March 14, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held on Tuesday, April 11, 1995, at 7:00 p.m. at the Elmira Holiday Inn, in the
City of Elmira, NewYork. Following the Meeting, desserts, coffee, tea and other
refreshments will be served.
The one item on the agenda requiring Shareholders vote will be the election of
eight directors. The candidates nominated for three-year terms, all currently
serving, are: John W. Bennett, Robert H. Dalrymple, Natalie B. Kuenkler, Ralph
H. Meyer, Samuel J. Semel, Richard W. Swan and William A. Tryon. The nominated
candidate for a one-year term, who is currently serving, is: Stephen M.
Lounsberry III. The attached Proxy Statement sets forth in detail information
relating to the nominated candidates as well as those directors continuing in
office.
In addition to the above-noted election, we will review our financial
performance for the past year and discuss our plans for 1995. Also, Joseph J.
Tascone, Vice President and Senior Trust Investment Officer of Chemung Canal
Trust Company, will speak on the topic of Investing: "How to Snatch Defeat from
the Jaws of Victory".
It is important that you be represented at the Meeting whether or not you plan
to attend in person. Accordingly, we urge you to mark, sign, date and return
the enclosed proxy card in the envelope provided. Also, if you plan to attend
the Meeting, please mark the proxy card where indicated and include the number
in your group. Your directors and management look forward to seeing you on
April 11.
Sincerely yours,
/s/ John W. Bennett
John W. Bennett
President and CEO
One Chemung Canal Plaza
P.O. Box 1522
Elmira, New York 14902
Parent Company of
CHEMUNG CANAL TRUST COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
As directed by the Board of Directors of Chemung Financial Corporation, NOTICE
IS HEREBY GIVEN that the Annual Meeting of Shareholders of the Corporation will
be held at the Elmira Holiday Inn, One Holiday Plaza, Elmira, New York, Tuesday,
April 11, 1995, at 7:00 p.m. for the following purposes:
1. To elect seven (7) directors, each to hold office for a
term of three years and one (1) director to hold office
for a term of one year,and in each case until their
respective successors have been elected and qualified.
2. To transact such other business as may properly come
before the Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 8, 1995 as the
record date for determination of Shareholders entitled to notice of and to vote
at this Meeting.
Shareholders are requested to date, sign and mail the enclosed proxy in the
envelope provided at their earliest convenience. A prompt response will be
appreciated and will save the Corporation additional time and expense.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome F. Denton
Secretary
March 14, 1995
CHEMUNG FINANCIAL CORPORATION
ONE CHEMUNG CANAL PLAZA, P.O. BOX 1522, ELMIRA, NEW YORK
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, APRIL 11, 1995
GENERAL INFORMATION:
Chemung Financial Corporation and its wholly-owned subsidiary, Chemung Canal
Trust Company, are incorporated under the laws of the State of New York. For
purposes of this proxy statement, financial and other information is presented
on a consolidated basis for Chemung Financial Corporation (Corporation ) and
Chemung Canal Trust Company (Bank). The disclosed information of the Corporation
and the Bank should be viewed as though it pertained to one entity, unless
otherwise stated.
The Corporation anticipates that the proxy and proxy statement will be mailed to
holders of Common Stock of the Corporation on or about March 14, 1995.
SOLICITATION AND REVOCATION OF PROXIES:
This proxy statement is furnished to the Shareholders of Chemung Financial
Corporation in connection with the solicitation of proxies by the Board of
Directors of the Corporation for the purposes set forth in the attached Notice
of Annual Meeting to be held April 11, 1995. The proxy may be revoked at any
time prior to the voting thereof. Such right is not limited or subject to any
formal procedure. Attendance at the Meeting will not in and of itself revoke a
proxy.
The cost of soliciting proxies will be borne by the Corporation and the Bank.
In addition to solicitations by mail, some of the directors, officers, and
regular employees of the Corporation and the Bank may conduct additional
solicitations by telephone and personal contacts without remuneration. American
Stock Transfer & Trust Company , the Corporation's transfer agent, will aid the
Corporation in the solicitation of proxies and proxy vote tabulations. Nominees,
brokerage houses, custodians and fiduciaries will be requested to forward
soliciting material to beneficial owners of stock held of record and the
Corporation will reimburse such persons for any reasonable expense.
BOARD OF DIRECTORS:
ELECTON OF DIRECTORS
Those persons serving as directors of the Corporation and the Bank, being the
same individuals, normally serve three-year terms of office, with approximately
one-third of the total number of each such Board of Directors to be elected at
each Annual Shareholders Meeting of each such entity.
The number of directors to be elected at the 1995 Annual Meeting of Shareholders
is eight (8); seven (7) for three-year terms and one (1) for a one-year term,
each to serve for such term and until their respective successors are elected
and qualified. Nominees for director will be elected by a plurality of votes
cast at the Meeting by holders of Common Stock present in person or by proxy and
entitled to vote on such election. Any other matter requires the affirmative
vote of a majority of the votes cast at the Meeting. Only shares affirmatively
voted in favor of a nominee will be counted toward the achievement of a
plurality. Votes withheld (including broker non-votes) and abstentions are
counted as present for the purpose of determining a quorum but are not counted
as votes cast.
Proxies returned by Shareholders and not revoked will be voted for the election
of the nominees as directors unless Shareholders instruct otherwise on the
proxy. If any nominee shall become unavailable for election, the persons
designated as proxies reserve full discretion to cast votes for other persons.
The following table sets forth information concerning the Board of Directors'
nominees for election as directors and the other directors whose terms of office
do not expire at the 1995 Annual Meeting:
Length of Service Principal Occupation
Name and Age As Director (1) During Past 5 Years
NOMINEE WITH TERM
EXPIRING IN 1996
Stephen M. Lounsberry III Since 1995 (1995) President of Moore & Steele
Age 41 Corporation, manufacturer
of railroad lubrication
systems
NOMINEES WITH TERMS
EXPIRING IN 1998
John W. Bennett Since 1988 (1988) President & CEO of the
Age 61 Corporation and the Bank
since January 1, 1991;
formerly President of the
Corporation and the Bank;
also director of Hardinge
Brothers, Inc.
Robert H. Dalrymple Since 1995 (1995) Secretary of Dalrymple
Age 44 Holding Corporation, parent
company for several
construction companies
NOMINEES WITH TERMS
EXPIRING IN 1998
Natalie B. Kuenkler Since 1985 (1976) Director of various
Age 69 community organizations
Ralph H. Meyer Since 1985 (1981) President of Guthrie
Age 55 Healthcare System, a
vertically integrated
healthcare delivery
system
Samuel J. Semel Since 1993 (1993) President of Chemung
Age 68 Electronics, Inc.,
retail electronics store
Richard W. Swan Since 1985 (1984) President of Swan &
Age 46 Sons-Morss Co., Inc.,
insurance brokerage agency
William A. Tryon Since 1987 (1987) Chairman of the Board and
Age 64 CEO of Trayer Products,Inc.
automotive and truck parts
manufacturer; and Chairman
of the Board of Perry and
Swartwood, Inc., insurance
brokerage agency; formerly
a director of the Bank from
1964 to 1976
DIRECTORS CONTINUING IN OFFICE
WITH TERMS EXPIRING IN 1996
Robert E. Agan Since 1986 (1986) President and CEO, and
Age 56 Director of Hardinge
Brothers, Inc., machine
tool manufacturer
Donald L. Brooks, Jr. Since 1985 (1972) Physician
Age 66
Boyd McDowell II Since 1985 (1969) Retired since April 1,
Age 69 1991; formerly Chairman of
the Board & CEO of the
Corporation and the Bank;
also a director of Hardinge
Brothers, Inc.
Thomas K. Meier Since 1988 (1988) President of Elmira College
Age 54
DIRECTORS CONTINUING IN OFFICE
WITH TERMS EXPIRING IN 1996
Charles M. Streeter, Jr. Since 1985 (1979) President of Streeter
Age 55 Associates, Inc., general
contractors
Nelson Mooers van den Blink Since 1985 (1983) Chairman of the Board,
Age 60 Chief Executive Officer, and
Treasurer of The Hilliard
Corporation, motion control
equipment, oil reclaimer and
filter manufacturer
DIRECTORS CONTINUING IN OFFICE
WITH TERMS EXPIRING IN 1997
David J. Dalrymple Since 1993 (1993) President of Dalrymple
Age 40 Holding Corporation since
December 17, 1993, parent
company for several
construction companies;
formerly Vice President
Richard H. Evans Since 1985 (1981) Retired since January 1,
Age 64 1995; formerly Chairman of
the Board & CEO of Chas. F.
Evans Co., Inc.
Edward B. Hoffman Since 1993 (1993) Partner with Sayles, Evans,
Age 63 Brayton, Palmer & Tifft, law
firm
John F. Potter Since 1991 (1991) President of Seneca
Age 49 Beverage Corp., wholesale
distributor of beer, water
and soda products
Whitney S. Powers Since 1985 (1983) Manufacturing Consultant;
Age 71 also a director of Hardinge
Brothers, Inc.
William C. Ughetta Since 1985 (1985) Senior Vice President and
Age 62 General Counsel of Corning
Incorporated, a diversified
manufacturing company
(1) The date in parentheses reflects the year in which the director was first
elected to the Bank Board.
Messrs. Robert H. Dalrymple and Stephen M. Lounsberry III were elected to the
Corporation's and the Bank's Boards of Directors on January 11, 1995 and
March 8, 1995, respectively.
DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of the Corporation held eight (8) regularly scheduled
meetings and one (1) special meeting during the year ended December 31, 1994.
The Corporation has no standing committees.
The Board of Directors of the Bank held twelve (12) regularly scheduled meetings
and no special meetings during the year ended December 31, 1994.
Among its standing committees, the Board of Directors of the Bank has an
Examining Committee, Nominating Committee and a Personnel Committee. The
Examining Committee makes an annual examination of the Bank as a whole, reviews
the Banks internal audit and loan review procedures, and recommends to the
Board of Directors the engagement and dismissal of independent auditors. During
1994 this Committee held three (3) meetings. On December 31, 1994 its members
were Messrs. Brooks (Chairman), Agan, Hoffman, McDowell, Meyer, Potter, Powers
and Semel.
The Nominating Committee selects and recommends to the Board of Directors
nominees for election to the Board. The Committee will consider written
recommendations by Shareholders for nominees for election to the Board if such
recommendations are mailed to the Chairman of the Nominating Committee or to the
President of the Corporation at the Corporations Main Office, One Chemung Canal
Plaza, Elmira, New York 14902. There were no Committee meetings held in 1994.
On December 31, 1994 its members were Messrs. Swan (Chairman), Bennett, Brooks,
D. Dalrymple, McDowell, Potter, Powers, Streeter, and Mrs. Kuenkler.
The Personnel Committee reviews employee benefit programs and employee relation
policies and procedures. Additional responsibilities include the nomination of
officers, recommendation of Executive Officer compensation plans, and
establishment of guidelines for setting all other officers' salaries. The
Committee held six (6) meetings in 1994 and on December 31, 1994 its members
were Messrs. Meier (Chairman), Brooks, D. Dalrymple, Evans, Meyer, Potter,
Streeter, Ughetta, and Mrs. van den Blink.
During the year ended December 31, 1994, each director of the Corporation and
the Bank attended at least 75% of the aggregate of (1) the total number of Board
Meetings held and (2) the total number of meetings held by all committees of
which such director was a member, with the exceptions of Messrs. Agan, Brooks,
McDowell, and Mrs. Kuenkler who attended 64%, 73%, 72% and 54%, respectively,
of such meetings.
DIRECTORS COMPENSATION
Each director of the Bank who is not an officer or employee of the Bank receives
an annual retainer of $5,000 and a fee of $300 for each meeting of the Board of
Directors attended. Those directors who are members of one or more committees
of the Board of Directors also receive a fee of $300 for each meeting of each
committee attended, with the exception of the Chairman of each committee who
receives $350.
Directors who are not officers or employees of the Corporation receive a fee of
$300 for attendance at meetings of the Board of the Corporation which are held
on days when there is no meeting of the Board of Directors of the Bank. There
was one such meeting during 1994. Otherwise, directors of the Corporation are
not compensated for services rendered by them to the Corporation. It presently
is contemplated that such will continue to be the policy of the Corporation.
Any director who is entitled to receive a retainer and fees for meetings of the
Board of Directors and of committees thereof attended, may elect to have all or
a portion of said retainer and fees deferred under the Banks Deferred Directors
Fee Plan . Each participating director may designate, in increments of 10%, the
compensation to be deferred, or compensation already deferred, to be allocated
to a memorandum Money Market or a memorandum Unit Value Account, or a
combination of such accounts. The memorandum Money Market Account of each
participating director is credited with the dollar amount of deferral, and
interest is computed and added to said account at the times and in the manner
and at the rate at which interest is computed for the Bank's Insured Money
Market Accounts. The memorandum Unit Value Account of each participating
director is credited with the dollar amount of deferral, with the aggregate of
said deferred amounts being converted to units on a quarterly basis by dividing
the aggregate of said deferred amounts by the closing bid price for shares of
the Common Stock of the Corporation on such trading dates as noted in the Plan.
Dividends are credited to said account on the dates and at the rate per unit at
which dividends are paid per share on the Corporation's outstanding Common Stock
and are then converted to units using the same basis of conversion as for
deferred amounts. Within certain time limitations, a participating director
may elect to receive deferred fees either in a lump sum or in installments.
The aggregate amount of directors retainers and fees paid and deferred during
1994 was $207,350. No additional compensation was received by any director for
special assignments or services.
CERTAIN TRANSACTIONS
Some of the directors and officers of the Bank, and some of the corporations and
firms with which these individuals are associated, also are customers of the
Bank in the ordinary course of business, or are indebted to the Bank in respect
to loans of $60,000 or more, and it is anticipated that some of these
individuals, corporations and firms will continue to be customers of and
indebted to the Bank on a similar basis in the future. All loans extended to
such individuals, corporations and firms were made in the ordinary course of
business, did not involve more than normal risk of collectibility or 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 bank transactions with unaffiliated persons.
The Bank has purchased insurance from a CNA Company, American Casualty Company
of Reading, Pennsylvania, providing for reimbursement of directors and officers
of the Corporation and the Bank for costs and expenses incurred by them in
actions brought against them for wrongful acts in connection with their duties
as directors or officers, including actions as fiduciaries of the Banks Pension
and Profit-Sharing Plans, under the Employee Retirement Income Security Act of
1974. The insurance coverage, which expires in November 1995, costs $18,423 on
an annual basis, and has been paid by the Bank. No claims have been made or
paid under this insurance.
The Bank has retained Sayles, Evans, Brayton, Palmer & Tifft, of which
Mr. Hoffman is a partner, for legal services during the last two years and
expects to retain Sayles, Evans, Brayton, Palmer & Tifft for legal services
during the current year.
VOTING SECURITIES AND EQUITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
AND BY DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The Board of Directors has fixed the close of business on March 8, 1995, as the
record date for determination of Shareholders entitled to notice of and to vote
at this Meeting.
As of the close of business on February 15, 1995, the Corporation had
outstanding 2,093,481 shares of Common Stock. Each of said shares is entitled
to one vote at the Meeting with respect to each matter to be voted upon. None
of said stock has cumulative voting rights.
To the knowledge of the Corporation, as of January 3, 1995, the only persons who
beneficially owned more than 5% of the outstanding shares of the Corporations
Common Stock are set forth below:
Mary E. Dalrymple of 661 Foster Avenue, Elmira, New York, David J. Dalrymple of
274 Upper Coleman Avenue, Elmira, New York and Robert H. Dalrymple of 875 Upland
Drive, Elmira, New York, may be deemed to have beneficially owned collectively
341,349 shares or 16.31% of the Corporation's Common Stock. Mary E. Dalrymple,
the mother of David J. Dalrymple and Robert H. Dalrymple, owned directly 214,221
of said shares. David J. Dalrymple owned directly 46,162 shares and as
custodian for his children under the New York State Uniform Gifts to Minors Act
1,904 shares. Robert H. Dalrymple owned directly 38,000 shares and as custodian
for his children under the New York State Uniform Gifts to Minors Act 1,904
shares. Dalrymple Holding Corporation, of which corporation David J. Dalrymple
and Robert H. Dalrymple are officers, directors and principal shareholders,
owned directly 39,158 of said shares. Said total ownership by said three
persons does not include 15,115 shares owned by Susquehanna Supply Company of
which David J. Dalrymple and Robert H. Dalrymple each own 23.1% of the
outstanding common stock nor does it include 1,350 shares and 1,000 shares owned
by the respective spouses of David J. Dalrymple and Robert H. Dalrymple. Said
persons may be deemed to share beneficial ownership because of family
relationships amongst them and because they may be deemed to constitute a
"group" within the meaning of Section 13 (d)(3) of the Exchange Act. The
disclosure described herein shall not be deemed to be an admission by said
persons that such a group exists.
The Bank, in various fiduciary, agency and trust capacities held a total of
608,507 shares or 29.1 % of the outstanding stock of the Corporation. When
acting in a co-fiduciary capacity, the 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. Where the Bank is sole trustee, the shares will be voted only
if the trust instrument provides for voting the stock at the direction of the
donor or a beneficiary and such direction is in fact received. It is the
intention of the Bank in its fiduciary capacity to vote those shares as to which
it has sole voting power in favor of the proposals as hereinafter described.
As of January 3, 1995, each director or nominee and each Executive Officer named
in the Summary Compensation Table herein, individually, and all directors,
nominees and Executive Officers as a group beneficially owned Common Stock as
reported to the Corporation as of said date as follows (unless otherwise
indicated, each of the persons named has sole voting and investment power with
respect to the shares listed):
DIRECTORS, NOMINEES AND AMOUNT AND NATURE PERCENT OF SHARES
EXECUTIVE OFFICERS OF BENEFICIAL OWNERSHIP(A) OUTSTANDING(B)
Robert E. Agan 450 --
John W. Bennett(C) 7,674 --
Donald L. Brooks, Jr. 1,250 --
David J. Dalrymple(D) 46,162 2.21
Robert H. Dalrymple(D) 38,000 1.82
Richard H. Evans 9,352 --
Edward B. Hoffman 1,579 --
Natalie B. Kuenkler(E) 6,706 --
Stephen M. Lounsberry III 1,625 --
Boyd McDowell II 8,357 --
Thomas K. Meier 2,000 --
Ralph H. Meyer 1,500 --
John F. Potter(F) 8,171 --
Whitney S. Powers 9,675 --
Samuel J. Semel 4,176 --
Charles M. Streeter, Jr.(G) 10,213 --
Richard W. Swan(H) 19,133 --
William A. Tryon 14,039 --
William C. Ughetta 6,500 --
Nelson Mooers van den Blink 1,476 --
Jan P. Updegraff(C) 3,009 --
All Directors, Nominees and 211,891 10.12
Executive Officers as a group
(24 persons)(I)
Notes:
A. Unless otherwise noted, all shares included in this table are owned directly,
with sole voting and dispositive power.
B. Unless otherwise noted, less than 1% per individual.
C. Includes all vested shares of Common Stock of the Corporation held for the
benefit of each Executive Officer by the Bank as trustee of the Bank's Profit
Sharing, Savings and Investment Plan, who may instruct the trustee as to the
voting of such shares. If no instructions are received, the trustee votes
the shares in the same proportion as it votes all of the shares for which
instructions were received from all Plan participants. The power to dispose
of shares is held by Plan participants subject to certain restrictions.
Messrs. Bennett and Updegraff have a vested interest in 6,578 and 2,859 such
shares held by the Plan, respectively. Under the provisions of the Plan, the
trustee holds for the benefit of all employees who participate in the Plan
183,018 shares of the Corporation's Common Stock
D. Does not include 39,158 shares owned by Dalrymple Holding Corporation, of
which corporation David J. Dalrymple and Robert H. Dalrymple are officers,
directors and the principal shareholders nor 15,115 shares owned by
Susquehanna Supply Company, of which company Messrs. Dalrymple are each 23.1%
owners, as to which shares Messrs. Dalrymple disclaim beneficial ownership.
See also VOTING SECURITIES AND EQUITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
AND BY DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS herein.
E. Includes 4,131 shares held by Mrs. Kuenkler and another as trustees under the
Will of a decedent under which Mrs. Kuenkler is an income beneficiary and as
trustee shares voting and dispositive powers. Does not include 75,600 shares
owned by The Rathbone Corporation, of which Mrs. Kuenkler is a director.
F. Includes 5,448 shares owned by Seneca Beverage Corp., of which corporation
Mr. Potter is an officer, director and the principal shareholder.
G. Includes 5,418 shares owned by Streeter Associates, Inc., of which
corporation Mr. Streeter is an officer, director and the principal
shareholder.
H. Includes 6,000 shares owned by Swan & Sons-Morss Co., Inc., of which
corporation Mr. Swan is an officer, director and one of the principal
shareholders. Does not includes 2,158 shares held by others as trustees for
a trust of which Mr. Swan is an income beneficiary, as to which shares Mr.
Swan disclaims beneficial ownership.
I. Does not include 14,441 shares owned as custodians for minor children and
owned by spouses of certain officers and directors as to which such officers
and directors disclaim beneficial ownership.
Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Corporation's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership, reports of
changes in beneficial ownership, and annual reports involving security
transactions pursuant to one or more rules as set forth under Sections 16(a) and
16(b) of the Securities Exchange Act. Directors, executive officers, and
greater than ten percent shareholders are required by SEC regulation to furnish
the Corporation with copies of all Section 16(a) forms they file.
To the Corporation's knowledge, based on review of the copies of such reports
furnished to the Corporation and written representations that no other reports
were required for the year ended December 31, 1994, the executive officers,
directors and any ten percent shareholder complied with all Section 16(a) filing
requirements.
MANAGEMENT:
DIRECTORS' PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under the supervision of the Personnel Committee of the Board of Directors which
is composed entirely of outside directors, the Bank has developed and
implemented compensation policies which seek to enhance the profitability of the
Bank and the Corporation and thus, shareholder value while at the same time
providing fair and competitive compensation which will attract and retain well-
qualified executives. Based upon recommendations of the Personnel Committee,
the Board of Directors sets the annual compensation of the Chief Executive
Officer and approves guidelines establishing compensation for other senior
management which is then recommended by the Chief Executive Officer based upon
performance and other relevant factors and then approved by the Board of
Directors. Aside from the fringe benefit programs in which all Bank employees
participate, annual compensation of all Bank executives consists of an annual
salary and a discretionary bonus which may or may not be deferred at the
executive's election. This bonus is paid only if profits for the year exceed 8%
of the Shareholders equity and is recommended by the Personnel Committee and
fixed by the Board of Directors near year-end, when results for the year can be
accurately predicted. The Bank at present has no long term compensation plan
such as stock options.
In evaluating the performance and recommending the compensation of the Chief
Executive Officer and the compensation guidelines for the Bank's other senior
management, the committee has taken particular note of management's success
during 1994 in achieving certain profit, growth and operational objectives which
were established by the Board of Directors in the Bank Plan at the beginning of
1994 and compared the Corporation's financial results against the results
reported by similar banking businesses in New York and Pennsylvania. In making
its evaluation the committee also noted management's successful expansion of the
Corporation's market base during 1994 through the acquisition from the
Resolution Trust Corporation of deposits and banking offices in three new market
areas and the further expansion to a fourth new market area through a merger
with an existing full-service bank. The financial and operational measurements
considered by the Board were: profits, return on assets, return on equity, new
product development, expense control, asset growth, non-interest income, asset
quality and asset liability management. There is no specific weight given to
any of these factors and there is no formula whereby a certain performance will
result in a certain bonus or salary. he committee subjectively considers total
performance and the total financial and operating conditions of the Bank in
making its compensation recommendations.
Also, in considering the compensation of the Chief Executive Officer, the
committee consulted with Ben S. Cole of Ben S. Cole Financial Inc., an
organization which provides comparative information on CEO compensation for a
nationwide peer group of independent banks and holding companies having similar
asset size. From this consultation it was determined that the performance of
the Bank compared favorably with that of its peers and that the compensation
paid by the Bank was well within the range of compensation paid by its peers.
In its review of management performance and compensation, the committee has also
taken into account management's consistent commitment to the long-term success
of the Corporation and its subsidiary. The committee has recognized that the
Corporation's profitability in any one year is considerably impacted by the
general economic conditions nationally and in its trading areas, over which
management has little or no control, and the committee's policy, therefore, is
to not over-emphasize, either positively or negatively, a single year's results
at the expense of significant, sustained, long-term earnings growth.
Based on its evaluation of these factors, the committee believes that the
executive management of the Corporation is dedicated to achieving significant
improvements in long-term financial performance and that the compensation
policies, plans and programs the committee has implemented and administered have
contributed to achieving this management focus.
SUBMITTED BY THE DIRECTORS' PERSONNEL COMMITTEE
Thomas K. Meier, Chairman John F. Potter
Donald L. Brooks, Jr. Charles M. Streeter, Jr.
David J. Dalrymple William C. Ughetta
Richard H. Evans Nelson Mooers van den Blink
Ralph H. Meyer
COMPARATIVE RETURN PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return For Fiscal Years Ending December
31, 1990 - 1994 Among Chemung Financial Corporation, NASDAQ - Composite Index
and NASDAQ - Bank Stock Index
1990 1991 1992 1993 1994
Chemung Financial Corp. 89.99 71.40 75.55 98.17 113.47
NASDAQ - Composite 84.92 136.28 158.58 180.93 176.92
NASDAQ - Bank Stocks 73.23 120.17 174.87 199.33 198.69
The cumulative total return includes (i) dividends paid and (ii) changes in the
share price of the Corporation's Common Stock and assumes that all dividends
were reinvested. The above graph assumes that the value of the investment in
Chemung Financial Corporation and each index was $100 on December 30, 1989.
The NASDAQ - Composite and Bank Stock indices were obtained from the Center for
Research in Security Prices, University of Chicago, Chicago, Illinois.
EXECUTIVE OFFICERS
During 1994, the names and positions of the executive officers of the
Corporation and the Bank, all serving one-year terms, were as follows:
NAME AGE POSITION (served since)
John W. Bennett 61 President and CEO of the Corporation and the
Bank(1991); formerly President of the
Corporation and the Bank (1988); and prior
thereto Vice President of theCorporation and
Executive Vice President of the Bank (1986)
Jan P. Updegraff 52 Vice President and Treasurer of the
Corporation (1990) and Executive Vice
President of the Bank (1990)
Daniel F. Agan 61 Vice President of the Corporation (1988) and
Senior Vice President of the Bank (1984)
Robert J. Hodgson 49 Vice President of the Corporation (1990) and
Senior Vice President of the Bank (1988)
James E. Corey, III 48 Vice President of the Corporation (1993) and
Senior Vice President of the Bank (1993)
EXECUTIVE COMPENSATION
The following information indicates all compensation paid by the Bank during
1994 to the Chief Executive Officer and any of the four highest paid executive
officers of the Corporation and the Bank whose total compensation exceed
$100,000.
At present, the officers of the Corporation are not separately compensated for
services rendered by them to the Corporation. It presently is contemplated that
such will continue to be the policy of the Corporation.
SUMMARY COMPENSATION TABLE
NAME ANNUAL COMPENSATION
AND
PRINCIPAL ALL OTHER
POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION ($)(2)
John W. Bennett 1994 185,692 30,000 8,174
President & CEO
of the Corporation 1993 162,885 32,000 6,597
and the Bank
1992 156,539 18,000 6,713
Jan P. Updegraff 1994 90,385 25,000 6,266
Vice President &
Treasurer of the 1993 84,692 20,000 2,100
Corporation and
Executive Vice 1992 82,615 15,000 3,716
President of the Bank
(1) Includes amounts allocated for the year indicated, whether paid or
deferred, to such person under the Bank's Incentive Bonus Plan.
(2) Includes amounts allocated for the year indicated to such person under the
Bank's Profit-Sharing, Savings and Investment Plan.
RETIREMENT PLAN
The Bank maintains a non-contributory, defined benefit Retirement Plan trusteed
and administered by the Bank. The Plan covers all employees who have attained
age 20 with one or more years of service and who have one thousand hours of
service during the plan year. Under the Plan, the annual benefit payable to
qualifying employees upon their retirement is based on the average of their five
highest paid years out of the last ten calendar years of employment. Normal
retirement age under the Plan is 65. The Plan also provides for reduced benefit
payments for early retirement following age 55. Compensation under the Plan is
limited to all of an employees salary, wages, or other regular payments from the
Bank, excluding bonuses, commissions, overtime pay, or other unusual payments.
The Retirement Plan provides an annual benefit of 1.2% for each year of credited
service to a maximum of 25 years and for each additional year to a maximum of 10
years, 1% times the above average compensation, plus for each year of credited
service to a maximum of 35 years, .65% of the above average compensation to the
extent it exceeds the average of the taxable wage base in effect under Section
230 of the Social Security Act for each year in the 35 - year period ending with
the year in which the participant attains social security retirement age (which
base was $24,312 for a participant attaining age 65 in 1994).
The following table sets forth the estimated annual benefits, based upon a
straight-life annuity form of pension, payable on retirement at age 65 by a
participating employee, assuming final average earnings as shown. Employees
become fully vested following 5 years of service.
AVERAGE ANNUAL ANNUAL BENEFITS UPON RETIREMENT
EARNINGS WITH YEARS OF SERVICE INDICATED
10 20 30 35
$100,000 16,920 33,839 49,759 57,219
$120,000 20,620 41,239 60,659 69,769
$150,000 26,170 52,339 77,009 88,594
$190,000 33,570 67,139 98,809 116,694
$200,000 33,940 70,839 104,259 119,969
The previously- noted executive officers of the Corporation and the Bank had the
following credited full years of service under the Plan, as of December 31, 1994
John W. Bennett (39) and Jan P. Updegraff (24).
Due to the full funding limitation, the Bank made no contribution to the
Pension Plan for 1994. Contributions made to the Pension Plan by the Bank
totaled $306,288 for 1993, and $316,345 for 1992.
Effective January 1, 1994, the Bank established a non-qualified Executive
Supplemental Pension Plan designed to provide a benefit which, when added to
other retirement income, will ensure the payment of a competitive level of
retirement income in order to attract, retain and motivate selected executives
of the Bank. From time to time the Board of Directors may select executives as
participants in the plan. Currently, the President is the only plan participant.
The Plan provides an annual benefit equal to the amount, if any, that the
benefit which would have been paid under the terms of the Bank's Pension Plan,
computed as if the basic Pension Plan benefit formula administered and payable
without regard to the special benefit limitations required to comply with
Sections 415, 401(a)(17) and other governing sections of the Internal Revenue
Code, exceeds the benefit which is payable to the participant under the terms of
the Pension Plan on the date of the participant's termination.
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN
The Bank maintains a Profit-Sharing, Savings and Investment Plan for the benefit
of all employees with one or more years of service who have attained one
thousand hours of service during the Plan year. The Banks contribution in any
year is paid out of the Banks net profit and, therefore, is subject to change
from year to year. The contribution shall not exceed the maximum amount
deductible for income tax purposes for such year. Annual contributions under
the Plan are allocated pro rata on the basis of participants aggregate covered
compensation, limited, however, to a maximum of 50% of the defined benefit
limit under Code Section 415 (b) (1) (A) in effect as of January 1 of the Plan
Year for which the contribution is made (50% of $118,800 or $59,400 for 1994).
Participants who have earned at least five years of vesting service may make
limited withdrawals from the Plans Trust Fund from account balances accumulated
prior to January 1, 1985. The Plan further provides the opportunity for all
participants to contribute up to 10% of pay on a tax-deferred basis with the
Bank matching 50% of the first 6% of that contribution. Both the Bank's profit
sharing and matching contributions are invested in the Corporation's Common
Stock to the extent available. Participants' accounts are at all times 100%
vested, and benefits are payable upon retirement, death, disability, or other
termination of employment.
The Bank made contributions to the Profit Sharing, Savings and Investment Plan
totaling $423,161 for 1994, $406,798 for 1993, and $450,241 for 1992.
INCENTIVE BONUS PLAN
The Bank instituted an Incentive Bonus Plan effective January 1, 1983, for its
senior officers which proveides that the Bank may award bonuses to key
management officers and others in such amount as the Board of Directors, in its
sole discretion, may, from time to time, determine. Bonuses awarded may be paid
in cash or, in certain instances, may be deferred at the participant's option,
until his or her retirement or separation from service. The maximum pool of
funds available for the Plan is defined as not to exceed 25% of the amount by
which the Bank's profits for any award year exceed 8% of shareholders equity at
the beginning of the award year.
The Bank made contributions to the Incentive Bonus Plan totaling $182,500 for
1994, $171,500 for 1993, and $160,000 for 1992.
EMPLOYMENT CONTRACTS
The Bank has employment contracts with nineteen of its senior officers, all vice
president level and above. The contracts provide that in the event of
termination of any of these officers' employment without cause, the officer
shall continue to receive his or her salary at the level then existing and the
customary fringe benefits which he or she is then receivingfor a period ending
December 31, 1996, except for Messrs. Agan, Corey and Hodgson whose guaranteed
terms end December 31, 1997, and Messrs. Bennett and Updegreaff whose guaranteed
terms end December 31, 1998. The contracts further provide that they may be
extended by the Board of Directors on a year-to-year basis and also may be
terminated for cause upon thirty days' notice.
OTHER COMPENSATION AGREEMENTS
The Bank maintains several contributory and non-contributory medical, life and
disability plans covering all officers, as well as all full-time employees. The
Bank does not maintain any stock option, stock appreciation rights or stock
purchase or award plans for offficers or directors.
INDEPENDENT PUBLIC ACCOUNTANTS:
The accounting firm of KPMG Peat Marwick, 113 South Salina Street, Syracuse, New
York 13202 has acted as the Bank's and the Corporation's independent auditors
and accountants for the fiscal year of 1994 and will so act in 1995.
Representatives of KPMG Peat Marwick will be present at the Annual Meeting of
Shareholders with the opportunity to make a statement. The representatives will
respond to appropriate questions.
OTHER BUSINESS:
Management knows of no business which will be presented for consideration, other
than the matters described in the Notice of Annual Meeting. If other matters
are properly presented, the persons designated as proxies intend to vote thereon
in accordance with their best judgment.
SHAREHOLDER PROPOSALS:
Qualified Shareholders desiring to present a proposal at the 1996 Annual
Meeting of Shareholders, including a notice of intent to make a nomination at
said Meeting, must submit such proposal to the Corporation on or before November
14, 1995. Such proposals must comply in all respects with the rules and
regulations of the Securities and Exchange Commission.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome F. Denton
Secretary
Date: March 14, 1995
One Chemung Canal Plaza
Elmira, New York 14902
CHEMUNG
FINANCIAL
CORPORATION
Subsidiary, Chemung Canal Trust Company
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
One Chemung Canal Plaza Annual Meeting of
P.O. Box 1522 Shareholders to be held
Elmira, New York 14902 April 11, 1995
APPENDIX
OMITTED GRAPHIC MATERIAL
The Comparative Return Performance Graph set forth under the heading "Comparison
of Five Year Cumulative Total Return For Fiscal Years Ending December 31, 1990 -
1994 Among Chemung Financial Corporation, NASDAQ -Composite Index and NASDAQ -
Bank Stock Index", as required by Item 402 (l) of Regulation S-K has been
omitted pursuant to Rule 304(d) of Regulation S-T but will be filed with the
Securities and Exchange Commission in paper form pursuant to Rule 311(b) of
Regulation S-T.
PROXY FORM
CHEMUNG FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - APRIL 11, 1995
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CHEMUNG FINANCIAL CORPORATION
John R. Battersby, Darwin C. Farber, and John B. Hintz, each with power of
substitution and with all the powers and discretion the undersigned would have
if personally present, are hereby appointed the Proxy Agents to represent the
undersigned at the Annual Meeting of Shareholders of Chemung Financial
Corporation, to be held on April 11, 1995 (including any adjournments or
postponements thereof) and to vote all shares of Common Stock of Chemung
Financial Corporation which the undersigned is entitled to vote on all matters
that properly come before the meeting, subject to any directions indicated.
(To be signed on Reverse Side)
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED. IF NO
DIRECTIONS TO THE CONTRARY ARE GIVEN, THE PROXY AGENTS INTEND TO VOTE
FOR THE NOMINEES.
NOMINEES
FOR WITHHELD
3-year term: John W. Bennett
1. Election of Robert H. Dalrymple
Directors. Natalie B. Kuenkler
Ralph H. Meyer
For, except vote withheld from the Samuel J. Semel
following nominee(s): Richard W. Swan
William A. Tryon
1-year term: Stephen M. Lounsberry III
I/We will attend the Meeting
Number in group
SIGNATURE(S) DATE
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee, custodian or
guardian, please give full title as such.