy
will be voted FOR the election of the named individuals as Directors
of the Company as outlined in the Notice of Annual Meeting of
Shareholders. As to any other business which may properly come before
the meeting, the persons named on the Proxy will vote according to
their best judgment.
Any proxy given by a shareholder may be revoked at any time
before it is voted by: (i) the shareholder attending the meeting and
voting thereat in person; (ii) the due execution and delivery of a
later dated proxy; or (iii) the due execution and delivery of a
written notice of revocation to Donald S. Ames, Secretary, Cortland
First Financial Corporation, No. 65 Main Street, Cortland, New York
13045. If not revoked, the Proxy will be voted in accordance with its
terms.
This proxy statement and the accompanying Proxy are first being
mailed to shareholders on or about February 28, 1996.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on February 9, 1996, the record date for
the determination of shareholders entitled to vote at the meeting,
there were outstanding and entitled to vote 672,000 shares of the
Company's common stock. Each share of common stock entitles the
holder to one (1) vote.
ELECTION OF DIRECTORS
At the meeting, a total of three (3) Directors (Class I) are to
be elected to serve for a term of three (3) years and until their
respective successors are duly elected and qualified. The shares
represented by the enclosed Proxy will be voted FOR the election of
the three (3) nominees named below (unless otherwise specified), each
of whom is at present a Director of the Company. If any nominee
becomes unavailable for any reason before the election (which is not
anticipated), the Proxy may be voted for such other person as may be
determined by the Board of Directors of the Company.<PAGE>
INFORMATION CONCERNING NOMINEES FOR DIRECTORS
AND OTHER DIRECTORS
<TABLE>
<CAPTION> Shares % of
Beneficially Total
Business Experience Director Owned as of Common
Name and Age and Directorships Since* 2/9/95 (1) Stock
NOMINEES FOR ELECTION (CLASS I)
<S> <C> <C> <C>
David R. Alvord President and Director of 1979 1,757 .26
(55) Company; President, Chief
Executive Officer and
Director - First National
Bank of Cortland
Donald S. Ames Director of Company; 1986 24,800 3.69
53) President - Cortland
Laundry, Inc., Cortland,
New York (commercial
laundry)
David J. Taylor Director of Company; 1993 1,500 .22
(52) President - Prosco
Products, Inc., Cortland,
New York (manufacturer's
representative/distrib-
utor)
OTHER DIRECTORS **
Shares % of
Beneficially Total
Business Experience Director Owned as of Common
Name and Age and Directorships Since* 2/9/95 (1) Stock
Harry D. Newcomb Director of Company; 1979 4,050 (2) .60
(67) President - Newcomb
Motors, Inc., Cortland,
New York (automobile
dealer)
Robert M. Lovell Director of Company; 1988 518 (3) .08
(49) President - Cortland
Memorial Hospital
Richard J. Shay Director of Company; 1988 500 .07
(63) District Attorney -
Cortland County,
Cortland, New York
Charles H.
Spaulding Director of Company; 1993 997 (4) .15
(47) Vice President - George B.
Bailey Agency, Inc.,
Cortland, New York
(insurance agency)
Stuart E. Young Director of Company; 1991 200 .03
(46) Partner - Spruce-Eden
Farms (dairy farm);
President - Cortland
Bulk Milk Producers
Cooperative, Inc.
(6/89 to present)
Mary Alice Director of Company; 1994 100 .01
Bellardini Mayor - Village of Homer
(62) (4/87 to present);
Director - Blue Cross and
Blue Shield of Central
New York, Inc. (health
and hospitalization
insurance) (1984 to
1994); Director - HMO-CNY,
Inc. (health maintenance
organization) (1995)
John H. Buck Director of Company; 1994 746 .11
(50) President - Buck
Environmental Laboratories,
Inc. (testing facility for
air, water, soil, and waste)
(12/88 to present)
All Directors and Officers
as a Group (11 in Group) 35,268 5.25
</TABLE>
* Year in which the Director was first elected to the Board of
Directors of the Company or the Company's subsidiary, First National
Bank of Cortland (the "Bank").
** Messrs. Spaulding, Shay, and Lovell are members of Class II with
terms expiring in 1997; Messrs. Newcomb, Young, and Buck, and Ms.
Bellardini are members of Class III with terms expiring in 1998.
(1) Includes shares owned by family members residing in the
same household as to which certain Directors disclaim
beneficial ownership. Except as otherwise indicated the
named Director has sole voting and sole investment power
with respect to all of the indicated shares.
(2) Includes 2290 shares owned by Mr. Newcomb's wife, Muriel,
of which Mr. Newcomb disclaims any beneficial ownership.
(3) Includes 268 shares owned by Mr. Lovell's children, Owen
and Adrienne, pursuant to the Uniform Gift to Minors Act,
of which Mr. Lovell has sole voting and investment power.
(4) Includes 897 shares owned by Mr. Spaulding's wife,
Elizabeth, of which Mr. Spaulding disclaims any beneficial
ownership.
The principal occupations of all the nominees and other Directors
have been set forth for five (5) years or more. Management is not
aware of any family relationships between the above-named Directors.
ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS
During 1995, there were six (6) regularly scheduled meetings of
the Company's Board of Directors. There were twelve (12) regularly
scheduled meetings of the Bank's Board of Directors. Each of the
incumbent Directors of the Company attended at least seventy-five
percent (75%) of the aggregate of all of the meetings of the Board of
Directors and any committees on which the Director was a member. The
Company's Executive Committee, which consists of Messrs. Alvord, Ames,
Newcomb, and Shay, has the power to exercise all of the executive and
supervisory powers of the entire Board of Directors in the interim
between meetings of the Board of Directors. This Committee did not
meet in 1995. The Company does not have any nominating, compensation,
or audit committee. The Bank, however, does have a Trust Audit
Committee, an Audit Committee, an Executive Committee, and a
Compensation Committee. The Bank also has a Trust Committee, which
met forty-five (45) times during 1995. A description of the Bank's
Trust Audit, Audit, and Executive Committees follows. A description
of the Bank's Compensation Committee is set forth on page 5.
Trust Audit Committee:
The Trust Audit Committee met one (1) time in March 1995. The
function of the committee is to review the audit of the Trust
Department to determine whether income and expense is properly
recorded, whether adequate internal controls and safeguards are
maintained and if any funds held in a fiduciary capacity remain
uninvested or undistributed any longer than necessary.
The Committee consists of the following Directors appointed by
the President and approved by the Board of Directors: Charles H.
Spaulding, Stuart E. Young, and Mary Alice Bellardini.
Audit Committee:
The Audit Committee, which met fourteen (14) times in 1995,
supervises the internal audit activities of the Bank and supervises
and directs the Bank's auditors. The function of the Committee is to
ensure that the Bank's activities are being conducted in accordance
with law and the banking rules and regulations established by the
Comptroller of the Currency, other regulatory and supervisory
authorities, and in conformance with established policy. In addition,
the Audit Committee recommends to the Board, the services of a
reputable certified public accounting firm. The Board of Directors
then appoints the certified public accounting firm at the annual
reorganization meeting of the Directors. The Committee receives and
reviews the reports of the certified public accounting firm and
presents them to the Board of Directors with comments and
recommendations.
The Committee consists of the following Directors appointed by
the President and approved by the Board of Directors: Richard J.
Shay, Donald S. Ames, and Harry D. Newcomb.
Executive Committee:
The Executive Committee possesses and may exercise all the
executive and supervisory powers of the entire Board of Directors
between meetings of the Board subject to such restrictions and
instructions as may from time to time be given to the Committee by the
Board of Directors and except as the bylaws otherwise provide. The
Committee met fifty-two (52) times in 1995.
The Committee consists of the following Directors appointed by
the President and approved by the Board of Directors: David R.
Alvord, Donald S. Ames, Harry D. Newcomb, and Richard J. Shay. The
remaining Directors serve on a rotating basis.
Board of Directors' Fees:
The Directors of the Company receive no compensation for serving
in such capacity. For the year 1996, members of the Bank's Board of
Directors are being compensated at the rate of $350.00 per meeting
attended; members of the Executive Committee are being compensated
$75.00 per meeting attended; and members of the Compensation Committee
are being compensated $200.00 per meeting attended.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation for services
to the Bank in all capacities in the years 1993-1995 to each of the
most highly compensated executive officers of the Bank who received
more than $100,000 in cash compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Long Term
Compensation
Annual Compensation Payouts
Name and LTIP All Other
Principal Payouts Compensation
Position Year Salary ($) ($)(1) ($)(2)
- - - - - --------------------------------------------------------------------
<S> <C> <C> <C> <C>
David R. Alvord 1995 150,000. 20,000. 116,020.
President & Chief 1994 141,000. - 107,856.
Executive Officer 1993 133,000. - 62,230.
of the Bank
- - - - - --------------------------------------------------------------------
(1) Paid to Mr. Alvord under the three (3) year Executive
Incentive Compensation Plan described on page 7.
(2) Includes the following amounts for Mr. Alvord for 1995:
$21,150 under the one (1) year Executive Incentive
Compensation Plan described on page 7; $8,657 for the
current year contribution to the Employee Salary Savings
Plan - 401K; $6,000 for the current year contribution to
the pension plan; and $80,213 for the current year
contribution to the Excess Benefit Plan described on page
7.
</TABLE>
The Compensation Committee of the Bank meets semi-annually to
conduct a comprehensive performance review of all Bank officers and
to recommend the annual base remuneration for the Bank officers to the
Board of Directors. The Committee considers each officer's
performance as measured against that individual's job description.
In recommending the base annual salary for the chief executive
officer, the Committee considers overall asset quality, earnings,
capital adequacy, peer group and industry comparisons, general
economic trends and total return to shareholders. The Committee
believes that Mr. Alvord performed exceptionally well in each of the
above measurable categories and that the Company's success is due, in
large part, to his efforts. Mr. Alvord does not participate in the
determination of his annual compensation.
The Committee meets separately to consider award payments under
the Bank's Executive Incentive Compensation Plan. Under this plan
certain designated officers are considered for annual and three (3)
year incentive payments based on prior goals established by the Board
of Directors for return on assets. A description of this plan is
found on page 7.
The Committee is appointed by the President, approved by the
Board of Directors, and consists of Donald S. Ames, Jr., Robert M.
Lovell, David J. Taylor, Harry D. Newcomb, and John H. Buck.
<TABLE>
<CAPTION> Comparison of Five Year Cumulative Total
Return of CFFC, S&P 500 & NASDAQ Banks
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
NASDAQ 100 164 239 272 271 404
CFFC 100 118 129 216 319 317
S&P 500 100 131 141 154 157 215
</TABLE>
Pension Benefits
The Bank has a non-contributory pension plan, which an employee
is eligible to participate in upon attaining age twenty-one (21) and
completion of twelve (12) months consecutive service during which the
employee worked 1,000 or more hours of service. The Bank's
contribution is determined according to a formula based on years of
service with the Bank. The Bank's contribution to the Plan in 1995
and 1994 totaled $128,129 and $97,100, respectively. Contributions
to the plan in 1995 were $6,000 for Mr. Alvord, and $42,578 for all
nine (9) executive officers as a group.
401K Plan
The Bank has an Employee Salary Savings Plan - 401K. The Bank's
contributions to the 401K Plan are made according to a schedule of
matching employee contributions and are made as accrued. The Bank's
contributions to the Plan for 1995 and 1994 were $94,752 and $81,523,
respectively. Contributions to the plan in 1995 were $8,657 for Mr.
Alvord, and $32,816 for all nine (9) executive officers as a group.
Executive Incentive Compensation Plan
On May 17, 1987, the Board of Directors of the Bank approved the
adoption of an Executive Incentive Compensation Plan (the "Plan").
Its purpose is to enhance the Bank's performance and to further its
long-term objectives by providing certain key employees with financial
incentives. On November 29, 1988, the Compensation Committee of the
Bank determined that the Plan should be implemented beginning in
calendar year 1989.
Under the terms of the Plan, at the beginning of each year the
Board of Directors establishes target performance goals for the Bank
for both the current year and for the next three (3) years. If, in
the opinion of the Board, the one (1) year goal is met, eligible
employees could be entitled to receive such award as is determined by
the Board of Directors. The annual award fund for distribution to
plan participants may not exceed fifteen percent (15%) of
participating base payroll exclusive of any overtime pay, bonuses or
fringe benefits. Similarly, if the three (3) year goal is met,
participants could be entitled to an additional award payment as
determined by the Board of Directors. Such award fund may not exceed
fifteen percent (15%) of the average base salaries during the three
(3) year performance period.
Participation in the Plan is designed to include the Bank's
President, Chief Executive Officer, Function Managers, and those other
employees who, in the opinion of the Board, contribute significantly
to the profitability of the Bank. Plan awards either are paid in cash
at the end of the applicable one (1) year or three (3) year
performance period or, at the election of the participating employee,
may be deferred until a later specified date.
The target performance objective for the current year was a
return on average assets of 1.32%. The target performance objective
for the three (3) year award was previously established at 1.35%. A
second criterion for the three (3) year award requires that the
Company's average return on average assets equal or exceed a selected
peer group average return on average assets.
A total of $60,030 was accrued for the year 1995 in connection
with the one (1) year goal for all executive officers as a group. Of
this amount, a total of $15,000 was earned by Mr. Alvord. The total
accrual in connection with the Plan for both the one (1) and three (3)
year goals was $60,030 for 1995 and $122,420 for 1994.
Excess Benefit Plan
Effective January 1, 1991, the Board of Directors of the Bank
approved the adoption of an Excess Benefit Plan for David R. Alvord
(the "Excess Plan"). Its purpose is to provide Mr. Alvord with
retirement benefits in addition to those benefits provided pursuant
to the Bank's pension plan.
Under the terms of the Excess Plan, Mr. Alvord is entitled to
receive upon retirement at age sixty-five (65) an amount equal to
eighty percent (80%) of his then Average Base Compensation increased
by the amount of the Accumulated Fund expressed as a straight life
annuity and reduced by the sum of: (a) the annual benefit to be
provided Mr. Alvord pursuant to the Bank's pension plan expressed as
a straight life annuity; (b) the annual benefit to be provided from
the vested portion of the Bank's contributions to Mr. Alvord's account
balance in the Bank's 401-K Plan as if such balance were to be paid
in the straight life annuity; and (c) an amount equal to Mr. Alvord's
primary social security benefit expressed in the form of a straight
life annuity. The Accumulated Fund is the amount that would have been
contributed to the Bank's pension plan on Mr. Alvord's behalf but for
the limitation imposed by Section 401(a)(4) of the Internal Revenue
Code. The Accumulated Fund is deemed to have earned interest each
year at the same rate of return actually earned for such year by the
Bank's pension plan.
Under the original terms of the Excess Plan, the amount of the
benefit to be paid to Mr. Alvord was to be reduced in the event he
retired before age sixty-five (65). The amount of the reduction was
based on a fraction the numerator of which was the number of years
remaining until Mr. Alvord reaches age sixty-five (65) and the
denominator of which is the total number of years of service Mr.
Alvord would have had had he continued to work until such age. In
addition, certain actuarial reductions were to be applied to reflect
the early commencement of payments. Effective January 1, 1994, the
Excess Plan was amended to provide that no reduction will be made,
whether to reflect remaining years of service to age sixty-five (65)
or to reflect the early commencement of payments, in the event such
retirement is the result of Mr. Alvord's retirement on or after the
expiration of his Employment Agreement (December 31, 2000), Mr.
Alvord's disability, a termination by the Bank without cause, the
occurrence of an event which gives Mr. Alvord the right to terminate
his employment under the Employment Agreement (e.g., a Change in
Control, a material reduction in Mr. Alvord's authority), or Mr.
Alvord's death. If Mr. Alvord retires before age sixty (60), no
benefits are payable under the Excess Plan unless such retirement is
the result of a Change in Control, a material reduction in Mr.
Alvord's authority, Mr. Alvord's disability, or a termination by the
Bank without cause.
For purposes of the Excess Plan, the term Change in Control means
a sale by the Company or the Bank of all or substantially all of its
assets, any individual or entity acquiring at least twenty-five
percent (25%) of those securities of the Bank entitled to vote for
directors. Average Base Compensation is generally defined as Mr.
Alvord's average salary for the thirty-six (36) month period
immediately preceding his retirement including any elective
contributions to the 401-K Plan and annual bonus, but excluding any
bonuses paid pursuant to the Bank's Executive Incentive Compensation
Plans and the value of any employee benefits paid on Mr. Alvord's
behalf.
In order to fund its liability, effective January 1, 1995, the
Bank established the "First National Bank of Cortland Excess Benefit
Trust for the Benefit of David R. Alvord." Each year the Bank will
contribute such amount to the Trust so that the balance of the Trust
will equal the actuarial value of the estimated benefit payable to Mr.
Alvord pursuant to the Excess Plan. The initial contribution to the
Trust was $118,000. The contribution for 1995 was $80,213.
Deferred Compensation Agreement
Effective December 31, 1991, the Bank adopted a Deferred
Compensation Agreement with its Directors. The purpose of the
Agreement is to provide Directors with the option to defer the receipt
of all or a portion of their director's fees. The election must be
made on or before December 31st of the year preceding the year in
which the fees are to be paid. Once made, the election will remain
in effect until revoked by the individual Director. All amounts
deferred pursuant to the Agreement will be credited with interest each
month at the rate being paid on one (1) year U.S. Treasury Notes as
of January 1st of the particular year.
Upon a Director no longer being a member of the Bank's Board, all
amounts deferred by the Director plus any earnings thereon shall be
paid, at the Director's election, over a period of ten (10) years or
in a lump sum. A Director may elect to defer commencement of any
installment payments for up to five (5) years following his or her
termination as a member of the Board.
During 1995, two (2) Directors participated in the deferred
compensation arrangement. The Directors deferred a total of $15,475.
Other Transactions
The Bank has had and expects to have in the future, banking
transactions in the ordinary course of business with many of its
Directors, officers and their associates. The maximum aggregate
extensions of credit to Directors and executive officers and their
related interests since the beginning of 1995 was $4,400,130 or 20.32%
of the Bank's total equity capital. As of December 31, 1995, such
indebtedness totaled $4,328,769 or 18.69% of the Bank's equity
capital. All extensions of credit to such persons have been made in
the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and in the
opinion of the management of the Bank, do not involve more than a
normal risk of collectibility or present other unfavorable features.
Employment Agreement
Effective January 1, 1994, the Company and the Bank entered into
an agreement with Mr. Alvord providing for his continued services
through December 31, 2000, at a minimum base salary of $133,000 per
year. The agreement provides that it may be terminated by Mr. Alvord
at any time during the first six (6) months following a "change in
control" of the Company or the Bank. A change in control is defined
as (i) the sale, exchange or other disposition by either the Company
or the Bank of all or substantially all of its assets either to a
single purchaser or to a group of affiliated purchasers in one (1)
transaction or a series of related transactions pursuant to common
plan; (ii) the sale, exchange or other disposition in one (1)
transaction or in a series of related transactions pursuant to a
common plan by either the Company or the Bank of at least twenty-five
percent (25%) of its issued and outstanding shares; or (iii) the
merger, consolidation or other combination of either the Company or
the Bank where the existing shareholders receive less than fifty-one
percent (51%) of the outstanding voting stock of the new or continuing
entity. In the event of such a termination, Mr. Alvord will be
entitled to receive an amount equal to three (3) times his then base
salary plus the amount of any taxes or other charges which may be
imposed upon Mr. Alvord pursuant to the Internal Revenue Code as a
result of any "excess parachute payments".
PROPOSAL TO REDUCE PAR VALUE OF COMMON STOCK
AND TO EFFECT THREE-FOR-ONE STOCK SPLIT
The Company is presently authorized to issue 3,000,000 shares of
common stock, par value $5.00 per share. As of February 9, 1996,
there were 672,000 shares of common stock outstanding and entitled to
vote and zero (0) shares held in the Company's treasury.
The proposed amendment to the Company's Certificate of
Incorporation would reduce the par value of the presently authorized
3,000,000 shares of common stock, both issued and unissued, from $5.00
per share to $1.6667 per share, and would change each share of common
stock presently issued into three shares, $1.6667 par value per share.
This would effect a three-for-one stock split.
As of February 9, 1996, the price of the Company's common stock,
as quoted on the National Association of Securities Dealers, Inc.
Bulletin Board, was Bid $50.50 and Asked $53.50. The Board of
Directors of the Company believes that this price level tends to
discourage some individuals from investing in the Company's common
stock. The Board also believes that the proposed stock split will
result in a market price for the Company's common stock that should be
more attractive
to a broader spectrum of investors and should, therefore, benefit both
the Company and its shareholders. The stock split will not result in
any change in the capital or surplus accounts of the Company.
If approved by the shareholders, it is expected that the proposed
amendment would become effective as of the close of business on or
about March 29, 1996, after the filing of the Certificate of Amendment
as provided by New York law. Such effective date will be the record
date for the determination of shareholders entitled to receive the
additional shares of common stock to be issued in accordance with the
stock split.
If the Certificate of Amendment is amended as proposed, each
existing certificate representing previously issued shares of common
stock with a par value of $5.00 each will thereafter automatically be
deemed to represent the same number of shares of common stock with a
par value of $1.6667 each. As soon as practicable after the effective
date, the Company will mail to each shareholder a new certificate or
certificates representing two additional shares of common stock with
a par value of $1.6667 per share for each share of common stock held
of record at the effective date. Accordingly, shareholders should not
send their existing certificates to the Company.
The Company has been advised by its counsel that under current
federal tax laws: the receipt of the additional shares pursuant to the
stock split will not result in federal taxable income to the
shareholders; the cost or other tax basis to a shareholder of each
share of common stock held immediately prior to the stock split will
be split equally among the three shares held immediately after the
split; and the holding period for each of the new shares will include
the period for which the existing share was held.
Shareholders should note that, assuming transactions of an
equivalent dollar amount, brokerage commissions on purchases and sales
of the Company's common stock after the split and transfer taxes, if
any, may be somewhat higher than before the split because of the
increased number of shares involved.
The following resolution will be proposed at the Shareholders
Meeting:
RESOLVED, that the Certificate of Incorporation of the Company
be amended to reduce the par value of the presently authorized
3,000,000 shares of common stock, both issued and unissued, from
$5.00 per share to $1.6667 per share, and to change each share
of common stock presently issued into three shares of common
stock, $1.6667 per share, by the filing of an amendment
substantially in the form of Exhibit "A" attached hereto.
The favorable vote of a majority of the outstanding shares of the
common stock of the Company entitled to vote is required in order to
adopt the resolution. Unless some other direction is specified,
proxies will be voted in favor of this proposal.
The Board of Directors of the Company recommends voting FOR the
proposed amendment.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
At its last organizational meeting the Board reappointed Coopers
& Lybrand as the Company's independent auditors for the year ending
December 31, 1995. This appointment was based upon the recommendation
of the Audit Committee. An independent auditor has not yet been
selected for the Company's current year.
A representative of Coopers & Lybrand is not expected to be
present at the Annual Meeting of Shareholders. In the event a
representative does attend, such representative will have an
opportunity to make a statement if so desired and to respond to
appropriate questions.
ANNUAL REPORT
The Annual Report of the Company, including financial statements
for the year 1995, accompanies this proxy statement.
OTHER MATTERS
The Board of Directors is not aware of any matters other than
those indicated above that will be presented for action at the
meeting. The enclosed Proxy gives discretionary authority, however,
in the event any other matter should be presented.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company.
In addition to the use of the mails, some of the officers, Directors
and regular employees of the Company may solicit proxies in person and
by telephone and telegraph and may solicit brokers and other persons
holding shares beneficially owned by others to procure from the
beneficial owners consents to the execution of proxies. The Company
will reimburse such brokers and other persons for their expenses
incurred in sending proxy forms and other material to their
principals.
SUBMISSION OF PROPOSALS BY SHAREHOLDERS
Any proposals of shareholders intended to be presented at the
1997 Annual Meeting of Shareholders must be received by the Company
not later than December 1, 1996, for inclusion in the proxy statement
and form of proxy pertaining to that meeting.
By Order of the Board of Directors
Donald S. Ames
Secretary
Dated: February 28, 1996<PAGE>
EXHIBIT "A"
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
CORTLAND FIRST FINANCIAL CORPORATION
Under Section 805 of the Business Corporation Law
We, the undersigned, being the President and Secretary,
respectively, of Cortland First Financial Corporation, do hereby
certify that:
1. The name of the corporation is Cortland First Financial
Corporation.
2. Its Certificate of Incorporation was filed by the Department
of State on May 30, 1986.
3. The Certificate of Incorporation is hereby amended as
authorized in Section 801 of the Business Corporation Law to reduce
the par value of the authorized shares of common stock from $5.00 per
share to $1.6667 per share and to change each share of issued common
stock into three shares of common stock.
4. To accomplish the foregoing amendment, paragraph 4 of the
Certificate of Incorporation is hereby amended to reduce the par value
of the authorized shares of common stock from $5.00 per share to
$1.6667 per share and to change each share of issued common stock into
three shares of common stock. Paragraph 4 of the Certificate of
Incorporation is hereby amended to read as follows:
"4. Number of Shares. The aggregate number of shares
the Corporation shall have the authority to issue is:
Three Million (3,000,000) all of which shall be common
shares of the par value $1.6667 each."
5. The six hundred seventy-two thousand (672,000) shares of
issued and outstanding common shares par value $5.00 each shall be
changed into two million sixteen thousand (2,016,000) shares of common
stock par value $1.6667 per share at the rate of three (3) shares of
common stock par value $1.6667 for each share of the currently issued
and outstanding common stock par value $5.00. The nine hundred
eighty-four thousand (984,000) shares of authorized but unissued
common stock shall be changed into nine hundred eighty-four thousand
(984,000) shares of common stock par value $1.6667 per share.
6. The foregoing amendment of the Certificate of Incorporation
was authorized by a vote of the Board of Directors followed by a vote
of the holders of a majority of all outstanding shares entitled to
vote thereon at a meeting of shareholders.
IN WITNESS WHEREOF, we have made and subscribed this Certificate
this day of , 1996.
David R. Alvord, President
Donald S. Ames, Secretary
STATE OF NEW YORK )
) SS.:
COUNTY OF CORTLAND )
David R. Alvord, being duly sworn, deposes and says, that he is
one of the persons described in and who executed the foregoing
Certificate, that he has read the same and knows the contents thereof,
and that the statements contained therein are true.
David R. Alvord
Sworn to before me this
day of , 1996.
Notary Public
Appendix A: Proxy Card
CORTLAND FIRST FINANCIAL CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS, MARCH 25, 1996
PROXY
The undersigned hereby appoints Richard J. Shay, Harry D. Newcomb,
and Charles H. Spaulding, and each of them, with full power of
substitution, attorneys and proxies to represent the undersigned at
the Annual Meeting of Shareholders of Cortland First Financial
Corporation (the "Company") to be held at the office of the
corporation at 65 Main Street, in the City of Cortland, Cortland
County, New York, on the 25th of March, 1996, at 1:00 p.m. and at any
adjournment or adjournments thereof, and to vote all shares of stock
which the undersigned may be entitled to vote at said meeting, and
with all other powers which the undersigned would possess if
personally present.
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as withheld in the space to vote for all
below) nominees below
(CLASS I)
David R. Alvord
Donald S. Ames
David J. Taylor
(Instructions: To withhold authority to vote for
any individual nominee, write that nominee's name
in the space provided below.)
(2) PROPOSAL TO AMEND the Company's Certificate of
Incorporation to reduce the par value of the presently
authorized 3,000,000 shares of common stock, both issued
and unissued, from $5.00 per share to $1.6667 per share,
and to change each share of common stock presently issued
into three shares of common stock, $1.6667 per share.
The favorable vote of a majority of the outstanding shares of
the common stock of the Company entitled to vote is required
in order to adopt the resolution. Unless some other direction
is specified, proxies will be voted in favor of this proposal.
[ ] [ ] [ ]
FOR ABSTAIN AGAINST
(3) With discretionary authority upon such other business as
may properly come before the meeting.
PLEASE SIGN AND DATE BELOW, AND RETURN
This Proxy will be voted as directed but, if no direction is
indicated, it will be voted FOR the election of Directors and FOR the
proposal to amend the Company's Certificate of Incorporation. Matters
(1) and (2) above have been proposed by the Board of Directors of the
Company.
Date:____________________,1996
_____________________________
_____________________________
Signature(s) of Shareholder(s)
INSTRUCTIONS
Please sign exactly as name appears hereon and where shares are
held jointly each holder should sign. If you cannot be present in
person at the meeting, it is important that your Proxy be dated,
signed, and returned promptly in the enclosed envelope in order to
assure that your stock may be voted at the meeting.
When signing as attorney, administrator, executor, trustee,
guardian, or other fiduciary, please give your full title. If signing
for a corporation, please indicate your office.
