BANK OF NEW YORK CO INC, DEF 14A, 1997-03-28

BANK OF NEW YORK CO INC
DEF 14A, 1997-03-28
STATE COMMERCIAL BANKS

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<PAGE> 1

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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

The Bank of New York Company, Inc.
- --------------------------------------------------------------------------------
(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)(1)(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:
<PAGE> 2

LOGO 48 Wall Street, New York, N.Y. 10286
================================================================================

PROXY STATEMENT

This Proxy Statement is submitted in connection with the solicitation of proxies
for the Annual Meeting of Shareholders ("Annual Meeting") by the Board of
Directors of The Bank of New York Company, Inc. (the "Company"). The Board of
Directors has fixed the close of business on March 24, 1997 as the time as of
which shareholders of the Company entitled to notice of and to vote at the
Annual Meeting shall be determined. The outstanding voting stock of the Company
as of March 24, 1997 consisted of 385,625,705 shares of Common Stock ($7.50 par
value) ("Common Stock"), each share being entitled to one vote. Only
shareholders whose names appeared on the books of the Company at the close of
business on March 24, 1997 will be entitled to notice of and to vote at the
Annual Meeting or any adjournment thereof. Three officers of the Company have
been designated as the proxies to vote shares at the Annual Meeting in
accordance with the instructions on the proxy card. The Company's By-laws
provide that the presence at the Annual Meeting of the holders of a majority of
the shares of the Company entitled to vote at such meeting constitutes a quorum
for the transaction of business.

A Notice of Annual Meeting and a form of proxy are enclosed. Each proxy
submitted will be voted as directed, but if not otherwise specified, proxies
solicited by the Board of Directors will be voted for the election as directors
of those nominees named in this Proxy Statement, for ratification of the
appointment of Ernst & Young LLP as the Company's independent public
accountants, for the approval of the proposed amendment to the Company's 1993
Long Term Incentive Compensation Plan and against the shareholder proposals set
forth in Items 4 and 5 of the form of proxy. Should any nominee for director
named in this Proxy Statement become unable or unwilling to accept nomination or
election, which is not anticipated, it is intended that the persons acting as
proxies will vote for the election of such other person, if any, as the Board of
Directors may recommend.

A PLURALITY OF THE VOTES CAST IS SUFFICIENT TO ELECT DIRECTORS AND A MAJORITY OF
THE VOTES CAST IS SUFFICIENT TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AND
TO ADOPT THE SHAREHOLDER PROPOSALS. THE FAVORABLE VOTE OF THE HOLDERS OF A
MAJORITY OF ALL OUTSTANDING SHARES ENTITLED TO VOTE THEREON IS SUFFICIENT TO
APPROVE THE AMENDMENT TO THE COMPANY'S 1993 LONG TERM INCENTIVE COMPENSATION
PLAN.

FOR PURPOSES OF DETERMINING THE VOTES CAST WITH RESPECT TO ANY MATTER PRESENTED
FOR CONSIDERATION AT THE ANNUAL MEETING, ONLY THOSE CAST "FOR" OR "AGAINST" ARE
COUNTED. PURSUANT TO NEW YORK LAW, ABSTENTIONS, BROKER "NON-VOTES" (OR VOTES
"WITHHELD" IN THE ELECTION OF DIRECTORS) WILL NOT BE COUNTED.

The management of the Company knows of no matters which are to be presented for
consideration at the Annual Meeting other than those specifically described in
the Notice of Annual Meeting of Shareholders, but if other matters are properly
presented, it is the intention of the persons designated as proxies to vote on
them in accordance with their judgment.

Each shareholder has the right to revoke a proxy at any time before it is voted.
A proxy may be revoked by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date. Any shareholder may
attend the Annual Meeting and vote in person whether or not a proxy was
previously submitted.

This Proxy Statement and the accompanying form of proxy are first being sent to
shareholders on or about March 31, 1997.

The cost of soliciting the proxies to which this Proxy Statement relates will be
borne by the Company. In addition to the use of the mails, proxies may be
solicited in person or by telephone or telegram by officers and regular
employees of the Company and its subsidiaries who will not be specifically
compensated therefor. The Company has engaged Morrow & Co. to assist in the
solicitation of proxies for a fee of $10,000 plus reimbursement for
out-of-pocket expenses. The Company will also reimburse brokers or other persons
holding shares in their names or in the names of their nominees for their
reasonable out-of-pocket expenses in forwarding proxies and proxy material to
the beneficial owners of such shares.
<PAGE> 3

BOARD OF DIRECTORS AND DIRECTOR COMPENSATION

The Company is a bank holding company whose principal subsidiary is The Bank of
New York (the "Bank"). The Company and the Bank are incorporated under the laws
of the State of New York. The interests of shareholders are represented by the
Board of Directors, which oversees the business and management of the Company.
Information concerning the members of the Board of Directors who are standing
for reelection is set forth below under the caption "Nominees for Election as
Directors." This solicitation of proxies is intended to give all shareholders a
chance to vote for the persons who are to be their representatives in the
governance of the Company.

In accordance with New York law, the Company's By-laws set forth the Board's
responsibilities and establish various corporate authorizations. The By-laws
also deal with the organization of the Board, which is described below. The
Board has the power to amend the By-laws.

Directors are elected to serve until the next annual meeting of shareholders and
until their successors have been elected and qualified. Ms. Martha T. Muse and
Mr. W.S. White, Jr. are retiring from the Board and will not stand for
reelection. Mr. Chevalier retired from the Board on December 31, 1996.

During 1996, the Board of Directors of the Company met a total of 12 times. Each
incumbent director attended at least 75% of the aggregate number of meetings of
the Board of Directors and the committees thereof on which such director served
during 1996 except Mr. Kogan who joined the Board in June 1996 and attended 6 of
9 meetings held during the time he was a director. The Board of the Bank, which
during 1996 included all the members of the Board of Directors of the Company,
held a regular meeting each month.

The Board of Directors of the Company has appointed several committees which
have responsibility for particular corporate matters. There follows a
description of each committee and its functions, including certain information
concerning the directors standing for reelection who serve on such committee.

The Board of Directors of the Company has a Nominating Committee whose members
during 1996 were Messrs. Chaney (Chairman), Hennessy, Malone and Morley. The
Nominating Committee is willing to consider nominations for future election to
the Board, and shareholders may submit in writing the names and qualifications
of proposed nominees to the Secretary of the Company. The Nominating Committee
met three times during 1996.

The Board of Directors of the Company has an Executive Committee whose members
during 1996 were Messrs. Bacot (Chairman), Barth, Chaney, Chevalier, Gomory,
Griffith, Hennessy, Miller and Renyi, and Mses. Muse and Rein. The Executive
Committee has the full authority of the Company's Board of Directors, except for
limitations relating to major corporate matters. The Executive Committee met
twice in 1996.

The Board of Directors of the Company annually appoints an Audit Committee,
comprising directors who are not officers of the Company, to consider relevant
accounting matters arising in such year. Ms. Muse (Chairwoman), Messrs. Biondi,
Chaney, Gomory, Hennessy, Kogan, Luke, White and Ms. Rein, served on the Audit
Committee during 1996. The duties of the Audit Committee include reviewing
examinations made by the regulatory authorities, reviewing and approving the
program of the internal auditor, recommending to the Board of Directors the
selection of independent public accountants, reviewing audited financial
statements presented to shareholders and the soundness of internal accounting
controls, and reporting its findings to the Board of Directors. The Audit
Committee met six times in 1996.

The Board of Directors of the Company has a Compensation Committee whose members
during 1996 were Messrs. Morley (Chairman), Chaney, Malone, Miller and Sells.
The Compensation Committee is responsible for matters of executive compensation
and administration of the Company's incentive compensation plans. The
Compensation Committee met six times during 1996.

The Board of Directors of the Company has a Pension Committee whose duties are
to ascertain that the retirement plans of the Company are in compliance with the
Employee Retirement Income Security Act of 1974, to review the investments in
the trust funds of the plans and to report to the Board on these matters.
Messrs. White (Chairman), Barth, Luke and Morley and Ms. Rein served on the
Pension Committee during 1996. The Pension Committee met two times during 1996.

During 1996, each director who was not an officer of the Company or its
subsidiaries received an annual retainer of $26,000 and 1200 shares of Common
Stock as adjusted for the 2 for 1 stock split effective August 8, 1996. In
addition, each director who was not an officer of the Company or its
subsidiaries

2
<PAGE> 4

received a fee of $1,800 for each meeting of the Board and any committee which
the director attended. The Chairman of the Audit Committee received an
additional annual retainer fee of $7,000, the Chairman of the Compensation
Committee received an additional annual retainer fee of $5,000 and the Chairmen
of the other Committees of the Board each received an additional annual retainer
fee of $3,000. A director who serves on the Boards of both the Company and the
Bank receives only one retainer. If the Boards of the Company and the Bank meet
on the same day, only one fee is paid for attendance at both meetings. Officers
of the Company and its subsidiaries do not receive any compensation for service
on the Boards of the Company or its subsidiaries, or the committees thereof.

Under the Deferred Compensation Plan for Non-Employee Directors of The Bank of
New York Company, Inc. (the "Directors' Deferred Compensation Plan"), each
director who is not an officer of the Company or any of its subsidiaries may
elect to defer payment of the director's retainer and meeting fees. In
accordance with the director's election, pursuant to the terms of the Directors'
Deferred Compensation Plan, deferral of the retainer and meeting fees are
allocated to accounts on the Company's books corresponding to the investment
funds under the Company's profit-sharing plan; the accounts are adjusted to
reflect the investment performance of such funds. All payments are made in cash,
except that payment is made in shares of Common Stock with respect to amounts
allocated to the Common Stock fund. The Directors' Deferred Compensation Plan
contains provisions for the payment of each director's account balance upon such
director's termination following a change of control (as defined in the
Directors' Deferred Compensation Plan). The Directors' Deferred Compensation
Plan is not funded and payments are made from the Company's general assets.

The Bank of New York Company, Inc. Retirement Plan for Non-Employee Directors
(the "Directors' Retirement Plan") provides retirement benefits to a director
who retires from the Board after attaining age 60 or becoming disabled, and
serving for at least five years, provided the director is not an employee or
former employee entitled to retirement benefits under a retirement plan of the
Company or its subsidiaries for services as an employee. The amount of the
retirement benefit is equal to 50% of the director's annual cash retainer,
increased by 10% for each additional year of service in excess of five years of
service and subject to a maximum benefit of 100% of such retainer. If the
director retires from the Board after attaining age 70, the retirement benefit
is paid for the director's life; otherwise, it is paid for a number of years
equal to the director's years of service on the Board (but in no event after the
death of the director). The Directors' Retirement Plan contains provisions for
the payment of each director's account balance upon such director's termination
following a change of control (as defined in the Directors' Retirement Plan).
The Directors' Retirement Plan is not funded and payments are made from the
Company's general assets.

ELECTION OF DIRECTORS

Unless contrary instructions are given, the persons designated as proxies intend
to vote on behalf of shareholders for the election of the nominees listed in the
following pages. If any nominee shall unexpectedly become unable or unwilling to
accept nomination or election, the persons designated as proxies intend to vote
on behalf of shareholders for the election of such other person, if any, as the
Board of Directors may recommend. The directors elected will hold office until
the next annual meeting and until their successors have been elected and
qualified.

NOMINEES FOR ELECTION AS DIRECTORS

The following pages show each nominee for election as a director, his or her
age, his or her principal occupation during the past five years, certain other
directorships and trusteeships held, the year in which he or she became a
director, and his or her holdings of Common Stock as of March 24, 1997.

All nominees who are presently serving as directors were elected to their
present term of office by the shareholders with the exception of Messrs. Kogan,
Luke and Papageorge who were elected by the Boards of Directors of the Company
and the Bank.

3
<PAGE> 5

The following information has been furnished by the nominees.

<TABLE>
<CAPTION>
NOMINEE,
YEAR ELECTED A
DIRECTOR PRINCIPAL OCCUPATION
AND SECURITIES OWNED AND OTHER INFORMATION
- ----------------------------------------------------------------------------------------------
- ---------------------

<S> <C>
LOGO Chairman and Chief Executive Officer of The Bank of New York Company,
J. CARTER Inc. and Chairman of The Bank of New York
BACOT
1975 Chairman and Chief Executive Officer of The Bank of New York Company,
COMMON SHARES: Inc. since 1982. Chairman of The Bank of New York since 1982 and Chief
1,028,214 Executive Officer from 1982 through 1995. Director of Associates First
Capital Corp., The Bank of New York, Centennial Insurance Company,
Federal Reserve Bank of New York, Phoenix Home Life Mutual Insurance
Company, Time Warner, Inc., Woolworth Corporation, The
Philharmonic-Symphony Society of New York, Inc. and the Josiah Macy,
Jr. Foundation. Trustee of Atlantic Mutual Insurance Company. Life
Trustee and Chairman Emeritus of Hamilton College. Chairman and
Director of United Way of New York City. Member of The Bankers
Roundtable, Council on Foreign Relations, Economic Club of New York
and New York City Partnership, Inc. Age 64.
LOGO Retired: Formerly Chairman and Chief Executive Officer of Ciba-Geigy
RICHARD BARTH Corporation
1989
COMMON SHARES: Chairman of Ciba-Geigy Corporation from July, 1990 to December, 1996;
15,062 President and Chief Executive Officer of Ciba-Geigy Corporation from
1986 to April 1996. Director of The Bank of New York, Bowater
Incorporated, Imclone Incorporated and Novartis Corporation (successor
to Ciba-Geigy Corporation). Trustee of Committee for Economic
Development and Chairman of the Board of Trustees of New York Medical
College. Member of the American, New York and New Jersey Bar
Associations. Age 65.

LOGO Chairman and Chief Executive Officer of Universal Studios, diversified
FRANK BIONDI, JR. entertainment operator
1995
COMMON SHARES: Chairman and Chief Executive Officer of Universal Studios since April,
2,565 1996. President and Chief Executive Officer of Viacom, Inc. from 1987
to January 1996. President and Chief Executive Officer of Viacom
International, Inc. from 1987 to January 1996. Director of The Bank of
New York, Vail Resorts, Leake and Watts Services and the Museum of
Television & Radio. Trustee of Princeton University and Claremont
Graduate School. Age 52.
</TABLE>

4
<PAGE> 6

<S> <C>
LOGO Chairman and Chief Executive Officer of Tiffany & Co., international
WILLIAM R. designers, manufacturers and distributors of jewelry and fine goods
CHANEY
1989 Chairman and Chief Executive Officer of Tiffany & Co. since 1984.
COMMON SHARES: Director of The Bank of New York, Tiffany & Co., The Tinker Foundation
22,600 Incorporated and Provident Holdings, Inc. Trustee of Atlantic Mutual
Insurance Companies. Chairman of the Fifth Avenue Association. Age 64.

LOGO President of Alfred P. Sloan Foundation, Inc., private foundation
RALPH E.
GOMORY President of Alfred P. Sloan Foundation, Inc. from 1989 to present.
1981 Senior Vice President for Science and Technology of International
COMMON SHARES: Business Machines Corporation from 1985 to 1989. Director of Ashland
46,800 Inc., The Bank of New York, The Washington Post Company, Lexmark
International, Inc. and Polaroid Corp. Member of the National Academy
of Sciences and the National Academy of Engineering. Age 67.

LOGO Vice Chairman of The Bank of New York Company, Inc. and of The Bank of
ALAN R. New York
GRIFFITH
1990 Vice Chairman of The Bank of New York Company, Inc. and of The Bank of
COMMON SHARES: New York since December 1994. Senior Executive Vice President of The
334,683 Bank of New York Company, Inc. and President and Chief Operating
Officer of The Bank of New York from June, 1990 to December, 1994.
Director of The Bank of New York and Downtown Lower Manhattan
Association. Trustee of Lafayette College, The ALS Association, Nature
Conservancy -- New York Region, and The Chesapeake Bay Foundation.
Member of the Bankers Roundtable. Age 55.
</TABLE>

5
<PAGE> 7

<S> <C>
LOGO Retired
EDWARD L.
HENNESSY, JR. Chairman and Chief Executive Officer of Allied-Signal Inc. from 1979
1985 to 1991. Director of The Bank of New York, The Wackenhut Corporation,
COMMON SHARES: Lockheed Martin Corporation, NAI Technologies, Walden Residential
16,200 Properties, Inc. and Fundamental Management Corporation. Trustee of
the Catholic University of America and Stevens Institute of
Technology. Director and Treasurer of March of Dimes. Age 68.

LOGO President and Chief Executive Officer of Schering-Plough Corporation,
RICHARD J. manufacturer of pharmaceutical and consumer products
KOGAN
1996 President and Chief Executive Officer of Schering-Plough Corporation
COMMON SHARES: since January 1996. President and Chief Operating Officer from 1986 to
1,200 1995. Director of The Bank of New York, Colgate-Palmolive Company,
Schering-Plough Corporation and the Board of Overseers of the Stern
School of Business at New York University. Trustee of Atlantic Mutual
Insurance Companies. Member of the Council on Foreign Relations. Age
55.

LOGO Chairman, President and Chief Executive Officer of Westvaco
JOHN A. Corporation. Manufacturer of paper, packaging and specialty chemicals
LUKE, JR.
1996 Chairman, President and Chief Executive Officer of Westvaco
COMMON SHARES: Corporation since 1996. President and Chief Executive Officer since
1,000 1992. Director of Arkwright Mutual Insurance Co., The Bank of New
York, Westvaco Corporation, American Forest and Paper Association, The
Americas Society, Inc., United Negro College Fund. Trustee of Lawrence
University, and The Tinker Foundation. Governor: National Council of
The Paper Industry for Air and Stream Improvement, Inc. Age 48.
</TABLE>

6
<PAGE> 8

<S> <C>
LOGO Chairman of Tele-Communications, cable television multiple system
JOHN C. operator
MALONE
1986 Chairman of Tele-Communications, Inc. since November 1996. Chairman
COMMON SHARES: and Chief Executive Officer February, 1997 to March, 1997. Chairman,
12,600 President and Chief Executive Officer November, 1996 to February,
1997. President and Chief Executive Officer 1973 to November, 1996.
Director of The Bank of New York, CATO Institute, Discovery
Communications, Inc., Tele-Communications, Inc., Tele-Communications
International, Inc. and Black Entertainment Television. Age 56.
LOGO Chief Executive Officer and Publisher of Our World News, LLC
DONALD L.
MILLER Chief Executive Officer and Publisher of Our World News, LLC since
1977 November, 1995; Vice President -- Employee Relations, Dow Jones and
COMMON SHARES: Company, Inc. from 1986 to 1995. Director of The Bank of New York,
31,044 Advanced Consumer Marketing Corp., The Jackie Robinson Foundation and
Associated Black Charities. Trustee of Pace University. Age 65.

LOGO Retired
H. BARCLAY
MORLEY Chairman of Stauffer Chemical Company from 1977 to 1985; Chief
1976 Executive Officer from 1974 to 1985. Director of The Bank of New York
COMMON SHARES: and Schering-Plough Corporation. Age 67.
38,206
</TABLE>

7
<PAGE> 9

<S> <C>
LOGO Senior Executive Vice President of The Bank of New York Company, Inc.
DENO D. and Senior Executive Vice President and Chief Financial Officer of The
PAPAGEORGE Bank of New York
1997
COMMON SHARES: Chief Financial Officer of The Bank of New York since 1981 and Senior
338,261 Executive Vice President since 1982. Senior Executive Vice President
of The Bank of New York Company, Inc. since 1988. Director of The Bank
of New York. Member of The Bankers Roundtable, Institute of Chartered
Accountants of Manitoba and New York Clearing House Financial Officers
Committee. Age 58.
LOGO Executive Vice President, Metropolitan Life Insurance Company,
CATHERINE A. insurance and financial services
REIN
1981 Executive Vice President -- Corporate Development and Services of
COMMON SHARES: Metropolitan Life Insurance Company from 1989 to present. Senior Vice
20,883 President from 1988 to 1989. Director of Corning Incorporated. The
Bank of New York, General Public Utilities Corp., New England
Investment Companies, Inc. and Inroads/New York City, Inc. Trustee of
the National Urban League and New York University Law Center
Foundation. Age 53.

LOGO President of The Bank of New York Company, Inc. and President and
THOMAS A. Chief Executive Officer of The Bank of New York
RENYI
1992 President of The Bank of New York Company, Inc. since March, 1992.
COMMON SHARES: Chief Executive Officer of The Bank of New York since January, 1996
274,715 and President since December, 1994. Chief Operating Officer of The
Bank of New York from December, 1994 to January, 1996. Vice Chairman
of The Bank of New York from 1992 to 1994. Senior Executive Vice
President and Chief Credit Policy Officer of The Bank of New York from
1989 to 1992. Director of The Bank of New York. Director and Treasurer
of New York Bankers Association. Charter Trustee of Rutgers, The State
University. Trustee, Fisher House Foundation. Member, The New York
Botanical Gardens Board of Managers. Member of the Bankers Roundtable.
Age 51.
</TABLE>

8
<PAGE> 10

<S> <C>
LOGO Retired
HAROLD E.
SELLS Chairman and Chief Executive Officer, Woolworth Corporation from 1989
1986 to July, 1993; Chairman and Chief Executive Officer, F. W. Woolworth
COMMON SHARES: Co. from 1987 to 1989. Director of The Bank of New York and
14,600 Opportunity Village Retarded Association of Nevada Foundation. Age 68.
</TABLE>

- --------------------------------------------------------------------------------

9
<PAGE> 11

SECURITY OWNERSHIP BY MANAGEMENT

The following table indicates the beneficial ownership of the Company's Common
Stock as of March 24, 1997, by (1) each of the directors (including all nominees
for reelection), (2) the chief executive officer and the other four most highly
compensated executive officers and (3) all directors and executive officers of
the Company as a group, based upon information supplied by each of the directors
and officers. No director or officer currently holds any shares of the Company's
Preferred Stock.

<TABLE>
<CAPTION>
SHARES THAT MAY BE
SHARES OF ACQUIRED WITHIN
COMMON STOCK 60 DAYS BY PERCENT OF
BENEFICIALLY EXERCISE OF OPTIONS COMMON
NAME OF BENEFICIAL OWNER OWNED AND WARRANTS TOTAL STOCK(1)
- --------------------------------- ------------ ------------------- --------- ----------
<S> <C> <C> <C> <C>
J. Carter Bacot.................. 1,028,214 1,352,850 2,381,064
Richard Barth.................... 15,062 1,200 16,262
Frank J. Biondi, Jr. ............ 2,565 2,565
William R. Chaney................ 22,600 4,000 26,600
Samuel F. Chevalier.............. 22,007 21,718 43,725
Ralph E. Gomory.................. 46,800 46,800
Alan R. Griffith................. 334,683 473,894 808,577
Edward L. Hennessy, Jr. ......... 16,200 16,200
Richard J. Kogan................. 1,200 1,200
John A. Luke, Jr. ............... 1,000 1,000
John C. Malone................... 12,600 12,600
Donald L. Miller................. 31,044 31,044
H. Barclay Morley................ 38,206 38,206
Martha T. Muse................... 15,076 996 16,072
Deno D. Papageorge............... 338,261 613,154 951,415
Catherine A. Rein................ 20,883 20,883
Thomas A. Renyi.................. 274,715 661,154 935,869
Harold E. Sells.................. 14,600 14,600
W. S. White, Jr. ................ 17,880 17,880
All Directors and Executive
Officers of the Company, as a
Group (a total of 28 persons,
including those named above)... 3,108,540 4,557,990 7,666,530 1.9%
</TABLE>

- ---------------
(1) All percentages are less than 1% of the Company's outstanding shares of
Common Stock except as indicated.

10
<PAGE> 12

EXECUTIVE COMPENSATION AND OTHER INFORMATION

The following tables present information concerning compensation for the Chief
Executive Officer and the four most highly compensated executive officers of the
Company for services in all capacities to the Company and its subsidiaries
during the years indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
AWARDS
-----------------------
SECURITIES
UNDERLYING
OPTIONS
SARS(#)
----------
NAME AND YEAR ANNUAL COMPENSATION (G) ALL OTHER
PRINCIPAL ---- --------------------------------------- COMPENSATION(2)($)
POSITION SALARY($) BONUS($) OTHER PAYOUTS ------------------
- ----------------- (B) ---------- ---------- ANNUAL ----------
COMPENSATION($) LTIP (I)
(A) (C) (D) --------------- RESTRICTED PAYOUTS($)
STOCK ----------
(E) AWARD(S)($)
----------- (H)
(F)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Carter
Bacot........... 1996 $1,050,000 $4,293,750(1) -- -- 240,000 $ -- $167,014
Chairman 1995 1,047,116 3,684,375 -- -- 200,000 -- 166,393
1994 900,000 2,562,125 -- -- 160,000 1,160,000 138,960
- ------------------------------------------------------------------------------------------------------------------
Thomas A. Renyi.. 1996 650,000 2,520,000(1) -- -- 140,000 -- 103,390
President 1995 553,270 1,855,000 -- -- 100,000 -- 87,917
1994 383,846 846,750 -- -- 80,000 435,000 59,266
- ------------------------------------------------------------------------------------------------------------------
Samuel F. 1996 597,500 1,983,750(1) -- -- 40,000 -- 113,092
Chevalier....... 1995 535,000 1,655,625 -- -- 80,000 -- 101,164
Vice Chairman(3) 1994 532,693 1,122,875 -- -- 80,000 507,500 98,543
- ------------------------------------------------------------------------------------------------------------------
Alan R.
Griffith........ 1996 417,692 1,428,750(1) -- -- 70,000 -- 66,439
Vice Chairman 1995 390,000 1,194,375 -- -- 70,000 -- 61,973
1994 363,846 713,125 -- -- 60,000 435,000 57,033
- ------------------------------------------------------------------------------------------------------------------
Deno D. 1996 536,923 1,702,500(1) -- -- 80,000 -- 85,404
Papageorge...... 1995 460,000 1,421,250 -- -- 80,000 -- 73,097
Senior Executive 1994 457,693 951,750 -- -- 80,000 507,500 70,668
Vice President
</TABLE>

- ---------------
(1) The bonus amounts for 1996 consist of cash bonuses for performance against
pre-established goals of $2,100,000, $1,170,000, $802,500, $585,000 and
$690,000 awarded to Messrs. Bacot, Renyi, Chevalier, Griffith and
Papageorge, respectively, and the value on December 31, 1996, of performance
share awards made under the Company's 1993 Long-Term Incentive Plan, the
vesting of which was based on 1996 performance. The number of shares which
vested and the value thereof on December 31, 1996, for each of the Named
Executive Officers are shown below.

<TABLE>
<CAPTION>
Value as of
December 31,
Shares Vested 1996 of Shares
on December 31, Vested
1996 Pursuant Pursuant
to Awards Made to Awards Made
in 1994 in 1994
--------------- --------------
<S> <C> <C>
Bacot.................................................. 65,000 $2,193,750
Renyi.................................................. 40,000 1,350,000
Chevalier.............................................. 35,000 1,181,250
Griffith............................................... 25,000 843,750
Papageorge............................................. 30,000 1,012,500
</TABLE>

(2) The items included under column (i) for 1996 consist of the following: (1)
annual Company contributions on behalf of the named employees under the
Company's profit-sharing plan, amounting to $157,500, $97,500, $89,625,
$62,654, and $80,539 for Messrs. Bacot, Renyi, Chevalier, Griffith and
Papageorge, respectively, (2) annual allocations under the Company's
employee stock ownership plan for the accounts of Messrs. Bacot, Renyi,
Griffith and Papageorge of $9,514, $5,890, $3,785 and $4,865, respectively,
and (3) excess interest in the amount of $23,467 earned by Mr. Chevalier
under a deferred compensation plan.

(3) Retired on January 31, 1997.

11
<PAGE> 13

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NAME
- ---------------------- POTENTIAL REALIZABLE
VALUE AT
(A) ASSUMED ANNUAL RATES OF
INDIVIDUAL GRANTS(1) STOCK PRICE
---------------------------------------------------
NUMBER OF % OF TOTAL EXERCISE EXPIRATION APPRECIATION FOR
SECURITIES OPTIONS/SARS OR BASE DATE 10-YEAR OPTION TERM(2)
UNDERLYING GRANTED TO PRICE ---------- -----------------------
OPTIONS/SARS EMPLOYEES IN ($/SH) 10%($)(4)
GRANTED(#) FISCAL YEAR -------- (E) ----------
------------ ------------ 5%($)(3)
(B) (C) (D) ---------- (G)
(F)
<S> <C> <C> <C> <C> <C> <C>
Bacot................. 240,000 9.3% $22.5625 1/9/06 $3,405,464 $8,630,115
Renyi................. 140,000 5.4 22.5625 1/9/06 1,986,521 5,034,234
Chevalier............. 40,000 1.5 22.5625 1/9/06 567,577 1,438,353
Griffith.............. 70,000 2.7 22.5625 1/9/06 993,260 2,517,117
Papageorge............ 80,000 3.1 22.5625 1/9/06 1,135,155 2,876,705
</TABLE>

- ---------------
(1) All options were granted on January 9, 1996. For each named executive
officer except Mr. Bacot and Mr. Chevalier, 4,432 of the indicated options
are incentive stock options and become exercisable on January 9, 2000; the
balance of the options are non-qualified stock options and become
exercisable on January 9, 1997. For Mr. Bacot and Mr. Chevalier, all
indicated options are non-qualified stock options and become exercisable on
January 9, 1997.

(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and therefore
are not intended to forecast possible future appreciation, if any, in the
Company's stock price. The Company did not use an alternative formula for a
grant date valuation, as the Company is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors.

(3) Values are based on an assumed stock price of $36.7519.

(4) Values are based on an assumed stock price of $58.5213.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NAME
- ----------------------
(A) SHARES ACQUIRED VALUE NUMBER OF VALUE OF UNEXERCISED
ON EXERCISE(#) REALIZED($) SECURITIES IN-THE-MONEY OPTIONS/
--------------- ---------- UNDERLYING SARS AT FY-END($)
UNEXERCISED ----------------------
(B) (C) OPTIONS/SARS AT EXERCISABLE/
FY-END(#) UNEXERCISABLE
----------------- ----------------------
EXERCISABLE/
UNEXERCISABLE (E)
-----------------
(D)
<S> <C> <C> <C> <C>
Bacot................. 156,596 $2,442,231 1,172,746/261,718 $26,396,847/$3,118,023
Renyi................. 0 0 518,282/161,718 11,561,726/ 1,999,273
Chevalier............. 83,874 950,269 0/ 61,718 0/ 880,523
Griffith.............. 24,000 469,371 421,022/ 91,718 9,427,599/ 1,216,148
Papageorge............ 36,000 558,370 582,282/101,718 13,183,599/ 1,328,023
</TABLE>

12
<PAGE> 14

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION FOR 1996

PRINCIPLES AND PROGRAM

The Company's executive compensation program is a pay for performance program.
It is designed to:

- motivate executives to enhance shareholder value with compensation
plans that tie reward to Company performance; and,

- target executive compensation at a level to ensure the Company's
ability to attract and retain superior executives.

The Compensation Committee of the Board of Directors, which is composed entirely
of outside directors, has the responsibility for the design, implementation and
administration of the Company's executive compensation program.

To meet the above objectives, the program, which has both cash and equity
elements, consists of base salary, an annual cash incentive bonus, performance
share grants and stock options. In determining executive compensation, the
Compensation Committee evaluates both the total compensation package and its
individual elements. As part of its review, the Committee considers compensation
data concerning the Company's key competitors developed by independent
compensation consultants. Key competitors include banks in the peer group used
for the five-year comparison of total shareholder return. It is expected that
total compensation will vary annually based on Company and individual
performance. The Compensation Committee and the management of the Company
believe that compensation should be based both on short-term and long-term
measurements and be directly and visibly tied to Company performance, thus
introducing substantial risk in the payout levels.

In evaluating the Company's 1996 financial performance, the Compensation
Committee considered a variety of factors. Most noteworthy was 1996 being the
fourth consecutive year of record results. Net income was $1,020 million, the
highest in the Company's history, and an 11.6% increase over the $914 million
reported in 1995. Earnings per fully diluted common share were a record $2.41,
12.1% higher than the $2.15 in 1995. The Company also achieved a record level of
return on assets and return on average common equity. ROA was 1.90% in 1996
compared with 1.72% in 1995, while ROE was 19.98% compared with 19.42% in 1995.
The Company's 1996 performance also reflected strong growth in fee income and
continued tight control of operating expenses. The result was an efficiency
ratio of 50.5%, once again among the best of any major bank in the United
States. Capital levels remained strong and well in excess of the regulatory
minimums for a "well-capitalized" bank. The Company's quarterly common stock
dividend was raised twice in 1996; 11% or $.02 on January 10th and 10% or $.02
on July 9th to a record annual level of $.88 per share. After year end, on
January 14, 1997, the quarterly dividend was raised an additional $.02, or 9.1%
resulting in an annualized rate of $.96 per share. On July 9, 1996 the Company
declared a 2-for-1 common stock split for holders of record on July 19. The
price of a common share of stock rose 38.4% from the end of 1995 to year-end
1996 outperforming the Dow Jones Industrial Average and the Standard & Poor's
500, Money Center Bank and Regional Bank indexes.

Following is a description of the elements of executive compensation and a
review of Mr. Bacot's compensation levels for 1996, as they relate to the
Company's performance:

BASE SALARY

Base salary levels for executive officers are determined by the Salary Committee
of The Bank of New York (the "Bank"), which comprises the same members as the
Compensation Committee. The Committee assesses a number of factors in fixing the
base salary of the executive officers (including the five most highly
compensated) such as the level of responsibility of the particular position,
compensation levels for positions of comparable responsibility at key
competitors, the individual's performance, the Company's overall financial
performance, and the business and inflationary climate. In considering base
salary levels, the Committee considers all of these factors without giving
specific weight to any one factor.

Base salary levels of executive officers are reviewed every quarter by the
Salary Committee; individual increases generally occur every two years, but are
occasionally awarded more frequently in exceptional cases, as when an individual
is promoted to a new position with greater responsibility. Because of the
substantial risk in the payout levels of the long-term incentive plan, the
Salary Committee believes that base salary levels for the named executives
should be at or above median for the peer group. Mr. Bacot's

13
<PAGE> 15

base salary is set at the high end of the comparison group due to his number of
years as Chairman and Chief Executive Officer relative to the comparison group
and because of the high level of risk inherent in the payout levels under the
incentive plans. Mr. Bacot's base salary remained unchanged at $1,050,000 during
1996.

Performance evaluations of other executive officers are reviewed with the
Committee by the Chief Executive Officer. Independent compensation consultants
are used to confirm that the salary levels at the Company are within the range
of the Company's key competitors. To ensure that compensation policy for the top
executive officers is consistent with overall Company financial performance and
executive compensation strategies, the Committee reviews the compensation
awarded to approximately 40 of the Bank's most highly compensated executives.

ANNUAL CASH INCENTIVES

The annual cash incentive is designed to provide a short-term (one-year)
incentive to executive officers based on a subjective evaluation of their
individual contribution to Company financial performance for the year. Cash
incentives to those executive officers named in the Summary Compensation Table
are determined based on performance against preestablished corporate goals. If
performance goals are not met, awards are scaled down against target, or
eliminated. Heads of major business units and other key officers are eligible
for incentive payments. Incentive awards are made after each year's results are
known pursuant to the 1994 Management Incentive Compensation Plan, under which
aggregate awards generally may not exceed 10% of the amount by which net income
exceeds 7% of average shareholders' equity for the plan year. Although the Plan
provides for a minimum aggregate award of $100,000, as a matter of policy, no
awards are made pursuant to the Plan unless net income exceeds 7% of average
shareholders' equity for the plan year. Upon recommendation of the Compensation
Committee, Board approval is required for executive officer incentive payments.

In the case of Mr. Bacot, his bonus for 1996 was determined pursuant to goals
that were established at the beginning of 1996. Net income was the performance
basis for the award and the results indicated that his payout would be at the
maximum, 200% of base salary. Cash incentive awards for the other four named
executive officers were similarly determined pursuant to goals that were
established at the beginning of 1996.

PERFORMANCE SHARE GRANTS

The Compensation Committee strongly endorses the use of performance shares in
lieu of restricted shares as an important component of long-term incentive
compensation for the most senior management of the Company. Whereas restricted
stock usually has some value at vesting, performance share earnouts fluctuate
based on Company results against pre-established goals over designated
performance periods.

In 1994, performance share grants were made covering performance for calendar
years 1994, 1995 and 1996. Therefore, no new performance share grants were made
during 1996 to any executive officer. Shares granted in 1994 with a performance
period equal to the 1996 calendar year, earned out at 125% of granted shares due
to performance exceeding pre-established goals. Mr. Bacot earned 65,000 shares
based on a grant of 52,000 shares. The value of these shares is included in the
Bonus column of the Summary Compensation Table, and related footnote.

STOCK OPTION GRANTS

Stock options are designed to provide long-term (ten-year) incentives and
rewards tied to the price of the Company's Common Stock. Given the fluctuations
of the stock market, stock price performance and financial performance are not
always consistent. The Compensation Committee believes that stock options, which
provide value to participants only when the Company's shareholders benefit from
stock price appreciation, are an important component of the Company's executive
compensation program. The number of options currently held by an officer is not
a factor in determining individual grants, and the Compensation Committee has
not established any target level of ownership of Company Common Stock by the
Company's officers. However, retention of shares of Company stock by officers is
encouraged.

Stock option grants were made pursuant to the 1993 LTIP. During 1996,
approximately 450 key officers received stock option grants including all
executive officers. The number of option shares granted is based on a subjective
evaluation of an individual's contribution to Company financial performance,

14
<PAGE> 16

his/her position and salary level in the Company and competitive compensation
data. Stock options are issued annually at an exercise price equal to 100% of
the fair market value of the Company's Common Stock on the date of grant.
Vesting terms for stock options are shown in the footnotes to the Option/SAR
Grants in Last Fiscal Year table on page 12; the term of the options is ten
years from the grant date.

The outside consultant used by the Committee has confirmed that Mr. Bacot's
long-term incentive opportunity, which includes stock options and performance
shares, is consistent with practices at other key competitors and should be
targeted at the median levels of grants at peer companies. Accordingly, Mr.
Bacot was awarded 240,000 option shares during 1996.

Under Section 162(m) of the Internal Revenue Code of 1986 (the "Code"), the
Company will not be able to take tax deductions for employee remuneration to the
named executives to the extent such remuneration exceeds $1 million and is not
based on performance as defined in Section 162(m) of the Code. The Company has
modified its incentive compensation plans, has obtained and will continue to
seek the necessary shareholder approvals and has established the requisite
performance measurements to insure that compensation paid under those plans will
be deductible. In order to maintain the desired degree of management flexibility
to award compensation based upon individual performance, compensation which does
not qualify for the deduction may also be paid.

By: The Compensation Committee,
December 31, 1996

William R. Chaney
John C. Malone
Donald L. Miller
H. Barclay Morley
Harold E. Sells

15
<PAGE> 17

THE BANK OF NEW YORK COMPANY, INC.

COMPARISONS OF FIVE-YEAR TOTAL SHAREHOLDER RETURN

<TABLE>
<CAPTION>
THE BANK OF
MEASUREMENT PERIOD NEW YORK CO.,
(FISCAL YEAR COVERED) INC PEER GROUP S&P 500
<S> <C> <C> <C>
12/31/91 100.00 100.00 100.00
12/31/92 181.11 137.90 107.61
12/31/93 197.71 168.75 118.40
12/31/94 208.65 164.82 119.97
12/31/95 364.25 271.67 165.00
12/31/96 520.25 400.18 202.90
</TABLE>

Value of assumed $100 investment on December 31, 1991 in The Bank of New York
Company, Inc. Common Stock, in the Standard & Poors 500 Stock Index or in the
Peer Company Group Index. Dividends are reinvested.

PEER COMPANY GROUP

BankAmerica Corporation
Bankers Trust New York Corporation
The Chase Manhattan Corporation(3)
Chemical Banking Corporation(3)
Citicorp
Continental Bank Corporation(1)
First Chicago NBD Bancorp(2)
First Interstate Bancorp(4)
J.P. Morgan and Co. Incorporated
Wells Fargo and Company

(1) Continental Bank Corporation was acquired by BankAmerica Corporation in 1994
and has therefore been deleted from the Peer Company Group as of 12/31/93.

(2) Reflects the Merger of First Chicago Corporation with NBD Bancorp effective
12/1/95. The 1995 performance for this stock was calculated based on returns
accruing to holders of the common stock of First Chicago Corporation as of
January 1, 1995.

(3) Chemical Banking Corporation acquired The Chase Manhattan Corporation and
changed the name to The Chase Manhattan Corporation effective 4/1/96. 1996
Performance for The Chase Manhattan Corporation (new) reflects returns
accruing to holders of the common stock of Chemical Banking Corporation as
of January 1, 1996. 1996 performance for the Chase Manhattan Corporation
(old) reflects returns accruing to holders of the common stock of The Chase
Manhattan Corporation as of January 1, 1996.

(4) First Interstate Bancorp was acquired by Wells Fargo and Company effective
4/1/96. 1996 performance calculations for First Interstate Bancorp reflect
returns accruing to holders of First Interstate Bancorp common stock as of
January 1, 1996.

EMPLOYMENT AGREEMENTS AND RELATED MATTERS. The executive officers named in the
Summary Compensation Table on page 11 of this Proxy Statement are currently
parties to the agreements described below.

EMPLOYMENT AGREEMENTS. The agreements for Messrs. Bacot and Papageorge (the
"Agreements") generally provide that in the event that, within two years after a
Change of Control (as defined below) of the Company, such an executive officer
either receives or gives notice that his employment will terminate for any
reason, either voluntarily or involuntarily, other than because of death,
disability, willful misconduct or retirement under the Company's Retirement
Plan, such termination will not become effective until the earlier of (i) five
years from the date of the Change of Control, (ii) death, (iii) an election to
take early or disability retirement benefits and (iv) age 65 (such period being
referred to hereinafter as the "Termination Period"). During the Termination
Period, such employee will not be required to perform any services and, in
general, will be entitled to (i) compensation at an annual rate equal to 100% of
the

16
<PAGE> 18

highest rate of base and incentive pay paid during the 36 months prior to the
commencement of the Termination Period, including payment under employee benefit
plans, subject to reduction for amounts earned from other employment, and (ii)
continued coverage (or the equivalent thereof) under all pension and insurance
plans offered to regular salaried employees. For purposes of such coverage, the
annual rate of compensation provided for in the Agreements, before reduction for
other amounts earned, will be used as the basis for determining the level of
benefits under any such plan, including the Company's Retirement Plan. In
addition, at the commencement of the Termination Period, unless otherwise
provided by applicable law or regulation, such executive officers will become
fully vested in, and any installments not then due or exercisable will become
accelerated and due or exercisable under, any stock options, performance awards
or other deferred compensation (including interest thereon) granted to such
executive officers prior to the commencement of the Termination Period. (As
noted below, in the event of a Change in Control the 1988 and 1993 Long-Term
Incentive Plans provide for vesting or exercisability, as applicable, for awards
of stock appreciation rights, performance shares and restricted stock; the 1988
Long-Term Incentive Plan also provides for exercisability of stock options; and
the 1993 Long-Term Incentive Plan also provides for a cash payment with respect
to the portion of a stock option which is not fully exercisable.) The Agreements
may be terminated by the Company at any time upon nine months' notice, provided
that no such termination will be effective if a Change of Control has occurred.
As of January 1, 1997, the annual rate of compensation payable under the terms
of the Agreements to Messrs. Bacot and Papageorge would be $5,544,930 and
$2,343,199, respectively. For purposes of the Agreements, a "Change of Control"
is deemed to have taken place (i) if The Bank of New York becomes a "subsidiary"
of any "company" (as such terms are defined in the Bank Holding Company Act of
1956) (provided that this clause (i) shall not be applicable to corporate
reorganizations in which the present stockholders of the Company retain their
approximate ownership interest), or (ii) any person (including a corporation,
partnership or other group) files a Notice of Change of Control under the Change
in Bank Control Act of 1978 with respect to the Company or The Bank of New York,
such Notice is not disapproved or withdrawn and such person subsequently
acquires 25% or more of the voting securities of the Company or The Bank of New
York.

SEVERANCE AGREEMENTS. The severance agreements for Messrs. Renyi, Chevalier and
Griffith (the "Severance Agreements") generally provide that in the event that,
within 24 months after a "Change in Control" (as defined below) of the Company,
such an executive officer either (i) receives notice that his employment will
terminate for any reason (other than death, retirement, Cause or Disability (as
defined in the Severance Agreements)) or (ii) gives notice that his employment
will terminate for Good Reason (as defined in the Severance Agreements), such
executive officer will be provided with severance pay in an amount equal to 2.99
times the annualized includable compensation for the base period. However, the
Severance Agreements in all events limit the amount of such payments so that
they will not be subject to excise tax as "excess parachute payments" (as
defined in the Internal Revenue Code). The Severance Agreements, which commenced
on October 11, 1994, supersede the Severance Agreements dated July 9, 1991, the
initial term of which expired on December 31, 1994. Thereafter they became
automatically renewable for consecutive one year periods unless terminated by
either party on 90 days prior notice; provided, that notwithstanding any such
notice, the Severance Agreements will continue in effect for 24 months after a
Change in Control which occurs during the term thereof (as renewed, if
applicable). As of January 1, 1997, the maximum severance payable under the
Severance Agreements was $4,264,066 for Mr. Renyi, $6,883,690 for Mr. Chevalier
and $3,477,392 for Mr. Griffith. Mr. Chevalier's agreement terminated when he
retired on January 31, 1997.

OTHER EMPLOYEE BENEFIT MATTERS. In July 1994 Messrs. Bacot and Papageorge
entered into Tax Reimbursement Agreements with the Company. The Tax
Reimbursement Agreements provide that if any payments to be made to either of
Messrs. Bacot and Papageorge for compensation or benefits pursuant to the
Agreements are subject to the excise tax on excess parachute payments, the
Company will pay to such officer an amount such that the net amount retained by
him, after deduction of any federal, state and local income tax, employment tax
and excise tax shall be equal to the total amount payable pursuant to the
Agreements as if the excise tax had not applied.

Under the 1988 Long-Term Incentive Plan, in the event of a Change in Control (as
defined below), (i) all stock options shall become exercisable in full, (ii) all
stock appreciation rights which have been outstanding for at least six months
shall become exercisable in full, (iii) all performance shares shall be deemed
to be earned in full and all performance shares granted in the form of share
units shall be paid in cash, and (iv) the restrictions applicable to all shares
of restricted stock shall lapse and such shares shall

17
<PAGE> 19

be deemed fully vested and all restricted stock awards granted in the form of
share units shall be paid in cash. Furthermore, any holder of an award who is
deemed by the Compensation Committee to be a statutory officer ("insider") for
purposes of Section 16 of the Securities and Exchange Act of 1934 (the "Exchange
Act"), shall be entitled, in lieu of the exercise of any stock option, to obtain
a cash payment in an amount equal to the difference between the option price of
such stock option and (x) in the event the Change in Control is the result of a
tender offer or exchange offer for the Common Stock, the final offer price per
share paid for the Common Stock, or such lower price as the Compensation
Committee may determine with respect to any incentive stock option to preserve
its incentive stock option status, multiplied by the number of shares of Common
Stock covered by such stock option, or (y) in the event the Change in Control is
the result of any other occurrence, the aggregate value of the Common Stock
covered by the stock option, as determined by the Compensation Committee at such
time. The Compensation Committee may, in its discretion, include such further
provisions and limitations in any agreement documenting such awards as it may
deem equitable and in the best interests of the Company.

Under the 1993 Long-Term Incentive Plan, in the event of a Change in Control (as
defined below), (i) all stock appreciation rights which have not been granted in
tandem with stock options and which have been outstanding for at least six
months shall become exercisable in full, (ii) all performance shares shall be
deemed to be earned in full and all performance shares granted in the form of
share units shall be paid in cash, and (iii) the restrictions applicable to all
shares of restricted stock shall lapse and such shares shall be deemed fully
vested and all restricted stock awards granted in the form of share units shall
be paid in cash. Furthermore, any person who has been granted a stock option
which is not exercisable in full shall be entitled, in lieu of the exercise of
the portion of the stock option which is not exercisable, to obtain a cash
payment in an amount equal to the difference between the option price of such
stock option and (x) in the event the Change in Control is the result of a
tender offer or exchange offer for the Common Stock, the final offer price per
share paid for the Common Stock, or such lower price as the Compensation
Committee may determine with respect to any incentive stock option to preserve
its incentive stock option status, multiplied by the number of shares of Common
Stock covered by such portion of the stock option, or (y) in the event the
Change in Control is the result of any other occurrence, the aggregate value of
the Common Stock covered by such portion of the stock option, as determined by
the Compensation Committee at such time.

The Company entered into a trust agreement with an independent trustee in 1988
to establish a trust (the "Trust") to provide for the payment of amounts due to
Messrs. Bacot and Papageorge upon a Change of Control (as defined in the
Agreements) of the Company. The terms of the Trust provide for the payment to
Messrs. Bacot and Papageorge of the full amounts payable to them pursuant to
their employment agreements described above, including all annual compensation
payments due and any retirement benefits payable to them thereunder. The Trust
is revocable at any time at the option of the Company prior to a Change of
Control. After the occurrence of a Change of Control, the Trust will become
irrevocable and will be used for the exclusive purpose of providing benefits to
such persons. The Trust is funded by the deposit of an irrevocable letter of
credit in the amount of $40 million issued by an entity unaffiliated with the
Company.

The Company entered into a second trust agreement with an independent trustee in
1993 to establish a trust (the "Second Trust") to provide for the payment of
amounts due to Messrs. Renyi, Chevalier and Griffith (and certain other senior
executives) upon a Change in Control (as defined below) of the Company. The
terms of the Second Trust provide for the payment to Messrs. Renyi, Chevalier
and Griffith (and certain other senior executives) of the severance pay payable
to them pursuant to their Severance Agreements described above. The Second Trust
also provides for the payment of amounts due to participants under the Company's
Supplemental Executive Retirement Plan and Excess Benefit Plan which include
Messrs. Renyi, Chevalier and Griffith (and certain other senior executives). The
Second Trust is revocable at any time at the option of the Company prior to a
Change in Control. After the occurrence of a Change in Control, the Second Trust
will become irrevocable and will be used for the exclusive purpose of providing
benefits to such persons. The Second Trust is funded by the deposit of an
irrevocable letter of credit in the amount of $40 million issued by an entity
unaffiliated with the Company.

The Company entered into a third trust agreement with an independent trustee in
1994 to establish a trust (the "Third Trust") to provide for amounts due to
Messrs. Bacot and Papageorge upon a Change in Control (as defined below) of the
Company. The terms of the Third Trust provide for the payment to Messrs. Bacot
and Papageorge of the tax reimbursement payments payable to them under the terms
of the Tax Reimbursement Agreements described above. The Third Trust is
revocable at any time at the

18
<PAGE> 20

option of the Company prior to a Change in Control. After the occurrence of a
Change in Control, the Third Trust will become irrevocable and will be used for
the exclusive purpose of providing benefits to such persons. The Third Trust is
funded by the deposit of an irrevocable letter of credit in the amount of $21
million issued by an entity unaffiliated with the Company.

CHANGE IN CONTROL. A "Change in Control" for purposes of the Severance
Agreements of Messrs. Renyi, Chevalier and Griffith, the Second and Third
Trusts, the Supplemental Executive Retirement Plan and Excess Benefit Plan, the
1984 Stock Option Plan, the 1988 Long-Term Incentive Plan and the 1993 Long Term
Incentive Plan is deemed to occur if (A) any "person" (as such term is defined
in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), excluding the Company or
any of its subsidiaries, a trustee or any fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, an underwriter
temporarily holding securities pursuant to an offering of such securities or a
corporation owned, directly or indirectly, by stockholders of the Company in
substantially the same proportion as their ownership of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding securities
("Voting Securities"); or (B) during any period of not more than two years,
individuals who constitute the Board as of the beginning of the period and any
new director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in clause (A) or
(C) of this sentence) whose election by the Board or nomination for election by
the Company's shareholders was approved by a vote of at least two-thirds ( 2/3)
of the directors then still in office who either were directors at such time or
whose election or nomination for election was previously approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 60% of the combined voting power of the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or any agreement for the sale or
disposition by the Company or all or substantially all of the Company's assets.

19
<PAGE> 21

PENSION BENEFITS

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
---------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- ------------- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000.... $ 24,750 $ 33,000 $ 40,650 $ 48,150 $ 55,650 $ 63,150
200,000... 49,500 66,000 81,300 96,300 111,300 126,300
300,000... 74,250 99,000 121,950 144,450 166,950 189,450
400,000... 99,000 132,000 162,600 192,600 222,600 252,600
500,000... 123,750 165,000 203,250 240,750 278,250 315,750
600,000... 148,500 198,000 243,900 288,900 333,900 378,900
700,000... 173,250 231,000 284,550 337,050 389,550 442,050
800,000... 198,000 264,000 325,200 385,200 445,200 505,200
900,000... 222,750 297,000 365,850 433,350 500,850 568,350
1,000,000... 247,500 330,000 406,500 481,500 556,500 631,500
1,100,000... 272,250 363,000 447,150 529,650 612,150 694,650
1,200,000... 297,000 396,000 487,800 577,800 667,800 757,800
1,300,000... 321,750 429,000 528,450 625,950 723,450 820,950
1,400,000... 346,500 462,000 569,100 674,100 779,100 884,100
1,500,000... 371,250 495,000 609,750 722,250 834,750 947,250
1,600,000... 396,000 528,000 650,400 770,400 890,400 1,010,400
1,700,000... 420,750 561,000 691,050 818,550 946,050 1,073,550
1,800,000... 445,500 594,000 731,700 866,700 1,001,700 1,136,700
1,900,000... 470,250 627,000 772,350 914,850 1,057,350 1,199,850
2,000,000... 495,000 660,000 813,000 963,000 1,113,000 1,263,000
2,100,000... 519,750 693,000 853,650 1,011,150 1,168,650 1,326,150
2,200,000... 544,500 726,000 894,300 1,059,300 1,224,300 1,389,300
2,300,000... 569,250 759,000 934,950 1,107,450 1,279,950 1,452,450
2,400,000... 594,000 792,000 975,600 1,155,600 1,335,600 1,515,600
2,500,000... 618,750 825,000 1,016,250 1,203,750 1,391,250 1,578,750
2,600,000... 643,500 858,000 1,056,900 1,251,900 1,446,900 1,641,900
2,700,000... 668,250 891,000 1,097,550 1,300,050 1,502,550 1,705,050
2,800,000... 693,000 924,000 1,138,200 1,348,200 1,558,200 1,768,200
2,900,000... 717,750 957,000 1,178,850 1,396,350 1,613,850 1,831,350
3,000,000... 742,500 990,000 1,219,500 1,444,500 1,669,500 1,894,500
</TABLE>

Individuals listed in the Summary Compensation Table on page 11 had the
following covered compensation, and years of credited service as of December 31,
1996, respectively: J. Carter Bacot, $2,999,039, 36 years; Thomas A. Renyi,
$1,377,372, 25 years; Alan R. Griffith, $920,513, 30 years; and Deno D.
Papageorge, $1,144,872, 27 years. Covered compensation consists of the average
of the three highest consecutive years of combined salary and bonus paid in the
last ten years, and corresponds to those amounts indicated in column (c) and the
cash portion of the amounts indicated in column (d) of the Summary Compensation
Table.

For Messrs. Bacot, Renyi, Papageorge and Griffith, the Pension Plan Table sets
forth the estimated annual pension benefit in the form of a straight life
annuity payable at normal retirement age before reduction for Social Security
benefits.

Mr. Chevalier's estimated annual pension benefit at normal retirement age,
before reduction for Social Security benefits, was $744,561 as of December 31,
1996. That amount consisted of benefits accrued under the Retirement Plan of The
Bank of New York Company, Inc., the former Retirement Plan of Irving Bank
Corporation and Affiliated Companies (which was merged into the Retirement Plan
of The Bank of New York Company, Inc. on December 31, 1992), the Excess Benefit
Plan of Irving Bank Corporation and Affiliated Companies and The Bank of New
York Company, Inc. Supplemental Executive Retirement Plan.

20
<PAGE> 22

DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

The Company has purchased directors' and officers' liability and corporate
reimbursement insurance, covering all directors and officers of the Company and
all subsidiaries, from the following underwriters: National Union Fire Insurance
Company of Pittsburgh, PA.; Lloyd's of London; Bankers Insurance Company,
Limited; Corporate Officers and Directors Assurance Ltd.; and ACE Insurance
Company Ltd. These policies are dated December 1, 1996 at a total premium
expense for a one year period of $1,268,000, which was paid by the Company.

CERTAIN TRANSACTIONS

In the ordinary course of business, the Company and certain of its subsidiaries
have had, and expect to continue to have, banking and fiduciary transactions
with a number of their directors and executive officers and their associates and
members of their immediate families. Such transactions are all on bases
comparable to similar transactions with others who are not within such group.

Certain of the Company's executive officers and directors and members of their
immediate families are customers of the Company and its subsidiaries, and
certain of the Company's executive officers and directors are executive
officers, directors or beneficial owners of 10 percent or more of any class of
equity securities of corporations, or members of partnerships, which are
customers of or suppliers to the Company and its subsidiaries. As such customers
or suppliers, their transactions were in the ordinary course of business. Such
customer transactions include borrowings, all of which were made in the ordinary
course of business and on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
others and did not involve more than a normal risk of collectability or present
any other unfavorable features.

During 1996, John C. Malone, a director of the Company was also president and
chief executive officer and a holder of more than 10 percent of the equity
securities of Tele-Communications, Inc. The Company made loans to
Tele-Communications, Inc. and certain of its affiliated companies during 1996
and the largest aggregate amount of indebtedness outstanding at any one time
during 1996 was approximately $523 million net of loans participated to the
Bank. As of February 28, 1997 approximately $328 million, net of loans
participated to the Bank, was outstanding to Tele-Communications, Inc. and its
affiliates. In addition to the loans made by the Company, bank subsidiaries of
the Company made loans to Tele-Communications, Inc. and certain of its
affiliated companies. All of these loans were made for a variety of corporate
purposes and bear interest at market rates of interest based on various interest
rate indices.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely on a review of the copies of reports furnished to the Company and
written representations that no other reports were required, the Company
believes its executive officers and directors have complied with all applicable
Section 16(a) filing requirements.

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information as of December 31, 1996
concerning persons which to the knowledge of the Company had beneficial
ownership of more than 5% of the voting securities indicated.

<TABLE>
<CAPTION>
TITLE
OF NAME AND AMOUNT AND NATURE OF PERCENT
CLASS ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------- --------------------------------------------- -------------------- --------
<S> <C> <C> <C>
Common
Stock FMR Corp.(1) 39,079,935 shares 9.96%
82 Devonshire Street
Boston, Massachusetts 02109
Common
Stock The Capital Group Companies, Inc. and 23,229,240 shares 5.9%
Capital Research and Management Company (2)
333 South Hope Street
Los Angeles, CA 90071
</TABLE>

21
<PAGE> 23

- ---------------
(1) FMR Corp. through subsidiaries had the sole dispositive power with respect
to all of the reported shares and sole power to vote 6,496,170 of such
shares. Edward C. Johnson, 3rd, Chairman of FMR Corp., and members of the
Edward C. Johnson, 3rd family and trusts for their benefit may be deemed to
be a beneficial owner of the shares owned beneficially by FMR Corp.

(2) Capital Research and Management Company, an investment advisor and a wholly
owned subsidiary of The Capital Group Companies, Inc. had the sole
dispositive power with respect to all of the reported shares. The Capital
Group Companies, Inc. may be deemed to be a beneficial owner of the shares
owned beneficially by Capital Research and Management Company.

PROPOSAL TO RATIFY THE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors, acting upon the recommendation of the Audit Committee,
has appointed Ernst & Young LLP to serve as the Company's independent public
accountants for the year 1997, and the shareholders will be asked to ratify such
appointment at the Annual Meeting. In 1996 the fees paid to Ernst & Young LLP
for all services, including their work in connection with registration
statements, tax compliance and operational procedures, were approximately $1.8
million.

Representatives of Ernst & Young LLP are expected to attend the Annual Meeting,
to have an opportunity to make a statement, if they desire to do so, and to be
available to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR PROXY FOR THE
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.

PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S
1993 LONG TERM INCENTIVE PLAN

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THIS PROPOSAL.

On January 14, 1997 and March 11, 1997, the Board of Directors adopted
amendments to the 1993 LTIP, effective upon shareholder approval. The amendments
will enable the Company to continue to be entitled to federal income tax
deductions with respect to awards of performance based compensation to the Chief
Executive Officer and the four other most highly compensated executive officers
of the Company to the extent their annual remuneration exceeds $1 million. The
Board of Directors recommends that the shareholders approve the adoption of the
amendments to the 1993 LTIP.

Amendments. The amendments provide that effective March 11, 1997 no employee
may receive stock option grants in any year for more than 750,000 shares.

Under the amendments, awards of performance shares to the Chief Executive
Officer and the employees whom the Compensation Committee considers likely to be
among the four most highly compensated executive officers for the year in which
an award is made or payable shall, except to the extent determined otherwise by
the Compensation Committee, be subject to performance conditions. The conditions
must be established within 90 days after the start of the performance period and
be based on the achievement by the Company or, if applicable, a business unit of
a specified target operating income, net income, earnings per share, return on
assets, return on equity, any combination of the foregoing, or on the
achievement of a targeted shareholder return. The Compensation Committee may
reduce or eliminate an award of performance shares to such officers,
notwithstanding the achievement of a specified target. The maximum number of
performance shares subject to any award to such an officer is 300,000 for each
12 months during the performance period; to the extent the award is paid in cash
the maximum is the cash value of such shares at the closing price on the Common
Stock's last trading day on the New York Stock Exchange (the "NYSE") during the
period. If such an officer terminates employment for any reason during the
period, the award will be payable to the extent determined by the Compensation
Committee if the performance conditions are achieved.

The following is a summary of the principal terms of the 1993 LTIP as amended to
date, in addition to the amendments discussed above:

General. The purpose of the 1993 LTIP is to promote the long-term financial
interests of the Company, including its growth and performance, by encouraging
its employees and the employees of its

22
<PAGE> 24

subsidiaries to acquire an ownership position in the Company, enhancing its
ability to attract and retain employees of outstanding ability and providing
employees with an interest in the Company parallel to that of the Company's
shareholders. Under the 1993 LTIP, the Company may grant employees stock awards,
stock options (either incentive stock options within the meaning of Section 422
of the Code or nonstatutory stock options), stock appreciation rights,
performance shares and restricted stock (collectively, the "awards"). The 1993
LTIP is administered by the Compensation Committee, which is authorized to
select employees of the Company and its subsidiaries to receive awards,
determine the type of awards to be made, determine the number of shares of
Common Stock or share units subject to any award and determine the other terms
and conditions of such awards to the extent not provided for in the 1993 LTIP.
All employees of the Company and its subsidiaries who have demonstrated
significant management potential or who have the capacity for contributing in a
substantial measure to the successful performance of the Company, as determined
by the Compensation Committee, are eligible to receive awards under the 1993
LTIP. The Compensation Committee may also deem other employees of the Company
and its subsidiaries eligible to receive awards of nonstatutory options under
the 1993 LTIP. While such criteria are subjective in nature, based on its
experience to date under the 1993 LTIP, the Company currently estimates that
approximately 600 employees are likely to be eligible to receive awards each
year under the 1993 LTIP. In addition, a special grant of stock options to
purchase 50 shares was made to a broad group of employees in January 1997;
approximately 11,300 employees are eligible for this grant.

The following table presents information concerning awards made under the 1993
LTIP in 1996 to the Chief Executive Officer and the four other most highly
compensated executive officers of the Company, all current executive officers as
a group, all current directors who are not executive officers as a group and all
employees including all current officers who are not executive officers as a
group, under the 1993 LTIP. The persons and groups of persons identified below
may receive additional awards and other benefits under the 1993 LTIP in the
future; however, the amount and timing of any such awards cannot be determined
at this time.

<TABLE>
<CAPTION>
PERFORMANCE
SHARES(1) STOCK OPTIONS
------------------ ---------------------------------
DOLLAR NUMBER OF EXERCISE PRICE
VALUE UNITS NUMBER OF SHARES PER SHARE
------ --------- ---------------- --------------
<S> <C> <C> <C> <C>
J. Carter Bacot............................... $0 0 240,000 $ 22.5625
Chairman
Thomas A. Renyi............................... $0 0 140,000 $ 22.5625
President
Samuel F. Chevalier........................... $0 0 40,000 $ 22.5625
Vice Chairman
Alan R. Griffith.............................. $0 0 70,000 $ 22.5625
Vice Chairman
Deno D. Papageorge............................ $0 0 80,000 $ 22.5625
Vice President
Executive Officer Group....................... $0 0 914,000 $ 22.5625
(including identified officers)
Non-Executive Officer Director Group.......... $0 0 0
Non-Executive Officer Employee Group(2)....... $0 0 1,676,700 $ 22.5625
</TABLE>

- ---------------
(1) An individual earns performance shares based on the performance of the
Company.

(2) Does not include an option grant of 2,000 shares made subsequent to the
grants in the table at an exercise price of $29.75.

The maximum aggregate number of shares of Common Stock which are available for
the grant of awards under the 1993 LTIP shall not exceed the greater of (i) in
any year, one percent (1%) of the number of shares of Common Stock outstanding
as of January 1 of such year (including treasury shares) or (ii) during the
first five years the 1993 LTIP is in effect, five percent (5%) of the number of
shares of Common Stock outstanding as of January 1, 1993 (including treasury
shares). The maximum number of shares set forth in clause (i) of the preceding
sentence will be increased in any year by the number of shares available for
grant in any previous years since the effective date of the 1993 LTIP which were
not covered by awards granted under the 1993 LTIP in such years. The maximum
number of shares in clause

23
<PAGE> 25

(ii) of the preceding sentence will be increased by one percent (1%) of the
increase in the number of outstanding shares of Common Stock for each year that
such increase in outstanding shares occurs during the first five years the 1993
LTIP is in effect. Notwithstanding the foregoing, in no event shall (x) more
than 24,000,000 shares of Common Stock be available in the aggregate for the
issuance of Common Stock pursuant to incentive stock options granted under the
1993 LTIP, or (y) more than 30% of the number of shares of Common Stock
available for the grant of awards under the 1993 LTIP be available for the
issuance of Common Stock pursuant to performance share or restricted stock
awards.

At January 1, 1997, the number of outstanding shares of Common Stock (including
treasury shares) was 444,317,786. On March 26, 1997, the closing price of the
Common Stock on the NYSE was $38.875 per share.

Stock Awards. Stock awards consist of actual shares of Common Stock which are
fully vested on grant, including the right to vote and receive dividends.

Stock Options. Stock options entitle the holder to purchase shares of Common
Stock at a per share price determined by the Compensation Committee which price
will not be less than the closing price of Common Stock on the NYSE ("Fair
Market Value") on the date of grant. Stock options will be exercisable for such
period as is determined by the Compensation Committee, but in no event may
options be exercisable after 10 years from the date of grant. The Compensation
Committee may permit an employee who has received a grant of nonstatutory stock
options to transfer the options, subject to such terms and conditions specified
by the Compensation Committee, to the employee's spouse and issue (including
adopted and step children) or to a trust for the benefit of the employee and
such family members.

Upon the grant or exercise of an incentive stock option, no income will be
realized by the optionee for Federal income tax purposes and the Company will
not be entitled to any deduction. If the Common Stock acquired upon exercise is
not disposed of within the one-year period beginning on the date of the transfer
of the Common Stock to the optionee, nor within the two-year period beginning on
the date of the grant of the option, any gain or loss realized by the optionee
upon the disposition of such shares will be taxed as long-term capital gain or
loss. In such event, no deduction will be allowed to the Company. If the Common
Stock is disposed of within the one-year or two-year periods referred to above,
the optionee will realize ordinary income at the time of disposition in an
amount equal to the excess of the Fair Market Value of the Common Stock on the
date of exercise (or, if less. the net proceeds of the disposition) over the
exercise price, and the Company will be entitled to a corresponding deduction.

Upon the grant of a nonstatutory option, no income will be realized by the
optionee for Federal income tax purposes, and the Company will not be entitled
to any deduction. Upon the exercise of such an option, the optionee will realize
ordinary income in the amount by which the Fair Market Value of the Common Stock
at the time of exercise exceeds the exercise price, and the Company will be
entitled to a corresponding deduction. The Compensation Committee may permit an
optionee to satisfy the Company's obligation to withhold required taxes upon the
exercise of a nonstatutory option by having the Company retain the number of
shares of Common Stock, the Fair Market Value of which is equal to the required
withholding amount.

Stock Appreciation Rights. Stock appreciation rights entitle the holder to
receive from the Company an amount equal to the amount by which the Fair Market
Value of a share of Common Stock on the date of exercise exceeds the grant
price. Stock appreciation rights may be granted in tandem with a stock option.
in addition to a stock option or may be free-standing and unrelated to a stock
option and may not be exercised earlier than six months after grant, except in
the event of the holder's death or disability. The Compensation Committee is
authorized to determine whether a stock appreciation right will be settled in
cash, Common Stock or a combination thereof.

Performance Shares. Performance share awards consist of a grant of actual
shares of Common Stock or share units having a value equal to an identical
number of shares of Common Stock. The number of shares of Common Stock or share
units to which the holder is entitled is based upon performance conditions of
the Company over a performance period (which in no event may be less than 12
months) as determined by the Compensation Committee. Performance share awards
may provide the holder with dividends or dividend equivalents and voting rights
prior to vesting. The Compensation Committee will determine whether performance
shares granted in the form of share units shall be paid in cash, Common Stock or
a combination thereof.

24
<PAGE> 26

Restricted Stock. Restricted stock awards consist of a grant of actual shares
of Common Stock or share units having a value equal to an identical number of
shares of Common Stock. Restricted stock awards may provide the holder with
dividends or dividend equivalents and voting rights prior to vesting. The
Compensation Committee will determine whether restricted stock granted in the
form of share units shall be paid in cash, Common Stock or a combination
thereof. The employment conditions and the length of the period for vesting of
restricted stock awards are established by the Compensation Committee at the
time of grant, except that each restriction period may not be less than 12
months.

Change of Control. In the event of a Change of Control (as defined on page 19,
above), (i) all stock appreciation rights which have not been granted in tandem
with stock options and which have been outstanding for at least six months shall
become exercisable in full, (ii) the restrictions applicable to all shares of
restricted stock shall lapse and such shares shall be deemed fully vested and
all restricted stock granted in the form of share units shall be paid in cash,
(iii) all performance shares shall be deemed to be earned in full and all
performance shares granted in the form of share units shall be paid in cash, and
(iv) any person who has been granted a stock option which is not exercisable in
full shall be entitled, in lieu of the exercise of the portion of the stock
option which is not exercisable, to obtain a cash payment in an amount equal to
the difference between the option price of such stock option and (A) in the
event the Change of Control is the result of a tender offer or exchange offer
for the Common Stock, the final offer price per share paid for the Common Stock,
or such lower price as the Compensation Committee may determine with respect to
any incentive stock option to preserve its incentive stock option status,
multiplied by the number of shares of Common Stock covered by such portion of
the stock option, or (B) in the event the Change of Control is the result of any
other occurrence, the aggregate value of the Common Stock covered by such
portion of the stock option, as determined by the Compensation Committee at such
time.

The 1993 LTIP, which was effective as of January 1, 1993, was approved by the
Company's shareholders at the annual meeting held on May 11, 1993. The 1993 LTIP
or any portion thereof may be amended, suspended or terminated by the Board of
Directors at any time, provided that no amendment shall be made without
stockholder approval if such approval is necessary for the 1993 LTIP to continue
to comply with Rule 16b-3 under the Exchange Act. Unless terminated earlier by
the Board of Directors, the term of the 1993 LTIP will expire on December 31,
2002.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR PROXY FOR THE
ADOPTION OF AMENDMENTS TO THE 1993 LONG-TERM INCENTIVE PLAN.

SHAREHOLDER PROPOSALS

SHAREHOLDER PROPOSAL WITH RESPECT TO CUMULATIVE VOTING

John J. and Margaret R. Gilbert, 29 East 64th Street, New York, New York
10021-7043, who are the owners of record of 1,328 and 1,344 shares respectively,
of the Common Stock of the Company and both co-trustees U/W Lewis D. Gilbert for
660 shares, and Mr. John C. Henry, 5 East 93rd Street, New York, New York 10128,
who is the owner of 1,000 shares, have informed the Company that at least one of
them intends to present the following proposal at the Annual Meeting:

"RESOLVED: That the stockholders of Bank of New York Company, Inc.,
assembled in annual meeting in person and by proxy, hereby request the
Board of Directors to take the steps necessary to provide for cumulative
voting in the election of directors, which means each stockholder shall be
entitled to as many votes as shall equal the number of shares he or she
owns multiplied by the number of directors to be elected, and he or she may
cast all of such votes for a single candidate, or any two or more of them
as he or she may see fit."

PROPONENTS' STATEMENT IN SUPPORT OF RESOLUTION:

"Continued strong support along the lines we suggest were shown at the last
annual meeting when 21.6%, 2003 owners of 30,104,773 shares, were cast in favor
of this proposal. The vote against included 1,651 unmarked proxies.

"A California law provides that all state pension holdings and state college
funds, invested in shares must be voted in favor of cumulative voting proposals,
showing increasing recognition of the importance of this democratic means of
electing directors.

25
<PAGE> 27

"The National Bank Act provides for cumulative voting. In many cases companies
get around it by forming holding companies without cumulative voting. Banking
authorities have the right to question the capability of directors to be on
banking boards. In many cases authorities come in after and say the director or
directors were not qualified. We were delighted to see the SEC has finally taken
action to prevent bad directors from being on boards of public companies. The
SEC should have hearings to prevent such persons becoming directors before they
harm investors.

"We think cumulative voting is the answer to find new directors for various
committees. Some recommendations have been made to carry out the CERES 10
points. The 11th, in our opinion, should be having cumulative voting and ending
staggered boards.

"When Alaska became a state it took away cumulative voting over our objections.
The Valdez oil spill might have been prevented if environmental directors were
elected through cumulative voting. The huge derivative losses might have also
been prevented with cumulative voting.

"Many successful corporations have cumulative voting. Example, Pennzoil defeated
Texaco in that famous case. Ingersoll-Rand, also having cumulative voting, won
two awards. Fortune magazine ranked it second in its industry as "America's Most
Admired Corporations" and the Wall Street Transcript noted "on almost any
criteria used to evaluate management, Ingersoll-Rand excels." In 1994 and 1995
they raised their dividend.

"Lockheed-Martin, as well as VWR Corporation now have a provision that if anyone
has 40% or more of the shares cumulative voting applies, it does apply at the
latter company.

"In 1995, American Premier adopted cumulative voting. Alleghany Power System
tried to take away cumulative voting, as well as put in a stagger system, and
stockholders defeated it, showing stockholders are interested in their rights.

"If you agree, please mark your proxy FOR this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."

MANAGEMENT RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:

At the 1996 Annual Meeting, 78.4% of the votes cast were voted against this
proposal. The Board of Directors continues to believe firmly that cumulative
voting would not be in the best interests of the Company or its shareholders.
This system would enable the holders of relatively small numbers of shares to
elect one or more directors to represent their particular interests on the
Board. Cumulative voting introduces the possibility of partisanship among Board
members and could impair their ability to work together and function as a
cohesive unit. This factor might also discourage qualified individuals from
accepting an invitation to serve on the Board. To be effective, the Board of
Directors must be totally attentive to the collective best interests of all
shareholders and must not be responsive to the special concerns of a particular
group. Under present procedure an individual can be elected to the Board only by
receiving a plurality of the votes cast. The Board of Directors believes that
this system has worked well, is in the best interests of all shareholders and
should remain in effect.

ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR
PROXY AGAINST ADOPTION OF THE SHAREHOLDER PROPOSAL.

SHAREHOLDER PROPOSAL WITH RESPECT TO PLACE OF ANNUAL MEETING

Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W.,
Suite 215, Washington, D.C. 20037, who is the owner of 668 shares of the Common
Stock of the Company, has advised the Company that she intends to present the
following proposal at the Annual Meeting:

RESOLVED: "That the stockholders of Bank of New York recommend that
the Board of Directors take the necessary steps to have the annual meeting
take place each year in a major city where the Bank of New York has
branches."

PROPONENT'S STATEMENT IN SUPPORT OF RESOLUTION:

REASONS: "in 1996 Bank of New York had its annual meeting in Newark,
Delaware and in 1995 in suburban Patterson, New Jersey, places which are
hard to reach for the majority of stockholders."

26
<PAGE> 28

"The many problems that Bank of New York has makes maximum attendance
by outside independent non-employee stockholders most desirable."

"If you AGREE, please mark your proxy FOR this proposal."

MANAGEMENT RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:

Limiting the location of the annual meeting to major cities where the Bank has
branches would not necessarily result in higher attendance at shareholders'
meetings. The location of the Bank's branches may not coincide with the
residence of large numbers of shareholders. Several factors have been considered
by the Board in selecting the site for recent annual meetings, including
enabling shareholders to see places where their Company has important
operations. Thus, the 1995 annual meeting was held in Newark, Delaware, the site
of your Company's credit card operations. The 1996 annual meeting was held in
West Paterson, New Jersey at the headquarters of the Company's New Jersey
operations.

ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR
PROXY AGAINST ADOPTION OF THE SHAREHOLDER PROPOSAL.

FUTURE SHAREHOLDER PROPOSALS

In accordance with the rules of the Securities and Exchange Commission,
shareholders who intend to present proposals at the 1998 Annual Meeting of
Shareholders must submit such proposals in time for them to be received by the
Company on or before November 28, 1997, for inclusion in the Company's Proxy
Statement and form of proxy relating to that meeting.

PHEBE C. MILLER
Secretary

March 31, 1997

27
<PAGE> 29
THE BANK OF NEW YORK COMPANY, INC.
48 WALL STREET, NEW YORK, NY 10266

PROXY

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Robert J. Goebert, Robert E. Keilman
and Deno D. Papageorge as proxies each with the power to appoint his substitute
and hereby authorizes each of them to represent and to vote, as designated on
the reverse hereof, all the shares of Common Stock of the Bank of New York
Company, Inc. held of record by the undersigned on March 24, 1997 at the annual
meeting of shareholders to be held on May 13, 1997 or any adjournment thereof.

UNLESS OTHERWISE SPECIFIED, THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS, FOR PROPOSAL (2), FOR
PROPOSAL (3), AGAINST PROPOSAL (4) AND AGAINST PROPOSAL (5), IN THEIR
DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
COME BEFORE THE MEETING.

THE BANK OF NEW YORK COMPANY, INC.
P.O. BOX 11001
NEW YORK, N.Y. 10203-0001

Please complete, sign and date this proxy on the reverse side and return it
promptly in the accompanying envelope.
<PAGE> 30
THE
BANK OF
NEW
YORK
COMPANY, INC. 48 Wall Street, New York, N.Y. 10266
===============================================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
The Bank of New York Company, Inc.

Notice is hereby given that the Annual Meeting of Shareholders of The Bank of
New York Company, Inc. (the "Company") will be held at The Greenwich Library,
Cole Auditorium, 101 West Putnam Avenue, Greenwich, Connecticut, on Tuesday, May
13, 1997, at 10:00 a.m., local time, for the following purposes:

1. To elect sixteen directors to hold office until the next Annual Meeting
of Shareholders and until their respective successors have been elected
and qualified;

2. To ratify the appointment by the Board of Directors of Ernst & Young LLP
as the Company's independent public accountants for the current fiscal
year;

3. To approve the amendment of the 1993 Long Term Incentive Plan of The
Bank of New York Company, Inc. which would set a cap on, and require
performance goals for, awards to senior management;

4. To consider a shareholder proposal relating to cumulative voting rights;

5. To consider a shareholder proposal relating to the place of the annual
meeting of shareholders;

6. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.

The Board of Directors has fixed the close of business on March 24, 1997 as the
time as of which shareholders of the Company entitled to notice of and to vote
at the meeting shall be determined.

It is important that your shares be represented at the Annual Meeting. PLEASE
COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD PROMPTLY IN THE RETURN
ENVELOPE PROVIDED, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING,
SO THAT YOUR VOTE MAY BE RECORDED.

We hope you will be able to attend.

By order of the Board of Directors

/s/ J. Carter Bacot /s/ Phebe C. Miller
- ------------------------ ------------------------
J. CARTER BACOT PHEBE C. MILLER
Chairman of the Board Secretary

March 31, 1997

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3:
- -------------------------------------------------------------------------------
FOR WITHHOLD EXCEPTION
1. ELECTION OF DIRECTORS:
Nominees: Messrs. Bacot, Barth, Biondi, [ ] [ ] [ ]
Chaney, Gomory, Griffith, Hennessy, Kogan,
Luke, Malone, Miller, Morley, Papageorge,
Ms. Rein, Messrs. Renyi and Sells
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME ON THE FOLLOWING
BLANK LINE.)

Exceptions:
------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of Auditors:
[ ] [ ] [ ]

FOR AGAINST ABSTAIN
3. Amendment to the 1993
Long Term Incentive Plan. [ ] [ ] [ ]

- -------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE AGAINST PROPOSALS 4 AND 5:
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
4. Shareholder Proposal regarding
Cumulative Voting Rights to be [ ] [ ] [ ]
accorded to shareholders.

FOR AGAINST ABSTAIN
5. Shareholder Proposal relating to
the place of the annual meeting [ ] [ ] [ ]
of shareholders.

- -------------------------------------------------------------------------------

Address Change and/or Comments Mark Here [ ]

Please sign exactly as the name appears hereon, if stock
is held in names of joint owners, each should sign.

Dated , 1997
--------------------------------------------

--------------------------------------------------------
Signature of Shareholder(s)

--------------------------------------------------------
Signature of Shareholder(s)
-------
VOTES MUST BE INDICATED
[X] IN BLACK OR BLUE INK. [ ]

SIGN, DATE AND RETURN THE VOTING INSTRUCTION CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------