| 1) | Amount Previously Paid: | |
| 2) | Form, Schedule or Registration Statement No.: | |
| 3) | Filing Party: | |
| 4) | Date Filed: |
April 15, 2011
NOTICE OF 20112014 ANNUAL MEETING OF STOCKHOLDERS
OF TOMPKINS FINANCIAL CORPORATION
The annual meetingAnnual Meeting of stockholdersShareholders (the “Meeting”“Annual Meeting”) of Tompkins Financial Corporation (“Tompkins Financial” or the(the “Company”) will be held on Monday, May 16, 201112, 2014 at 5:30 p.m., at the Country Club of Ithaca, 189 Pleasant Grove Road, Ithaca, New York, for the following purposes:
| 1. | To elect |
| 2. | To ratify the appointment of the independent registered public accounting firm, KPMG LLP, as the Company’s independent auditor for the fiscal year ending December 31, |
| 3. | To conduct an advisory vote |
| 4. | ||
| To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. |
The Company’s Board of Directors (the “Board”) has fixed the close of business on March 18, 201114, 2014 as the record date for determining stockholdersshareholders entitled to notice of and to vote at the Annual Meeting. Only stockholdersshareholders of record at the close of business on that date are entitled to vote at the Annual Meeting.
Enclosed with this notice are a proxy statement,Proxy Statement, a formForm of proxyProxy and return envelope, instructions for voting by telephone or via the Internet, the Company’s Annual Report on Form 10-K for the Company’s 2010 fiscal year 2013, and the Company’s 20102013 Corporate Report to stockholders.
The Board of Directors unanimously recommends that you vote “FOR” all of the proposals described above.Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the Annual Meeting, you are urged to read and carefully consider the enclosed proxy statement.Proxy Statement. You may vote by telephone, via the Internet, or mark, sign, date, and return the enclosed formForm of proxyProxy in the accompanying pre-addressed postage-paid envelope. Your proxy may be revoked prior to its exercise by filing a written notice of revocation or a duly executed proxy bearing a later date with the Corporate Secretary of Tompkins Financialthe Company prior to the Annual Meeting, or by attending the Annual Meeting and filing a written notice of revocation with the Corporate Secretary at the Annual Meeting prior to the vote and voting in person.
By Order of the Board of Directors,
| / | / | ||
| James J. Byrnes | |||
| Chairman | Asst. Vice President & Corporate Secretary |
TOMPKINS FINANCIAL CORPORATION, THE COMMONS, P.O. BOX 460, ITHACA, NEW YORK 14851 (607) 273-3210
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDERSHAREHOLDER MEETING TO BE HELD MAY 16, 2011
This Proxy Statement and annual reportthe Company’s Corporate Report to security holdersshareholders are available under the “SEC Filings” tab at www.tompkinsfinancial.com.
ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS TO BE HELD MAY 16, 2011
This proxy statementProxy Statement together with the formForm of proxyProxy is being mailed to stockholdersshareholders on or about April 15, 20114, 2014 in connection with the solicitation by the Board of Directors of Tompkins Financial Corporation (“Tompkins Financial” or the “Company”) of proxies to be used at the annual meetingAnnual Meeting of stockholdersShareholders (the “Meeting”“Annual Meeting”) of the Company to be held at the Country Club of Ithaca, 189 Pleasant Grove Road, Ithaca, New York on Monday, May 16, 201112, 2014 at 5:30 p.m., and any adjournment thereof.
Voting
Only stockholdersshareholders of record at the close of business on March 18, 201114, 2014 will be entitled to vote. On March 18, 2011,14, 2014, there were 10,951,94714,825,564 shares of the Company’s common stock, of the Company, par value $0.10 per share (the “Common Stock”(our “common stock”), outstanding and eligibleentitled to vote. Each share of Common Stockcommon stock is entitled to one vote on each matter to be voted on at the Annual Meeting.
Shareholders whose shares are registered in their own names may vote by mailing a completed proxy, via the Internet or by telephone, or by voting in person at the Annual Meeting. Instructions for voting via the Internet or by telephone are set forth on the enclosed formForm of proxy.Proxy. To vote by mailing a proxy, sign and return the enclosed formForm of proxyProxy in the enclosed pre-addressed postage-paid envelope. Shares of Common Stockcommon stock covered by a proxy that is properly executed and returned will be voted and, if the stockholdershareholder who executes such proxy specifies therein how such shares shall be voted on such proposals, the shares will be voted as so specified. Executed proxies with no instructions will be voted “FOR” each proposal for which no instruction is given. Other than the election of Directors, the proposal to ratify the appointment of the independent registered public accounting firm, KPMG LLP, as the Company’sour independent auditor for the fiscal year ending December 31, 2011, the advisory vote on executive compensation,2014, and advisory vote as to the frequency of the advisory vote on executive compensation, the Board is not aware of any other matters to be presented for stockholdershareholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting, or any adjournments thereof, the Board of Directors intends that the persons named in the accompanying proxy will vote the shares represented by all properly executed proxies on any such matters in accordance with the judgment of the person or persons acting under the proxy.
The presence of a stockholdershareholder at the Annual Meeting will not automatically revoke a proxy previously delivered by that stockholder.shareholder. A stockholdershareholder may, however, revoke his or her proxy at any time prior to its exercise by: (1) delivering to the Corporate Secretary a written notice of revocation prior to the Annual Meeting, (2) delivering to the Corporate Secretary a duly executed proxy bearing a later date, or (3) attending the Annual Meeting and filing a written notice of revocation with the Corporate Secretary at the Annual Meeting prior to the vote and voting in person.
The presence, in person or by proxy, of the holders of at least a majority of the shares of Common Stockcommon stock entitled to vote at the Annual Meeting is necessary to constitute a quorum for the conduct of business at the Meeting and, in the event there are not sufficient votes on any matter, the Meeting may be adjourned.
Vote Required and Board Recommendations
| Proposal No. 1 | Vote Required | Board of Directors Recommendation | ||
| Election of Directors | A plurality of votes cast by holders of | “FOR” all Director nominees |
| Proposal No. 2 | Vote Required | Board of Directors Recommendation | ||
| Ratification of the appointment of the independent registered public accounting firm, KPMG LLP, as the Company’s independent auditor for the fiscal year ending December 31, | A majority of | “FOR” the ratification of the appointment of the independent registered public accounting firm, KPMG LLP, as the Company’s independent auditor for the fiscal year ending December 31, |
| Proposal No. 3 | Vote Required | Board of Directors Recommendation | ||
| Advisory vote on the | A majority of | “FOR” the advisory approval of the NEO compensation described |
Abstentions and Broker Non-votes
At the Annual Meeting, abstentions, in person or by proxy, and broker non-votes will each be counted for purposes of determining the presence of a quorum. A “broker non-vote” occurs when a broker, bank, or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power on that matter and has not received instructions from the beneficial owner. Effective January 1, 2010, brokers are no longer permitted to vote onAt the election of Directors without instructions from their customers. BrokerAnnual Meeting, broker non-votes and abstentions will have no effect on the outcome of any of the Company’s proposals.
Solicitation of Proxies
The total cost of solicitation of proxies in connection with the Annual Meeting will be borne by the Company. In addition to solicitation by mail, Directors,our directors, officers and employees of the Company may solicit proxies for the Annual Meeting personally or by telephone or electronic communication without additional remuneration. The Company will also provide brokers and other record owners holding shares in their names or in the names of nominees, in either case which are beneficially owned by others, proxy material for transmittal to such beneficial owners and will reimburse such record owners for their expenses in doing so.
| Common Stock Ownership | ||||||||
| Number of Shares | Percent of | |||||||
| Beneficially Owned | Outstanding | |||||||
| Names | or Held in Deferred Trust | Shares(1) | ||||||
| Directors, Nominees and Executive Officers | ||||||||
| John E. Alexander+,++ | 37,548 | (2) | ** | |||||
| Robert B. Bantle* | 28,105 | (3) | ** | |||||
| Paul J. Battaglia+.++ | 3,162 | (4) | ** | |||||
| James J. Byrnes+,++ | 45,036 | ** | ||||||
| Daniel J. Fessenden+,++ | 1,828 | (5) | ** | |||||
| Francis M. Fetsko* | 39,083 | (6) | ** | |||||
| James W. Fulmer*,+,++ | 118,187 | (7) | 1.06 | |||||
| Reeder D. Gates+,++ | 130,529 | (8) | 1.12 | |||||
| James R. Hardie+,++ | 72,041 | (9) | ** | |||||
| Carl E. Haynes+,++ | 4,943 | (10) | ** | |||||
| Susan A. Henry+,++ | 622 | (11) | ** | |||||
| Patricia A. Johnson+,++ | 2,407 | (12) | ** | |||||
| Gerald J. Klein, Jr.* | 34,982 | (13) | ** | |||||
| Sandra A. Parker+,++ | 200 | ** | ||||||
| Thomas R. Rochon+,++ | 1,695 | (14) | ** | |||||
| Stephen S. Romaine*,+,++ | 53,024 | (15) | ** | |||||
| Thomas R. Salm+,++ | 11,413 | (16) | ** | |||||
| Michael H. Spain+,++ | 472,971 | (17) | 4.21 | |||||
| William D. Spain, Jr.+,++ | 468,176 | (18) | 4.18 | |||||
| Craig Yunker+,++ | 16,894 | (19) | ** | |||||
| All Directors and executive officers as a group (25 persons) | 1,194,204 | 10.52 | ||||||
| Tompkins Trust Company in the fiduciary capacity indicated: | ||||||||
| Executor, Trustee or Co-Trustee | 794,388 | (20) | 7.12 | |||||
| Agent or Custodian | 777,258 | (20) | 6.97 | |||||
| Tompkins Trust Company in the fiduciary capacity indicated (Plan shares held in custody by Prudential Investment Management Services, LLC): | ||||||||
| Trustee for the Tompkins Financial Employee Stock Ownership and Investment & Stock Ownership Plans | 706,112 | (21) | 6.33 | |||||
| Shares of | ||||||||
| Common Stock | ||||||||
| Beneficially | Percent of | |||||||
| Name and Address of Beneficial Owner | Owned | Class | ||||||
BlackRock, Inc. (formerly Barclays Global Investors, NA)(1) | 675,612 | 6.21% | ||||||
40 East 52nd Street, New York, NY 10022 | ||||||||
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, 1716 Directors will be elected for a one-year term expiring at the 20122015 Annual Meeting, and with respect to each Director, until his or her successor is elected and qualified.
In the event any nominee is unable or declines to serve as a Director at the time of the Annual Meeting, the proxies will be voted for the nominee, if any, who may be designated by the Board, of Directors, upon recommendation of the Company’s Nominating and Corporate Governance Committee, to fill the vacancy. As of the date of this proxy statement,Proxy Statement, the Board of Directors is not aware that any nominee is unable or will decline to serve as a Director.
Vote Required and Recommendation
A plurality of votes cast by holders of shares of Common Stockcommon stock entitled to vote thereon. thereon is required to elect the nominees.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES.
The following table sets forth each Director nominee and each continuing Director and includes such person’s name, age, the year he or she first became a Director and whether he or she has been determined to be an independentIndependent Director, as that term is defined in the listing standards of the NYSE AmexMKT LLC Company Guide. Biographies of the Director nominees follow the table. Unless otherwise indicated, all Directors have been employed in their current positions for at least five years.
| Name | Age | Year First Elected Director | Term to Expire | Independent(1) | |||||||||
| Board Nominees for Terms to Expire in 2014: | |||||||||||||
| John E. Alexander | 61 | 1993 | (2) | 2015 | Yes | ||||||||
| Paul J. Battaglia | 62 | 2010 | 2015 | Yes | |||||||||
| Daniel J. Fessenden | 48 | 2009 | 2015 | Yes | |||||||||
| James W. Fulmer | 62 | 2000 | 2015 | No | |||||||||
| James R. Hardie | 71 | 2001 | 2015 | No | |||||||||
| Carl E. Haynes | 68 | 1996 | (3) | 2015 | Yes | ||||||||
| Susan A. Henry | 67 | 2010 | 2015 | Yes | |||||||||
| Patricia A. Johnson | 58 | 2006 | 2015 | Yes | |||||||||
| Frank C. Milewski | 63 | 2012 | 2015 | Yes | |||||||||
| Sandra A. Parker | 65 | 2010 | 2015 | Yes | |||||||||
| Thomas R. Rochon | 61 | 2009 | 2015 | Yes | |||||||||
| Stephen S. Romaine | 49 | 2007 | 2015 | No | |||||||||
| Michael H. Spain | 56 | 2000 | 2015 | No | |||||||||
| William D. Spain, Jr. | 62 | 2000 | 2015 | No | |||||||||
| Alfred J. Weber | 61 | 2012 | 2015 | Yes | |||||||||
| Craig Yunker | 63 | 2000 | 2015 | Yes | |||||||||
| Year First | |||||||||
| Elected | Term to | ||||||||
| Name | Age | Director | Expire | Independent(1) | |||||
| Board Nominees for Terms to Expire in 2012: | |||||||||
| John E. Alexander | 58 | 1993 | (2) | 2012 | Yes | ||||
| Paul J. Battaglia | 59 | 2010 | 2012 | Yes | |||||
| James J. Byrnes | 69 | 1989 | (2) | 2012 | Yes | ||||
| Daniel J. Fessenden | 45 | 2009 | 2012 | Yes | |||||
| James W. Fulmer | 59 | 2000 | 2012 | No | |||||
| Reeder D. Gates | 65 | 1985 | (2) | 2012 | Yes | ||||
| James R. Hardie | 68 | 2001 | 2012 | No | |||||
| Carl E. Haynes | 65 | 1996 | (3) | 2012 | Yes | ||||
| Susan A. Henry | 64 | 2010 | 2012 | Yes | |||||
| Patricia A. Johnson | 55 | 2006 | 2012 | Yes | |||||
| Sandra A. Parker | 62 | 2010 | 2012 | Yes | |||||
| Thomas R. Rochon | 58 | 2009 | 2012 | Yes | |||||
| Stephen S. Romaine | 46 | 2007 | 2012 | No | |||||
| Thomas R. Salm | 70 | 1981 | (2) | 2012 | Yes | ||||
| Michael H. Spain | 53 | 2000 | 2012 | No | |||||
| William D. Spain, Jr. | 59 | 2000 | 2012 | No | |||||
| Craig Yunker | 60 | 2000 | 2012 | Yes | |||||
| (1) | Independence has been affirmatively determined by the Company’s Board of Directors in accordance with Section 803A of the listing standards of NYSE |
| (2) | Served as a Director of Tompkins Trust Company, prior to the formation of |
| (3) | Served as a Director |
Director Qualifications, including Director Nominees
The following paragraphs provide information as of the date of this proxy statementProxy Statement regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he or she should serve as a Director. The information presented includes information each Director has given us about positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he or she currently serves as a Director or has served as a Director during the past five years.
John E. Alexander
has served as a Director of the Company since 1995 and as a Director of Tompkins Trust Company since 1993. Mr. Alexander was a principalPaul J. Battaglia
has served as a Director of the Company sinceDaniel J. Fessenden
has served as a Director of the Company sinceJames W. Fulmer
served as President of the Company from 2000 through 2006, and has served as a Director of the Company since 2000, andJames R. Hardie
has served as a Director of the Company since 2001. Mr. Hardie has been Vice Chairman of the Board of Directors of Tompkins Insurance Agencies (“TIA”), a wholly-owned subsidiary of the Company, since August 1, 2002. He was President of Austin, Hardie, Wise Agency, Inc. from 1974 until January 1, 2001, when he became President, Chief Executive Officer and a Director of TIA. Effective January 1, 2003, Mr. Hardie ceased serving as President and Chief Executive Officer of TIA. He continues to be employed by TIA as a producer. Mr. Hardie is the managing member of Bennington Farms, LLC, a property leasingCarl E. Haynes
served as a Director of the Company from 1996 until 2000 and was re-appointed on February 20, 2007. He has served as a Director of Tompkins Trust Company since 1996. Dr. Haynes has been President of Tompkins Cortland Community College since 1995, and he served as Chairman of the Board of Directors of Cayuga Medical Center until May 2007. He also serves on the Board of Directors of the TC3 Foundation, Therm, Inc., CNY Regional Alliance, Cortland County Business Development Corporation, Cayuga-Cortland Workforce Investment Board, Tompkins County Area Development Corporation, Tompkins County Community Advisory Panel and Tompkins County Workforce Investment Board, among others. We believe Dr. Haynes’ qualifications to sit on our Board of Directors include hisSusan A. Henry
has served as a Director of the Company sincePatricia A. Johnson
has served as a Director of the Company since 2006, and has served as a Director of Tompkins Trust Company since 2002.Frank C. Milewskihas served as a Director of the Companysince August 2012, when he was appointed by the Board to fill a vacancy following the VIST Acquisition. Mr. Milewski served as Vice Chairman of the Board of VIST Financial Corporation (“VIST”) from 2007 to 2012, where he served as a director from 2002 until its acquisition by the Company in August 2012. Mr. Milewski served as a director of Merchants Bank from 1985 until VIST acquired Merchants in 1999. He has served as a director on the Board of Directors of Tompkins VIST Bank since 1999. Mr. Milewski is Regional President of Providence Service Corporation, a publicly traded company which provides services in the human services field. Formerly, he was the founder, President and Chief Executive Officer of The ReDCo Group, prior to its acquisition by Providence Service Corporation in 2004. Mr. Milewski is responsible for oversight and direction of six separate operating companies in five states. Mr. Milewski currently serves as a member of the Schuylkill Economic Development Corporation (SEDCO’s) Board of Directors and as such is involved in fostering economic growth, development, and job creation in the greater Schuylkill County region. Previously he served on a number of community-oriented not-for-profit boards. We believe Mr. Milewski’s qualifications to sit on our Board of Directors include his executive experience in a leadership position with a publicly traded company, his prior service on VIST’s Audit/Examining Committee and the Tompkins VIST Bank Board of Directors, and his involvement with economic development and other civic engagement in the Schuylkill County region.
Sandra A. Parker
has served as a Director of the Company sinceThomas R. Rochon
has served as a Director of the Company since 2009 and as a Director of Tompkins Trust Company since January 2009. In July, 2008, Dr. Rochon was appointed President of Ithaca College. Prior to his appointment, he served from 2003 to July, 2008 as the Executive Vice President and Chief Academic Officer for the University of St. Thomas inStephen S. Romaine
Michael H. Spain
has served as a Director of the Company since 2000, and as a Director of Tompkins MahopacWilliam D. Spain, Jr.
has served as a Director of the Company since 2000, as a Director of Tompkins MahopacAlfred J. Weberis president of Tweed-Weber, Inc., a management consulting firm, and has been a member of our Board of Directors since August 2012 when he was appointed by the Board to fill a vacancy following the VIST Acquisition. Mr. Weber served as Chairman of the Board of VIST Financial Corporation from 2005 to 2012, where he served as a Director from 1995 until its acquisition by the Company in August, 2012. He currently serves on the Board of Directors of Tompkins VIST Bank, and has served as its Chairman since 2005. He has been in the consulting industry since 1974 and has been president of his own business since 1984. The fundamental focus of his work is to help clients build and implement strategies to gain and sustain competitive advantage in their marketplace. He has worked with hundreds of businesses, not-for-profit organizations, health and home care agencies, and associations across the country. Mr. Weber currently serves on the boards of Berks County Community Foundation, Our City Reading, St. Paul’s Lutheran Church, and Boscov’s LLC. He previously served on the boards of Alvernia University, the United Way of Berks County, the Berks County Chamber of Commerce, the Berks County Workforce Investment Board, the Greater Berks Development Fund, and the Burn Prevention Foundation. We believe Mr. Weber’s qualifications to sit on our Board of Directors include his experience in leading change initiatives and his expertise in the area of strategic planning.
Craig Yunker
has served as a Director of the Company since 2000 and as a Director ofThe names and ages of the Company’s executive officers, including the Named Executive Officers identified in the Summary Compensation Table in this proxy statement,Proxy Statement, their positions and offices held with the Company, their term of office and experience isare set forth in Part I of the Company’s Annual Report on Form 10-K for the Company’s 20102013 fiscal year, a copy of which is enclosed with this proxy statement.
Matters Relating To Thethe Board Ofof Directors
Board of Directors Meetings and Committees; Annual Meeting Attendance
During fiscal 2010,2013, the Board of Directors held four regular meetings and aone strategic planning meeting. As a matter of Company practice John E. Alexander, Paul J. Battaglia, James J. Byrnes, Daniel J. Fessenden, Reeder D. Gates, Carl E. Haynes, Susan A. Henry, Patricia A. Johnson, Sandra A. Parker, Thomas R. Rochon, Thomas R. Salm, and Craig Yunker, (the “Independent Directors”)the Independent Directors met in Executive Sessionexecutive session at the end of each regular meeting. Thus,meeting, for a total of five meetings during 2010, the Independent Directors held four meetings (Directors Paul J. Battaglia, Susan A. Henry and Sandra A. Parker, elected May 10, 2010, attended two of the four meetings).2013. During this period, all of the Directors attended or participated in at least 75%80% of the aggregate of the total number of meetings of the Board of Directorsheld during the periods that he or she served and the total number of meetings held by all committees of the Board of Directors on which each such Director served.
The Board currently maintains and appoints the members of the following five standing committees: Executive, Compensation, Audit/Examining, Nominating and Corporate Governance, and Pension InvestmentQualified Plans Review.
Board of Directors: Committee Membership
| Director | Executive | Compensation | Nominating/ Corporate Governance | Qualified Plans Review | ||||||||||||||||
| John E. Alexander | — | X | — | — | X | |||||||||||||||
| Paul J. Battaglia | X | — | Chair | — | ||||||||||||||||
| — | ||||||||||||||||||||
| Daniel J. Fessenden | — | — | — | X | — | |||||||||||||||
| James W. Fulmer | X | — | — | |||||||||||||||||
| — | — | |||||||||||||||||||
| Carl E. Haynes | X | — | — | Chair | — | |||||||||||||||
| Susan A. Henry | — | — | — | — | X | |||||||||||||||
| Patricia A. Johnson | — | — | X | — | — | |||||||||||||||
| Frank C. Milewski | — | — | X | — | — | |||||||||||||||
| Sandra A. Parker | — | X | — | — | — | |||||||||||||||
| Thomas R. Rochon | — | X | — | — | — | |||||||||||||||
| Stephen S. Romaine | X | — | — | — | ||||||||||||||||
| X | ||||||||||||||||||||
| Michael H. Spain | X | — | — | — | — | |||||||||||||||
| Alfred J. Weber | — | — | — | X | — | |||||||||||||||
| Craig Yunker | X | Chair | X | — | — | |||||||||||||||
The Board of Directors has adopted a written charter for the Executive Committee (as used in this paragraph, the “Committee”).Committee. A copy of the Executive Committee’s charter is posted in the “Corporate Governance” section of the Company’s website (www.tompkinsfinancial.com). The Executive Committee did not meet during fiscal 2010.2013. The Executive Committee acts, as necessary, on behalf of the Board of Directors pursuant to the Company’s Second Amended and Restated Bylaws as amended.
The Board of Directors has adopted a written charter for the Compensation Committee (as used in this paragraph, the “Committee”). A copy of the Committee’s charter is posted in the “Corporate Governance” section of the Company’s website (www.tompkinsfinancial.com). The Committee met threesix times during fiscal 2010.2013. Among its duties and responsibilities, the Committee assesses executive performance and reviews, determines and recommends salaries and other matters relating to executive compensation, except that the compensation of the Company’s Chief Executive Officer is determined by the full Board upon recommendation by the Committee. It also administers the Company’s stock optionequity incentive plans, including reviewing and granting stock optionsequity incentive awards to executive officers and other employees. The Committee also reviews and approves various other Company compensation policies and matters, senior management planning, and is responsible for ensuring that the Company’s executive officers are compensated effectively and in a manner consistent with the Company’s objectives. Each of the members of this Committee is an “independent“Independent Director” as defined in Section 803A of the NYSE AmexMKT LLC Company Guide.Guide, and also meets the heightened independence standards for compensation committee members set forth in NYSE MKT Rule 805(C). The responsibilities and activities of the Committee are described in greater detail in the “Compensation“Compensation Discussion and Analysis” included inAnalysis” beginning on page 16 of this proxy statement.
The Board of Directors has adopted a written charter for the Audit/Examining Committee (as used in this paragraph, the “Committee”). A copy of the Committee’s charter is posted in the “Corporate Governance” section of the Company’s website (www.tompkinsfinancial.com). The Committee met nine times during fiscal 2010.2013. This Committee assists the Board in its general oversight of the Company’s accounting and financial reporting, internal controls and audit functions, and is directly responsible for the appointment, compensation and oversight of the work of the Company’s independent auditors. The responsibilities and activities of the Committee are described in greater detail in the “Report of the Audit/Examining Committee of the Board of Directors” included in this proxy statement.Proxy Statement. The Board of Directors has determined that John E. Alexander, Paul J. Battaglia, Daniel J. Fessenden, and Patricia A. Johnson, Frank C. Milewski and Craig Yunker each qualify as an “audit committee financial expert”“Audit Committee Financial Expert” as defined in Item 407(d) of Regulation S-K and that each of the members of the
The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee (as used in this paragraph and hereafter,in the next five paragraphs, the “Committee”). A copy of the Committee’s charter is posted in the “Corporate Governance” section of the Company’s website (www.tompkinsfinancial.com). The Committee met threefive times during the 20102013 fiscal year. This Committee is responsible for assisting the Board in developing corporate governance policies and practices that comply with applicable laws and regulations, including NYSE AmexMKT LLC listing standards and corporate governance requirements, and the corporate governance requirements of the Sarbanes-Oxley Act of 2002.
The Committee is also responsible for identifying, evaluating and recommending qualified candidates for election to the Board of Directors.Board. The Committee will evaluate candidates who are identified by shareholders, by other members of the Board, of Directors, and occasionally by members of the Company’s Leadership Team.leadership team, which is comprised of the Company’s executive officers. The same procedures are used to evaluate all candidates, regardless of the source of the recommendation. To be considered, each candidate must possess the following minimum qualifications and attributes: highesthigh personal values, judgment and integrity; an ability to understand the regulatory and policy environment in which the Company conducts its business; a demonstrated, significant engagement in one of the market areas served by the Company, based on one or more of the following within such market area - area—professional/business relationships, residence, and involvement with civic, cultural or charitable organizations; and experience which demonstrates an ability to deal with the key business, financial and management challenges that face financial service companies. The Committee believes that such connections with one of the Company’s local communities fosters ties between the Company and that community, and also allows the Director to better understand the banking and financial services needs of its local stakeholders.
In identifying potential nominees, the Committee also considers whether a particular candidate adds to the overall diversity of the Board. The Committee seeks nominees with a broad diversity of experience, professions, skills, geographic representation and backgrounds. The CompanyBoard believes that the backgrounds and qualifications of the Directors, considered as a group, should comprise an array of experience, knowledge and abilities to allow the Board to most effectively carry out its responsibilities. Although the Committee does take diversity into account when evaluating a particular candidate, it is only one of several criteria used during the Committee’s assessment process, and the Committee has not formalized its diversity practices into a written policy.
While individual experiences and qualifications serve as a baseline for consideration, the Committee recognizes that the Board of Directors governs as a whole, and not as a collection of individuals. The effectiveness of the Board is not a function of the individual attributes of its members; rather, it depends on the overall chemistry of the Board. Therefore, the Committee assesses whether a particular candidate will be able to function within this broader context by evaluating his or her: ability to understand, and willingness to engage, the issues presented to the Board; ability to exercise prudence and judgment, but also decisiveness; and ability to effectively communicate his or her ideas to the other members of the Board. In the case of incumbent Directors, these assessments are made based on past experience with a particular Director and, in the case of first-time nominees, these issues are explored during the interview and vetting process described below.
Once the Committee has determined its interest in a potential nominee, it begins discussions with him or her as to his or her willingness to serve on the Board and one or more of the Company’s subsidiary boards and, for first-time nominees, an interview will be conducted. If the nominee is an incumbent Director, the Committee will consider prior Board performance and contributions as described above; in the case of a first-time nominee, the Committee will evaluate its discussions with the candidate, and the Committee may also seek to verify its preliminary assessment of the candidate by discussing his or her particular attributes with other appropriate parties who have had prior professional experiences with him or her. At the conclusion of this process, the Committee will recommend qualified candidates that best meet the Company’s needs to the full Board, which then selects candidates to be nominated for election at the next annual meeting of stockholders.shareholders. The Committee uses the same process for evaluating all candidates, whether recommended by stockholders, Directorsshareholders, directors or management.
The Board of Directors has adopted a written charter for the Pension InvestmentQualified Plans Review Committee. This Committee met two times during fiscal 2010,2013, and it is responsible for reviewing and setting the assets held ininvestment goals and objectives of the Tompkins Financial Corporation Retirement Plan.
Director Compensation
It is the general policy of the Board that employee Directorsdirectors are not paid for their service on the Company’s Board of Directors beyond their regular employee compensation.
2013 Director Compensation
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | All Other Compensation | Total | ||||||||||||
| ($) | ($) | ($) | ($) | |||||||||||||
| Alexander | — | 37,500 | — | 37,500 | ||||||||||||
| Battaglia | — | 48,950 | — | 48,950 | ||||||||||||
| Byrnes | 75,000 | — | — | 75,000 | ||||||||||||
| Fessenden | 44,500 | — | — | 44,550 | ||||||||||||
| Gates | 42,550 | — | — | 42,550 | ||||||||||||
| Hardie | 18,000 | — | 20,800 | (3) | 38,800 | |||||||||||
| Haynes | 27,850 | 16,100 | — | 43,950 | ||||||||||||
| Henry | — | 33,000 | — | 33,000 | ||||||||||||
| Johnson | 38,200 | — | — | 38,200 | ||||||||||||
| Milewski | 43,350 | — | — | 43,350 | ||||||||||||
| Parker | 32,700 | — | — | 32,700 | ||||||||||||
| Rochon | — | 36,700 | — | 36,700 | ||||||||||||
| Spain, M. | 18,000 | 18,000 | — | 36,000 | ||||||||||||
| Spain, Wm. | 34,750 | — | — | 34,750 | ||||||||||||
| Weber | 13,725 | 23,675 | — | 37,400 | ||||||||||||
| Yunker | — | 46,700 | — | 46,700 | ||||||||||||
| Name | Fees Earned or Paid in Cash (2) | Stock Awards (3) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) | All Other Compensation | Total | |||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||
| Achzet | 8,739 | — | 8,739 | (5) | ||||||||||||||
| Alexander | — | 33,550 | 33,550 | |||||||||||||||
| Battaglia | 14,935 | 4,250 | 19,185 | |||||||||||||||
| Byrnes | 50,000 | — | 50,000 | |||||||||||||||
| Fessenden | 19,980 | 11,670 | 31,650 | |||||||||||||||
| Gates | — | — | 35,525 | 35,525 | ||||||||||||||
| Hardie | 13,000 | — | 20,800 | (6) | 33,800 | |||||||||||||
| Harrison | 10,864 | — | 10,864 | (5) | ||||||||||||||
| Haynes | 16,730 | 13,920 | 30,650 | |||||||||||||||
| Henry | — | 17,336 | 17,336 | |||||||||||||||
| Johnson | 31,375 | — | 31,375 | |||||||||||||||
| Parker | 17,686 | — | 17,686 | |||||||||||||||
| Rawlings | — | 5,639 | 5,639 | (5) | ||||||||||||||
| Rochon | — | 27,750 | 27,750 | |||||||||||||||
| Salm | 37,500 | — | 37,500 | |||||||||||||||
| Spain, M. | 17,000 | 13,000 | 30,000 | |||||||||||||||
| Spain, Wm. | 30,000 | — | 30,000 | |||||||||||||||
| Yunker | — | 30,100 | 30,100 | |||||||||||||||
| (1) | Amounts disclosed for certain Directors include cash compensation for service on subsidiary boards. For a more detailed discussion of such fees, see “Subsidiary Board |
| (2) | |
| The stock | |
| Represents compensation for Mr. Hardie’s service as a producer for Tompkins Insurance Agencies. |
Effective January 1, 2010 through May 10, 2010,2013, the Company’s non-employee Directors were compensated for service on the Company’s Board of Directors as follows. An annual $9,000$13,000 retainer payable in quarterly installments of $2,250$3,250 each was paid at the beginning of each quarter.quarter to non-employee Directors. In addition, non-employee Directors received $1,000$1,250 for each of the four regularly-scheduled Board meetings the Director attended, as well as $400$750 for each Audit/Examining, Compensation or Nominating and Corporate Governance Committee meeting attended and Pension Investment$400 for each Qualified Plans Review Committee meeting attended (effective May 11, 2010, meeting fees for these Committees, with the exception of the Pension Investment Review Committee, increased to $750 per meeting); and $700 for each Audit/Examining Committee meeting attended (effective May 11, 2010, meeting fees for this Committee increased to $750 per meeting).attended. The Chair of the Audit/Examining Committee received an additional $4,000$10,000 annual fee paid in quarterly installments of $1,000,$2,500, and as of May 11, 2010, the Chairs of the Compensation, and Nominating and Corporate Governance Committees also received an additional $4,000 annual fee paid in quarterly installments of $1,000. All non-employee Director’sDirectors’ fees paid for service on the Company’s Board of Directors are paid in cash or, if a valid election was made by the Director prior to January 1, 2010,2013, such Director’sDirectors’ fees were paiddeferred pursuant to (i) the Retainer Plan as described below under “Timing and Manner of Payment.”or (ii) pursuant to a Deferred Compensation Agreement. In addition to these fees, Directors are eligible to receive optionsequity awards granted pursuant to the Company’s 2009 Equity Plan, though none were issued to Directors during fiscal 2010.
In lieu of any retainer, board meeting and/or committee fees, or stipends to the individual serving in the office of Vice Chair of the Tompkins Financial Corporation and Tompkins Trust Company Board of Directors was $35,000 paid in quarterly installments of $8,750, effective January 1, 2010 through May 10, 2011, and $40,000 paid in quarterly installments of $10,000, effective May 11, 2010. The Vice Chair’s feean annual retainer was paid to James J. Byrnes in cash.
Subsidiary Board Service Compensation
Any non-employee member of the Company’s Board of Directors who also satsits on the boardBoard of TheTompkins Bank of Castile received an additional annual $13,200$14,200 Board Retainer Fee, paid in quarterly installments of $3,300. The aforementioned fees were pro-rated as necessary for Directors completing less than a full year of service. Each non-employee Director’s fees were paid in cash, or if a valid election was made by$3,550. During 2013, Paul J. Battaglia, Sandra A. Parker, and Craig Yunker sat on the Director prior to January 1, 2010, deferred pursuant to (i) the Retainer Plan or (ii) pursuant to a Deferred Compensation Agreement.
Timing and Manner of Payment of Company BoardDirector Compensation
All retainer and meeting fees were paidfor service on the Company’s Board, as well as service on the Board of Directors of one or more of our subsidiaries, are payable quarterly, by the Company, either in cash or, if a timely election wasis made by the Director, in Company stock pursuant to the Retainer Plan. Non-employee Directors may also elect to receive compensation in deferred cash pursuant to a Deferred Compensation Agreement. If a Director elects to receive deferred stock compensation under the Retainer Plan, his or her fees are transferred to a Rabbi Trust. The trustee acquires shares of the Company’s common stock pursuant to the Company’s Dividend Reinvestment and Stock Purchase and Sale Plan. A Director has no rights in or to the shares of common stock held in the Rabbi Trust until distribution is made in accordance with the Retainer Plan. An aggregate of 5,2425,956 shares of Common Stockcommon stock was acquired by the Rabbi Trust under the Retainer Plan in 20102013 representing board and committee fees and retainers paid and expensed in 2010.
Corporate Governance Matters
Corporate Governance Guidelines
The Board of Directors as follows. An annual $13,000 retainer payable in quarterly installments of $3,250 each will be paid at the beginning of each quarter to the Company’s non-employee Directors. In addition, non-employee Directors receive $1,250 for each of the four regularly-scheduled Board meetings the Director attends. The other elements of director compensation (e.g.has adopted Corporate Governance Guidelines (the “Guidelines”), committee meeting fees or additional amounts for service as Chair) remain unchanged from 2010.
Shareholder Communications with Directors
Shareholders may communicate with the Company’s Board of Directors by writing to the following address: Board of Directors, Tompkins Financial Corporation, P.O. Box 460, Ithaca, New York 14851. BothAll such communications from shareholders will be reviewed by the Chairman of the Nominating and Vice Chair, each of whomCorporate Governance Committee, who is an independentIndependent Director, of the Company, will review all correspondence and, if either of thems/he determines that a communication should be reviewed by the full Board, of Directors, it will be presented to the Board for its review and consideration.
Policy Regarding DirectorsDirector Attendance at Annual Meetings
The Company does not have a formal policy in place requiringBoard strongly encourages the attendance of all Directors at annual meetingsAnnual Meetings. The Annual Meeting of stockholders, althoughShareholders for fiscal 2012 was held on May 20, 2013 and, with the Board strongly encourages suchexception of Frank C. Milewski and Sandra A. Parker, all of the Directors then in office were in attendance.
Code of Ethics
The Board of Directors has adopted the Tompkins Financial Corporation Code of Ethics for the Chief Executive Officer and Senior Financial Officer which applies to the Company’s Chief Executive Officer and Chief Financial Officer.Officer (who also serves as our principal accounting officer). A copy of the Code of Ethics is available in the “Corporate Governance” section of the Company’s website (www.tompkinsfinancial.com). The Company will post material amendments to or waivers from the Code of Ethics for Chief Executive Officer and Senior Financial Officer at this location on its website.
Board Leadership Structure
Presently, the roles of Chief Executive Officer and Chairman of the Board are separate, as the Board feels this offers advantages of including additional input and a range of prior experience within our leadership structure. However, no single leadership model is right for the Company at all times, and the Board does not have a policy that these roles will always be separate. The Board recognizes that other leadership models can be appropriate for the Company, given different circumstances.
The Board has an active role, both at the full Board and also at the committee level, in overseeing management of the Company’s risks. The Board regularly reviews information regarding asset quality, capital, securities portfolio, liquidity, operations and other matters, as well as the risks associated with each. The Compensation Committee oversees risks associated with compensation arrangements and the Audit Committee oversees management of financial risks. The Board’s role in the risk oversight process has not directly impacted its leadership structure.
Risk and Influence on Compensation Programs
The Company’sBoard’s Compensation Committee also considers risk and its influence on the Company’s compensation programs. TheThis Committee reviews each compensation element individually and in the aggregate to ensure that the overall compensation program provides a balanced perspective that ultimately aligns pay with performance while also ensuring bonus / incentive programs do not motivate inappropriate risk-taking. Since the bonuses are discretionary, the Committee has the ability to reduce bonus amounts should it be determined that certain actions or practices by the executive officers are promoting unnecessary or excessive risk. Equity award levels and practices are set to foster shared interests between management and stockholders,shareholders, but are not considered by the Committee to be at levels that would drive inappropriate behavior. In the Committee’s judgment, the compensation policies and practices of the Company do not give rise to material risks.
In addition, we are subject to guidance issued by our primary banking regulators designed to ensure that incentive compensation arrangements at banking organizations appropriately tie rewards to longer-term performance and do not undermine the safety and soundness of the firm or create undue risks to the financial system. This guidance embodies three core principles, which are: (1) incentive compensation arrangements at a banking organization should provide employees incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risks; (2) these arrangements should be compatible with effective controls and risk management, and (3) these arrangements should be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. We believe that our incentive compensation programs are in compliance with this guidance.
Affirmative Determination of Director Independence
A majority of the Board voted to approve an amendment (the “Bylaw Amendment”) to Article IV, Section 4of Directors, and each member of the AmendedAudit/Examining Committee, Compensation Committee, and Restated BylawsNominating and Corporate Governance Committee, is independent, as affirmatively determined by the Board, consistent with the criteria established by NYSE MKT LLC and as required by our Bylaws.
The Board has conducted an annual review of director independence for all current nominees for election as Directors and all continuing Directors. During this review, the Company, effective immediately, to provide that upon a Director’s reachingBoard considered transactions and relationships during the mandatory retirement age of 72, suchpreceding three years between each Director may serve out the remainderor any member of his or her elected term untilimmediate family and the next Annual MeetingCompany, and its executive officers, subsidiaries, affiliates and principal shareholders, including those described below under “Transactions with Related Persons.” The purpose of Stockholders.
As a result of this review, the Board affirmatively determined that the Directors identified as “Independent” in the table on Page 3 meet the Company’s standard of independence.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information, as of March 14, 2014, with respect to the beneficial ownership of our common stock by: (1) each shareholder known by the Company to be the beneficial owner of more than 5% of the Second AmendedCompany’s common stock; (2) each Director and Restated Bylawsnominee; (3) each executive officer named in the Summary Compensation Table, below; and (4) all executive officers and Directors as a group. Except as otherwise indicated, each of the Company, including the Bylaw Amendment effective January 25, 2011, incorporated herein by reference to Exhibit 3.1shareholders named below has sole voting and investment power with respect to the Company’s current Report on Form 8-K, filed with the Securities and Exchange Commission on January 31, 2011.
| Common Stock Ownership | |||||||||||||||||
| Phantom Stock Held in Deferred Trust(1) | Number of Shares Beneficially Owned(2) | Percent of Outstanding Names Shares(2)(3) | |||||||||||||||
| Directors, Nominees and Executive Officers | |||||||||||||||||
| John E. Alexander+ | 11,022 | 32,387 | (4) | ** | |||||||||||||
| Paul J. Battaglia+ | 3,246 | 3,841 | (5) | ** | |||||||||||||
| David Boyce* | — | 41,579 | (6) | ** | |||||||||||||
| James J. Byrnes++ | — | 45,036 | ** | ||||||||||||||
| Daniel J. Fessenden+ | 1,592 | 1,178 | ** | ||||||||||||||
| Robert D. Davis* | — | 9,306 | (7) | ** | |||||||||||||
| Francis M. Fetsko* | — | 26,466 | (8) | ** | |||||||||||||
| James W. Fulmer*+ | — | 126,217 | (9) | ** | |||||||||||||
| Reeder D. Gates++ | 5,783 | 126,500 | (10) | ||||||||||||||
| James R. Hardie+ | 1,572 | 65,743 | (11) | ** | |||||||||||||
| Carl E. Haynes+ | 5,594 | 4,958 | ** | ||||||||||||||
| Susan A. Henry+ | 3,317 | 1,136 | ** | ||||||||||||||
| Patricia A. Johnson+ | 2,564 | 116 | ** | ||||||||||||||
| Frank C. Milewski+ | — | 17,449 | ** | ||||||||||||||
| Sandra A. Parker+ | — | 2,620 | ** | ||||||||||||||
| Thomas R. Rochon+ | 4,378 | 234 | (12) | ** | |||||||||||||
| Stephen S. Romaine*,+ | — | 70,633 | (13) | ** | |||||||||||||
| Michael H. Spain+ | 4,605 | 470,080 | (14) | 3.17% | |||||||||||||
| William D. Spain, Jr.+ | 2,542 | 465,893 | (15) | 3.14% | |||||||||||||
| Alfred J. Weber+ | 828 | 10,788 | ** | ||||||||||||||
| Craig Yunker+ | 8,372 | 13,814 | ** | ||||||||||||||
| All Directors and executive officers as a group (25 persons) | — | 1,225,199 | 8.16% | ||||||||||||||
| * | Named Executive Officer |
| + | Currently a Director of the Company and a Director Nominee |
| ++ | Currently a Director of the Company |
| ** | Less than 1 percent |
| (1) | Each share of phantom stock is the economic equivalent of one share of common stock. Phantom stock represents deferred stock compensation under the Amended and Restated Retainer Plan for Eligible Directors of Tompkins Financial Corporation and its Wholly-Owned Subsidiaries (the “Retainer Plan”). These shares are held in a deferred trust account (the “Rabbi Trust”) pending distribution upon the occurrence of certain events specified in the Retainer Plan. The reporting person has no voting or investment power over the shares prior to such distribution. The shares of Common Stock held in deferred trust accounts for non-employee Directors are voted by Tompkins Trust Company (the “Trust Company”) as trustee of the Rabbi Trust. |
| (2) | Does not include shares of Phantom Stock held in the Rabbi Trust. |
| (3) | The number of shares beneficially owned by each person or group as of March 14, 2014, includes shares of common stock that such person or group had the right to acquire on or within 60 days after March 14, 2014, including, but not limited to, upon the exercise of options. For each individual and group included in the table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the 14,825,564 shares of common stock outstanding and entitled to vote on March 14, 2014 plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days after March 14, 2014. The percentages listed in this column do not include shares acquired pursuant to the Retainer Plan and held in the Rabbi Trust; directors have no voting or investment power with respect to such shares. For a more detailed discussion of the Retainer Plan, refer to “Timing and Manner of Payment ofDirector Compensation,” Page 11. For a description of the vesting provisions for the restricted stock referenced in the footnotes below, see the “2013 Outstanding Equity Awards at Fiscal Year-End” table, below. |
| (4) | Includes 505 shares owned by Mr. Alexander’s spouse. |
| (5) | Shares owned by Mr. Battaglia’s spouse. |
| (6) | Includes 1,918 shares held in the Company’s Employee Stock Ownership and Investment & Stock Ownership Plans, 4,230 shares of restricted stock, and 25,534 shares that Mr. Boyce may acquire by exercise of options exercisable at March 14, 2014 or within 60 days thereafter. |
| (7) | Includes 245 shares held in the Company’s Investment & Stock Ownership Plan. |
| (8) | Includes 6,085 shares held in the Company’s Employee Stock Ownership and Investment & Stock Ownership Plans, 4,230 shares of restricted stock, and 10,039 shares that Mr. Fetsko may acquire by exercise of options exercisable at March 14, 2014 or within 60 days thereafter. |
| (9) | Includes 10,216 shares held in the Company’s Employee Stock Ownership Plan, 4,230 shares of restricted stock, 28,155 shares owned by Mr. Fulmer’s spouse, and 27,953 shares that Mr. Fulmer may acquire by exercise of options exercisable at March 14, 2014 or within 60 days thereafter. |
| (10) | Includes 3,200 shares owned by Mr. Gates’ spouse. |
| (11) | Includes 743 shares held in the Company’s Employee Stock Ownership Plan. |
| (12) | Includes 10 shares owned by Dr. Rochon’s spouse as Custodian for each of their two sons. |
| (13) | Includes 8,653 shares held in the Company’s Employee Stock Ownership and Investment & Stock Ownership Plans, 8,609 shares of restricted stock, and 55,631 shares that Mr. Romaine may acquire by exercise of options exercisable at March 14, 2014 or within 60 days thereafter. |
| (14) | Includes 420,707 shares of Common Stock held by W. D. Spain & Sons Limited Partnership, of which Mr. Michael Spain is a General Partner and shares voting and investment control. Mr. Spain disclaims beneficial ownership of all shares of Common Stock owned by W. D. Spain & Sons Limited Partnership, except to the extent of 84,140 shares which represent his indirect pecuniary interest, through his ownership of 20% of W. D. Spain & Sons Limited Partnership. |
| (15) | Includes 420,707 shares of Common Stock held by W. D. Spain & Sons Limited Partnership, of which Mr. William Spain, Jr. is a General Partner and shares voting and investment control. Mr. Spain disclaims beneficial ownership of all shares of Common Stock owned by W. D. Spain & Sons Limited Partnership, except to the extent of 84,140 shares which represent his indirect pecuniary interest, through his ownership of 20% of W. D. Spain & Sons Limited Partnership. |
As of March 14, 2014, other than as listed in the Common Stock Ownership table above, no person or group was known by the Company to be the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock, except as follows:
| Name and Address of Beneficial Owner | Phantom Stock Held in Deferred Trust | Shares of Common Stock Beneficially Owned | Percent of Class | |||||||||
| Tompkins Trust Company in the fiduciary capacity indicated:(1) |
| |||||||||||
| Executor, Trustee or Co-Trustee | 753,473(2) | 5.08% | ||||||||||
| Agent or Custodian | 754,166(3) | 5.09% | ||||||||||
| Tompkins Trust Company in the fiduciary capacity indicated (Plan shares held in custody by Prudential Investment) | 5.23% | |||||||||||
| Trustee for the Tompkins Financial Employee Stock Ownership and Investment & Stock Ownership Plans | 774,848(4) | |||||||||||
| BlackRock, Inc.(5) 40 East 52nd Street, New York, NY 10022 | 1,208,554 | 8.2% | ||||||||||
| (1) | The Trust Company’s address is P.O. Box 460, Ithaca, New York, 14851. |
| (2) | Represents shares held in a fiduciary capacity as executor, trustee or co-trustee. Where the Trust Company is sole executor or trustee, such shares, generally, will be voted only if the legal instrument provides for voting the stock at the direction of the donor or a beneficiary and such direction is in fact received. When acting in a co-fiduciary capacity, such shares will be voted by the co-fiduciary or fiduciaries in the same manner as if the co-fiduciary or fiduciaries were the sole fiduciary. |
| (3) | Represents shares held as agent or custodian with the voting power retained by the owner. |
| (4) | Represents shares held and administered by Prudential Investment Management Services, LLC, of which 567,676 shares, or 3.83% of the outstanding shares (calculated as described above), are held by the Company’s Employee Stock Ownership Plan and 207,172 shares, or 1.40% of the outstanding shares (calculated as described above), are held by the Company’s Investment & Stock Ownership Plan. All such shares have been allocated to participant accounts. Individual plan participants are entitled to vote these shares, and as a result these shares are not voted by the Trust Company, which serves as Trustee for these plans. |
| (5) | This information is based on a Schedule 13G/A filed by BlackRock, Inc. on January 30, 2014. |
COMPENSATION DISCUSSION AND ANALYSIS
Overview
It is the position of the Compensation Committee and the Board of Directors that Tompkins Financial Corporation has long operated within the spirit of the guidance provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act and other recently enacted regulations. Management and the Board of Directors have been careful to avoid many of the risks of incentive programs, choosing to reward proven results on a discretionary basis as opposed to tying payments to any particular metric; therefore, not providing anmetric. The result is that no individual or group the incentiveis incentivized to take unnecessary risk with respect to a customer, the organization or our shareholders. TheseWe believe that these efforts are supported by an effective risk management system and strong corporate governance.
The Company has delegated to the Compensation Committee (the “Committee”) the responsibility for determining andor recommending to the full Board the compensation of the Company’s executive officers, including the Executive Officersexecutive officers identified in the Summary Compensation Table (the “Named Executive Officers”).
The Company has exhibitedcontinued to exhibit strong recent financial performance relative to its industry.peer group. In recognition of Company financial performance and the contributions made by the Named Executive Officers in 20102012 - 2013 the following compensation actions were approved.
Merit Increases.Effective April Officers, other than Mr. Davis who retired on December 31, 2013. |
| • | ||
Cash Bonuses.In February Officers, other than Mr. Davis. |
| • | ||
Long-Term Equity-Based Awards.The Committee uses discretion in determining the frequency of awards and has generally considered awards every 18 to 24 months. |
| • | Stock Awards for Successful VIST Integration.The Committee approved a stock award in |
These decisions as well as the Committee’s process in making compensation recommendations are described below:
It should be noted that Mr. Davis retired as the CEO of Tompkins VIST Bank on December 31, 2013, in accordance with the Company’s transition plan for the management of Tompkins VIST Bank. Accordingly, Mr. Davis was not considered for, nor did he receive, a merit increase, cash bonus or any equity compensation during 2013.
Compensation Philosophy and Objectives
The primary goal of the Committee is to offer executive compensation that is fair and reasonable, consistent with the Company’s size and the compensation practices of the financial services industry generally. Key objectives of the compensation package are to attract, develop, and retain high caliber executives who are capable of maximizing the Company’s performance for the benefit of its stockholders.shareholders. The Board and the Committee maintain full discretion over the components and payment of compensation in order to preserve the flexibility necessary to ensure itsthe Board’s ability to act in the Company’s best interests.
Tax and Accounting Considerations
The accounting and tax treatment of compensation generally has not been a significant factor in determining the amounts of compensation for our executive officers. However, the Compensation Committee and management have considered the accounting and tax impact of various program designs to balance the potential cost to the Company with the benefit/value to the executive.
Section 162(m) of the Internal Revenue Code generally denies publicly-held corporations a federal income tax deduction for compensation exceeding $1,000,000 paid to the chief executive officer or any of the three other highest paid executive officers (other than the chief financial officer), excluding performance-based compensation. Through December 31, 2013, this provision has not limited the Company’s ability to deduct executive compensation. The Committee will continue to monitor the potential impact of Section 162(m) on the Company’s ability to deduct executive compensation, and in particular, will review the effect of recent Internal Revenue Service rulings related to performance-based compensation in change-in-control situations. The 2009 Equity Plan has been designed, and is intended to be administered, in a manner that will enable the Company to deduct compensation attributable to options and certain other awards thereunder, without regard to the deduction limitation established by Section 162(m).
Section 409A of the Internal Revenue Code generally changes the tax rules that affect most forms of deferred compensation that were not earned and vested prior to 2005, and imposes an additional tax on certain forms of deferred compensation. The Committee takes Section 409A into account in determining the form and timing of compensation paid to the Company’s executives.
The Company values equity incentive awards under FASB ASC Topic 718. More information regarding the application of ASC Topic 718 by the Company may be found in Note 15 (Stock Plans and Stock Based Compensation) to the Company’s audited financial statements filed with the SEC in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
Compensation Committee and Process
Role of the Compensation Committee, Management, and Consultants
The Committee is responsible for general oversight of personnel policies for the Company and its subsidiaries, including review and administration of: deferred compensation; retirement and supplemental executive retirement plans; long-term equity compensation; and executive compensation plans. The Committee makes determinations andor recommends to the Board actions concerning the compensation of executive officers and Company compensation programs. Tasks outlined by the Compensation Committee Charter include, but are not limited to, the following: reviewing the competitiveness of the Company’s compensation programs; reviewing and approving annual performance goals and objectives; and evaluating the Chief Executive Officer’s and other executive officers’ performance as it relates to these goals. The Committee also supports the succession planning process in consultation with the Chief Executive Officer. The Committee also discusses and considers the results of the shareholders’ non-binding vote on say-on-pay. As permitted by law, the Committee may delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
Executive officers do not play a role in determining their own compensation decisions, but they are called on to make recommendations concerning those individuals that report to them.
The Committee also has the authority to retain such outside counsel, experts, and other advisors as it determines appropriate to assist it in the full performance of its functions.
The Company has assessed the independence of Mosteller pursuant to SEC rules and exchange requirements, and has concluded that no conflict of interest exists that would prevent Mosteller from independently representing the Compensation Committee. The Company made this determination based on its receipt of representations from Mosteller addressing the independence of Mosteller, and the Mosteller consultants involved in the engagement, which addressed the following factors: (1) other services provided to us by Mosteller; (2) fees paid by us as a percentage of Mosteller’s total revenue, which were less than 1% of Mosteller’s total revenue; (3) policies and procedures maintained by Mosteller that are designed to prevent a conflict of interest, a copy of which was provided for our review; (4) the absence of any business or personal relationships between the Mosteller consultants and any member of the Compensation Committee; (5) the fact that no Company stock is owned by Mosteller or any of its consultants; and (6) the absence of any business or personal relationships between our executive officers and the Mosteller consultants. In addition, the Company confirmed the content of Mosteller’s responses to items (4) and (6) above directly with the Company’s directors and executive officers.
Process of Determining Named Executive Officer Compensation
In furtherance of its objective to attract, develop and retain high caliber executives who are capable of maximizing the Company’s performance for the benefit of its stockholders,shareholders, the Committee periodically compares its compensation levels,
Toward that end, the Committee considered compensation data and practices of a group of banking companies that it believed were reasonably comparable to the Company’s asset size or which are headquartered in the Company’s geographic region. This data was provided by SNL Financial.
| Arrow Financial Corporation | ||
| Bryn Mawr Bank Corporation | ||
| Camden National Corporation | Old National Bancorp | |
| Community Bank System, Inc. | Park National Corporation | |
| Financial Institutions, Inc. | S&T Bancorp, Inc. | |
| First BanCorp. | Sun Bancorp, Inc. | |
| First Commonwealth Financial Corp. | United Community Banks, Inc. | |
| Hudson Valley Holding Corp. | ||
The above list of peer companies was modified from the peer group used during the 2012 compensation process to eliminate organizations that were acquired in 2013. As discussed earlier, during 2013 the Committee engaged Mosteller & Associates to conduct an independent peer group selection study, identifying organizations that were comparable in asset size, demographics, lines of business, and corporate performance measures. The results of the Mosteller & Associates study will be used when considering executive compensation during 2014.
The Committee believes that a certain level of discretion is appropriate in determining the Named Executive Officers’ compensation. Information from these comparative groups and compensation survey data is only one factor in the Committee’s assessment of appropriate compensation levels, policies, and practices. The Committee does not have a formal policy of targeting a certain percentile of the market data or using market data to establish the mix of compensation (including the allocation between cash and non-cash compensation and short and long-term equity compensation.)compensation). The Committee also does not have a formal policy regarding the relationship between compensation levels provided to the Chief Executive Officer and other Named Executive Officers.
For fiscal 2010,2013, the Committee considered a number of quantitative and qualitative performance factors to evaluate the performance of its executive officers, including its Chief Executive Officer. The 20092012 annual performance factors were considered for the purpose of determining 20102013 merit increases while the 20102013 annual performance factors were used to determine executive bonuses earned for 20102013 and paid in 2011.
| The Company’s net income as compared to the Company’s internal targets (in thousands of dollars) |
| Actual | Plan | ||||||||||||
| 2010 | $ | 33,830 | $ | 34,345 | -1.5 | % | |||||||
| 2009 | $ | 31,832 | $ | 31,141 | +2.2 | % | |||||||
| Actual | Plan | % Change | ||||||||||
| 2013 | $ | 50,856 | $ | 50,430 | 0.8 | % | ||||||
| 2012 | $ | 31,285 | $ | 36,326 | -13.9 | % | ||||||
| Increases in earnings per share (diluted EPS) |
| 2010 | 3.11 | +5.07 | % | ||||||
| 2009 | 2.96 | +6.47 | % |
| Plan | % Change | |||||||
| 2013 | 3.46 | 42.4 | % | |||||
| 2012 | 2.43 | -24.1 | % | |||||
| The Company’s return on assets (ROA), as ranked in the Federal Reserve Bank Holding Company Performance Report for its peer group | ||
| Actual | Ranking | |||||||
| 2013 | 1.03 | % | 53rd percentile | |||||
| 2012 | 0.76 | % | 35th percentile | |||||
| 1 Year | 5 Year | 10 Year | ||||||||||
| TMP | 34.24 | % | 2.97 | % | 7.35 | % | ||||||
| KBW | 46.85 | % | 8.14 | % | 2.21 | % | ||||||
| The Company’s return on equity (ROE), as ranked in the Federal Reserve Bank Holding Company Performance Report for its peer group | ||
| Actual | Ranking | |||||||
| 2013 | 11.47 | % | 73rd percentile | |||||
| 2012 | 8.30 | % | 74th percentile | |||||
The Committee believes that the total compensation provided to the Company’s executive officers is competitive, particularly given the Company’s relative performance, and that the Company’s compensation practices for fiscal 20102013 were appropriate.
Consideration of Say-on-Pay Results
In 2011, the Company’s shareholders determined to hold an advisory vote on Pay
Components of Compensation
The major components of the Company’s executive officer compensation are: (i) Base Salary,base salary, (ii) Annual Bonus,annual bonus, (iii) Long-Term, Equity-Based Awards,long-term, equity-based awards, and (iv) Retirementretirement and Other Benefits.
Base Salary
The Company maintains a common anniversary date for the merit review process, and related increases in compensation rates occur in April. MostFollowing an analysis of the factors described in the preceding paragraph, most of the Company’s executives received salary rate increases at this time, including all of the Named Executive Officers.Officers (other than Mr. Davis). Mr. Romaine’s annual salary rate was increased to $435,000$513,600 representing an increase of 6.5%7.0%. Messrs. Fulmer, Fetsko Bantle and KleinBoyce received annual salary rate increases to $285,000$319,000 (+4.2%3.5%), $245,000$300,000 (+6.2%), $178,000 (+3.6%3.5%), and $230,000$278,200 (+5.7%3.0%) respectively.
Annual Bonus
Long-Term, Equity-Based Awards
The Tompkins Financial Corporation 2009 Equity Plan, that replaced the 2001 Plan. The new planwhich was approved by shareholders, gives the Company more flexibility in the types of equity grants availableawarded in order to better and more efficiently align executive and stockholdershareholder interests. A total of 820,000922,000 shares were reserved under the new plan,2009 Equity Plan, of which 236,870636,510 have been issued.issued as of the date of this proxy statement. In addition, executives may receive Common Stockthe Company’s common stock through the profit sharing component of the Tompkins Financial Corporation Employee Stock Ownership Plan. For a more detailed discussion of the profit sharing component, and other deferred compensation and retirement plans, please see the text accompanying the tables following this section.
The Committee uses discretion in determining the frequency and level of awards. Generally, the Committee will consider market data, Companythe Company’s financial performance, and individuals’ performance before deciding whether an award should be made and the number of shares to be granted. The Committee is careful to grant equity-based compensation only at times wherewhen participants are not in possession of material non-public information. NoIn May 2013, a number of executives received long-term equity-based awardsawards. Among that group were the Named Executive Officers, with the exception of Mr. Davis, who each received stock-settled stock appreciation rights (SARs) and shares of restricted stock. Stock Settled SARS are a right to receive compensation in 2010.
Stock Awards for Successful VIST Integration.The Committee approved a stock award in October 2013 which was based on the successful integration of the VIST Financial business into our Company. This stock award was not subject to vesting or forfeiture, and the recipients included all of the Named Executive Officers, other than Mr. Davis. Following the Compensation Committee’s review of the full-year financial results, an equal award was approved and granted in February 2014. The October 2013 grant is included in the Summary Compensation Table below, and the February 2014 grant will be included in the Summary Compensation Table for 2014.
Retirement and Other Benefits
.Retirement Plans.
The Company maintains several retirement programs that are designed to assist Company employees with their long-term retirement planning. Substantially all Company employees, including the Named Executive Officers, are eligible to participate in the Investment & Stock Ownership (401(k)) Plan and theNamed Executive Officers may also participate in a non-qualified deferred compensation plan and Messrs. Romaine, Fulmer, Fetsko, Bantle and Kleinall of our Named Executive Officers are parties to Supplemental Executive Retirement Plan (SERP) Agreements with the Company.Company (other than Mr. Davis). These plans provide retirement income that may be limited in the qualified plans due to IRS limitations or are intended to provide additional retirement benefits. The Committee believes that the plans and the level of benefits that are provided are appropriate to promote retention and to recognize and reward long-term service to the Company.
For more information regarding these plans, please refer to the narrative accompanying the “Pension BenefitBenefit” and “2013 Non-Qualified Deferred Compensation” tables on pages 28 and 33, respectively, in this proxy statement. Information regarding SERP benefits is explained under “Potential Payments upon Termination or Change ofin Control.”
Life Insurance Benefits.
As a part of its comprehensive and competitive approach to compensation, the Company provides life insurance benefits to certain officers of the Company, including all of the Named Executive Officers, with respect to which the Company has entered into life insurance contracts. These insurance contracts are carried at cash surrender value on the Company’s consolidated statements of financial condition. Increases in the cash surrender value of the insurance are reflected as noninterest income, and the related mortality expense is recognized as other employee benefits expense, in the Company’s consolidated statements of income.Post-Retirement Life Insurance and Medical Insurance.
The Company offers post-retirement life insurance coverage to employees who have worked for the Company for 10 or more years and who retire at or after age 55. All of the Named Executive Officers are entitled to receive life insurance coverage under this policy.Additionally, Tompkins Trust Company offershistorically offered post-retirement medical coverage to certain employees. Retiree medical insurance subsidized by the Company has been eliminated for new hires after December 31, 2004. The current Tompkins Trust Company retirees and active eligible employees (at least 55 years of age and 10 years of service as of December 31, 2004) are a “grandfathered group” and as such continue to receive a portion of the premium cost of their retiree medical insurance from the Company. There is currently a $3,000 annual cap on the employer payments. None of the Named Executive Officers are part of the “grandfathered group” eligible to receive these premium contributions in retirement.
Perquisites.
Perquisites for the Named Executive Officers are limited to personal use of a Company-owned vehicle.Termination of Employment and Change-in-Control Arrangements
Compensation Recovery Policies
The Compensation Committee intends to formulate a compensation recovery policy once regulatory guidance is issued on this topic.
Compensation Committee Report
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” has been reviewed and discussed with the management of the Company. Based on the Compensation Committee’s review and discussion, the Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference into the Company’s 2013 Annual Report on Form 10-K and in this proxy statement.
Members of the Compensation Committee:
Craig Yunker, Chair
Thomas R. Rochon
Sandra A. Parker
John E. Alexander
Compensation Committee Interlocks and Insider Participation
The members of the Company’s Compensation Committee are identified above under “Compensation Committee Report.” No member of the Compensation Committee was at any time during fiscal 20102013 or before an officer or employee of the Company or any of the Company’s subsidiaries.subsidiaries, or had any relationship requiring disclosure under “Transactions with Related Persons” in this proxy statement. No executive officer of the Company has served on the board of Directorsdirectors or compensation committee of any other entity, that has or has had one or moreof whose executive officers who served as a member of the Company’s Board of Directors or the Compensation Committee during fiscal 2010.
2013 Summary Compensation Table
The following table sets forth information concerning the total compensation earned by the Company’s Chief Executive Officer and Chief Financial Officer and the next three other most highly compensatedhighly-compensated executive officers of the Company in the fiscal year ended December 31, 2010.2013. These five officers are referred to as the “Named Executive Officers” in this proxy statement.
| Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Option Awards(4) | Non- Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | |||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||
| Stephen S. Romaine | 2013 | 505,846 | 200,000 | 365,897 | (3) | 59,589 | — | 0 | 37,338 | 1,168,670 | ||||||||||||||||||||||||||
| President & CEO of | 2012 | 474,898 | 144,000 | 0 | 0 | — | 464,956 | 114,453 | 1,198,307 | |||||||||||||||||||||||||||
| Tompkins | 2011 | 451,923 | 175,000 | 127,083 | 97,276 | — | 637,170 | 75,614 | 1,564,066 | |||||||||||||||||||||||||||
| James W. Fulmer | 2013 | 316,519 | 93,300 | 172,670 | (3) | 29,034 | — | 0 | 34,131 | 645,654 | ||||||||||||||||||||||||||
| Vice Chair of the | 2012 | 305,515 | 75,000 | 0 | 0 | — | 277,341 | 38,233 | 696,089 | |||||||||||||||||||||||||||
| Company; Chairman, | 2011 | 293,769 | 84,500 | 63,542 | 48,638 | — | 474,268 | 37,140 | 1,001,857 | |||||||||||||||||||||||||||
| President & CEO of Tompkins Bank of Castile | ||||||||||||||||||||||||||||||||||||
| Francis M. Fetsko | 2013 | 297,692 | 85,100 | 172,670 | (3) | 29,034 | — | 0 | 28,636 | 613,132 | ||||||||||||||||||||||||||
| Executive Vice | 2012 | 281,877 | 66,200 | 0 | 0 | — | 224,426 | 86,500 | 659,003 | |||||||||||||||||||||||||||
| President COO & CFO of Tompkins | 2011 | 252,538 | 70,950 | 63,542 | 48,638 | — | 272,595 | 30,895 | 739,158 | |||||||||||||||||||||||||||
| David S. Boyce | 2013 | 276,308 | 80,900 | 172,670 | (3) | 29,034 | — | 0 | 24,350 | 583,262 | ||||||||||||||||||||||||||
| President & CEO of | 2012 | 219,553 | 51,600 | 0 | 0 | — | 147,365 | 21,954 | 440,472 | |||||||||||||||||||||||||||
| Tompkins Insurance Agencies | 2011 | 211,154 | 58,100 | 63,542 | 48,638 | — | 221,219 | 25,380 | 628,033 | |||||||||||||||||||||||||||
| Robert D. Davis | 2013 | 400,000 | 0 | 0 | 0 | — | 0 | 38,696 | 438,696 | |||||||||||||||||||||||||||
| CEO of Tompkins VIST Bank (retired 12/31/2013) | 2012 | 169,231 | (7) | 0 | 0 | 0 | — | 0 | 3,650 | 172,881 | ||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards | Option Awards(2) | Non-Equity Incentive Plan Compen-sation | Change in Pension Value and Nonqualified Deferred Compen- sation Earnings(3) | All Other Compen-sation(4) | Total | ||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Stephen S. Romaine | 2010 | 444,596 | 165,000 | 0 | 242,604 | 43,076 | 895,276 | ||||||||||||||||
| President & CEO of | 2009 | 390,058 | 155,000 | 288,860 | 166,343 | 43,287 | 1,043,548 | ||||||||||||||||
| the Company | 2008 | 340,000 | 150,000 | 0 | 126,177 | 26,969 | 643,146 | ||||||||||||||||
| James W. Fulmer | 2010 | 292,865 | 80,400 | 0 | 192,452 | 141,685 | 707,402 | ||||||||||||||||
| Vice Chair of the | 2009 | 270,000 | 75,100 | 144,430 | 144,880 | 168,940 | 803,350 | ||||||||||||||||
| Company, Chairman, | 2008 | 260,500 | 85,000 | 0 | 165,129 | 82,542 | 593,171 | ||||||||||||||||
| President & CEO of | |||||||||||||||||||||||
| The Bank of Castile | |||||||||||||||||||||||
| Francis M. Fetsko | 2010 | 250,546 | 68,000 | 0 | 106,813 | 31,685 | 457,044 | ||||||||||||||||
| Executive Vice President & | 2009 | 225,054 | 67,450 | 144,430 | 68,726 | 29,957 | 535,617 | ||||||||||||||||
| CFO of the Company | 2008 | 210,000 | 68,000 | 0 | 63,823 | 126,880 | 468,703 | ||||||||||||||||
| Robert B. Bantle | 2010 | 183,177 | 49,450 | 0 | 99,522 | 148,416 | 480,565 | ||||||||||||||||
| Executive Vice | 2009 | 169,700 | 48,200 | 144,430 | 77,296 | 24,113 | 463,739 | ||||||||||||||||
| President | 2008 | 164,000 | 44,300 | 0 | 71,199 | 16,220 | 295,719 | ||||||||||||||||
| Gerald J. Klein, Jr | 2010 | 235,481 | 57,600 | 0 | 135,294 | 30,473 | 458,848 | ||||||||||||||||
| President & CEO of | 2009 | 213,058 | 59,050 | 144,430 | 100,461 | 26,510 | 543,509 | ||||||||||||||||
| Mahopac National Bank | 2008 | 201,000 | 65,300 | 0 | 89,758 | 114,097 | 470,155 | ||||||||||||||||
| (1) | These amounts represent cash awards for performance bonuses, including amounts of such bonuses deferred under |
| (2) | Reflects the fair value of the awards at the grant date, in accordance with FASB ASC Topic 718 for financial statement reporting purposes, excluding the effect of estimated forfeitures. For additional information as to the assumptions made in valuation, see Note 12 to the consolidated financial statements filed with the SEC in the Company’s 2013 Annual Report on Form 10-K. Amounts shown in the table are based on the Company’s accounting expense for these awards, and do not necessarily correspond to the actual value that may be recognized by the Named Executive Officers. |
| (3) | Includes a stock award made in October, 2013, which was based on the successful integration of the VIST Financial business into our Company. This stock award was not subject to vesting or forfeiture. The respective values of these awards are as follows: Mr. Romaine - $64,235; Mr. Fulmer - $25,695; Mr. Fetsko - $25,695; and Mr. Boyce - $25,695. |
| (4) | The Black Scholes value for the 2013 stock-settled SARs was $9.5039 per share. We report these equity awards using the aggregate grant date fair value in accordance with FASB ASC Topic 718. |
| (5) | These values are based on the Tompkins Financial Corporation Retirement Plan and the Supplemental Executive Retirement Plan, and are composed entirely of the changes in pension value. The following assumptions were used by the retirement plan actuaries to calculate the Change in Pension Value from year-end 2012 to year-end 2013. |
| Discount Rate: Pension plan(s) 4.10% at 12/31/2012, 5.00% at 12/31/2013; SERP(s) 4.20% at 12/31/2012, 5.00% at 12/31/2013. Retirement Plan Mortality: IRC Section 430 Funding Mortality | |
| For 2013, the aggregate change in actuarial present value of accumulated benefits for each Named Executive Officer was a negative number due to the significant increase in the discount rate from 12/31/2012 to 12/31/2013. However, applicable SEC rules require that we report a “$0” in this column instead of the negative number. The actual decrease in actuarial present values for 2013 are as follows: Mr. Romaine – ($58,604); Mr. Fulmer – ($32,540); Mr. Fetsko – ($58,366); Mr. Boyce – ($64,191). | |
| (6) | Includes perquisites and other personal benefits or property. Includes employer matching contributions pursuant to Company’s Investment & Stock Ownership 401(k) Plan, and amounts paid pursuant to the profit sharing portion of the Investment & Stock Ownership Plan and the Employee Stock Ownership Plan, and the taxable amounts of the applicable life insurance premiums paid on the Named Executive Officers’ behalf by the Company. |
| For Mr. Romaine the amounts were as follows: The Company’s profit sharing contributions to the Investment & Stock Ownership Plan—$23,745; Company match on salary deferral to the 401(k) plan—$10,200; taxable amounts applicable to life insurance—$3,176; personal use of Company-owned vehicle—$217. | |
| For Mr. Fulmer the amounts were as follows: The Company’s profit sharing contributions to the Investment & Stock Ownership Plan—$15,276; Company match on salary deferral to the 401(k) plan—$10,200; taxable amounts applicable to life insurance—$5,276; personal use of Company-owned vehicle—$3,379. | |
| For Mr. Fetsko the amounts were as follows: The Company’s profit sharing contributions to the Investment & Stock Ownership Plan—$14,094; Company match on salary deferral to the 401(k) plan—$10,200; taxable amounts applicable to life insurance—$2,537; personal use of Company-owned vehicle—$1,805. | |
| For Mr. Boyce the amounts were as follows: The Company’s profit sharing contributions to the Investment & Stock Ownership Plan—$10,978; Company match on salary deferral to the 401(k) plan—$10,200 taxable amounts applicable to life insurance—$1,404; personal use of Company-owned vehicle—$1,768. | |
| For Mr. Davis the amounts were as follows: Company match on salary deferral to the 401(k) plan—$10,200; taxable amounts applicable to life insurance—$2,574; personal use of Company-owned vehicle—$25,922. | |
| (7) | Reflects salary paid by the Company to Mr. Davis from August 1, 2012, the date of the VIST acquisition, through December 31, 2012. |
| Robert D. Davis has an Employment Agreement with Tompkins VIST Bank, which expired in accordance with its terms upon Mr. Davis’ retirement on December 31, 2013. Under that agreement, Mr. Davis was entitled to receive the salary and substantially the same benefits he was receiving at the time of the VIST acquisition, from the date of the acquisition through December 31, 2013, unless the Employment Period (as defined in the agreement) was earlier terminated for certain reasons described in the agreement. If Tompkins had terminated Mr. Davis without Mr. Davis’ consent prior to December 31, 2013, Tompkins would have been required to continue such salary and benefits through December 31, 2013. Mr. Davis’ employment agreement contains customary confidentiality, non-solicitation and non-competition covenants through December 31, 2015. |
Long-Term Equity-Based Awards and Stock Ownership Plan - $31,205; Company match on salary deferral to the 401k - $9,800; taxable amounts applicable to life insurance - $1,855; personal use of Company-owned vehicle - $216.
The Company maintains the 2009 Equity Plan as a vehicle to encourage the continued employment of key employees of the Company and its subsidiaries, and to align their interests with those of the Company’s stockholdersshareholders by facilitating theirthe employees’ ownership of a stock interest in Tompkins Financial Corporation. The Committee believes that an equity plan is in the best interests of the Company and its stockholdersshareholders since it enhances the Company’s ability to continue to attract and retain qualified Directors, officers and other key employees.
Option/Equity Grants in Fiscal 2010
Grants of Plan-Based Awards
| Name | Grant date | All other stock awards; Number of shares of stock or units | All other option awards; Number of securities underlying options | Exercise or base price of the option awards ($/Sh) | Grant date fair value of stock and option awards | |||||||||||||
| (#) | (#) | ($) | ||||||||||||||||
| Stephen S. Romaine | May 3, 2013 | 6,270 | 40.60 | 59,589 | ||||||||||||||
| May 3, 2013 | 5,870 | 301,659 | ||||||||||||||||
| Oct. 23, 2013 | 1,250 | 64,235 | ||||||||||||||||
| James W. Fulmer | May 3, 2013 | 3,055 | 40.60 | 29,034 | ||||||||||||||
| May 3, 2013 | 2,860 | 146,975 | ||||||||||||||||
| Oct. 23, 2013 | 500 | 25,695 | ||||||||||||||||
| Francis M. Fetsko | May 3, 2013 | 3,055 | 40.60 | 29,034 | ||||||||||||||
| May 3, 2013 | 2,860 | 146,975 | ||||||||||||||||
| Oct. 23, 2013 | 500 | 25,695 | ||||||||||||||||
| David S. Boyce | May 3, 2013 | 3,055 | 40.60 | 29,034 | ||||||||||||||
| May 3, 2013 | 2,860 | 146,975 | ||||||||||||||||
| Oct. 23, 2013 | 500 | 25,695 | ||||||||||||||||
| Robert D. Davis | — | — | — | — | — | |||||||||||||
The 2009 Equity Plan allows awards at the discretion of the Committee and does not have threshold, target, or maximum amounts payable for performance; therefore, it is not an equity incentive plan as defined under ASC718FASB ASC Topic 718 (formerly FAS 123).
The vesting schedule for each of the Named Executive Officers.
| Name | Number of Securities Underlying Unexercised Options- Exer-cisable (1) | Number of Securities Underlying Unexercised Options-Unexercisable (2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexcercised Unearned Options | Option Exercise Price | Option Expiration Date | ||||||||
| Stephen S. Romaine | 0 | 22,000 | $ | 41.71 | 09/17/19 | ||||||||
| 0 | 57 | $ | 37.28 | 11/29/17 | |||||||||
| 5610 | 10,834 | $ | 37.28 | 11/29/17 | |||||||||
| 7,368 | 4,328 | $ | 39.56 | 01/18/17 | |||||||||
| 1,048 | 3,757 | $ | 39.56 | 01/18/17 | |||||||||
| 4,114 | 0 | $ | 38.54 | 01/23/16 | |||||||||
| 4,114 | 3,872 | $ | 38.54 | 01/23/16 | |||||||||
| 7,718 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 6,658 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 8,785 | 0 | $ | 29.30 | 09/30/12 | |||||||||
| 2,563 | 0 | $ | 25.79 | 07/24/11 | |||||||||
| Total | 47,978 | 44,848 | |||||||||||
| James W. Fulmer | 0 | 11,000 | $ | 41.71 | 09/17/19 | ||||||||
| 3,185 | 3,693 | $ | 37.28 | 11/29/17 | |||||||||
| 556 | 3,567 | $ | 37.28 | 11/29/17 | |||||||||
| 4,114 | 0 | $ | 38.54 | 01/23/16 | |||||||||
| 4,114 | 3,872 | $ | 38.54 | 01/23/16 | |||||||||
| 2,130 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 11,181 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| Total | 25,280 | 22,132 | |||||||||||
| Francis M. Fetsko | 0 | 11,000 | $ | 41.71 | 09/17/19 | ||||||||
| 3,185 | 3,693 | $ | 37.28 | 11/29/17 | |||||||||
| 556 | 3,567 | $ | 37.28 | 11/29/17 | |||||||||
| 4,114 | 0 | $ | 38.54 | 01/23/16 | |||||||||
| 4,114 | 3,872 | $ | 38.54 | 01/23/16 | |||||||||
| 5,322 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 6,658 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 8,785 | 0 | $ | 29.30 | 09/30/12 | |||||||||
| Total | 32,734 | 22,132 | |||||||||||
| Robert B. Bantle | 0 | 11,000 | $ | 41.71 | 09/17/19 | ||||||||
| 3,185 | 3,693 | $ | 37.28 | 11/29/17 | |||||||||
| 556 | 3,567 | $ | 37.28 | 11/29/17 | |||||||||
| 4,114 | 0 | $ | 38.54 | 01/23/16 | |||||||||
| 4,114 | 3,872 | $ | 38.54 | 01/23/16 | |||||||||
| 5,394 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 6,586 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 106 | 0 | $ | 29.30 | 09/30/12 | |||||||||
| Total | 24,055 | 22,132 | |||||||||||
| Gerald J. Klein, Jr | 0 | 11,000 | $ | 41.71 | 09/17/19 | ||||||||
| 3,740 | 5,823 | $ | 37.28 | 11/29/17 | |||||||||
| 0 | 1,438 | $ | 37.28 | 11/29/17 | |||||||||
| 231 | 77 | $ | 39.56 | 01/18/17 | |||||||||
| 3,977 | 3,965 | $ | 39.56 | 01/18/17 | |||||||||
| 4,937 | 2,323 | $ | 38.54 | 01/23/16 | |||||||||
| 1,927 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 5,262 | 0 | $ | 35.77 | 05/03/14 | |||||||||
| 7,321 | 0 | $ | 29.30 | 09/30/12 | |||||||||
| 1,000 | 0 | $ | 25.79 | 07/24/11 | |||||||||
| Total | 28,395 | 24,626 |
Outstanding Equity Awards of Named Executive Officers
The following table shows the aggregate number of unexercised options, stock appreciation rights, and unvested restricted stock awards outstanding as of December 31, 2013 for each of the Named Executive Officers.
2013 Outstanding Equity Awards at Fiscal Year-End
| Option Awards | Stock Awards | |||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | |||||||||||||||||||
| Stephen S. Romaine | 0 | 6,270 | — | $ | 40.60 | 05/03/2023 | 5,870 | $ | 301,659 | |||||||||||||||||
| 1,785 | 8,715 | — | $ | 37.00 | 08/19/2021 | 2,739 | 140,757 | |||||||||||||||||||
| 11,220 | 10,780 | — | $ | 41.71 | 09/17/2019 | |||||||||||||||||||||
| 0 | 57 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 14,025 | 2,419 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 11,696 | 0 | — | $ | 39.56 | 01/18/2017 | |||||||||||||||||||||
| 2,330 | 2,475 | — | $ | 39.56 | 01/18/2017 | |||||||||||||||||||||
| 4,114 | 0 | — | $ | 38.54 | 01/23/2016 | |||||||||||||||||||||
| 7,986 | 0 | — | $ | 38.54 | 01/23/2016 | |||||||||||||||||||||
| 7,718 | 0 | — | $ | 35.77 | 05/03/2014 | |||||||||||||||||||||
| 6,658 | 0 | — | $ | 35.77 | 05/03/2014 | |||||||||||||||||||||
| Total | 67,532 | 30,716 | 8,609 | 442,416 | ||||||||||||||||||||||
| James W. Fulmer | 0 | 3,055 | $ | 40.60 | 05/03/2023 | 2,860 | 146,975 | |||||||||||||||||||
| 892 | 4,358 | — | $ | 37.00 | 08/19/2021 | 1,370 | 74,404 | |||||||||||||||||||
| 5,610 | 5,390 | — | $ | 41.71 | 09/17/2019 | |||||||||||||||||||||
| 6,878 | 0 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 2,473 | 1,650 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 4,114 | 0 | — | $ | 38.54 | 01/23/2016 | |||||||||||||||||||||
| 7,986 | 0 | — | $ | 38.54 | 01/23/2016 | |||||||||||||||||||||
| 2,130 | 0 | — | $ | 35.77 | 05/03/2014 | |||||||||||||||||||||
| 11,181 | 0 | — | $ | 35.77 | 05/03/2014 | |||||||||||||||||||||
| Total | 41,264 | 14,453 | 4,250 | 217,379 | ||||||||||||||||||||||
| Francis M. Fetsko | 0 | 3,055 | $ | 40.60 | 05/03/2023 | 2,860 | 146,975 | |||||||||||||||||||
| 892 | 4,358 | — | $ | 37.00 | 08/19/2021 | 1,370 | 74,404 | |||||||||||||||||||
| 5,610 | 5,390 | — | $ | 41.71 | 09/17/2019 | |||||||||||||||||||||
| 1,064 | 0 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 2,473 | 1,650 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| Total | 10,039 | 14,453 | 4,230 | 217,379 | ||||||||||||||||||||||
| David S. Boyce | 0 | 3,055 | — | $ | 40.60 | 05/03/2023 | 2,860 | 146,975 | ||||||||||||||||||
| 892 | 4,358 | — | $ | 37.00 | 08/19/2021 | 1,370 | 74,404 | |||||||||||||||||||
| 5,610 | 5,390 | — | $ | 41.71 | 09/17/2019 | |||||||||||||||||||||
| 5,227 | 0 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 4,124 | 1,650 | — | $ | 37.28 | 11/29/2017 | |||||||||||||||||||||
| 3,042 | 0 | $ | 38.54 | 01/23/2016 | ||||||||||||||||||||||
| 6,639 | 0 | — | $ | 38.54 | 01/23/2016 | |||||||||||||||||||||
| Total | 25,534 | 14,453 | 4,230 | 217,379 | ||||||||||||||||||||||
| Robert D. Davis | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
| (1) | Options/SARs reported in this column are vested and currently exercisable. |
| (2) | Options/SARs granted with an expiration date of May 3, 2014 have a five-year vesting schedule with zero percent vesting in year one and 25% vesting at the end of each of years two, three, four, and five. Options/SARs granted with expiration dates of Jan. 23, 2016, Jan. 18, 2017, Nov. 29, 2017, Sept. 17, 2019, August 19, 2021 and May 3, 2023 all have a seven-year vesting schedule with zero percent vesting in year one, 17% vesting in years two through six and 15% vesting in year seven. |
| (3) | Restricted stock awards granted on August 19, 2011 and May 3, 2013 carry a seven year vesting schedule with zero percent vesting in year one, 17% vesting in years two through six and 15% vesting in year seven. |
| (4) | Market value for shares of restricted stock that have not vested is calculated using the closing sales price of our common stock on the NYSE MKT LLC on December 31, 2013 of $51.39. |
Options Exercised and Value for Fiscal 2010
The following table sets forth information concerning the exercise of options by each Named Executive Officer during fiscal 20102013 and the potential value realized.
2013 Option Exercises
| Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | ||||
| (#) | ($) | |||||
| Stephen S. Romaine | 0 | 0 | ||||
| James W. Fulmer | 11,798 | 238,615 | ||||
| Francis M. Fetsko | 5,125 | 82,574 | ||||
| Robert B. Bantle | 16,000 | 181,932 | ||||
| Gerald J. Klein, Jr | 4,125 | 50,861 | ||||
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||||||||
| (#) | ($) | (#) | ($) | |||||||||||||
| Stephen S. Romaine | — | — | 1,811 | 88,048 | ||||||||||||
| James W. Fulmer | — | — | 780 | 37,708 | ||||||||||||
| Francis M. Fetsko | 29,894 | 225,848 | 780 | 37,708 | ||||||||||||
| David S. Boyce | 8,982 | 107,840 | 780 | 37,708 | ||||||||||||
| Robert D. Davis | — | — | — | — | ||||||||||||
| (1) | Equal to the difference between the market price of our common stock on the NYSE MKT LLC at exercise and the exercise price for such options. |
Deferred Profit-Sharing Plan
The Company hasmaintains an Investment and& Stock Ownership Plan (the “ISOP”) that covers substantially all of the employees of the Company and its subsidiaries. The ISOP is a profit-sharing plan with a salary deferral arrangement meeting the requirements of Section 401(k) of the Internal Revenue Code of 1986, as amended. Pursuant to the ISOP, an employee may defer a portion of the employee’s base pay, within limits specified in the ISOP. The ISOP further provides that the Company will match 100% of an employee’s contribution up to 3% of the employee’s base pay, and will match 50% of an employee’s additional contribution to the ISOP that is greater than 3%, but not more than 5%, of the employee’s base pay. In addition, the ISOP has an employer-funded profit sharing component. Profit sharing contributions are discretionary contributions determined by the Company’s Board of Directors and are limited to a maximum amount as stipulated in the ISOP. The ISOP allows employees to elect to defer a portion of their profit sharing component (which deferral is not eligible for matching by the Company), or to receive cash. Amounts contributed by the Company for the accounts of the Named Executive Officers are included as “All Other Compensation” in the Summary Compensation Table, above, and described in Note 45 to that table.
The Company also hasmaintains the Tompkins Financial Corporation Employee Stock Ownership Plan (the “ESOP”), which covers substantially all employees of the Company. The purpose of the ESOP is to permit the Company to make discretionary profit sharing contributions to employees in the form of shares of Common Stockcommon stock of the Company in order to facilitate stock ownership by employees. Contributions are determined by the Company’s Board of Directors and are limited to a maximum amount as stipulated in the ESOP. Amounts accrued for the accounts of the Named Executive Officers are included as “All Other Compensation” in the Summary Compensation Table, above, and described in Note 45 to that table.
Retirement Plans
The Company has a defined benefit pension plan, called the Tompkins Financial Corporation Retirement Plan (the “Retirement Plan”), which covers substantially all employees of the Company and its subsidiaries employed prior to January 1, 2010. The
The following table provides information with respect to each pension plan that provides for payments or other benefits at, following, or in connection with retirement. This includes a tax-qualified defined benefit plan and a supplemental executive retirement plan, but it does not include defined contribution plans (whether tax-qualified or not).
Pension Benefit
| Name | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefit | Payments During the Last Fiscal Year | |||||||||
| Stephen S. Romaine | Tompkins Financial Corporation Retirement Plan | 10.00 | $ | 140,192 | $ | — | |||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 16.83 | $ | 697,818 | $ | — | ||||||||
| Total | $ | 838,010 | $ | — | |||||||||
| James W. Fulmer | Tompkins Financial Corporation Retirement Plan | 22.00 | $ | 311,075 | $ | — | |||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 33.58 | $ | 1,124,364 | $ | — | ||||||||
| Total | $ | 1,435,439 | $ | — | |||||||||
| Francis M. Fetsko | Tompkins Financial Corporation Retirement Plan | 14.17 | $ | 295,082 | $ | — | |||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 14.25 | $ | 189,504 | $ | — | ||||||||
| Total | $ | 484,586 | $ | — | |||||||||
| Robert B. Bantle | Tompkins Financial Corporation Retirement Plan | 9.75 | $ | 139,185 | $ | — | |||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 9.83 | $ | 333,967 | $ | — | ||||||||
| Total | $ | 473,152 | $ | — | |||||||||
| Gerald J. Klein, Jr. | Tompkins Financial Corporation Retirement Plan | 10.00 | $ | 148,397 | $ | — | |||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 15.75 | $ | 461,036 | $ | — | ||||||||
| Total | $ | 609,433 | $ | — | |||||||||
| Name | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefit | Payments During the Last Fiscal Year | ||||||||||||
| Stephen S. Romaine | Tompkins Financial Corporation Retirement Plan | 13.00 | $ | 251,941 | $ | — | ||||||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 19.83 | $ | 1,629,591 | $ | — | |||||||||||
| Total | $ | 1,881,532 | $ | — | ||||||||||||
| James W. Fulmer | Tompkins Financial Corporation Retirement Plan | 25.00 | $ | 488,311 | $ | — | ||||||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 36.58 | $ | 1,666,197 | $ | — | |||||||||||
| Total | $ | 2,154,508 | $ | — | ||||||||||||
| Francis M. Fetsko | Tompkins Financial Corporation Retirement Plan | 17.17 | $ | 532,399 | $ | — | ||||||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 17.25 | $ | 390,842 | $ | — | |||||||||||
| Total | $ | 923,241 | $ | — | ||||||||||||
| David S. Boyce | Tompkins Financial Corporation Retirement Plan | 13.00 | $ | 200,752 | $ | — | ||||||||||
| Tompkins Financial Corporation Supplemental Executive Retirement Plan | 25.00 | $ | 526,463 | $ | — | |||||||||||
| Total | $ | 727,215 | $ | — | ||||||||||||
| Robert D. Davis | [Not a plan participant.] | — | $ | — | $ | — | ||||||||||
The present value of accumulated benefits shown in the Pension Benefits table above is based on benefits accrued as of December 31, 2013. The amounts reflect the method and assumptions used in calculating our pension liability under U.S. GAAP as of that date, except that (1) each participant is assumed to commence benefits on his or her normal retirement date, and (2) there is no assumed mortality prior to the benefit commencement date. For additional information regarding assumptions used in calculating the value of participant benefits under the Retirement Plan and the SERP Agreements, see Note 13 to the consolidated financial statements included in the Company’s 2013 Annual Report on Form 10-K.
The Retirement Plan provides a monthly benefit payable at retirement. This benefit is determined by the accumulation of credits which are earned as the participant works for the Company. The credits earned for each plan year are based on the sum of the participant’s age and years of service at the beginning of that plan year. When a participant terminates employment or retires, the credits earned for all plan years are summed and multiplied by the “Average Final Earnings” under the Plan, and the result is then converted into a monthly annuity. This type of plan is often referred to as a “pension equity plan.”
“Average Final Earnings” is the average of the participant’s compensation over the five consecutive Plan Years out of the last ten which produce the highest average. “Compensation” generally consists of total W-2 earnings, less incentive bonuses, fringe benefits and compensation from stock option exercises. A participant is eligible for an unreduced benefit upon the attainment of his or her “Normal Retirement Date”, which is generally the first day of the month following his or her 65th birthday.
A participant’s retirement benefit is fully vested upon the completion of three years of service. The Normal Retirement Age under the Plan is age 65. The accrued benefit is payable at this age; however,Participants are eligible for a reduced benefit mayupon becoming eligible for early retirement. To be payable aseligible for early asretirement, a participant generally must have obtained age 55.
Benefits under the Retirement Plan are not subject to any reduction for Social Security benefits or other offset amounts. Benefits may be paid in certain alternative forms having actuarial equivalent values.
In addition to more effectively control the volatility of plan expense, the Company closed the Tompkins Financial Retirement Plan, to new employees and adoptedeach of the Tompkins Financial Corporation Defined ContributionNamed Executive Officers, other than Mr. Davis, participates in a SERP agreement with the Company. The SERP provides each executive with supplemental retirement income upon the attainment of age 65 with at least 10 years of service. Executives are eligible for a reduced early retirement benefit upon the attainment of age 55 with at least 10 years of service. The SERP benefit formula is 75% of the executive’s “Average Compensation”, minus the participant’s Retirement Plan. The Plan provides a benefit, contribution to participating employees based on age and lengthminus his or her Social Security benefit. “Average Compensation” is the average of service.
Potential Payments upon Termination or Change in Control
Each of the Named Executive Officer,Officers, other than Mr. Davis, has entered into a Supplemental Executive Retirement AgreementsAgreement with the Company, which, among other things, replaced the SERP agreements and employment agreements that were previously in place with Mr. Fulmer, Mr. Klein and Mr. Romaine.Company. The December 2005 SERP agreements provide the covered executive officers with the following retirement, death, disability and change of control benefits:
• | Retirement |
| any single life annuity provided under the Company’s Retirement Plan and (b) any social security benefits. This benefit is also reduced by 5% for each year the |
Death |
Disability |
Change of Control Benefits.In the event of a change in control, the covered executive officer will be deemed to have completed |
Upon termination or a change in control of the Company, our Named Executive Officers are also entitled to certain rights with respect to their equity awards. As described below, these rights may include acceleration of vesting, or additional time periods in which to exercise a vested award.
2001 Stock Option Plan. Under the 2001 Stock Option Plan, all outstanding options become fully vested and immediately exercisable upon a change in control of the Company. In the event of an optionee’s termination of employment without “cause,” other than by reason of death, disability, or retirement, this plan provides that the optionee will have the right to exercise the vested portion of his unexercised options for up to 30 days following his termination date, as long as the option period does not otherwise expire during such 30-day period. In the event that the optionee retires from the Company or any of its subsidiaries on a scheduled retirement date, the optionee will have the right to exercise the vested portion of his unexercised options for up to 90 days following his retirement date, as long as the option period does not otherwise expire during such 90-day period. Upon the death of an optionee, any vested but unexercised options may be exercised within one year after the date of the optionee’s death, but only (i) by the optionee’s estate or other legal representative, and (ii) prior to the expiration of the term of the option. If an optionee’s employment is terminated because he has become permanently and totally disabled (as defined in Section 22(e)(3) of the Internal Revenue Code), the optionee will have the right to exercise the vested portion of his unexercised options for up to one year following his termination date, as long as the option period does not otherwise expire during such one-year period. Finally, if an optionee is terminated for “cause,” all of his outstanding options—whether or not exercisable—are terminated. Under the 2001 Stock Option Plan, “cause” is defined as the optionee’s dishonesty, malfeasance, misfeasance or the commission of a criminal offense.
2009 Equity Incentive Plan. Under the 2009 Equity Plan, if the Company is not the surviving corporation following a change in control, and the acquirer does not assume the outstanding equity awards, or does not substitute equivalent equity awards, then all of the equity awards held by our Named Executive Officers will become immediately and fully exercisable and/or vested. In addition, the Board of Directors may, in its sole discretion, provide for a cash payment to be made to all awardees under the 2009 Equity Plan for their outstanding awards, determined on the basis of the fair market value that would be received in the change in control by the holders of our common stock. However, any stock option intended to be an Incentive Stock Option under Section 422 of the Internal Revenue Code will be adjusted in a manner to preserve such status. If an awardee’s employment is terminated without “cause” within 24 months following a change in control, and Tompkins is the surviving corporation following such change in control, or if the acquirer assumes the outstanding equity awards, or substitutes equivalent equity awards, then all of the equity awards held by our Named Executive Officers will become immediately and fully exercisable and/or vest upon such termination. In this case, the Named Executive Officer would have the right to exercise the vested portion of his unexercised awards for up to one year following his termination date, as long as the award period does not otherwise expire during such one-year period. If an awardee’s employment is terminated for “cause” within 24 months following a change in control, and Tompkins is the surviving corporation following such change in control, or if the acquirer assumes the outstanding equity awards, or substitutes equivalent equity awards, then any equity awards held by the Named Executive Officers will expire or be forfeited, and any rights under such awards will terminate immediately.
For purposes of the 2009 Equity Plan, the term “cause” is defined to mean (a) gross negligence or gross neglect of duties; or (b) commission of a felony or of a gross misdemeanor involving moral turpitude in connection with the employee’s employment with the Company; or (c) fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the employee’s employment; or (d) issuance of an order for removal of the employee by any agency which regulates the activities of the Company. Any determination of “Cause” under the plan is made by the Company’s Compensation Committee in its sole discretion.
Under the 2009 Equity Plan, unvested or unexercisable awards are forfeited or terminated upon an awardee’s termination of employment. If the Named Executive Officer’s employment is terminated for any reason other than death, disability, retirement or “cause,” he would have the right to exercise the vested portion of his unexercised awards for up to three months following his termination date, as long as the award period does not otherwise expire during such three-month period. Upon a termination for “cause,” any equity awards (whether or not exercisable) will terminate immediately, and any unvested restricted stock awards will be forfeited. If a Named Executive Officer dies, any equity awards which are exercisable will continue to be exercisable at any time before the earlier of (i) one year following his death or (ii) the expiration date of the award. Similarly, if a Named Executive Officer’s termination is due to disability or retirement, his equity awards which are exercisable will continue to be exercisable at any time before the earlier of (i) one year following his termination of employment or (ii) the expiration date of the award. However, a stock option which is intended to qualify as an Incentive Stock Option will only be treated as such to the extent it complies with the requirements of Section 422 of the Internal Revenue Code.
In addition, the SERP agreements with Messrs. Fulmer Klein and Romaine provide that in the event that the covered executive officer’s employment is terminated without cause (other than upon a change of control, death or disability), then the executive officerhe is entitled to (a) payment of his or her base salary in effect immediately prior to the executive officer’shis termination of employment and (b) participate (but not required to)participation, at his option, in the Company’s welfare benefits. These severance benefits are payable for a period of 24 months to Mr. Fulmer and 12 months to Mr. Romaine. At the discretion of the Compensation Committee Messrs. KleinFetsko and Romaine.
Further, under the SERP agreements, in the event Messrs. Fulmer’s, Romaine’s, Klein’s, Bantle’s or Fetsko’sthat a Named Executive Officer’s employment is involuntarily terminated (other than for cause) at any time, or the executive voluntarily resigns after reaching age 55 and after completing 10 years of service, but prior to his designated retirement age in his SERP agreement, he will be entitled to payment of his retirement benefits on his designated retirement date, or, in the event of his death, his spouse will be entitled to payment of the death benefits described above.
No benefits are payable under the SERP agreements if the covered executive officer’s employment is terminated for cause, or if he or she engages in competitioncompetes with the Company. If the executive officer voluntarily terminates his or her employment before age 55 and before completion of 10 years of service, other than because of death, disability or change of control, he or she will not be entitled to payment of any retirement benefits. The SERP agreements are not employment agreements and do not confer upon the covered executive officers any right to continued employment with the Company or any of its subsidiaries.
Potential Payments upon Change in Control as of December 31, 20102013
| Name | SERP Accumulated Annual Benefit prior to Change of Control | SERP Accumulated Annual Benefit after Change of Control | Increase in Benefit | Other Benefits Due to Change of Control(1) | ||||||||||
| Stephen S. Romaine | $ | 263,538 | $ | 265,752 | $ | 2,214 | $1,524,669 payable in year one; $720,625 payable for years 2 and 3. | |||||||
| James W. Fulmer | 144,653 | 144,653 | — | $643,244 payable in year one; $254,733 payable for years 2 and 3. | ||||||||||
| Francis M. Fetsko | 62,441 | 72,395 | 9,954 | $793,769 payable in year one; $405,258 payable for years 2 and 3. | ||||||||||
| David S. Boyce | 95,794 | 95,794 | — | $759,497 payable in year one; $370,986 payable for years 2 and 3. | ||||||||||
| Robert D. Davis | 0 | 0 | — | — | ||||||||||
| Name | SERP Accumulated Annual Benefit prior to Change of Control | SERP Accumulated Annual Benefit after Change of Control | Increase in Benefit | Other Benefits Due to Change of Control | ||||||
| $ | $ | $ | ||||||||
| Stephen S. Romaine | 163,726 | 194,526 | 30,800 | $635,499, payable for a period of 3 years (1) | ||||||
| James W. Fulmer | 130,115 | 130,115 | — | $393,138, payable for a period of 3 years (1) | ||||||
| Francis M. Fetsko | 43,851 | 61,545 | 17,694 | $336,723, payable for a period of 3 years (1) | ||||||
| Robert B. Bantle | 38,470 | 78,243 | 39,773 | $246,170 payable for a period of 3 years (1) | ||||||
| Gerald J. Klein, Jr. | 77,207 | 98,040 | 20,833 | $311,373, payable for a period of 3 years (1) | ||||||
| (1) | If terminated, or duties or compensation of Named Executive Officer are significantly reduced due to change in control, Named Executive Officer receives for a period of three years continuation of compensation (base pay plus average of bonus and profit sharing compensation for last two years) as well as all current employee welfare benefits. Compensation is reduced by a factor of 20% to 100% dependent upon the executive officer’s age at the time of termination. Year one includes value of accelerated vesting of equity incentive awards, calculated using the closing sale price of our common stock on the NYSE MKT LLC on December 31, 2013. |
The table above shows the potential incremental value transfer to each Named Executive Officer under a change-in-control scenario as of December 31, 2013, the last business day of fiscal 2013. Unvested, unexercised stock options and unvested restricted stock awards are significantly reduced duevalued at the closing market price of our common stock on that date. The actual amounts to Changebe paid out can only be determined at the time of Control,such Named Executive Officer receives for a periodOfficer’s separation from the Company.
Compensation Upon Other Termination Events as of three years continuation of compensation (base pay plus average of bonus and profit sharing compensation for last two years) and all employee welfare benefits.
| Stephen S. Romaine | James W. Fulmer | Francis M. Fetsko | David S. Boyce | Robert D Davis | ||||||||||||||||
| Retirement(1) | — | 168,663 | — | — | — | |||||||||||||||
| Voluntary Resignation(2) | — | 168,663 | — | — | — | |||||||||||||||
| Termination Without Cause(3) | 520,935 | 489,754 | — | — | — | |||||||||||||||
| Termination for Cause(4) | — | 36,477 | — | — | — | |||||||||||||||
| Death(5) | 1,892,196 | 1,360,332 | 1,021,000 | 1,112,800 | 175,000 | |||||||||||||||
| Disability(6) | 180,000 | 180,000 | 178,615 | 165,784 | 180,000 | |||||||||||||||
| (1) | This section shows amounts payable immediately upon retirement as of 12/31/2013 under the Retirement Plan and Supplemental Executive Retirement Plan. Although Romaine, Fetsko, and Boyce have zeroes in this section, they would be entitled to a future benefit under the Retirement Plan and Supplemental Executive Retirement Plan payable as early as age 55. The actuarial present value of the benefits payable under the Retirement Plan and Supplemental Executive Retirement Plan are disclosed in the Pension Benefits Table. |
| (2) | This section shows amounts payable immediately upon voluntary resignation as of 12/31/2013 under the Retirement Plan and Supplemental Executive Retirement Plan. Although Romaine, Fetsko, and Boyce have zeroes in this section, they would be entitled to a future benefit under the Retirement Plan and Supplemental Executive Retirement Plan payable as early as age 55. The actuarial present value of the benefits payable under the Retirement Plan and Supplemental Executive Retirement Plan are disclosed in the Pension Benefits Table, and any benefits payable to the executive for voluntary resignation with good cause following a Change of Control are disclosed on the Potential Payments upon Change in Control table above. |
| (3) | This section shows amounts payable immediately upon termination without cause (absent a change in control) as of 12/31/2013 under the Retirement Plan and Supplemental Executive Retirement Plan. For Romaine, the amount shown represents 12 months base salary plus the value of 12 months of welfare benefits. For Fulmer, the amount shown represents 12 months base salary plus the value of 12 months of welfare benefits as well as 12 months of benefit payments from the Retirement Plan and Supplemental Executive Retirement Plan. Although Fetsko and Boyce have zeroes in this section, they would be entitled to a future benefit under the Retirement Plan and Supplemental Executive Retirement Plan payable as early as age 55. The actuarial present value of the benefits payable under the Retirement Plan and Supplemental Executive Retirement Plan are disclosed in the Pension Benefits Table, and any benefits payable to the executive for voluntary resignation with good cause following a Change of Control are disclosed on the Potential Payments upon Change in Control table above. |
| (4) | This section shows amounts payable immediately upon Termination for Cause as of 12/31/2013 under the Retirement Plan. No Supplemental Executive Retirement Plan benefits are payable to the NEOs if they are terminated for cause. Although Romaine, Fetsko, and Boyce have zeroes in this section, they would be entitled to a future benefit under the Retirement Plan payable as early as age 55. The actuarial present value of the benefits payable under the Retirement Plan and Supplemental Executive Retirement Plan are disclosed in the Pension Benefits Table. |
| (5) | This section shows amounts payable immediately upon Death as of 12/31/2013 under the Retirement Plan, Supplemental Executive Retirement Plan, Bank Owned Life Insurance and/or Group Term Life Insurance. In addition to the amount shown for Fetsko, his surviving spouse would receive a future death benefit from the Retirement Plan and Supplemental Executive Retirement Plan at the time Fetsko would have reached age 55. |
| (6) | This section shows amounts payable immediately upon disability as of 12/31/2013 under the Long-Term Disability Plan. |
Deferred Compensation Plan for Selected Officers
The Company maintains a nonqualified deferred compensation plan for a select group of officers, including the Named Executive Officers. This plan allows participating employees to defer receipt of all or a portion of bonuses, excess awards under the Company’s 401(k) plan, and profit sharing payments otherwise payable to them until a future date. Amounts deferred under the deferred compensation plan on the part of the Named Executive Officers are included as “Bonus” or included in “Other“All Other Compensation”, as applicable, in the Summary Compensation Table.
The bonuses listed in the Summary Compensation Table are reported for the year thatin which they were “earned.”earned. The payment for said bonuses is made in the following year. If the Named Executive Officer electedelects to defer a bonus or profit sharing payment, the paymentamount credited to his or her account under the deferred compensation plan is the net amount after Social Security and Medicare are withheld.
| Name and Principal Position | Executive Contributions in Last FY | Registrant Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate withdrawals / Distributions | Aggregate Balance at Last FYE | ||||||||
| ($) | ($) | ($) | ($) | ($) | |||||||||
| Stephen S. Romaine | n/a | n/a | |||||||||||
James W. Fulmer (1) | 11,629 | 1,843 | 42,691 | ||||||||||
Francis M. Fetsko (2) | 11,468 | 2,568 | 63,144 | ||||||||||
Robert B. Bantle (3) | 44,513 | 16,790 | 384,563 | ||||||||||
| Gerald J. Klein, Jr | n/a | n/a | |||||||||||
Amounts deferred by participating officers are credited to defer his profit sharing payment, which isa bookkeeping account maintained for each officer. Such amounts then accrue interest on a quarterly basis, at a rate equal to the amount includedhigher of either the highest yielding Treasury constant maturity bond for that calendar year, as reported in the “Executive ContributionsFederal Reserve Statistical Release, or the prime rate, as published in The Wall Street Journal on the Last Fiscal Year.” The aggregate balance includes deferrals since Mr. Fulmer’s electionfirst business day of that calendar year. During 2013, interest accrued under the deferred compensation plan at the prime rate, 3.25%.
At the time an officer elects to participate in the deferred compensation plan, since 2006.
An officer may at any time terminate his or her election to defer 15%payments under the deferred compensation plan. Any such election is effective on the last day of the calendar year in which the election was made.
All payments under the deferred compensation plan are made in cash. Upon the death of a participant in the deferred compensation plan, any remaining balance in his or her account will be paid in a lump sum to his or her estate or designated beneficiaries. A participating officer may, under certain circumstances specified in the deferred compensation plan, be entitled to a hardship distribution of all or any portion of his bonus and profit sharing payment. The aggregate balance includes deferrals since Mr. Fetsko’s election to participate in the plan in 2002.
2013 Non-Qualified Deferred Compensation
| Name and Principal Position | Executive Contributions in Last FY | Registrant Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate withdrawals / Distributions | Aggregate Balance at Last FYE | |||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Stephen S. Romaine | n/a | — | — | — | n/a | |||||||||||||||
| James W. Fulmer(1) | 10,226 | — | 2,702 | — | 86,260 | |||||||||||||||
| Francis M. Fetsko(2) | 11,310 | — | 3,402 | — | 107,975 | |||||||||||||||
| David S. Boyce(3) | 12,900 | — | 4,064 | — | 128,852 | |||||||||||||||
| Robert D. Davis | n/a | — | — | — | n/a | |||||||||||||||
| (1) | Mr. Fulmer has elected to defer his profit sharing payment, which is the amount included in the “Executive Contributions in the Last Fiscal Year.” The aggregate balance includes deferrals since Mr. Fulmer’s election to participate in the plan since 2006. |
| (2) | Mr. Fetsko has elected to defer 15% of his bonus and profit sharing payment. The aggregate balance includes deferrals since Mr. Fetsko’s election to participate in the plan in 2002. |
| (3) | Mr. Boyce has elected to defer 25% of his bonus, which is the amount included in the “Executive Contributions in the Last Fiscal Year.” The aggregate balance includes deferrals since Mr. Boyce’s election to participate in the plan since 2003. |
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,
KPMG LLP,
The Audit/Examining Committee of the Board of Directors of the Company has appointed the independent registered public accounting firm, KPMG LLP (“KPMG”), as the Company’s independent auditor for the fiscal year ending December 31, 2011.2014. Although our Bylaws do not require the submission of the selection of the independent auditor to our shareholders for approval, the Board of Directors believes it is appropriate to give shareholders the opportunity to ratify the decision of the Audit/Examining Committee. Neither the Audit/Examining Committee nor the Board will be bound by the shareholders’ vote at the meeting but may take the shareholders’ vote into account in future determinations regarding the retention of the Company’s independent auditor.
Vote Required and Recommendation
The affirmative vote of a majority of the votes cast on the proposal is required for approval of this proposal. Abstentions and broker non-votes will not constitute or be counted as votes cast for purposes of this proposal, and therefore will have no impact on the outcome of this proposal.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OFFOR THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, KPMG LLP, AS THE INDEPENDENT AUDITOR OF THE COMPANY FOR FISCAL YEAR ENDING DECEMBER 31, 2011.2014. SHARES OF COMMON STOCK COVERED BY EXECUTED PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE VOTED “FOR” PROPOSAL NO. 2, UNLESS STOCKHOLDERS SPECIFYTHE SHAREHOLDER SPECIFIES A DIFFERENT CHOICE.
PROPOSAL NO. 3
ADVISORY VOTE ON THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE COMPENSATION
This proposal, commonly knowknown as a “say-on-pay”“Say-on-Pay” proposal, gives our stockholdersshareholders the opportunity to approve or not approve, on an advisory (nonbinding) basis, the compensation ofpaid to our Named Executive Officers (NEOs) as described in this proxy statementProxy Statement in accordance with the SEC’s rules. Accordingly, we will ask our stockholdersshareholders to vote “FOR” the following resolution at the Meeting:
“RESOLVED, that the stockholdersshareholders approve, on an advisory basis, the compensation ofpaid to Tompkins Financial Corporation’s Named Executive Officers (NEOs), as disclosed pursuant to the compensation disclosure rules of the Securities Exchange Commission in the Company’s Proxy Statement for the 20112014 Annual Meeting of StockholdersShareholders (which disclosure includes the Compensation Discussion and Analysis, the Executive Compensation Tables,executive compensation tables, and any related material)narrative discussion).”
What factors should be considered?
The Board of Directors urges you to consider the information regardingdiscussion of our executive compensation asprograms and practices in the “Compensation Discussion and Analysis” section of this Proxy Statement, beginning on page 16.
As discussed in the “Compensation Discussion and Analysis” beginning on page 17.
Why is the proposal being submitted to the stockholders?
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), requires that public companies give their stockholdersshareholders the opportunity to approve, on a nonbinding basis, executive officer compensation atevery one, two or three years. At the first annual meetingCompany’s Annual Meeting of stockholders held after January 21, 2011.
Is this vote binding on the Board of Directors?
Because your vote is advisory, it will not be binding upon the Board of Directors or the Compensation Committee. However, our Board of Directors and the Compensation Committee value the opinions of our stockholdersshareholders and will take into account the outcome of the vote when considering future executive compensation agreementsdecisions as it deems appropriate.
Vote Required and Recommendation
The affirmative vote of a majority of the votes cast on the proposal is required for approval of this proposal.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF APPROVING THE COMPENSATION OFPAID TO OUR NAMED EXECUTIVE OFFICERS (NEOs)(NEOS) AS DESCRIBED IN THIS PROXY STATEMENT. SHARES OF COMMON STOCK COVERED BY EXECUTED PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE VOTED “FOR” PROPOSAL NO. 3, UNLESS STOCKHOLDERS SPECIFYTHE SHAREHOLDER SPECIFIES A DIFFERENT CHOICE.
| 35 |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s Directors and officers, and persons who own more than 10% of the Company’s Common Stock,common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s capital stock. Officers, Directors and greater than 10% stockholdersshareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based upon on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during fiscal 20102013 all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% stockholdersshareholders were satisfied.
TRANSACTIONS WITH RELATED PERSONS
Certain directorsDirectors and executive officers of the Company, members of their immediate families and companies or firms with which they are associated, were customers of, or had other transactions with, the Company or its wholly-owned subsidiaries in the ordinary course of business during fiscal 2010.2013. Any and all loans and commitments to lend to such individuals were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company and did not involve more than the normal risk of collectability or present other unfavorable features. As of December 31, 2010,2013, the balance of all such loans was $2,550,829.$5,193,533. None of the loans outstanding to Directors or executive officers of the Company, or members of their immediate families or companies or firms with which they are associated, were nonperforming at December 31, 2010.
The Board maintains a written policy governing the procedures by which the Company and any of its subsidiaries may enter into transactions with related parties (the “Related Party Transactions Policy” or the “Policy”). The Policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company or any if its subsidiaries is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or beneficial owner of less than 10 percent of another entity). A “Related Party” is any (a) person who is or was an executive officer of the Company during the prior 12 months, a Director of the Company or a nominee for election as a Director of the Company, (b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. The Company’s Nominating and Corporate Governance Committee is apprised of any potential Interested Transaction, and this Committee is charged with evaluating and approving, as appropriate, any such transactions. The Committee takes into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Party’s interest in the transaction. In its implementation of the Policy, the Committee also has reviewed certain types of Interested Transactions and has established standing pre-approval for these types of transactions, subject in all cases to compliance with applicable regulations of the Securities and Exchange Commission,SEC, federal and state bank regulatory authorities, and other regulatory agencies.
Director William D. Spain, Jr. is a 50% owner of the law firm of Spain & Spain, PC. During 2013, the Company, through its subsidiary, Tompkins Mahopac Bank, paid $212,568 in legal fees to Spain & Spain, PC. Of this page left blank intentionally.]
REPORT OF THE AUDIT/EXAMINING COMMITTEE OF THE BOARD OF DIRECTORS
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
The Audit/Examining Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities. The Audit/Examining Committee is composed of four non-employee Directors, and one alternate non-employee Director, all of whowhom are “independent directors”“Independent Directors” under Section 803(A)803 of the NYSE AmexMKT LLC Company Guide and Rule 10A-3 under the Exchange Act.
The Audit/Examining Committee operates under a written charter approved by the Board of Directors.Board. The Audit/Examining Committee’s primary duties and responsibilities are: to oversee the Company’s accounting and financial reporting process and the audit of the Company’s financial statements and to monitor the integrity of the Company’s financial statements; to monitor the independence and qualifications of the Company’s independent auditor; monitor the performance of the Company’s independent auditor and internal auditing department; provide an avenue of communication among the Company’s independent auditor, management, the internal auditing department, and the Board of Directors; and to monitor compliance by the Company with legal and regulatory requirements. The Audit/Examining Committee is also directly responsible for the appointment and compensation of the Company’s independent auditor.
The Audit/Examining Committee met nine times during fiscal 20102013 and reports to the Board of Directors on a quarterly basis. The Audit/Examining Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. The Audit/Examining Committee’s meetings include, whenever appropriate, executive sessions with the Company’s independent auditors and with the Company’s internal auditors, in each case without the presence of the Company’s management.
The Audit/Examining Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities. It has direct access to the independent auditors and to any employee or officer of the Company it deems necessary. The Audit/Examining Committee has the ability to retain, at the Company’s expense and at compensation it deems appropriate, special legal, accounting, or other consultants or experts it deems necessary in the performance of its duties.
Management is responsible for the Company’s internal controls and financial reporting process. The Company’s independent registered public accounting firm, KPMG, LLP (“KPMG”), is responsible for performing an independent audit of the Company’s consolidated financial statements and an audit of the Company’s internal control over financial reporting in accordance with auditingthe standards generally accepted inof the United States of America and to issue reports thereon.
In connection with its responsibilities, the Audit/Examining Committee metreviewed and discussed with management and with KPMG to review and discuss the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2010.2013. The Audit/Examining Committee also discussed with KPMG the matters required to be discussed by Statement on Auditing StandardsStandard No. 61 (Communication with Audit Committees) as amended,16 as adopted by Public Company Accounting Oversight Board, in Rule 3200T, received the written disclosures and athe letter from KPMG required by the applicable requirements of the Public Company Accounting Oversight Board relating to that firm’s communications with the Audit/Examining Committee concerning KPMG’s independence from the Company, and has discussed with KPMG its independence.
Based upon the Audit/Examining Committee’s discussions with management, the Company’s internal auditor, and KPMG and the Audit/Examining Committee’s review of the information described in the preceding paragraph, the Audit/Examining Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2010,2013, be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010,2013, for filing with the SEC.
Members of the Audit/Examining Committee:
Paul J. Battaglia, Chair
Patricia A. Johnson
Frank C. Milewski
Craig Yunker Alternate
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit/Examining Committee has appointed KPMG LLP (“KPMG”) to continue as the Company’s independent registered public accounting firm engaged for the purpose of auditing the consolidated financial statements of the Company for the fiscal year ending December 31, 2011.2014. A representative of KPMG is expected to attend the Annual Meeting and will have an opportunity to make statements and respond to appropriate questions from stockholders.
Audit and Non-Audit Fees
KPMG, a registered public accounting firm, is engaged as the Company’s independent auditor. The following table sets forth the aggregate audit fees billed to the Company for the fiscal years ended December 31, 20102013 and December 31, 20092012 by KPMG. KPMG performed the professional tax services for the Company for the year ended December 31, 2009, but did not do so during fiscal 2010. For the year ended December 31, 2010, Crowe Horwath, LLP was engaged by the Company to perform the professional tax compliance, tax advice, tax planning and tax research services.
| 2010 | 2009 | |||||
| ($) | ($) | |||||
| Audit Fees: | 366,500 | 386,700 | ||||
| Audit-Related Fees: | 0 | 0 | ||||
| Tax Fees: | 0 | 134,085 | ||||
| All Other Fees: | 0 | 0 | ||||
| 2013 | 2012 | |||||||
| Audit Fees: | $ | 516,000 | $ | 839,400 | ||||
| Audit-Related Fees: | 0 | 0 | ||||||
| Tax Fees: | 0 | 0 | ||||||
| All Other Fees: | 0 | 0 | ||||||
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
The Company’s principal independent auditor, KPMG, did not perform any services other than financial audit services during fiscal 2010.
Audit/Examining Committee Pre-Approval Policy
The Audit/Examining Committee pre-approves all audit services and permitted non-audit services (including the fees and terms of such services) to be provided to the Company by its independent auditor, other than non-audit services falling within thede minimis exception described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit/Examining Committee prior to the completion of the audit. The Audit/Examining Committee may delegate to one or more designated members of the Audit/Examining Committee the authority to grant pre-approvals of audit services and permitted non-audit services, provided that decisions of such designated member(s) to pre-approve one or more such services shall be reported to the full Audit/Examining Committee at its next scheduled meeting.
All audit and non-audit services provided by KPMG, the independent registered public accounting firm engaged for the purpose of auditing the consolidated financial statements of the Company for fiscal 20102013 and fiscal 2009,2012, were pre-approved by the Company’s Audit/Examining Committee.
SHAREHOLDER PROPOSALS
Proposals of stockholdersshareholders of the Company that are intended to be presented by such stockholdersshareholders at the Company’s 2012 annual meeting2015 Annual Meeting and that stockholdersshareholders desire to have included in the Company’s proxyProxy materials relating to such meeting must be received by the Company no later than December 14, 2011,5, 2014, which is 120 calendar days prior to the anniversary of the Company’s mailing of this proxy statement,Proxy Statement, and must be in compliance with SEC Rule 14a-8 in order to be considered for possible inclusion in the proxy statementProxy Statement and formForm of proxyProxy for that meeting.
Under the Company’s Bylaws, in order for a matter to be deemed properly presented at the 2015 Annual Meeting, notice must be delivered to the Corporate Secretary of the Company at the principal executive offices of the Company no later than the close of business on December 14, 20115, 2014 (120 calendar days prior to the anniversary of the Company’s mailing of this proxy statement)Proxy Statement). These advance notice provisions are in addition to, and separate from, the requirements that a shareholder must meet to have a proposal included in our Proxy Statement under SEC rules (described above). The stockholder’sshareholder’s notice must set forth, as to each matter the stockholdershareholder proposes to bring before the annual meeting (a) a description in reasonable detail of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Company’s books, of the stockholdershareholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (c) the number of shares of the Company that are owned beneficially and of record by the stockholdershareholder proposing such business and by the beneficial owner, if any, on whose behalf the proposal is made, and (d) any personal or other material interest of such stockholdershareholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made in such business. In addition, a stockholdershareholder seeking to submit such business at an annual meeting shall promptly provide any other information reasonably requested by the Corporation.Company. If a stockholdershareholder gives notice of such a proposal after the Bylaw deadline, the stockholdershareholder will not be permitted to present the proposal to the stockholdersshareholders for a vote at the meeting.
FORM 10-K
A copy of the Company’s Annual Report on Form 10-K filed with the SEC is available without charge at our website (http://www.tompkinsfinancial.com) or by writing to: Tompkins Financial Corporation, ATTN: Francis M. Fetsko, Executive Vice President & Chief Financial Officer, P.O. Box 460, Ithaca, New York 14851. In addition, the Annual Report on Form 10-K (with exhibits) is available at the SEC’s Internet site (http://www.sec.gov).
OTHER MATTERS
The Company’s Board of Directors knows of no business to be presented for stockholdershareholder action at the Company’s Annual Meeting other than the election of Directors, the proposal for ratification of the selectionappointment of the independent registered public accounting firm, KPMG LLP, as the Company’s independent auditor for the fiscal year ending December 31, 2011,2014, and the advisory vote on executivethe compensation and advisory vote aspaid to the frequency of the advisory vote of executive compensation,.our Named Executive Officers in 2013. If any additional matters should be presented, it is intended that the enclosed proxy will be voted in accordance with the judgment of the person or persons acting under the proxy.
Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the Company’s Annual Meeting, you are urged to vote your proxy promptly. You may vote by telephone, via the Internet, or mark, sign, date, and return the enclosed proxy cardProxy Card in the accompanying pre-addressed postage-paid envelope. Your proxy may be revoked prior to its exercise by delivering to the Company’s Corporate Secretary prior to the Company’s Annual Meeting a written notice of revocation or a duly executed proxy bearing a later date, or by attending the Company’s Annual Meeting, filing a written notice of revocation with the Corporate Secretary at the Company’s Annual Meeting prior to the vote, and voting in person.
| Dated: April | By Order of the Board of Directors | |
| Asst. Vice President & Corporate Secretary |
HOUSEHOLDING OF PROXY STATEMENT
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for Proxy Statements and Annual Reports with respect to two or more shareholders sharing the same address by delivering a single Proxy Statement or Annual Report, as applicable, addressed to those shareholders. As permitted by the Exchange Act, only one copy of this Proxy Statement is being delivered to shareholders residing at the same address, unless shareholders have notified the Company whose shares they hold of their desire to receive multiple copies of the Proxy Statement. This Page Intentionally Left Blank]
If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Statement, or if you are receiving multiple copies of this Proxy Statement and wish to receive only one, please contact the Investor Relations department of the Company. The Company will promptly have delivered, upon oral or written request, a separate copy of this Proxy Statement to any shareholder residing at an address to which only one copy was mailed. Requests for additional copies from the Company should be directed to:
Tompkins Financial Corporation
The Commons
P.O. Box 460
Ithaca, NY 14851
Attention: Ms. Kathleen A. Manley, Assistant Vice President and Corporate Secretary
P.O. Box 460, Ithaca, New York 14851
(607) 273-3210
www.tompkinsfinancial.com
ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS OF
TOMPKINS FINANCIAL CORPORATION
Monday,May 16, 2011
INTERNET -Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page.
TELEPHONE -Call toll-free1-800-PROXIES(1-800-776-9437) in the United States or1-718-921-8500from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call.
Vote online/phone until 11:59 PM EST, Sunday, May 11, 2014.
MAIL -Sign, date and mail your proxy card in the envelope provided as soon as possible.
IN PERSON -You may vote your shares in person by attending the Annual Meeting.
GO GREEN -e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.
| COMPANY NUMBER | |||
| ACCOUNT NUMBER | |||
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SHAREHOLDER MEETING TO BE HELD ON MAY 12, 2014:
The BoardNotice of Directors recommends a voteMeeting/Proxy Statement, Corporate Report, and Form 10-K
are available at www.tompkinsfinancial.com/proxy.
Please detach along perforated line and mail in the envelope provided. IF you are not voting via telephone or the Internet.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” proposalsEACH OF THE NOMINEES LISTED UNDER PROPOSAL 1 BELOW,
AND “FOR” PROPOSALS 2 3 and proposal 4, option “3YEARS”. AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLACKBLUE OR BLUEBLACK INK AS SHOWN HEREx☒
Proposal No. 1. | ||||||
| NOMINEES: | ||||||
| ☐ | O | John E. Alexander | O | William D. Spain, Jr. | ||
| NOMINEES | O | Paul J. Battaglia | O | Alfred J. Weber | ||
| O | Daniel J. Fessenden | O | Craig Yunker | |||
| ☐ | WITHHOLD | O | James W. Fulmer | |||
| O | James R. Hardie | |||||
| FOR ALL | O | Carl E. Haynes | ||||
| NOMINEES | O | Susan A. Henry | ||||
| O | Patricia A. Johnson | |||||
| ☐ | O | Frank C. Milewski | ||||
| NOMINEES | O | Sandra A. Parker | ||||
| EXCEPT | O | Thomas R. Rochon | ||||
| (See | O | Stephen S. Romaine | ||||
| INSTRUCTIONS | O | Michael H. Spain | ||||
| below) | ||||||
| INSTRUCTIONS: | To withhold authority to vote for any individual Nominee(s), mark “FOR ALL NOMINEES EXCEPT” and fill in the circle next to each Nominee(s) with respect to whom you withhold authority to vote, as shown here:● |
| To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | ☐ |
FOR | AGAINST | ABSTAIN | ||
| Proposal No. 2.Ratify the appointment of the independent registered public accounting firm, KPMG LLP, as the Company’s independent auditor for the fiscal year ending December 31, 2014. | ☐ | ☐ | ☐ | |
| Proposal No. | ||||
| ☐ | ☐ |
In their discretion, the proxies will vote upon such other business as may properly come before the Annual Meeting or any adjournment thereof.
TO INCLUDE ANY COMMENTS, USE THE COMMENTS BOX ON THE REVERSE SIDE OF THIS CARD.
| Signature of Shareholder | Date: | Signature of Shareholder | Date: |
 | Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the shareholder is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If shareholder is a partnership, please sign in partnership name by authorized person. | |
TOMPKINS FINANCIAL CORPORATION
Annual Meeting of StockholdersShareholders to be held
Monday, May 16, 2011
YOUR VOTING CARD IS ATTACHED BELOW.
You may vote by telephone, via the Internet, or by conventional mail.
or in person at the Annual Meeting.
Please read the other side of this card carefully for instructions.
However you decide to vote, your representation at the
Annual Meeting of StockholdersShareholders is important to Tompkins Financial Corporation
PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TOMPKINS FINANCIAL CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS ON MONDAY, MAY 16, 2011
The undersigned stockholdershareholder of TOMPKINS FINANCIAL CORPORATION (the “Company”) hereby constitutes and appoints Francis M. Fetsko and Linda M. Carlton,Kathleen A. Manley, and each of them, as agent and proxy of the undersigned, with full power of substitution and revocation, to vote all shares of Common Stock of the Company standing in his or her name on the books of the Company and that the undersigned would beis entitled to vote at the Annual Meeting of StockholdersShareholders to be held at 5:30 p.m. at the Country Club of Ithaca, 189 Pleasant Grove Road, Ithaca, NY, on Monday, May 16, 2011,12, 2014, or at any adjournment thereof, with all the powers which the undersigned would possess if personally present, as designated on the reverse side.
THE UNDERSIGNED HEREBY INSTRUCTS THE SAID PROXIES TO VOTE IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED ON THE REVERSE SIDE. IF NO INSTRUCTION IS GIVEN ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED ON THE REVERSE SIDE, “FOR” RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, KPMG LLP, AS THE COMPANY’S INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 2011,2014, AND “FOR” APPROVAL OF THE COMPENSATION OFPAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DESCRIBED IN THE 20112014 PROXY STATEMENT, AND “FOR” THE OPTION OF “3 YEARS” AS THE PREFERRED FREQUENCY FOR FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION.STATEMENT. THE PROXIES WILL VOTE IN THEIR DISCRETION WITH RESPECT TO SUCH OTHER MATTERS (INCLUDING MATTERS INCIDENT TO THE CONDUCT OF THE MEETING), AS MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy Statement dated April 15, 2011,4, 2014, relating to the Annual Meeting of Stockholders to be held May 16, 2011.12, 2014. (Signature on the reverse side is required.)
(Continued and to be marked, signed and dated on reverse side.)
| COMMENTS: |
