Ace Brian R Form 4 COMMUNITY BANK SYSTEM / BRIAN R ACE ownership change

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

ACE BRIAN R

(Last) (First) (Middle)

R.R. #1, BOX 1550

(Street)

LACEYVILLE PA 18623

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
COMMUNITY BANK SYSTEM, INC. [ CBU ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
12/31/2014

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	12/31/2014		J(1)		17,635.298(2)	D	$0	0	I	By Laceyville Hardware Sep
Common Stock	12/31/2014		J		17,635.298	A	$0	46,049.3169(3)	D
Common Stock								125.839(4)	I	By Spouse

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Phantom Stock (Deferred Stock Units)	(5)	03/18/2015		A		850		(5)	(5)	Common Stock	850	$0	850	D
Phantom Stock (Deferred Compensation)	(6)							(6)	(6)	Common Stock	24,725.8938		24,725.8938(7)	D
Phantom Stock (Stock Balance Plan)	(8)							(8)	(8)	Common Stock	3,063.22		3,063.22(9)	D

Explanation of Responses:

1. Distribution from the Laceyville Hardware SEP into the reporting person's SEP IRA.

2. Includes 678.298 shares acquired in 2014 under the Community Bank System, Inc. Dividend Reinvestment Plan.

3. Includes 186.404 shares acquired in 2014 under the Community Bank System, Inc. Dividend Reinvestment Plan.

4. Includes 4.839 shares acquired in 2014 under the Community Bank System, Inc. Dividend Reinvestment Plan.

5. The reporting person has received deferred stock units under the Community Bank System, Inc. 2014 Long-Term Incentive Plan. Each phantom stock unit which represents a deferred stock unit is the economic equivalent of one share of Community Bank System, Inc. common stock and will be settled in common stock at a predetermined date.

6. Each unit of phantom stock is the economic equivalent of one share of Community Bank System, Inc. common stock. The units of phantom stock relating to the Deferred Compensation Plan will be settled in Community Bank System, Inc. common stock at future dates selected by the reporting person.

7. Includes 227.8895 units acquired on January 9, 2015 pursuant to the Deferred Compensation Plan's dividend reinvestment feature.

8. Each phantom stock unit is the economic equivalent of one share of Community Bank System, Inc. common stock. Phantom Stock (Stock Balance Plan) may be settled upon the later of the reporting person's attainment of age 55 or termination of service on Community Bank System, Inc.'s Board of Directors.

9. Includes 90.44 units of phantom stock acquired in 2014 under the Stock Balance Plan's dividend reinvestment feature.

	/s/ Danielle M. Cima, pursuant to a Confirming Statement executed by Brian R. Ace	03/20/2015
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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