SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the Com-
mission Only (as permitted by
|X| Definitive Proxy Statement Rule 14a-6(e)(2))
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TrustCo Bank Corp NY
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
TRUSTCO BANK CORP NY
320 State Street
Schenectady, New York 12305
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders Of
TrustCo Bank Corp NY:
Notice is hereby given that the Annual Meeting of Shareholders of TrustCo
Bank Corp NY ("TrustCo"), a New York corporation, will be held at TrustCo's
Trust Building, 192 Erie Boulevard, Schenectady, New York 12305, on May 19,
1997, at 10:00 a.m. local time for the purposes of considering and voting upon
the following matters:
1. Election of directors.
2. Adoption of an amendment to the Amended and Restated Certificate of
Incorporation of TrustCo to change the minimum and maximum numbers of
Directors.
3. Ratification of the appointment of independent auditors for 1997.
4. Any other business that properly may be brought before the meeting or
any adjournment thereof.
By Order of the Board of Directors
William F. Terry
Secretary
April 3, 1997
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER
YOU PLAN TO ATTEND THE MEETING OR NOT. YOU MAY WITHDRAW YOUR PROXY AT
ANY TIME PRIOR TO THE MEETING, OR IF YOU DO ATTEND THE MEETING, YOU MAY
WITHDRAW YOUR PROXY AT THAT TIME IF YOU WISH.
TRUSTCO BANK CORP NY
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 19, 1997
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of TrustCo Bank Corp NY ("TrustCo"), a New York
corporation, of proxies to be voted at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at 10:00 a.m. local time on Monday, May 19, 1997,
at TrustCo's Trust Building, 192 Erie Boulevard, Schenectady, New York 12305.
This proxy statement and the form of proxy were first mailed to shareholders on
April __, 1997. Any shareholder executing a proxy which is solicited hereby has
the power to revoke it. Revocation may be made by giving written notice to the
Secretary of TrustCo at any time prior to the exercise of the proxy.
Proxies will be solicited by mail. They also may be solicited by directors,
officers, and regular employees of TrustCo and Trustco Bank, National
Association of Schenectady, New York ("Trustco Bank"), a wholly-owned subsidiary
of TrustCo, personally or by telephone or telegraph, but such persons will
receive no additional compensation for such services. TrustCo has also retained
Regan and Associates to aid in the solicitation of proxies for a solicitation
fee of $2,750 plus expenses. The entire cost of this solicitation will be paid
by TrustCo and Trustco Bank.
As of March 1, 1997, there were 20,390,188 outstanding shares of Common
Stock, $1.00 par value (the "Common Stock"), of TrustCo. Only shareholders of
record of such Common Stock at the close of business on March 31, 1997, are
entitled to notice of and to vote at the Annual Meeting. Each shareholder of
record on that date is entitled to one vote for each share of Common Stock held.
With respect to each matter to be acted upon at the Annual Meeting, abstentions
on properly executed proxy cards will be counted for purposes of determining a
quorum at the meeting; however, such abstentions and shares not voted by brokers
and other entities holding shares on behalf of beneficial owners will not be
counted in calculating voting results on those matters for which the shareholder
has abstained or the broker has not voted.
Full shares of Common Stock held for the account of shareholders
participating in the Dividend Reinvestment and Stock Purchase Program will be
voted in the same manner as those shareholders have authorized their shares held
of record to be voted. If such shareholders fail to instruct how the shares
registered in their names shall be voted, the shares held in their dividend
reinvestment accounts will not be voted.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in a proxy statement
in connection with any forthcoming annual meeting must be submitted to TrustCo
on a timely basis. Proposals for inclusion in TrustCo's proxy statement and form
of proxy for the annual shareholders meeting to be held in May of 1998 must meet
the requirements established by the Securities and Exchange Commission for
shareholder proposals and must be received by TrustCo at its principal executive
offices no later than December 15, 1997. Any such proposals, together with any
supporting statements, should be directed to the Secretary of TrustCo.
1
THE ANNUAL MEETING
A description of the items to be considered at the Annual Meeting and other
information is set forth below.
Item 1. Election of Directors
The first item to be acted upon at the Annual Meeting is the election of
six (6) directors to serve on the TrustCo Board of Directors (the "TrustCo
Board") five of whom shall serve for a three (3) year term and one, Dr.
Marinello, for a one (1) year term, and until their successors shall have been
duly elected and qualified. The incumbent directors whose terms are currently
scheduled to expire at the Annual Meeting, and who have been nominated for
reelection as directors (collectively, the "TrustCo Director Nominees") are as
follows: Barton A. Andreoli, Nancy A. McNamara, John S. Morris, Ph.D., James H.
Murphy, D.D.S., William H.
Purdy, and Anthony J. Marinello, M.D., Ph.D.
TrustCo's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that the TrustCo Board shall consist of
not less than twelve (12) nor more than fifteen (15) members, and the TrustCo
Bylaws provide that the total number of directors may be fixed by resolution of
the TrustCo Board or the shareholders. The Certificate of Incorporation and the
Bylaws of TrustCo require the TrustCo Board to be divided into three (3) classes
of not less than four (4) members each, with one class to be elected each year
for a term of three (3) years.
The Bylaws also provide that newly created directorships resulting from an
increase in the number of directors and vacancies occurring in the TrustCo Board
for any reason, may be filled by the vote of a majority of the directors then in
office, although less than a quorum, at any meeting of the TrustCo Board.
Directors who are elected by the TrustCo Board shall hold office until the next
meeting of shareholders at which the election of directors is in the regular
order of business. In May of 1996, Dr. Marinello was appointed to the TrustCo
Board by the directors then in office to fill a vacancy in the class of
directors who are currently serving a three year term scheduled to expire in
1998.
As described further herein, the TrustCo Board has proposed an amendment to
the Certificate of Incorporation to change the minimum number of directors to
seven (7) and the maximum number to twenty (20), divided into three (3) classes,
as nearly as equal in number as possible. That proposal is the second item to be
acted upon at the Annual Meeting.
The affirmative vote of at least a majority of the votes cast by the
holders of Common Stock represented in person or by proxy at the Annual Meeting
is required to elect directors.
The pages that follow set forth information regarding the TrustCo Director
Nominees, as well as information regarding the remaining members of the TrustCo
Board whose terms of office do not expire this year. Proxies will be voted in
accordance with specific instructions contained therein. Shares will be voted
for the election of such TrustCo Director Nominees unless contrary instructions
are set forth on the enclosed TrustCo proxy card. If any nominee shall be
unavailable to serve, the shares represented by all valid proxies will be voted
for the election of such other person as the TrustCo Board may recommend, or the
TrustCo Board may reduce the number of directors to eliminate the vacancy. Each
of the TrustCo Director Nominees has consented to being named in this Proxy
Statement and to serve if elected. The TrustCo Board has no reason to believe
that any TrustCo Director Nominee will decline or be unable to serve if elected,
unless he or she reaches the mandatory
2
retirement age of 72 during the term of office. In the event a vacancy is
created by retirement or otherwise, the TrustCo Board may fill the vacancy or
may reduce the number of directors to eliminate the vacancy. If the vacancy is
filled, the director so elected shall hold office until the next meeting of
shareholders at which the election of directors is in the regular order of
business.
Information with regard to the business experience of each director and the
ownership of Common Stock on December 31, 1996, has been furnished by such
director, or has been obtained from the records of TrustCo.
The Common Stock is the only class of equity security outstanding.
INFORMATION ON TRUSTCO DIRECTORS AND NOMINEES
NOMINEES FOR ELECTION AS TRUSTCO DIRECTORS FOR
THREE-YEAR TERM TO EXPIRE IN 2000
Shares of TrustCo Common Stock(1)
Beneficially Owned
Name and Principal Occupation(1) No. of Shares(2) Percent of Class
- --------------------------------------------------------------- -------------------- --------------------
Barton A. Andreoli, Age 57; President, Towne 7,091 *
Construction & Paving Corp. Director of TrustCo and of
Trustco Bank since 1993.
Nancy A. McNamara, Age 47; Executive officer of 242,834 1.2
TrustCo (Vice President) since 1992 and Trustco Bank
(Senior Vice President) since 1988. Joined Trustco Bank in
1971. Director of TrustCo and of Trustco Bank since 1991.
John S. Morris, Ph.D., Age 71; President Emeritus and 33,339 *
Research Professor Philosophy, Union College and Former
Chancellor, Union University. Director of TrustCo since
1981 and of Trustco Bank since 1980.
James H. Murphy, D.D.S., Age 68; Orthodontist. Director 14,419 *
of TrustCo and of Trustco Bank since 1991.
William J. Purdy, Age 62; President of Welbourne & Purdy 7,956
Realty, Inc. Director of TrustCo and of Trustco Bank since *
1991.
----------
See footnotes on page 5.
3
NOMINEE FOR ELECTION AS TRUSTCO DIRECTOR FOR
ONE-YEAR TERM TO EXPIRE IN 1998
Shares of TrustCo Common Stock(1)
Beneficially Owned
Name and Principal Occupation (1) No. of Shares(2) Percent of Class
- ---------------------------------------------------------- ---------------------- ----------------------
Anthony J. Marinello, M.D., PhD, Age 41; Physician. 2,049 *
Director of TrustCo and of Trustco Bank since 1996.
TRUSTCO DIRECTORS CONTINUING IN OFFICE
Shares of TrustCo Common Stock(1)
Beneficially Owned
Name and Principal Occupation (1) No. of Shares(2) Percent of Class
- -------------------------------------------------------------------- ---------- ------------ ----------------
Lionel O. Barthold, Age 70; Chairman of Power 89,031 *
Technologies, Inc. (consulting engineers). Director of TrustCo
from 1981 through 1985, and from 1989 to present. Director
of Trustco Bank since 1977.
M. Norman Brickman, Age 71; President, D. Brickman, Inc. 79,033 *
(wholesale fruits and produce). Director of TrustCo and of
Trustco Bank since 1985.
Robert A. McCormick, Age 60; President of TrustCo and of
Trustco Bank since 1982. President and Chief Executive 758,219 3.7
Officer of TrustCo and Trustco Bank since 1984. Director of
TrustCo and of Trustco Bank since 1980.
Richard J. Murray, Jr., Age 68; Chief Executive Officer, 176,404 *
R.J. Murray Co., Inc. (air-conditioning and heating
distributors). Director of TrustCo and of Trustco Bank since
1985.
Kenneth C. Petersen, Age 60; President and Chief Operating 37,473 *
Officer, Schenectady International, Inc. (chemical
manufacturer). Director of TrustCo and of Trustco Bank since
1982.
----------
See footnotes on page 5.
4
TRUSTCO DIRECTORS CONTINUING IN OFFICE
Shares of TrustCo Common Stock(1)
Beneficially Owned
Name and Principal Occupation (1) No. of Shares(2) Percent of Class
- ------------------------------------------------------------- --------------------- ----------------
William D. Powers, Age 55; Chairman, New York 2,943 *
Republican State Committee. Director of TrustCo and of
Trustco Bank since 1995.
William F. Terry, Age 55; Executive officer of TrustCo 233,043 1.1
(Secretary) since 1990 and of Trustco Bank (Senior Vice
President) since 1987. Director of TrustCo and of Trustco
Bank since 1991.
INFORMATION ON TRUSTCO EXECUTIVE OFFICERS NOT LISTED ABOVE
Shares of TrustCo Common Stock
Beneficially Owned
Name and Principal Occupation No. of Shares(2) Percent of Class
- ---------------------------------------------------------------------- ---------------- ------------------
Robert T. Cushing, Age 41; Executive officer of TrustCo 64,880 *
(Vice President and Chief Financial Officer) and Trustco Bank (Senior Vice
President and Chief Financial Officer). Joined Trustco Bank in May 1994, after
serving as a partner at KPMG Peat Marwick LLP since 1987.
Ralph A. Pidgeon, Age 54; Executive officer of TrustCo 225,765 1.1
(Vice President and Assistant Secretary) since 1995 and of
Trustco Bank (Senior Vice President) since 1978. Joined
Trustco Bank in 1964.
TRUSTCO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (15
INDIVIDUALS) BENEFICIALLY OWN 1,974,479 SHARES OF TRUSTCO COMMON STOCK,
WHICH REPRESENT 9.7% OF THE OUTSTANDING SHARES.
<FN>
(1) Each of the Directors has held, or retired from, the same position or
another executive position with the same employer during the past five
years.
(2) Each director and executive officer named herein has sole voting and
investment power with respect to the shares listed above, except that
voting and investment power over a total of 4,087 shares is shared with
their spouses and children, and a total of 29,771 are owned by spouses
and other family members. The shares shown include 1,101,403 shares of
TrustCo Common Stock with respect to which certain directors and
executive officers have a right to acquire beneficial ownership within
60 days of December 31, 1996.
(3) * Less than 1%
</FN>
5
Director Fees, Committees and Attendance
The TrustCo Board held six (6) meetings during 1996. Each Director attended
100% of the aggregate of the meetings of the TrustCo Board and of the
Committees on which he/she served. Each Director who is not an employee of
TrustCo or of Trustco Bank currently receives for his / her services as
Director a fee in the amount of $2,200 per meeting attended of TrustCo's
and Trustco Bank's Boards of Directors, and $1,100 per meeting
attended of any TrustCo or Trustco Bank committee of which he/she is a member.
Directors who are employees of TrustCo or Trustco Bank do not receive these
Directors' fees or other additional remuneration for TrustCo or Trustco Bank
Board of Directors' meetings or for special assignments.
TrustCo's Nominating Committee held no meetings in 1996. The four (4)
Directors currently serving on the Nominating Committee are R. McCormick
(Chairman), B. Andreoli, R. Murray, and W. Terry. The function of the
Nominating Committee is to consider and recommend to the TrustCo Board,
nominees for election to the TrustCo Board. Each of the nominees slated for
election at this year's Annual Meeting is an incumbent, and was considered
and selected by the TrustCo Board without action by the Nominating Committee.
The Nominating Committee will consider written recommendations by
shareholders for nominees for election to the TrustCo Board.
TrustCo's Audit Committee held one (1) meeting in 1996. The four (4)
Directors serving on the Audit Committee are R. Murray (Chairman), J. Murphy,
K. Petersen, and W. Purdy. The function of the Audit Committee is to review
TrustCo's and Trustco Bank's internal audit procedures, and also to review the
adequacy of internal accounting controls for TrustCo and Trustco Bank.
TrustCo's Stock Option Committee held two (2) meeting in 1996. The three
(3) Directors serving on the Stock Option Committee are J. Morris (Chairman),
B. Andreoli, and N. Brickman. The function of the Stock Option Committee is to
administer the 1995 TrustCo Bank Corp NY Stock Option Plan.
The Personnel Advisory Committee of Trustco Bank held one (1) meeting in
1996. The three (3) Directors serving on the Personnel Advisory Committee are
J. Morris (Chairman), B. Andreoli, and N. Brickman. The function of the
Personnel Advisory Committee is to review general compensation practices of
Trustco Bank and to recommend to the Board of Directors of Trustco Bank the
salary and benefits for Trustco Bank's three (3) executive officers who are
also Directors of TrustCo, and the two (2) executive officers of Trustco Bank
who are not directors of TrustCo.
TrustCo Executive Officers
Executive Officers of TrustCo are presently President and Chief Executive
Officer Robert A. McCormick, Vice President and Chief Financial Officer
Robert T. Cushing, Vice President Nancy A. McNamara, Vice President and
Assistant Secretary Ralph A. Pidgeon, and Secretary William F. Terry.
6
Trustco Bank Executive Officers
Executive Officers of Trustco Bank are presently President and Chief
Executive Officer Robert A. McCormick, Senior Vice President and Chief
Financial Officer Robert T. Cushing, Senior Vice Presidents Nancy A. McNamara,
Ralph A. Pidgeon, and Senior Vice President and Secretary William F. Terry.
TrustCo and Trustco Bank Executive Officer Compensation
The following table sets forth for the fiscal year ended December 31, 1996,
the compensation paid to or accrued on behalf of each of the five (5) most
highly compensated Executive Officers of TrustCo and Trustco Bank. The value
of incidental personal benefits, which may not be directly related to job
performance, has been included, where applicable, according to the Securities
and Exchange Commission's required disclosure thresholds. Each of the
following Executive Officers has an employment contract and a supplemental
retirement agreement described in subsequent pages.
7
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
Securities
Other Underlying
Annual Options/
Name and Salary Bonus Compensation SARs
Principal Position Year ($) ($)(1) ($)(2) (#)(3)
- ------------------------------ -------------- -------------- ----------------- -------------------- -------------------
Robert A. McCormick
President & Chief 1996 $750,000 $787,500 $66,813 115,000
Executive Officer, TrustCo 1995 720,000 648,000 48,736 138,000
and Trustco Bank 1994 700,000 525,000 17,894 151,800
- ------------------------------ -------------- -------------- ----------------- -------------------- -------------------
Robert T. Cushing
Senior Vice President, 1996 260,000 273,000 12,481 46,000
Chief Financial Officer, 1995 240,000 216,000 10,302 34,500
Trustco Bank; Vice 1994 138,000 106,808 7,003 60,720
President, Chief
Financial Officer, TrustCo(4)
- ------------------------------ -------------- -------------- ----------------- -------------------- -------------------
Nancy A. McNamara
Senior Vice President 1996 260,000 273,000 14,181 46,000
Trustco Bank; Vice 1995 240,000 216,000 12,194 34,500
President, TrustCo 1994 230,000 172,500 13,641 30,360
- ------------------------------ -------------- -------------- ----------------- -------------------- -------------------
Ralph A. Pidgeon
Senior Vice President 1996 260,000 273,000 15,892 46,000
Trustco Bank; Vice 1995 240,000 216,000 11,171 34,500
President, Assistant 1994 230,000 172,500 7,589 30,360
Secretary, TrustCo
- ------------------------------ -------------- -------------- ----------------- -------------------- -------------------
William F. Terry
Senior Vice President, 1996 260,000 273,000 14,659 46,000
Secretary, Trustco Bank; 1995 240,000 216,000 10,556 34,500
Secretary, TrustCo 1994 230,000 172,500 9,202 30,360
- ------------------------------ -------------- -------------- ----------------- -------------------- -------------------
<FN>
1. Bonus amounts include payments to senior executive officers of TrustCo as
short-term incentive compensation pursuant to the incentive program
described in greater detail herein under the caption "Personnel Advisory
Committee Report on Executive Compensation".
2. Includes amounts reimbursed by the Company for the payment of taxes pursuant to established benefit plans.
3. Stock Option data have been adjusted to reflect the 15% stock split on November 15, 1996, the 6 for 5 stock split
on August 24, 1995, and the 10% stock dividend on October 21, 1994.
4. Mr. Cushing commenced his employment with Trustco Bank on May 20, 1994. The salary for 1994 was based upon
an annual base salary of $230,000.
</FN>
8
Option/SAR Grants in Last Fiscal Year
Number of % of Total
Securities Options/
Underlying SARs Potential Realizable Value
Options/ Granted to Exercise at Assumed Annual Rates
SARs Employees or Base of Stock Price Appreciation
Granted in Fiscal Price Expiration For Option Term4
Name (#)(1) Year(2) ($/Sh)(3) Date 5% 10%
- --------------------------- ---------------- ----------------- -------------- ---------------- -----------------------------------
Robert A. McCormick 115,000 29.1% $17.64 7/01/2006 $1,275,350 $3,232,650
Robert T. Cushing 46,000 11.7% 17.64 7/01/2006 510,140 1,293,060
Nancy A. McNamara 46,000 11.7% 17.64 7/01/2006 510,140 1,293,060
Ralph A. Pidgeon 46,000 11.7% 17.64 7/01/2006 510,140 1,293,060
William F. Terry 46,000 11.7% 17.64 7/01/2006 510,140 1,293,060
<FN>
1. Options, which were granted on July 1, 1996, become exercisable in five
equal annual installments beginning July 1, 1996. Stock Option data has
been adjusted for the 15% stock split on November 15, 1996.
2. The total number of options granted in 1996 was 394,450, of which 299,000
(75.8%) were issued to the Executive group, 12,650 (3.2%) were issued to
the non-Executive Director group, and 82,800 (21.0%) to the non-Executive
Officer group.
3. Exercise or base price is equal to the mean between the closing dealer bid
and asked price for the Common Stock as quoted by Nasdaq on the date of
the grant.
4. The amounts included reflect pre-tax gain. The dollar amounts under these
columns are the result of calculations at the 5% and 10% rates set by the
Securities and Exchange Commission and, therefore, are not intended to
forecast possible future appreciation, if any, of TrustCo's stock price.
TrustCo's per share stock price would be $28.73 and $45.75 if increased 5%
and 10% respectively, compounded annually over the option term.
</FN>
Aggregated Option/SAR Exercises in Last Fiscal Year, and FY-End Option/SAR Values
Number of
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)(3)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#)(1) Realized ($)(2) Unexercisable Unexercisable
- -------------------------- ----------------------- ---------------------- ------------------------- -----------------------------
Robert A. McCormick -- -- 514,335/265,88 $4,849,983/1,509,734
Robert T. Cushing -- -- 59,432/81,788 401,599/ 441,326
Nancy A. McNamara 5,122 79,502 123,086/75,716 1,148,520/ 391,930
Ralph A. Pidgeon 13,036 192,427 176,138/75,716 1,852,850/ 391,930
William F. Terry 7,886 97,718 174,856/75,716 1,823,346/ 391,930
<FN>
1. Stock Option data have been adjusted for the 15% stock split on November
15, 1996, the 6 for 5 stock split on August 24, 1995, and the 10% stock
dividend on October 21, 1994. Shares shown include SARs exercised.
2. The amounts included reflect pre-tax gain. Amounts shown represent the
difference between the stock option grant price and the market value of
the stock on the date of exercise.
3. The amounts included reflect pre-tax gain. Value of unexercised
in-the-money options based on December 31, 1996, closing trade price of
$21.375.
</FN>
9
TrustCo Retirement Plans
Trustco Bank has a defined benefit retirement plan (the "Trustco Bank
Retirement Plan") pursuant to which annual retirement benefits are based on
years of service to a maximum of 30 and average annual earnings of the highest
five consecutive years during the final ten years of service. The Trustco Bank
Retirement Plan is fully funded by Trustco Bank contributions. In addition,
Trustco Bank has a supplemental retirement plan (the "Trustco Bank Supplemental
Retirement Plan"), which is an actuarial plan, under which additional retirement
benefits are accrued for eligible Executive and Senior Officers. Under the
Trustco Bank Supplemental Retirement Plan, the amount of supplemental retirement
benefits is based upon annual contributions which are actuarially calculated to
achieve a benefit at normal retirement which approximates the differences
between (i) the total retirement benefit the participant would have received
under the Trustco Bank Retirement Plan without taking into account limitations
on compensation, annual benefits and years of service; and (ii) the retirement
benefit the participant is projected to receive under the Trustco Bank
Retirement Plan at normal retirement. The Trustco Bank Supplemental Retirement
Plan provides benefits based on years of service to a maximum of 40.
The following table shows the approximate retirement benefits which would
have been payable in 1996 to salaried employees, under both the Trustco Bank
Retirement Plan and the Trustco Bank Supplemental Retirement Plan, assuming
retirement of such person at age 65, and payment of benefits in the form of a
life annuity. Earnings used in calculating benefits under these Plans are
approximately equal to cash amounts reflected as Salary plus Bonus in the
Summary Compensation Table. These Plans permit service and earnings to continue
to be credited for employment after age 65. However, it is Trustco Bank's policy
that executive officers will retire at age 65. The benefits set forth in the
following table are in addition to those which may be received as Social
Security benefits. The years of service at normal retirement age 65 for the
Executive Officers (other than Mr. McCormick) named in the Cash Compensation
Table would be as follows: Mr. Cushing, 27 years; Ms. McNamara, 43 years; Mr.
Pidgeon, 44 years; and Mr. Terry, 20 years.
Robert A. McCormick is not a participant in the Trustco Bank Supplemental
Retirement Plan, but has a separate agreement with Trustco Bank under which
additional retirement benefits are accrued. Under the terms of Mr. McCormick's
agreement, benefits are calculated on the actuarial basis used in the Trustco
Bank Supplemental Retirement Plan, however, he will be entitled to benefits
equal to those to which he would have been entitled if he had been an employee
of Trustco Bank and a participant under its qualified plans since the date he
joined a former employer. The benefit will be reduced by the amount of benefits
actually paid him under Trustco Bank's qualified plans and by his former
employer's qualified plans. The years of credited service at normal retirement
age 65 for Mr. McCormick would be 47.
10
Pension Plan Table
Annual Benefits for Years of Service
Remuneration 10 20 30 40
- ---------------------- ------------------- ---------------- ---------------- -----------------
$ 200,000 $ 36,900 $ 74,500 $ 113,200 $ 152,900
400,000 76,900 153,800 232,300 312,300
600,000 116,900 233,800 352,300 472,300
800,000 156,900 313,800 472,300 632,300
1,000,000 196,900 393,800 592,300 792,300
1,200,000 236,900 473,800 712,300 952,300
1,400,000 276,900 553,800 832,300 1,112,300
1,600,000 316,900 633,800 952,300 1,272,300
1,800,000 356,900 713,800 1,072,300 1,432,300
1,900,000 376,900 753,800 1,132,300 1,512,300
Generally, an employee who has attained age 55 and has ten years of service
has the right to elect to immediately begin receiving adjusted retirement
benefits less than those indicated in the table upon any separation from service
with Trustco Bank. The Internal Revenue Code places a maximum limit on the
benefits that can be provided under qualified retirement plans such as the
Trustco Bank Retirement Plan. For 1996, the annual Internal Revenue Code limit
for a straight-life annuity benefit at normal retirement age was $120,000, which
amount is actuarially reduced for participants who retire and begin receiving
benefits early.
The Trustco Bank Supplemental Retirement Plan provides that Trustco Bank,
in its discretion, may at any time elect to make a lump sum distribution of a
participant's supplemental benefit. The amount of this single payment is equal
to the participant's Supplemental Account Balance. A participant may also elect
to be paid the supplemental benefits upon separation of service from Trustco
Bank in one of the benefit forms provided under the Trustco Bank Retirement Plan
or in a single lump sum or installments.
The Trustco Bank Supplemental Retirement Plan and Mr. McCormick's separate
agreement are unfunded for tax purposes. However, Trustco Bank has established
an irrevocable trust (the "Rabbi Trust") to fund its obligations under these and
other executive compensation plans. Trustco Bank is required to make annual
contributions to the Rabbi Trust. However, the assets of the Rabbi Trust remain
subject to Trustco Bank's general creditors in the event of insolvency.
Personnel Advisory Committee Report on Executive Compensation
The Personnel Advisory Committee of Trustco Bank determines the
compensation of employees and officers of TrustCo and Trustco Bank, including
the Named Executive Officers identified in the Summary Compensation Table. Each
of the Named Executive Officers in the Summary Compensation Table has an
employment agreement with each of TrustCo and Trustco Bank. These employment
agreements are described elsewhere in this Proxy Statement.
The Personnel Advisory Committee of the Board of Directors of Trustco Bank,
the present members of which are: J. Morris (Chairman), B. Andreoli, and N.
Brickman, none of whom was an officer of TrustCo or Trustco Bank during fiscal
year 1996, furnished the following report on executive compensation to the
Board
11
of Directors of Trustco Bank, which has been adopted by the TrustCo Board for
the year ended December 31, 1996:
Under the supervision and direction of the Personnel Advisory Committee,
TrustCo and Trustco Bank have developed compensation policies, plans and
programs which seek to enhance profitability of TrustCo and Trustco Bank, and
ultimately shareholder value, by aligning closely the financial interests of
TrustCo's senior management with those of its shareholders. It continues to be
the purpose and intent of the Personnel Advisory Committee to design a
compensation program which reflects the standards of performance of Trustco
Bank, with particular emphasis on setting goals tied to return on shareholder
equity previously defined by the Board of Directors of Trustco Bank.
The function of the Personnel Advisory Committee is to review the general
compensation structure for executive officers of Trustco Bank, including those
executive officers named in the Summary Compensation Table (the "Named Executive
Officers") which appears elsewhere in this Proxy Statement, and to recommend to
the Board of Directors of Trustco Bank the salary and benefits of such executive
officers. The components of executive compensation for the Named Executive
Officers include salary, bonus, stock options, and cash payments under the
Trustco Bank Retirement Plan, Non-Qualified Supplemental Retirement Plan, and
Executive Officer Incentive Plan, and in Mr. McCormick's case, in his separate
agreement. The Personnel Advisory Committee evaluates individual performance and
corporate profitability to determine the level of any compensation adjustment to
take effect as of January of the following year. The Personnel Advisory
Committee also identifies persons within Trustco Bank eligible to participate in
the Executive Incentive Plan and the Nonqualified Supplemental Retirement Plan.
The Personnel Advisory Committee met once during the course of the year, on
October 15, 1996. The Stock Option Committee, whose members are the same as that
of the Personnel Advisory Committee, met separately on July 1, 1996, to 1)
identify eligible participants in TrustCo's 1995 Stock Option Plan; and 2) award
option grants for the current plan year. The Stock Option Committee considered
discussions KPMG Peat Marwick LLP had with management regarding general stock
option issues and trends when formulating its final decision on grants awarded
under the Stock Option Plan. KPMG Peat Marwick LLP provided information
regarding industry trends for general compensation levels and option levels in
the industry. KPMG Peat Marwick LLP is the independent auditor for TrustCo and
provides a variety of tax and financial consulting services for TrustCo. While
TrustCo does not have a target ownership level for equity holdings by its
executives, the Stock Option Committee does take into account the amount and
value of options currently held by eligible participants when granting option
awards. Options may be granted in varying amounts so as to create relative
ownership parity among the executive officers participating in the Stock Option
Plan.
It is the aim of the Personnel Advisory Committee to determine salary and
benefit levels of executive compensation principally upon the basis of overall
corporate performance, although elements of corporate performance may vary from
year to year in the discretion of the Personnel Advisory Committee and among
executive officers. In making any such determination, the Personnel Advisory
Committee will consider a number of factors including, among others, TrustCo's
and Trustco Bank's return on equity, attainment of net income goals and total
asset targets, overall profitability from year to year, banking experience of
individual officers, scope of responsibility within the overall organization,
performance and particular contributions to Trustco Bank and TrustCo during the
course of the year, and other relevant factors, including involvement in
community matters which may better position the organization to serve the
immediate needs of Trustco Bank's market. The Personnel Advisory Committee uses
broad discretion when determining compensation levels and considers all
12
of the above criteria. It does not assign a specific weight to any of these
factors when establishing salary and benefit levels. In addition, compensation
levels are established notwithstanding Trustco Bank's inability to deduct all
such compensation under provisions of the Internal Revenue Code of 1986, as
amended.
The Personnel Advisory Committee may also consider compensation programs
offered to executives performing similar duties for competing depository
institutions and their holding companies, with a particular focus on the level
of compensation paid by comparable institutions. To assist in this evaluation,
an industry group of 12 regional bank holding companies, called the Dow Jones
Banks - East Index, was identified by the Personnel Advisory Committee for
performance and compensation comparisons. This Index is comprised of a
broad-based group of banks on the East Coast and was chosen for comparative
purposes because of its members' geographic proximity to Trustco Bank. This peer
group consists of the same companies that comprise the published industry index
used in the performance graph that follows this report. While Trustco Bank is
comparatively smaller in terms of total asset size than the members of this peer
group, Trustco Bank favorably competes with these institutions in terms of
overall corporate performance. Trustco's return on asset and return on equity
ratios ranked in the top 50% and top 33%, respectively, when compared to the
members of this peer group, yet the base salary of Trustco's Chief Executive
Officer was below the mean and median base salary of the peer group members'
Chief Executive Officers. The Committee further takes into consideration the
unique size of TrustCo's executive group as compared to other financial
institutions. Trustco Bank and TrustCo currently operate with five (5) executive
officers, whereas many institutions in this peer group have a larger pool of
executive officers.
During its meeting in 1996, the Personnel Advisory Committee decided not to
change the current basic salary structure, short-term incentive compensation for
executives, or features of other employee benefits plans.
The Personnel Advisory Committee continues to believe that Trustco Bank is
better able to attract, retain, and motivate Trustco Bank's executives to
achieve superior performance if a relatively large percentage of senior
executive compensation is at risk. In other words, Trustco Bank's compensation
for senior executives, including those executives named in the Summary
Compensation Table, is designed with an objective of providing less total
compensation when TrustCo's performance is poorer than a peer group of
companies, and providing superior total compensation when performance is
superior to that of the peer group.
In evaluating corporate performance for purposes of establishing short-term
incentive compensation awards for executive officers, the Personnel Advisory
Committee evaluated TrustCo's performance as compared with TrustCo's profit plan
for the year, and also evaluated financial results (generally return on equity)
as compared with peers for the current year. In the opinion of the Personnel
Advisory Committee, return on equity is the most significant measure of
performance of TrustCo and its relative importance to shareholders. Therefore,
the target pools were established to provide senior executives with an incentive
to increase return on equity performance. The Personnel Advisory Committee then
established a percentage of target pool to be paid as short-term incentive
compensation (this ranged from 0% to 125% of base compensation). The target pool
payment would be made to senior executives based on TrustCo's return on average
equity for the year. The range of target return on average equity was from 14%,
which equated to a 40% payout, to 20% return on average equity, which equated to
a 125% payout. Return on average equity in 1996 was 19.05%. Senior executives
would receive no incentive compensation award for return on average equity below
14%.
In consideration of the potential benefits payable under the incentive
program described above, senior executives ceased to be eligible for
contributions to Trustco Bank's profit sharing plan beginning in 1994, which
13
qualifies for favorable tax treatment and to which Trustco Bank historically has
made contributions equal to 15% of compensation.
The Personnel Advisory Committee's actions concerning compensation were
ultimately judgements based upon the Committee's ongoing assessment and
understanding of TrustCo and its executive officers, performance of its
executive officers, and whether or not cash payments or incentive payments would
provide an appropriate award or incentive to the officers' contribution to
TrustCo's past and future performance.
With respect to total compensation paid to Mr. McCormick during 1996, the
Committee reviewed, among other criteria noted above, the consistent growth in
performance and shareholder equity since his appointment as President in 1982
and Chief Executive Officer in 1984, and his ability to effectively influence
and lead the executive team to attain this performance level. The Committee
exercises broad discretion when considering these criteria and does not assign a
specific weight to any of these factors. Mr. McCormick did not participate in
the discussions regarding his compensation.
The TrustCo Board of Directors
Barton A. Andreoli James H. Murphy, D.D.S.
Lionel O. Barthold Richard J. Murray, Jr.
M. Norman Brickman Kenneth C. Petersen
Anthony J. Marinello, M.D., Ph.D. William D. Powers
Robert A. McCormick William J. Purdy
Nancy A. McNamara William F. Terry
John S. Morris, Ph.D.
14
Share Investment Performance
The following graphs show changes over five-year and nine-year periods in
the value of $100 invested in: (1) TrustCo Common Stock; (2) the Standard &
Poor's 500 index; and (3) an industry group of 12 other regional bank holding
companies, called the Dow Jones Banks--East Index. TrustCo management believes
that longer term performance is of greater importance to TrustCo shareholders.
The nine-year period is presented in addition to the five-year period required
by the Securities and Exchange Commission because it provides additional
perspective, and matches the longest period for which Dow Jones Banks--East
Index information is available. The banks comprising the Dow Jones Banks--East
Index are: Bank of Boston Corp., The Bank of New York Co., Baybanks, Inc.,
Corestates Financial Corp., Fleet Financial Group Inc., MBNA Corp., Mellon Bank
Corp., Mercantile Bankshares Corp., PNC Bank Corp., State Street Boston Corp.,
Summit Bancorp, and Wilmington Trust Corp.
The year-end pre-tax values of each investment are based on share price
appreciation plus dividends paid, with cash dividends reinvested the date they
were paid.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG TRUSTCO BANK CORP. NY, THE S&P 500 INDEX AND THE
DOW JONES REGIONAL BANKS, EAST INDEX
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
TrustCo $130 $183 $189 $261 $305
S & P 500 108 118 120 165 203
DJBanks-East 144 151 145 248 343
*Assumes $100 invested on December 31, 1991 in stock or index-including reinvestment of dividends.
Fiscal year ending December 31.
15
COMPARISON OF NINE YEAR CUMULATIVE TOTAL RETURN*
AMONG TRUSTCO BANK CORP. NY, THE S&P 500 INDEX AND THE
DOW JONES REGIONAL BANKS, EAST INDEX
1988 1989 1990 1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ---- ---- ---- ----
TrustCo $133 $162 $154 $239 $312 $438 $451 $623 $727
S & P 500 117 154 149 194 209 230 233 321 394
DJBanks-East 115 117 65 121 174 183 176 301 416
*Assumes $100 invested on December 31, 1987 in stock or index-including reinvestment of dividends.
Fiscal year ending December 31.
Employment Contracts and Termination of Employment Arrangements
TrustCo and Trustco Bank have entered into agreements (individually the
"TrustCo Employment Agreement" and collectively the "TrustCo Employment
Agreements") to engage the services of the five Named Executive Officers: Robert
A. McCormick, the President and Chief Executive Officer of TrustCo and Trustco
Bank (the "President"); Nancy A. McNamara, Vice President of TrustCo, Ralph A.
Pidgeon, Vice President and Assistant Secretary of TrustCo, William F. Terry,
Secretary of TrustCo, and Robert T. Cushing, Vice President and Chief Financial
Officer of TrustCo, each a Senior Vice President of Trustco Bank as well
(collectively, the "Vice Presidents").
(1) President's TrustCo Employment Agreement
The President's TrustCo Employment Agreement, dated as of January 1, 1992,
and amended as of September 1, 1994, had an initial term expiring on December
31, 1994. The Agreement automatically renewed on January 1, 1995, and renews
each year thereafter, for a succeeding three year term until the President
receives a non-renewal notice or he reaches retirement age of 65 or the then
mandatory retirement age, whichever is greater.
The President's TrustCo Employment Agreement provides that his annual
compensation shall be his annual base salary plus his executive incentive bonus
("Annual Compensation"). Mr. McCormick's Annual Compensation in future years
will be negotiated with TrustCo and Trustco Bank and shall not be less than his
Annual Compensation for the preceding calendar year. As further compensation,
Mr. McCormick is entitled to participate fully in any disability, death benefit,
retirement, executive incentive compensation, or pension plans
16
maintained by TrustCo and/or Trustco Bank. Notwithstanding the foregoing, and as
described in greater detail herein under the caption "Personnel Advisory
Committee Report on Executive Compensation," Mr. McCormick has ceased to be
eligible to participate in the Trustco Bank profit sharing plan in consideration
of the potential benefits under the short-term incentive plan described above.
In the event there is a termination of the President for any reason, other
than good cause, or retirement, then he shall receive upon his termination an
amount equal to three times his then Annual Compensation, to be paid at his
election either (a) in a single lump sum reduced to its present value, within
ten days of his termination, or (b) in three equal annual payments each in the
amount of the Annual Compensation then in effect with the first payment to be
made within ten days after his termination. The President's TrustCo Employment
Agreement also provides for a gross up payment in the event that the amounts
payable to the President upon his termination under the President's TrustCo
Employment Agreement or any other agreement are subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code").
Upon termination of the President's employment due to retirement or
disability, TrustCo and Trustco Bank shall provide to the President and his
wife, for the life of the President, the same health insurance benefits provided
to retirees by TrustCo and Trustco Bank under their medical insurance plan.
TrustCo and Trustco Bank will also provide to the President for his life the
same life insurance benefits provided to retirees by TrustCo and Trustco Bank
under their life insurance plan.
The President's TrustCo Employment Agreement defines termination to
include: (a) any reduction in the President's annual compensation (including
executive incentive compensation), disability, death, retirement, pension or
profit-sharing benefits (unless such reductions shall be applied to all Trustco
Bank employees as part of a validly adopted plan of cost containment),
responsibilities or duties; or (b) either TrustCo's or Trustco Bank's relocation
or a change in the President's base location; or (c) receipt of a non-renewal
notice pursuant to the President's TrustCo Employment Agreement; or (d) the
unilateral election of the President to terminate his Agreement. Notwithstanding
the foregoing, the parties to the President's TrustCo Employment Agreement have
agreed that Mr. McCormick's ineligibility to participate in the Trustco Bank
profit sharing plan, as aforesaid, shall not have effected a termination of such
employment agreement.
(2) Vice Presidents' TrustCo Employment Agreements
The TrustCo Employment Agreements for the Vice Presidents (except for
Robert T. Cushing, whose employment agreement was executed on June 21, 1994)
were restated effective as of June 21, 1994. These employment agreements have
one year terms which automatically renew on January 1 of each year, unless a
Vice President receives a non-renewal notice or he or she reaches a specified
retirement age. The Vice Presidents' TrustCo Employment Agreements provide that
the annual compensation of each Vice President shall be his or her annual base
salary, which amount may be adjusted as agreed among the parties during each
renewal term. The Vice Presidents are also entitled to participate fully in any
disability, death benefit, retirement, executive incentive compensation, or
pension plans. Notwithstanding the foregoing, and as described in greater detail
herein under the caption "Personnel Advisory Committee Report on Executive
Compensation," the Vice Presidents ceased to be eligible to participate in the
Trustco Bank profit sharing plan in consideration of the potential benefits
under the short-term incentive plan described above.
In the event there is a termination of a Vice President within two years
after a change in control of TrustCo or Trustco Bank, for any reason other than
for good cause, death, retirement at the mandatory retirement age,
17
or disability, then he or she shall receive, within ten days of his or her
termination, an amount equal to two times the Vice President's annual base
salary then in effect. The TrustCo Employment Agreements for the Vice Presidents
also provide for a gross up payment in the event that the amounts payable to a
Vice President upon his or her termination under such Vice President's TrustCo
Employment Agreement or any other agreement involving such Vice President are
subject to the excise tax imposed by Section 4999 of the Code.
Upon termination of a Vice President's employment due to retirement or
disability, TrustCo and Trustco Bank shall provide to the Vice President and his
or her spouse, for the life of the Vice President, the same health insurance
benefits provided to retirees by TrustCo and Trustco Bank under their medical
insurance plan. TrustCo and Trustco Bank will also provide to the Vice President
for his or her life the same life insurance benefits provided to retirees by
TrustCo and Trustco Bank under their life insurance plan.
The TrustCo Employment Agreements for the Vice Presidents define
termination within two years after a change in control to include: (a) any
reduction in the executive's annual compensation, (including executive incentive
compensation), disability, death, retirement, pension or profit sharing benefits
(unless such reductions shall be applied to all Trustco Bank employees as part
of a validly adopted plan of cost containment), responsibilities or duties; or
(b) either TrustCo's or Trustco Bank's relocation or a change in the executive's
base location; or (c) receipt of a non-renewal notice pursuant to the TrustCo
Employment Agreement; or (d) the unilateral election of the executive to
terminate his or her Agreement. Notwithstanding the foregoing, the parties to
the Vice Presidents' TrustCo Employment Agreements have agreed that the Vice
Presidents' ineligibility to participate in the Trustco Bank profit sharing
plan, as aforesaid, shall not have effected a termination of such employment
agreements.
(3) General Provisions
In addition to termination payments for the President and Vice Presidents
described above, all TrustCo Employment Agreements provide for (a) the payment
in full of each employee's compensation due, including retirement, pension and
profit sharing plans, through the termination date, (b) the continuation of
health and group life insurance benefits for at least one year following
termination, and (c) the cost of any legal expenses as a result of such
termination.
THE TRUSTCO BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE TRUSTCO DIRECTOR
NOMINEES FOR ELECTION AS TRUSTCO DIRECTORS, WHICH IS ITEM 1 ON THE PROXY CARD
Item 2. Amendment of TrustCo's Amended and Restated Certificate of Incorporation
The TrustCo Board has unanimously recommended that the shareholders approve
a proposal to amend the TrustCo Bank Corp NY Amended and Restated Certificate of
Incorporation ("Certificate of Incorporation") to change the minimum and maximum
numbers of directors. The Certificate of Incorporation presently provides that
the number of directors to constitute the TrustCo Board shall consist of not
less than twelve (12) and not more than fifteen (15) members divided into three
(3) classes of not less than four (4) members each. The
18
TrustCo Bylaws provide that subject to the New York Business Corporation Law,
the number of directors constituting the Board may be changed from time to time
by action of the shareholders or the Board, provided that such numbers are not
less than the minimum of twelve (12) and maximum of fifteen (15). The Trustco
Bank Bylaws provide for a minimum number of directors of seven (7) and a maximum
of twenty (20). The Trustco Bank Board of Directors presently consists of those
persons who are also members of the TrustCo Board. In order that the minimum and
maximum numbers of directors are the same for both TrustCo and Trustco Bank and
to provide the TrustCo Board with additional flexibility, on February 18, 1997,
the TrustCo Board unanimously approved a change in the Certificate of
Incorporation (the "Certificate Amendment") to provide for a minimum number of
directors of seven (7) and a maximum number of twenty (20), divided into three
(3) classes, as nearly equal in number as possible, with one class to be elected
annually for a three-year term. The exact number of directors will be
established from time to time by the TrustCo Board. The number of directors
currently serving on the TrustCo Board is thirteen (13). The Certificate
Amendment is subject to approval of the shareholders at the Annual Meeting.
Reasons for and Effect of the Certificate Amendment
The TrustCo Board believes that the change in the minimum and maximum
numbers of directors is in the best interests of TrustCo and its shareholders.
The change will afford the TrustCo Board additional flexibility to adjust the
size of its membership as appropriate in circumstances which may arise in the
future. For example, the TrustCo Board could reduce the size of the Board to
facilitate communications among directors and increase the efficiency of the
Board, or could expand the size of the Board to accommodate additional directors
in future acquisitions. In addition, the change will make the TrustCo and
Trustco Bank requirements with respect to the number of directors identical.
In the event that the TrustCo Board decided to reduce the size of the
Board, it could do so by eliminating vacancies created by retirement or
otherwise, but as provided in the New York Business Corporation Law, could not
shorten the term of any incumbent director. If the size of the TrustCo Board
were to be increased, the directors then in office could fill the vacancies
created by the increase in accordance with the Bylaws, and such newly appointed
directors would hold office until the next meeting of shareholders at which the
election of directors is in the regular order of business. The change does not
affect the classification of the TrustCo Board, except that the number of
directors in a class may be increased or decreased, provided that the classes
are as nearly equal as possible.
The full text of Article VI of the Certificate of Incorporation, as
currently in effect and as proposed to be amended, is set forth in Exhibit A to
this Proxy Statement. The preceding description of the Certificate Amendment is
qualified in its entirety by reference to Exhibit A.
Vote Required
The Certificate Amendment will be adopted if approved by the affirmative
vote of the holders of at least two-thirds (2/3) of the Common Stock.
Abstentions on properly executed proxy cards and shares not voted by brokers and
other entities holding shares on behalf of beneficial owners will not be
counted, which will have the same effect as a vote "against" this proposal.
Dissenting votes give rise to no rights on the part of dissenters. The TrustCo
Board believes the adoption of the Certificate Amendment will be in the best
interests of the TrustCo shareholders.
THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE FOR THIS
PROPOSAL, WHICH IS ITEM 2 ON THE TRUSTCO PROXY CARD.
19
Item 3. Ratification of the Appointment of Independent Auditors
KPMG Peat Marwick LLP, certified public accountants, were the independent
auditors for TrustCo for the year ended December 31, 1996, and the TrustCo Board
has again selected and appointed them as the independent auditors for the year
ending December 31, 1997. A resolution will be presented at the Annual Meeting
to ratify their appointment as independent auditors. The independent auditors
will report on the consolidated financial statements of TrustCo for the current
calendar year and will perform such other non-audit services as may be required
of them. Representatives of KPMG Peat Marwick LLP are expected to be present at
the Annual Meeting to make a statement,if they so desire, and are also expected
to be available to respond to appropriate questions that may be raised.
During the year ended December 31, 1996, KPMG Peat Marwick LLP provided
various audit and non-audit professional services to TrustCo. Audit services so
provided included examination of the consolidated financial statements of
TrustCo, review, assistance and consultation in connection with the filing of
the Form 10-K Annual Report with the Securities and Exchange Commission, and
assistance with accounting and financial reporting requirements. Non-audit
services so provided included the preparation and planning of corporate tax
returns and general consultation on certain compensation matters.
THE TRUSTCO BOARD RECOMMENDS THAT TRUSTCO SHAREHOLDERS VOTE FOR THIS PROPOSAL,
WHICH IS ITEM 3 ON THE TRUSTCO PROXY CARD.
Item 4. Other Matters
The TrustCo Board is not aware of any other matters that may come before
the Annual Meeting. However, the proxies may be voted with discretionary
authority with respect to any other matters that may properly come before the
Annual Meeting.
SEC FORM 10-K:
TrustCo Bank Corp NY will provide without charge a copy of its Form 10-K
upon written request. Requests and related inquiries should be directed to:
William F. Terry, Secretary, TrustCo Bank Corp NY, P.O. Box 1082, Schenectady,
New York 12301-1082.
Ownership of TrustCo Common Stock by Certain Beneficial Owners
TrustCo is not aware of any person who, as of the date hereof, is the
beneficial owner of more than 5% of the Common Stock.
At March 1, 1997, the Trust Department of Trustco Bank held 4,677,974
shares of TrustCo Common Stock as executor, trustee and agent (22.95% of
outstanding shares) not otherwise reported in this proxy statement. Neither
TrustCo nor Trustco Bank has any beneficial interest in these shares.
20
Transactions with TrustCo and Trustco Bank Directors, Executive Officers and
Associates
Some of the directors and executive officers of TrustCo and Trustco Bank,
and some of the corporations and firms with which these individuals are
associated, are also customers of Trustco Bank in the ordinary course of
business, or are indebted to Trustco Bank in respect to loans of $60,000 or
more, and it is anticipated that they will continue to be customers of and
indebted to Trustco Bank in the future. All such loans, however, were made in
the ordinary course of business, did not involve more than normal risk of
collectibility, do not present other unfavorable features, and were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable Trustco Bank transactions with
unaffiliated persons. As of March 1, 1997 the total amount of such loans
represented 4.04% of shareholders' equity of TrustCo.
During the previous calendar year, Trustco Bank has had commercial
transactions in the ordinary course of business with companies with which
certain of TrustCo's directors are affiliated. No significant business or
personal relationship with Trustco Bank existed by virtue of a person's position
in TrustCo or in Trustco Bank, or ownership interest in TrustCo.
Insurance for Indemnification of Officers and Directors
TrustCo renewed insurance for the indemnification of its officers and
directors and officers and directors of Trustco Bank from the Progressive
Insurance Company effective for the one (1) year period from October 10, 1996 to
October 10, 1997. The cost of this insurance was $53,708, and coverage is
provided to all officers and directors of TrustCo and Trustco Bank. The TrustCo
Board has no knowledge of any claims made or sum paid pursuant to such insurance
policy during 1996.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
TrustCo's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of TrustCo's equity securities ("Reporting
Persons") to file initial reports of ownership and reports of changes of
ownership in TrustCo's Common Stock and other equity securities with the
Securities and Exchange Commission ("SEC"). Reporting Persons are required by
SEC regulations to furnish TrustCo with copies of all Section 16(a) reports they
file.
To TrustCo's knowledge, based solely on a review of the copies of such
reports furnished to TrustCo, and written representations that no other reports
were required, during the fiscal year ended December 31, 1996, all Section 16(a)
filing requirements have been met.
TRUSTCO SHAREHOLDERS
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE TRUSTCO ANNUAL MEETING, PLEASE
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING TRUSTCO PROXY CARD IN THE
ENVELOPE PROVIDED. IF YOU PLAN TO ATTEND THE MEETING AND ARE A SHAREHOLDER OF
RECORD, PLEASE MARK THE PROXY CARD APPROPRIATELY AND RETURN IT. HOWEVER, IF YOUR
SHARES ARE NOT REGISTERED IN YOUR OWN NAME, PLEASE ADVISE THE SHAREHOLDER OF
RECORD (YOUR BANK, BROKER, ETC.) THAT YOU WISH TO ATTEND. THAT FIRM MUST PROVIDE
YOU WITH EVIDENCE OF YOUR OWNERSHIP WHICH WILL ENABLE YOU TO GAIN ADMITTANCE TO
THE MEETING.
21
Exhibit A
The full text of Article VI of the Certificate of Incorporation, as currently in
effect, is set forth below:
Article VI
Directors; Election and Classification
6. The entire Board of Directors, consisting of not less than twelve (12)
members and not more than fifteen (15) members, shall be divided into three (3)
classes of not less than four (4) members each, which classes are hereby
designated as Class A, Class B and Class C. The number of directors of Class A
shall equal one-third (1/3) of the total number of directors as determined in
the manner provided in the By-Laws (with any fractional remainder to count as
one); the number of directors of Class B shall equal one-third (1/3) of said
total number of directors (or the nearest whole number thereto); and the number
of directors of Class C shall equal said total number of directors minus the
aggregate number of directors of Classes A and B. At the election of the first
Board of Directors, the class of each of the members then elected shall be
designated. The term of office of each member then designated as a Class A
director shall expire at the annual meeting of shareholders next ensuing, that
of each member then designated as a Class B director at the annual meeting of
shareholders one year thereafter, and that of each member then designated as a
Class C director at the annual meeting of shareholders two years thereafter. At
each annual meeting of shareholders held after the election and classification
of the first Board of Directors, directors to succeed those whose terms expire
at such annual meeting shall be elected to hold office for a term expiring at
the third succeeding annual meeting of shareholders and until their respective
successors are elected and have qualified or until their respective earlier
displacement from office by resignation, removal or otherwise.
The full text of Article VI of the Certificate of Incorporation, as proposed to
be amended, is set forth below:
Article VI
Directors; Election and Classification
6. The entire Board of Directors, consisting of not less than seven (7)
members and not more than twenty (20) members, shall be divided into three (3)
classes as nearly equal in number as may be, which classes are hereby designated
as Class A, Class B and Class C. The number of directors of Class A shall equal
one-third (1/3) of the total number of directors as determined in the manner
provided in the By-Laws (with any fractional remainder to count as one); the
number of directors of Class B shall equal one-third (1/3) of said total number
of directors (or the nearest whole number thereto); and the number of directors
of Class C shall equal said total number of directors minus the aggregate number
of directors of Classes A and B. At the election of the first Board of
Directors, the class of each of the members then elected shall be designated.
The term of office of each member then designated as a Class A director shall
expire at the annual meeting of shareholders next ensuing, that of each member
then designated as a Class B director at the annual meeting of shareholders one
year thereafter, and that of each member then designated as a Class C director
at the annual meeting of shareholders two years thereafter. At each annual
meeting of shareholders held after the election and classification of the first
Board of Directors, directors to succeed those whose terms expire at such annual
meeting shall be elected to hold office for a term expiring at the third
succeeding annual meeting of shareholders and until their respective successors
are elected and have qualified or until their respective earlier displacement
from office by resignation, removal or otherwise.
22
TRUSTCO BANK CORP NY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 19, 1997
The Board of Directors recommends a vote "FOR" proposals 1, 2, and 3 below
1. Election of Directors
[ ] FOR
[ ] WITHHELD
* FOR ALL EXCEPT the following nominees:
2. Approval of Amendment of Certificate of Incorporation
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
3. Ratification of Appointment of Independent Auditors
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
SPECIAL NOTES
[ ] I plan to attens meeting [ ] # attending
[ ] Comments on reverse side
SIGNATURES________________________________________ DATE_____________,1997
Please sign and date this proxy card exactly as your name(s) appear above and
return it promptly whether or not you plan to attend the meeting. If signing
for a corporation or partnership or as an agent, attorney or fiduciary,
indicate the capacity in which you are signing. If you do attend the meeting
and decide to vote by ballot, such vote will supersede this proxy.
This Proxy is solicited on behalf of the Board of Directors of TrustCo Bank
Corp NY ("TrustCo") for the Annual Meeting of shareholders to be held at
TrustCo's Trust Building, 192 Erie Boulevard, Schenectady, New York, on
May 19, 1997.
The undersigned hereby appointsHarry E. Whittingham, Jr. and Anthony M. Salerno,
and each of them, the proxy or proxies of the undersigned, with full power of
substitution, to vote all shares of common stock of TrustCo which the
undersigned is entitled to vote at the Annual Meeting, and at any adjournments
or postponements thereof.
This proxy will be voted as directed, but if no direction is indicated, it will
be voted FOR Proposals 1 through 3 and in the discretion of the proxies on such
other matters as may properly come before the Annual Meeting or any adjournments
or postponements thereof.
Your vote for election of Directors may be indicted on the other side. Nominees
are - Three Year Term: Barton A. Andreoli, Nancy A. McNamara, John S. Morris,
PhD, James H. Murphy, DDS, smd William H. Purdy. One Year Term: Anthony J.
Marinellno, MD, PhD.
Please sign and date this proxy card on the reverse side and mail promptly in
the enclosed postage-paid envelope. If you do not sign and return a proxy or
attend the meeting and vote by ballot, your shares cannot be counted.
Comments:_____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(If you have written in the abouve space, please mark the "Comments" box on the
other side of this card.)