SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
CORTLAND FIRST FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
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[ ] 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: ____________________________________________________________
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[Newspaper Advertisement]
TO THE SHAREHOLDERS OF ONEIDA VALLEY BANCSHARES, INC.
SHOULD YOU VOTE YES OR NO ON OUR PROPOSED MERGER WITH
CORTLAND FIRST FINANCIAL CORPORATION?
THE FACTS ABOUT THE STRATEGIC MERGER OF EQUALS WITH CORTLAND FIRST FINANCIAL
CORPORATION.
o Your Board has approved the merger based on a strategic plan to increase
long-term shareholder value.
o The regulators have approved the merger.
o All business investigations concerning Cortland First have been completed.
o The merger allows for continued input and representation by all Oneida
Valley Directors.
o Oneida Valley management will be strongly represented on an equal footing
with Cortland First personnel.
o Dual headquarters will be maintained in both Oneida and Cortland.
CONCLUSION:
o This is a strategic merger of equals that can and will happen when our
shareholders and Cortland First shareholders vote their approval.
THE FACTS ABOUT THE CNY FINANCIAL (THE PARENT OF CORTLAND SAVINGS BANK) HOSTILE
BID TO DISRUPT OR CIRCUMVENT OUR MERGER WITH CORTLAND FIRST.
o Unsolicited proposal from CNY Financial at $33.50 cash and $33.50 stock per
share.
o Contingencies include: regulator approval, due diligence, shareholder
approval, abandoning the merger with Cortland First.
o Several CNY Financial shareholders have contacted us indicating their
displeasure and disapproval of the actions of CNY Financial and their
intent to oppose CNY Financial's actions.
o Our Board consulted with expert financial advisors and legal advisors to
consider CNY Financial's proposal before unanimously rejecting it.
o If Oneida Valley were to be sold to CNY Financial, your Board of Directors
would be
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powerless to prevent the consolidation of jobs and services away from
Oneida.
o Several stock analysts for CNY Financial stock have recently downgraded the
stock upon learning of its plans to try to acquire our company.
CONCLUSION:
o Oneida Valley has prospered as a community-oriented bank for nearly 150
years. Our company is not for sale. CNY Financial is proposing a takeover
of our company, as opposed to a merger of equals. Our shareholders,
community, employees and customers are better served in the merger of
equals with Cortland First Financial Corporation.
WHEN YOU VOTE YES, YOU VOTE FOR ONEIDA!
[Bank logo]
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[Shareholder Letter -- to be mailed on or after November 10, 1998]
[Oneida Valley Bancshares, Inc. Letterhead]
November 10, 1998
Dear Shareholder:
We have previously communicated with you regarding the hostile efforts of
CNY Financial Corp. (the parent company of the Cortland Savings Bank) to acquire
control of your community bank and Oneida Valley Bancshares, Inc.
Your Board of Directors has carefully considered the actions of CNY and
their proposal to acquire control of Oneida Valley as we attempt to complete our
merger of equals with Cortland First Financial Corporation. In its effort to
acquire Oneida Valley and to disrupt the merger of equals, CNY has made several
statements which we believe are confusing, and potentially misleading.
In an effort to ensure that you, our shareholders, have the full story, we
are enclosing a short Question and Answer Sheet for your information.
We appreciate your continued support as we endeavor to enhance your long
term shareholder value, and hope that you will attend our shareholders' meeting
on Tuesday, November 17, 1998 at 4:00 p.m. in the Bank's main lobby.
Very truly yours,
BOARD OF DIRECTORS
ONEIDA VALLEY BANCSHARES, INC.
John W. Bailey
Donald H. Dew
Peter M. Dunn
Robert H. Fearon, Jr.
David P. Kershaw
Robert H. Kuiper
Samuel J. Lanzafame
John C. Mott
Richard G. Smith
Edward J. Thoma
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QUESTIONS AND ANSWERS
REGARDING ONEIDA VALLEY'S PROPOSED MERGER
WITH CORTLAND FIRST FINANCIAL CORPORATION
Q. I THOUGHT ONEIDA VALLEY WAS PLANNING TO MERGE WITH CORTLAND FIRST FINANCIAL
CORPORATION. WHY IS CNY FINANCIAL CORPORATION INVOLVED?
A. Oneida Valley has agreed to merge with Cortland First, and has requested
that you approve the merger at the Special Shareholders' Meeting to be held
on Tuesday, November 17, 1998. At the "eleventh hour," CNY Financial, the
parent corporation for the Cortland Savings Bank, has made an unsolicited
attempt to disrupt the merger and to acquire control of your company.
Q. WHAT ARE THE TERMS OF THE PROPOSED MERGER WITH CORTLAND FIRST?
A. As described more fully in the Proxy Statement/Prospectus that you have
received for the Special Shareholders' Meeting, the merger with Cortland
First is structured as a tax-free exchange in which Oneida Valley and
Cortland First will merge under the name "Alliance Financial Corporation."
Each Oneida Valley shareholder would receive up to 2.00 and no less than
1.75 shares of Alliance Financial Corporation common stock for each share
of Oneida Valley common stock currently owned. Oneida Valley shareholders
would not recognize taxable gain or loss in connection with this exchange,
except to the extent that shareholders receive cash for fractional shares.
Q. WHAT ARE THE TERMS OF CNY FINANCIAL'S HOSTILE OFFER?
A. CNY Financial proposes to pay $67.00 per share -- $33.50 in cash and $33.50
in CNY Financial common stock. The cash component would be taxable to
Oneida Valley shareholders. CNY Financial's common stock has been publicly
traded for approximately one month, and has no long term price history.
However, the market price of the CNY Financial common stock dropped
significantly when the hostile offer was publicly announced.
Q. CNY FINANCIAL HAS STATED THAT IT IS OFFERING MORE THAN ONEIDA VALLEY
SHAREHOLDERS WILL RECEIVE IN THE CORTLAND FIRST MERGER. IS THIS TRUE?
A. You should not be confused by CNY Financial's efforts to equate its attempt
to take control of Oneida Valley with the pending merger. A SALE OF CONTROL
IS A COMPLETELY DIFFERENT TRANSACTION THAN A MERGER OF EQUALS, and involves
a one time, short-term financial premium for selling control of Oneida
Valley. Unlike a sale of your company to CNY Financial, the merger of
equals envisions reaping the benefits of a strategic plan with Cortland
First, and building shareholder value through the long term growth of the
combined bank. As such, it is misleading to simply compare the financial
terms of the two proposed transactions. Your Board believes the pending
"merger of equals" is the
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best alternative to maintain our independence and at the same time enhance
long-term shareholder value. As we have stated before, THE BANK IS NOT FOR
SALE, AND THE MERGER OF EQUALS IS NOT A SALE OF THE BANK.
Q. THE CORTLAND FIRST MERGER HAS BEEN IN PROCESS FOR QUITE SOME TIME. WOULDN'T
CNY FINANCIAL NEED TO SPEND A LOT OF TIME AND EFFORT TO IMPLEMENT ITS
PROPOSAL TO ACQUIRE ONEIDA VALLEY?
A. THE MERGER WITH CORTLAND FIRST HAS BEEN APPROVED BY THE APPROPRIATE
REGULATORY AUTHORITIES AND IS ONLY AWAITING SHAREHOLDER APPROVAL BEFORE IT
CAN BE COMPLETED. THE HOSTILE TAKEOVER BY CNY FINANCIAL IS SPECULATIVE,
SUBJECT TO A NUMBER OF CONDITIONS, AND MAY NEVER HAPPEN. In addition to
negotiation of an agreement acceptable to CNY Financial, completion of a
due diligence review, and regulatory approvals, CNY Financial would need to
overcome intense opposition that has already been voiced by significant CNY
Financial shareholders. Further, since CNY Financial announced their
hostile takeover attempt, CIBC Oppenheimer Corp. and Friedman Billings have
downgraded their recommendations on CNY Financial's common stock. Based on
these events and other factors, your Board of Directors simply does not
believe that it would be prudent to abandon a pending beneficial merger of
equals to pursue a change of control transaction that might never occur.
Q. HOW WOULD CNY FINANCIAL'S PROPOSED TAKEOVER AFFECT THE ONEIDA COMMUNITY
DIFFERENTLY THAN THE PROPOSED MERGER WITH CORTLAND FIRST?
A. We believe that the merger with Cortland First is in the best interests of
our customers and our communities. In particular, the Merger Agreement with
Cortland First provides for the maintenance of dual headquarters in Oneida
and Cortland following the merger, and allows current Oneida Valley
management to play a strong role in running the combined bank. By contrast,
IF ONEIDA VALLEY WERE TO BE SOLD TO CNY FINANCIAL, YOUR BOARD OF DIRECTORS
WOULD BE POWERLESS TO PREVENT "DOWNSIZING" AND THE CONSOLIDATION OF JOBS
AND SERVICES AWAY FROM ONEIDA.
Q. I HEARD THAT CNY FINANCIAL HAS ALSO MADE A HOSTILE OFFER TO ACQUIRE CONTROL
OF CORTLAND FIRST. IS THIS TRUE?
A. Yes. On November 4, 1998, less than three hours after your Board of
Directors rejected CNY Financial's offer to take control of Oneida Valley,
CNY made an unsolicited proposal to take control of Cortland First. On
November 6, 1998, Cortland First's Board of Directors rejected CNY
Financial's takeover proposal and reaffirmed its intent to complete the
merger with Oneida Valley.
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Q. HOW CAN I HELP ONEIDA VALLEY TO STOP CNY FINANCIAL'S EFFORTS TO DISRUPT THE
CORTLAND FIRST MERGER?
A. NOW, MORE THAN EVER, YOUR VOTE IS CRUCIAL IN DETERMINING THE FUTURE OF
ONEIDA VALLEY. IF YOU HAVE NOT ALREADY DONE SO, PLEASE VOTE YOUR PROXY
"FOR" THE MERGER IN CONNECTION WITH THE SPECIAL SHAREHOLDERS' MEETING TO BE
HELD ON NOVEMBER 17, 1998. If you have any questions about these
developments please call any of your directors listed on the attached
letter.
Oneida Valley has prospered as a community oriented bank for nearly 150 years.
Your Board of Directors unanimously believes that we should continue on our
strategic merger of equals with Cortland First in which we will share control of
the combined bank going forward. DO NOT BE CONFUSED BY CNY FINANCIAL'S ATTEMPTS
TO DISRUPT OUR PENDING TRANSACTION IN PURSUIT OF ITS OWN GOALS -- WE URGE YOU TO
VOTE "FOR" THE MERGER OF EQUALS WITH CORTLAND FIRST.