<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CENTER BANKS, INCORPORATED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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)(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: ...........................................................
================================================================================
<PAGE> 2
CENTER BANKS
I N C O R P O R A T E D
March 20, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Center Banks
Incorporated, the holding company for Skaneateles Savings Bank, to be held on
Tuesday, April 15, 1997, at 10:00 a.m. local time. The Annual Meeting will take
place at the Skaneateles Country Club, West Lake Road, Skaneateles, New York.
The Board of Directors and members of management look forward to greeting you at
the meeting.
The Annual Meeting has been called for the following purposes: (1) to elect
three directors for a three-year term; (2) to amend the Company's certificate of
incorporation to change the name of the Company to "Skaneateles Bancorp, Inc.";
(3) to ratify the appointment by the Board of Directors of KPMG Peat Marwick LLP
as independent auditors for the fiscal year ending December 31, 1997; and (4) to
act upon such other business as may properly come before the meeting or any
adjournments thereof. The accompanying Proxy Statement provides detailed
information on the above items which are to be voted on at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting. Whether
or not you plan to attend the Annual Meeting, you are requested to complete,
sign and return the enclosed proxy card in the attached self-addressed, postage
paid envelope as soon as possible.
Sincerely yours,
JOHN P. DRISCOLL
Chairman, President and
Chief Executive Officer
<PAGE> 3
CENTER BANKS INCORPORATED
33 E. GENESEE STREET
SKANEATELES, NEW YORK 13152-0460
(315) 685-2265
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 15, 1997
NOTICE IS HEREBY GIVEN that an annual meeting (the "Annual Meeting") of
shareholders of Center Banks Incorporated ("Center Banks" or the "Company"), the
holding company for Skaneateles Savings Bank ("Skaneateles" or the "Bank"), will
be held on Tuesday, April 15, 1997 at 10:00 a.m. local time at the Skaneateles
Country Club, West Lake Road, Skaneateles, New York 13152 for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
(1) To elect three directors for a term of three years or until their
successors have been elected and qualified (Proposal No. l);
(2) To amend the Company's certificate of incorporation to change the
name of the Company to "Skaneateles Bancorp, Inc." (Proposal No. 2);
(3) To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997 (Proposal No.
3);and
(4) To act upon such other matters as may properly come before the
Annual Meeting or any adjournments thereof. Management of Center Banks is not
aware of any other matters which may properly come before the meeting.
Pursuant to the Company's Bylaws, the Board of Directors of the Company
has fixed the close of business on February 18, 1997 as the record date for the
Annual Meeting. Only holders of common stock of record at the close of business
on that date will be entitled to notice of and to vote at the Annual Meeting or
any adjournments thereof.
By Order of the Board of Directors
J. David Hammond
Secretary
Skaneateles, New York
March 20, 1997
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE POSTAGE PAID ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU
MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
- --------------------------------------------------------------------------------
<PAGE> 4
CENTER BANKS INCORPORATED
33 E. GENESEE STREET
SKANEATELES, NEW YORK 13152-0460
(315) 685-2265
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1997
This Proxy Statement is furnished as part of the solicitation of
proxies by the Board of Directors of Center Banks Incorporated ("Center Banks"
or the "Company"), the holding company for Skaneateles Savings Bank
("Skaneateles" or the "Bank"), for use at the 1997 annual meeting of
shareholders (the "Annual Meeting") of the Company to be held at the Skaneateles
Country Club, West Lake Road, Skaneateles, New York 13152 on April 15, 1997 at
10:00 a.m. local time, and at any adjournment thereof for the purposes set forth
in the Notice of Annual Meeting of Shareholders. This Proxy Statement, together
with the enclosed proxy, is first being mailed to shareholders on or about March
20, 1997.
The proxy solicited hereby and attached hereto, if properly signed and
returned to the Company and not revoked prior to its use, will be voted in
accordance with the instructions contained therein by Gary L. Karl, or his
assigns, who has been duly appointed by the Board of Directors to vote such
proxies. If no contrary instructions are given, each proxy received will be
voted for the proposals contained herein. Any shareholder giving a proxy has the
power to revoke it at any time before it is exercised by: (i) filing with the
Secretary of the Company written notice thereof (c/o J. David Hammond,
Secretary, Center Banks Incorporated, 33 E. Genesee Street, Skaneateles, New
York 13152-0460); (ii) submitting a duly executed proxy bearing a later date; or
(iii) appearing at the Annual Meeting and giving the Secretary notice of his or
her intention to vote in person. Proxies solicited hereby may be exercised only
at the Annual Meeting and any adjournment thereof, and will not be used for any
other meeting.
VOTING SECURITIES
The securities that can be voted at the Annual Meeting are shares of
Center Banks common stock, par value $0.01 per share ("Common Stock"). Only
shareholders of record at the close of business on February 18,1997 (the "Record
Date") will be entitled to notice of and to vote at the Annual Meeting. On the
Record Date, there were 950,006 shares of Common Stock issued and outstanding,
held of record by 587 shareholders, and the Company had no other class of equity
securities outstanding. Each share of Common Stock is entitled to one vote at
the Annual Meeting.
1
<PAGE> 5
PRINCIPAL HOLDERS OF COMMON STOCK
The following table (with notes thereto) sets forth information as of
the Record Date with respect to ownership of Common Stock by any person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) who is known to the Company to be
the beneficial owner of more than 5% of Common Stock and with respect to
ownership of Common Stock by all directors and executive officers of the Company
as a group (such information being based on information filed by or on behalf of
the beneficial holder concerned).
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) CLASS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Francis R. O'Connor 92,399 (2) 9.73
511 E. Fayette Street
P.O. Box 2367
Syracuse, NY 13220
Jeffrey L. Gendell 88,200 (3) 9.28
Tontine Partners, L.P.
31 West 52nd Street, 17th Floor
New York, NY 10019
Dimensional Fund Advisors 77,000 (4) 8.11
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
All current directors and executive
officers as a group (15 persons) 153,085 (5) 15.76
<FN>
(1)In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended ("1934 Act"), a person is deemed to be the beneficial owner for
purposes of this table of any shares of Center Banks Common Stock (a) over
which he or she has or shares voting or investment power, or (b) of which he
or she has the right to acquire beneficial ownership at any time within 60
days from February 18, 1997. For purposes of the 1934 Act, "voting power" is
the power to vote or direct the voting of shares, and "investment power" is
the power to dispose or direct the disposition of shares. All shares shown
in the table above have sole voting and investment power, except as
otherwise indicated. This table includes shares of Common Stock subject to
outstanding options granted pursuant to the Company's Stock Option Plans. As
of February 18, 1997, executive officers as a group held vested options to
purchase 21,350 shares. See "Compensation of Executive Officers."
(2) Mr. O' Connor's wife is a director of the Company.
(3) As reported by Jeffrey L. Gendell and Tontine Financial Partners, L.P., a
Delaware limited partnership ("Tontine"), in a statement as of September 28,
1995 on Schedule 13D under the Exchange Act. Of the 88,200 shares reported
above, Mr. Gendell reported sole dispositive powers as to 35,000 shares, and
both Mr. Gendell and Tontine reported shared voting and dispositive powers
as to 53,200 shares.
(4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 77,000 shares of Center
Banks Inc. Common Stock as of December 31, 1996, all of which shares are
held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
Sole Voting Power: 44,300 shares*
Shared Voting Power: 0
Sole Dispositive Power: 77,000
Shared Dispositive Power: 0
* Persons who are officers of Dimensional Fund Advisors Inc. also serve as
officers of DFA Investment Dimensions Group Inc., (the "Fund") and the DFA
Investment Trust Company (the "Trust"), each an open-end management
investment company registered under the
</TABLE>
2
<PAGE> 6
Investment Company Act of 1940. In their capacity as officers of the Fund
and the Trust, these persons vote 22,800 additional shares which are owned
by the Fund and 9,900 shares which are owned by the trust (both included in
Sole Dispositive Power above).
(5) Includes 92,399 shares owned by Mrs. O'Connor's husband.
INFORMATION WITH RESPECT TO NOMINEES FOR
DIRECTOR, CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
PROPOSAL NO. 1
ELECTION OF DIRECTORS
In accordance with the Company's Certificate of Incorporation, the
Board of Directors shall be divided into three classes as nearly equal in number
as possible. The members of each class are to be elected for a term of three
years and until their successors are elected and qualified. One class of
directors is to be elected annually. In accordance with the Company's Bylaws,
the size of the Board is presently set at eleven by the Board of Directors.
THE NOMINEES
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of the three candidates listed who
are being nominated for a three-year term. There are no arrangements or
understandings between the persons named and any other person pursuant to which
such nominee was selected. If any person named as nominee should be unable or
unwilling to stand for election at the time of the Annual Meeting, the proxy
will nominate and vote for a replacement nominee or nominees recommended by the
Board of Directors. At this time, the Board of Directors knows of no reason why
any of the nominees listed below may not be able to serve as director if
elected. Each nominee is also a director of the Bank, except for Israel Berkman.
Nominees receiving a plurality of the votes represented in person or by proxy at
the Annual Meeting will be elected director.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
FOLLOWING NOMINEES FOR DIRECTOR POSITIONS:
<TABLE>
<CAPTION>
NOMINEES FOR DIRECTOR WITH A TERM EXPIRING IN 2000
COMMON STOCK
BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY
DIRECTOR AS OF FEBRUARY 18, 1997
POSITION WITH THE COMPANY AND PRINCIPAL OF BANK --------------------------
NAME AGE OCCUPATION DURING THE PAST FIVE YEARS SINCE AMOUNT PERCENT (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Israel Berkman 68 Director; Retired, Examining Officer of the 1992(1) 1,842
Federal Reserve Bank of New York.
Ann G. Higbee 54 Director; President of Public Relations 1993 3,497
Services, Eric Mower and Associates.
Anne E. O' Connor 61 Director; Corporate Secretary, Kopp Billing 1995 92,399(3) 9.73
Agency, a medical billing agency.
<FN>
(1) Mr. Berkman is a director of the Company, but not the Bank.
(2) All indicated holdings amount to less than 1% of the issued and outstanding
Common Stock, unless otherwise indicated.
(3) Shares owned by Mrs. O' Connor's husband.
</TABLE>
3
<PAGE> 7
DIRECTORS WITH A TERM EXPIRING IN 1998
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY
DIRECTOR AS OF FEBRUARY 18, 1997
POSITION WITH THE COMPANY AND PRINCIPAL OF BANK --------------------------
NAME AGE OCCUPATION DURING THE PAST FIVE YEARS SINCE (1) AMOUNT PERCENT (2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walter D. Copeland 63 Director; Retired, President, Walter D. 1994 667(3)
Copeland Organization, Inc., a real estate
consulting firm.
John P. Driscoll 57 Chairman, President and Chief Executive 1992 18,345(4) 1.89
Officer of the Company. President & CEO of
Steamatic of Greater Rochester, a
commercial restoration and reconstruction
company from 1989 to 1992.
Carl W. Gerst, Jr. 59 Director; Executive Vice President, 1982 3,852
Chief Operating Officer and Director of
Anaren Microwave, Inc., a manufacturer
of military electronic subsystems.
John Bernard Henry 68 Director; Professor of pathology and former 1989 2,500(5)
President of the State University of New York
Health Science Center at Syracuse.
<FN>
(1) Includes terms as Trustee prior to the Bank's conversion from a mutual to
stock form of organization on May 30, 1986.
(2) All holdings amount to less than 1% of the issued and outstanding Common
Stock, unless otherwise indicated.
(3) Shares owned by Walter D. Copeland and Concetta M. Copeland Revocable Living
Trust dated October 11, 1995, Walter D. Copeland and Concetta M. Copeland,
trustees.
(4) Includes vested options to purchase 16,400 shares.
(5) All shares held jointly with Mr. Henry's wife, with whom Mr. Henry has
shared voting and investment power.
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS WITH A TERM EXPIRING IN 1999
COMMON STOCK
BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY
DIRECTOR AS OF FEBRUARY 18, 1997
POSITION WITH THE COMPANY AND PRINCIPAL OF BANK ---------------------------
NAME AGE OCCUPATION DURING THE PAST FIVE YEARS SINCE (1) AMOUNT PERCENT (2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Clifford C. Abrams 71 Director; Retired, President and General 1983 4,983(3)
Manager of Clifford C. Abrams, Inc., an
electrical contracting company.
David E. Blackwell 58 Director; President, Auburn Steel 1993 1,336
Company, Inc.
Howard J. Miller 64 Director; Retired, Vice President, 1993 2,046(4)
Distribution
Crucible Service Centers.
Raymond C. Traver, Jr., M.D. 54 Director; Orthopedic Surgeon. 1990 7,278(5)
<FN>
(1) Includes terms as Trustee prior to the Bank's conversion from a mutual to
stock form of organization on May 30, 1986.
(2) All holdings amount to less than 1% of the issued and outstanding Common
Stock, unless otherwise indicated.
(3) Includes 1,575 shares held by Mr. Abrams' wife.
(4) Includes 500 shares held by Mr. Miller's wife.
(5) Includes 4,050 shares held in trust under a defined employee contribution
pension plan; and 524 shares held by Dr. Traver as custodian for his
children.
</TABLE>
4
<PAGE> 8
DIRECTOR NOMINATIONS
Article III, Section 13 of the Company's Bylaws provides that the Board
of Directors shall act as a nominating committee for selecting the nominees for
election as directors. Accordingly, the Board, as a whole, nominates individuals
for election to the Board. The Board seeks individuals of proven judgment and
competence who are outstanding in their field, and considers such factors as
anticipated participation in Board activities, education, special talents or
skills, and personal attributes. Shareholders may name nominees for election to
the Board of Directors by submitting written nominations to the Secretary of the
Company not less than 60 days nor more than 90 days prior to the date of the
Annual Meeting. Such shareholder's notice shall set forth as to (a) each person
whom the shareholder proposes to nominate for election or re-election as a
director: (i) the name, age, business address, residence address, and shares of
the Company's Common Stock held by such person, (ii) the principal occupation or
employment of such person, and (iii) such person's written consent with respect
to serving as a director, if elected; and (b) as to the shareholder giving the
notice: (i) the name and address of such shareholder and (ii) the number of
shares of the Company's Common Stock which are owned of record by such
shareholder. If any shareholder nomination is properly and timely made in
accordance with Article III, Section 13 of the Bylaws, ballots will be provided
for use by shareholders at the Annual Meeting bearing the name of such nominee
or nominees.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The members of the Company's Board of Directors also serve as the
members of the Bank's Board of Directors, with the exception of Israel Berkman.
The Bank's Board of Directors meets regularly each month, and the Board of the
Company meets at least quarterly. The Company's Board of Directors held a total
of 9 meetings during 1996. No incumbent director attended less than 75% of the
aggregate number of meetings of the Company's Board of Directors and meetings
held by all committees of the Company's Board on which such director served
during the last fiscal year, except for David E. Blackwell and Ann G. Higbee.
The Bank's standing committees of the Board of Directors include the following:
the Executive Committee, the Examining Committee, the Personnel and Compensation
Committee and the Asset/Liability Management Committee. The Bank's Examining
Committee serves as the Company's Examining Committee, the Bank's Personnel and
Compensation Committee serves as the Company's Personnel and Compensation
Committee, and the Board as a whole nominates new directors.
The Examining Committee reviews the internal and external audits of the
Company and Bank and the adequacy of the Company's and the Bank's accounting,
financial and compliance controls, and makes recommendations to the Company's
Board regarding the appointment of independent auditors. During 1996, this
Committee held 3 meetings, and its present members are Clifford C. Abrams,
Israel Berkman, David E. Blackwell, Ann G. Higbee, Howard J. Miller and Anne E.
O'Connor.
The Personnel and Compensation Committee reviews and makes
recommendations to the Board regarding compensation levels, adjustments and
employee benefits to be instituted. The Personnel and Compensation Committee
held 4 meetings in 1996, and its present members are John P. Driscoll, Carl
W. Gerst, Jr., Ann G. Higbee, and Raymond C. Traver, Jr.
5
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
Since the formation of Center Banks, none of its executive officers
have received any separate form of compensation from the Company. Officers
receive compensation in their positions as officers of the Bank.
The following table sets forth the compensation paid by the Bank to the
Company's Chairman, President and Chief Executive Officer and to each executive
officer whose aggregate annual salary and bonus exceeded $100,000 for services
rendered in all capacities during the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------------------------------
AWARDS
OTHER ----------------
ANNUAL SECURITIES ALL OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY ($) (1) BONUS ($) SATION ($) OPTIONS (#) SATION ($)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John P. Driscoll 1996 142,899 30,670 (2) 17,936 (3) 4,667 16,375 (4)
Chairman, President & CEO 1995 124,547 17,406 10,113 - 26,417
1994 110,104 - 10,784 8,000 14,627
J. David Hammond 1996 92,777 9,170 (2) - 1,500 1,492 (5)
Executive Vice President 1995 22,332 - - 5,000 -
& Secretary
<FN>
(1) Includes the cost of shares allocated under the Company's Employee Stock
Ownership Plan. Mr. Hammond joined the Company in September 1995.
(2) Bonuses were paid in January 1997.
(3) Comprised entirely of country club dues.
(4) Includes contributions to the Company's 401(k) plan totaling $8,228, premium
payments on an individual flexible premium deferred variable annuity
totaling $7,127 and premiums paid on term life insurance policy totaling
$1,020.
(5) Comprised entirely of contributions to the Company's 401(k) plan.
</TABLE>
6
<PAGE> 10
OPTION GRANTS IN 1996
The following table sets forth stock options granted to the Company's
Chairman, President and Chief Executive Officer and named executive officers
during 1996.
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
- ------------------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED (#) (1) IN 1996 PER SHARE ($) DATE VALUE ($) (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John P. Driscoll 4,667 31.8 13.75 April 2006 16,661
J. David Hammond 1,500 10.2 13.75 April 2006 5,355
<FN>
(1) Options were granted on April 16, 1996 under the Company's Long Term
Incentive and Capital Accumulation Plan, and are exercisable 20% per year
after date of grant.
(2) The Black-Scholes option pricing model was used to calculate the grant date
present value. Significant assumptions are as follows:
- expected stock price volatility 25.42%
- risk-free rate of return 6.10%
- expected dividend yield 2.55%
- Expected time of exercise 5 years
</TABLE>
AGGREGATED OPTION EXERCISES IN 1996 AND 1996 YEAR END OPTION VALUES
The following table sets forth information with respect to the Chief
Executive Officer and named executive officers, concerning exercises of stock
options during 1996 and the number and value of unexercised options held at
December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1996 (#) DECEMBER 31, 1996 ($) (2)
ACQUIRED VALUE ---------------------------- ---------------------------------
NAME ON EXERCISE (#) REALIZED ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John P. Driscoll 600 3,900 16,400 9,467 111,600 40,468
J. David Hammond - - 1,000 5,500 1,000 7,750
<FN>
(1) Market value of underlying securities at exercise, minus the exercise price.
(2) Market value of underlying securities at 1996 year end, minus the exercise
price.
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are not executive officers of the Company receive a fee
of $400 per Board meeting attended. In addition, non-officer members of
committees of the Board receive a fee of $250 per committee meeting attended.
Directors who are also officers of the Company receive no compensation for
attendance at Board or committee meetings.
The 1995 Non-Employee Directors Warrant Plan (the "Warrant Plan") was
established to attract, retain and compensate for the services of highly
qualified individuals who are not employees of Company or the Bank, as members
of their respective boards of directors, and to enable them to increase their
ownership in the Company's common stock. Under the Warrant Plan, those outside
directors receive warrants (or options) to purchase shares of Common Stock only
if the Company achieves specified performance levels. The total number of shares
that may be issued pursuant to warrants granted under the Warrant Plan shall not
exceed 75,000. Each warrant that is granted vests and becomes exercisable over a
three-year period in increments of one-third on each anniversary of the grant
date. To date, there have been no warrants issued under this plan.
7
<PAGE> 11
EMPLOYMENT AGREEMENTS
Mr. Driscoll has an employment agreement with the Company and the Bank
which provides for an annual adjustment in Mr. Driscoll's salary as determined
by the Board of Directors based upon an annual review of his compensation. The
Board of Directors has set Mr. Driscoll's base salary for 1997 at $131,350. Mr.
Driscoll is also entitled to receive cash bonuses as the Board, in its
discretion, may award.
Under his agreement, Mr. Driscoll will receive a continuation of his
salary and benefits for two years if his employment is terminated by the Company
for any reason other than "cause", including a "change in control" of the
Company.
The Company and the Bank also entered into agreements with J. David
Hammond, Executive Vice President, and William Welch, John Mason, J. Daniel Mohr
and Karen Lockwood, Vice Presidents, pursuant to which they will receive a
continuation of their respective salaries and benefits for six months (twelve in
the case of Mr. Hammond) if a "change in control" of the Company occurs and
their employment is terminated as a result.
The named executive officers, like all eligible employees of the Bank,
are entitled to receive a bonus tied to specified target levels of the Company's
earnings per share, as well as to individual and departmental goals.
PERFORMANCE GRAPH
The following graph compares cumulative total shareholder returns on
the Company's stock over the last five years to the Nasdaq Stock Market Index
for U.S. companies and the Nasdaq Bank Index. Total return values were
calculated assuming a $100 investment on December 31, 1991 and reinvestment of
all dividends. The following graph shall not be deemed incorporated by reference
into any filing under the Securities Act of 1933 or the 1934 Act, and shall not
be deemed filed under either such act.
<TABLE>
<CAPTION>
TOTAL RETURN
----------------------------------------------------
DATE CENTER BANKS NASDAQ US NASDAQ BANK
- ---------------------------------------------------------------
<S> <C> <C> <C>
1991 100 100 100
1992 142 116 146
1993 142 134 166
1994 174 131 165
1995 226 185 246
1996 266 227 326
</TABLE>
INDEBTEDNESS OF MANAGEMENT
Skaneateles may make loans to directors and any executive officers of
the Company to the extent permitted by banking law. Any extensions of credit,
whether past or future, to directors or executive officers of the Company are
made in the ordinary course of business on substantially the same terms,
including interest rates, collateral and repayment terms, as those prevailing at
the time for comparable transactions with other persons, and do not involve more
than the normal risk of collectibility or present other unfavorable features.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the reporting of transactions by insiders in the Company's common stock
to the Securities and Exchange Commission (the "Commission") within required
time frames. All filings required under Section 16 of the Exchange Act during
1996 were made in a timely manner, except for a Form 4 for Ann G. Higbee,
Director, which was filed late due to an oversight. In making these statements,
the Company has relied on written representations of its incumbent executive
officers and directors.
PROPOSAL NO. 2
NAME CHANGE
The Board of Directors proposes to change the name of the Company from
"Center Banks Incorporated" to "Skaneateles Bancorp, Inc." The Board of
Directors believes that changing the name of the Company is in the Company's
best
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interest as the new name would allow stockholders, customers and the general
public to more closely identify the Company with its sole subsidiary,
Skaneateles Savings Bank. Furthermore, the Board of Directors believes that the
new name will better reflect the nature of the Company's business as the holding
company of a community bank operating in and around Skaneateles and greater
Syracuse, New York.
If the proposed name change is approved, Article 1 of the Company's
Certificate of Incorporation would be amended to read as follows:
"CORPORATE TITLE. The name of the corporation is
Skaneateles Bancorp Inc. (the "Corporation")."
No other changes to the Certificate of Incorporation are contemplated.
Approval of Proposal No. 2 requires the favorable vote of a majority of
the outstanding shares of the Company's Common Stock. As soon as practicable
following the approval, the Company intends to file an Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware, which amendment would become effective upon the filing thereof.
If approved, the name change will NOT affect the Company's issued and
outstanding stock certificates. Stockholders may, but are NOT required to,
surrender their current stock certificates for replacements. New stock
certificates reflecting the Company's new name will be issued in connection with
future trades, assuming the name change is approved.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" AMENDING THE
CERTIFICATE OF INCORPORATION OF THE COMPANY TO CHANGE THE NAME OF THE COMPANY.
UNLESS OTHERWISE INSTRUCTED, PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
VOTED FOR PROPOSAL NO. 2.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed KPMG Peat Marwick
LLP, independent auditors, to perform the audit of the Company's financial
statements for the year ending December 31, 1997, and has further directed that
the selection of auditors be submitted for ratification by a majority of the
outstanding shares of Common Stock present by proxy or in person and voting at
the Annual Meeting. KPMG Peat Marwick LLP was the Company's independent auditors
for the year ended December 31, 1996.
Representatives from KPMG Peat Marwick LLP will be present at the
Annual Meeting and will be given the opportunity to make a statement, if they so
desire, and will be available to respond to appropriate questions from
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPOINTMENT
OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
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DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
TO BE PRESENTED AT 1998 ANNUAL MEETING
Any proposal intended to be presented by any shareholder at the 1998
Annual Meeting of the Company must be received by the Secretary of the Company
at the principal executive offices, 33 E. Genesee Street, Skaneateles, New York
13152-0460, no later than November 20, 1997, to be considered for inclusion in
the Proxy Statement and proxy relating to the 1998 Annual Meeting.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1996 accompanies this Proxy Statement. The Annual Report
includes a general description of the business of Center Banks, management's
discussion and analysis of financial condition and results of operations, and
the Company's consolidated financial statements, with the independent auditor's
report thereon.
ANNUAL REPORT ON FORM 10-K
Upon receipt of a written request, the Company also will furnish to
shareholders, without charge, a copy of the Company's Annual Report on Form
10-K, for the year ended December 31, 1996. Such a written request should be
directed to J. Daniel Mohr, Investor Relations, Center Banks Incorporated, 33 E.
Genesee Street, Skaneateles, New York 13152-0460.
OTHER MATTERS
Other than procedural matters with respect to the conduct of the
meeting, management is not aware of any business to come before the meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the meeting, it is intended that the
proxy set forth in the accompanying proxy will be voted with respect to those
other matters in accordance with the judgment of the person voting the proxies.
The cost of the solicitation of proxies will be borne by the Company.
The Company has engaged Regan & Associates, Inc. for the purpose of soliciting
proxies. The cost of these services is approximately $3,000, plus out-of-pocket
expenses. The Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending the
proxy materials to the beneficial owners of Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
By Order of the Board of Directors,
JOHN P. DRISCOLL
Chairman, President and
Chief Executive Officer
Skaneateles, New York
March 20, 1997
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<PAGE> 14
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CENTER BANKS INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1997
The undersigned hereby appoints Gary L. Karl proxy for the undersigned
with full power of substitution, to vote all shares of the Common Stock
of CENTER BANKS INCORPORATED (the "Company") owned by the undersigned at
the Annual Meeting of Stockholders to be held at the Skaneateles Country
Club on Tuesday, April 15, 1997 at 10:00 a.m. local time, and at any
adjournments thereof:
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LEAVE THIS AREA
BLANK FOR ADDRESS
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Please be sure to sign and date Date
this Proxy in the box below.
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___Stockholder sign above___Co-holder (if any) sign above ____________
FOR ALL
FOR AGAINST EXCEPT
1. The election as directors of all nominees [ ] [ ] [ ]
listed (except as marked to the contrary
below):
ISRAEL BERKMAN, ANN G. HIGBEE,
ANNE E. O'CONNOR
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN
THE SPACE PROVIDED.
2. The proposal to change the name of the FOR AGAINST ABSTAIN
Company to "Skaneateles Bancorp, Inc." [ ] [ ] [ ]
and to amend Article 1 of the Company's
Certificate of Incorporation for that
purpose.
3. The approval of KPMG Peat Marwick LLP FOR AGAINST ABSTAIN
as the Company's independent auditors for [ ] [ ] [ ]
the fiscal year ending December 31, 1997.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" EACH OF THE LISTED PROPOSALS.
THIS PROXY IS SOLICITED BY THE
BOARD OF DIRECTORS.
The undersigned acknowledges receipt
from the Company prior to the execution of
this proxy of a Notice of Meeting and of a
Proxy Statement dated March 20, 1997.
Please sign exactly as your name appears
on this card. When shares are held by joint
tenants, both should sign. When signing as
attorney, executor, administrator, trustee or
guardian, please so indicate.
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DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE
PROVIDED.
CENTER BANKS INCORPORATED
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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