10
EXHIBIT F
NOTICE OF ANNUAL MEETING, PROXY STATEMENT
DATED APRIL 2, 1998, AND PROXY FORM
Notice of 1998 Annual Meeting and Proxy Statement
April 2, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
to be held on Wednesday, May 13, 1998, at 7:00 p.m., local time, at the
Elmira Holiday Inn, in the City of Elmira, New York. Following the
meeting, desserts, coffee, tea and other refreshments will be served.
The three items on the agenda requiring Shareholders' vote will be (1)
to elect seven directors - the candidates nominated for three-year terms,
all currently serving, are: John W. Bennett, Robert H. Dalrymple,
Frederick Q. Falck, Ralph H. Meyer, Samuel J. Semel, Richard W. Swan and
William A. Tryon, (2) to vote on a proposal to amend the corporation's
certificate of incorporation to increase the number of authorized shares of
common stock and to reduce the par value of such stock, and (3) to vote on
a proposal to adopt the Chemung Canal Trust Company Deferred Directors Fee
Plan. The attached Proxy Statement sets forth in detail information
relating to the proposals, the nominated candidates and those directors
continuing in office, and additional information relating to the management
of the corporation.
In addition to the above-noted election, we will review our financial
performance for the past year and discuss our plans for 1998.
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 and
date the proxy card enclosed in the mailing envelope sleeve and return it
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 May 13.
/s/ Jan P. Updegraff
Jan P. Updegraff
President and
Chief Executive Officer
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, 760 East Water Street, Elmira, New York, on Wednesday, May 13, 1998,
at 7:00 p.m. for the following purposes:
to elect seven (7) directors, each to hold office for a term of
three years and until their respective successors have been
elected and qualified;
to consider a proposal to amend the corporation's certificate of
incorporation to increase the number of authorized shares of
common stock and to reduce the par value of such stock;
to consider a proposal to adopt the Chemung Canal Trust Company
Deferred Directors Fee Plan; and
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 April 1,
1998 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
Robert J. Hodgson
Secretary
April 2, 1998
CHEMUNG FINANCIAL CORPORATION
ONE CHEMUNG CANAL PLAZA, P.O. BOX 1522, ELMIRA, NEW YORK
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 13, 1998
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, unless otherwise stated,
financial and other information is presented on a consolidated basis for
Chemung Financial Corporation ("Corporation") and Chemung Canal Trust
Company ("Bank").
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors for use at the Annual Meeting of
Shareholders (the "Annual Meeting") of Chemung Financial Corporation to be
held on Wednesday, May 13, 1998, at 7:00 p.m., local time, at the Elmira
Holiday Inn, One Holiday Plaza, 760 East Water Street, Elmira, New York.
This Proxy Statement and the accompanying Proxy and Notice of Annual
Meeting of Shareholders are being mailed to Shareholders on or about April
2, 1998. A Shareholder granting a proxy has the right to revoke it by a
duly executed Proxy bearing a later date, by attending the Annual Meeting
and voting in person, or by otherwise notifying the Secretary of the
Corporation in writing prior to the Annual Meeting.
Only Shareholders of record at the close of business on April 1, 1998
are entitled to receive notice of and to vote at the Annual Meeting. As of
March 16, 1998, there were 2,061,738 shares of Common Stock outstanding and
entitled to vote. Each share of Common Stock is entitled to one vote.
There are no cumulative voting rights. Nominees for director will be
elected by a plurality of votes cast at the Annual 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
votes cast at the meeting, except as otherwise provided in the
Corporation's Certificate of Incorporation or By-laws. Only shares
affirmatively voted in favor of a nominee will be counted toward the
achievement of a plurality. Votes withheld (including non-broker votes)
and abstentions are counted as present for the purpose of determining a
quorum but are not counted as votes cast.
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 their reasonable expenses.
ACTION TO BE TAKEN UNDER PROXY:
It is proposed that at the Annual Meeting action will be taken on the
matters set forth in the accompanying Notice of Annual Meeting and
described in this Proxy Statement. Proxies returned by Shareholders and
not revoked will be voted for the election of the nominees for directors,
for the proposal to amend the Corporation's Certificate of Incorporation to
increase the number of authorized shares of common stock and to reduce the
par value of such stock and for the proposal to adopt the Chemung Canal
Trust Company Deferred Directors Fee Plan unless Shareholders instruct
otherwise on the Proxy. A Shareholder granting a proxy has the right to
revoke it by filing with the Secretary of the Corporation prior to the time
such proxy is voted a duly executed proxy bearing a later date, by
attending the Annual Meeting and voting in person, or by otherwise
notifying the Secretary of the Corporation in writing of such Shareholder's
intention to revoke such proxy prior to the time such proxy is voted. The
Board of Directors does not know of any other business to be brought before
the Annual Meeting, but it is intended that, as to any such other business,
a vote may be cast pursuant to the Proxy in accordance with the judgment of
the person or persons acting thereunder. Should any nominee for the office
of director become unable to accept nomination or election, which is not
anticipated, it is intended that the persons acting under the Proxy will
vote for the election in the stead of such nominee of such other person as
the Board of Directors may recommend.
BOARD OF DIRECTORS:
Nominees For Election as 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 Meeting of each such entity. The number of
directors to be elected at the 1998 Annual Meeting of Shareholders is seven
(7) for three-year terms, each to serve for such term and until their
respective successors are elected and qualified.
The following table sets forth information concerning the nominees for
election as directors and each director continuing in office:
<CAPTION
Length of Principal Occupation During
Name and Age Service Past 5 Years
As Director
NOMINEES WITH TERMS
EXPIRING IN 2001
John W. Bennett Since 1988 Chairman of the Board of the Corporation
Age 64 and Bank; formerly President and Chief
Executive Officer of the Corporation and
Bank; also a director of Hardinge Inc.
Robert H. Dalrymple Since 1995 Secretary of Dalrymple Holding
Age 47 Corporation, a parent company for several
construction companies.
Length of Principal Occupation During
Name and Age Service Past 5 Years
As Director
NOMINEES WITH TERMS
EXPIRING IN 2001
(continued)
Frederick Q. Falck Since 1997 President of L.M. Trading Company, an
Age 49 agricultural investment corporation; Vice
President of Arnot Realty Corporation;
Chairman of The Rathbone Corporation;
President of the US Foundation of the
Universidad del Valle de Guatemala and
board member since 1986; Treasurer of the
Escuela Agricula Panamerica, an
agricultural college in Honduras and
Board member since 1990.
Ralph H. Meyer Since 1985 President and Chief Executive Officer of
Age 58 Guthrie Healthcare System, a vertically
integrated health care delivery system.
Samuel J. Semel Since 1993 President of Chemung Electronics, Inc.,
Age 71 an electronic and computer consulting
firm.
Richard W. Swan Since 1985 President of Swan & Sons-Morss Co., Inc.,
Age 49 an insurance brokerage agency.
William A. Tryon Since 1987 Chairman of the Board and Chief Executive
Age 67 Officer of Trayer Products, Inc., an
automotive, truck and other industrial
parts manufacturer; President of Perry &
Carroll, Inc., an insurance brokerage
agency; formerly a director of the Bank
from 1964 to 1976.
DIRECTORS
CONTINUING
IN OFFICE WITH
TERMS
EXPIRING IN 1999
Robert E. Agan Since 1986 Chairman of the Board, Chief Executive
Age 59 Officer and President of Hardinge Inc., a
world-wide machine tool manufacturer.
Donald L. Brooks, Since 1985 Retired physician.
Jr.
Age 69
Stephen M. Since 1995 President of Applied Technology
Lounsberry III Manufacturing Corporation since July 17,
Age 44 1996, a manufacturer of railroad
lubrication systems; formerly President
of Moore & Steele Corporation.
Length of Principal Occupation During
Name and Age Service Past 5 Years
As Director
DIRECTORS
CONTINUING
IN OFFICE WITH
TERMS
EXPIRING IN 1999
(continued)
Thomas K. Meier Since 1988 President of Elmira College.
Age 57
Charles M. Since 1985 President of Streeter Associates, Inc., a
Streeter, Jr. general building contractor.
Age 58
Nelson Mooers van Since 1985 Chairman of the Board, Chief Executive
den Blink Officer and Treasurer of The Hilliard
Age 63 Corporation, a motion control equipment,
oil reclaimer and filter manufacturer.
DIRECTORS
CONTINUING IN
OFFICE WITH TERMS
EXPIRING IN 2000
David J. Dalrymple Since 1993 President of Dalrymple Holding
Age 44 Corporation, parent company for several
construction companies.
Richard H. Evans Since 1985 Retired since January 1, 1995; formerly
Age 67 Chairman of the Board & Chief Executive
Officer of Chas. F. Evans Co., Inc.,
specialists in commercial roofing.
Edward B. Hoffman Since 1993 Partner with Sayles, Evans, Brayton,
Age 66 Palmer & Tifft law firm.
John F. Potter Since 1991 President of Seneca Beverage Corporation,
Age 52 a wholesale distributor of beer, water
and soda products.
William C. Ughetta Since 1985 Senior Vice President and former General
Age 65 Counsel of Corning Incorporated, a
diversified manufacturing company.
Jan P. Updegraff Since 1996 President and Chief Executive Officer of
Age 55 the Corporation and Bank; formerly Vice
President and Treasurer of the
Corporation and Chief Operating Officer
and Executive Vice President of the Bank.
PROPOSAL TO AMEND THE CORPORATION'S CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK AND TO
REDUCE THE PAR VALUE OF SUCH STOCK
The Corporation's Certificate of Incorporation currently authorizes
the issuance of three million (3,000,000) shares of Common Stock, with a
par value of five dollars ($5.00) per share. The Board of Directors on
March 11, 1998 unanimously adopted a resolution proposing that the
Certificate of Incorporation be amended to increase the authorized number
of shares of Common Stock to ten million (10,000,000), subject to
shareholder approval of the amendment.
The Board of Directors has also unanimously approved a change in the
par value of the Common Stock from $5.00 per share to $0.01 per share. The
purpose of reducing the par value is to reduce the amount of New York State
franchise taxes to be paid by the Corporation upon the increase in the
number of authorized shares. Under applicable New York State franchise tax
law, the Corporation must pay a one-time tax of one-twentieth of one
percent on the amount of the par value of the shares that are proposed to
be newly authorized. Reducing the par value of the Common Stock as
proposed will reduce this tax by approximately $17,000.
The reduction in the par value per share of the Common Stock from
$5.00 per share to $0.01 per share will not affect the Corporation's total
authorized Common Stock. The reduction in par value will reduce the par
value of the Corporation's Common Stock account and increase the
accumulated paid-in capital account by the same amount. The overall stock
equity balance will not change.
Par value is an arbitrary number that has no correlation with the
actual value of a corporation's common equity. The recommended change
would not change either the aggregate market or book value of shareholder
common equity. The change in par value represents an accounting change
that brings the par value of the Common Stock to a level similar to that of
many other publicly traded companies.
Proposed Amendment to Certificate of Incorporation
The Board of Directors has adopted resolutions setting forth (i) the
proposed amendment to paragraph 4 of the Corporation's Certificate of
Incorporation (the "Amendment"); (ii) the advisability of the Amendment;
and (iii) a call for submission of the Amendment for approval by the
Corporation's shareholders at the meeting.
The following is the text of paragraph 4 of the Certificate of
Incorporation of the Corporation, as proposed to be amended:
The aggregate number of shares which the Corporation shall have the
authority to issue is: Ten Million (10,000,000), all of which shall
be common shares of the par value of one cent ($0.01) each.
Purpose and Effect of the Proposed Amendment
As of April 1, 1998, the Corporation had 2,061,738 shares of Common
Stock outstanding. Based upon the number of outstanding shares of Common
Stock, the Corporation currently has 938,262 shares remaining available for
other purposes. The Board of Directors believes that it is in the
Corporation's best interest to increase the number of shares of Common
Stock that the Corporation is authorized to issue in order to give the
Corporation additional flexibility to maintain a reasonable stock price
with future stock splits and/or stock dividends. The Board of Directors
also believes that the availability of additional authorized but unissued
shares will provide the Corporation with the flexibility to issue Common
Stock for other proper corporate purposes which may be identified in the
future, such as to raise equity capital, to adopt additional employee
benefit plans or reserve additional shares for issuance under such plans,
and to make acquisitions through the use of stock.
The Board of Directors believes that the proposed increase in the
authorized Common Stock will make available sufficient shares for use
should the Corporation decide to use its shares for one or more of such
previously mentioned purposes or otherwise. No additional action or
authorization by the Corporation's shareholders would be necessary prior to
the issuance of such additional shares, unless required by applicable law
or the rules of any stock exchange or national securities association
trading system on which the Common Stock is then listed or quoted. The
Corporation reserves the right to seek a further increase in authorized
shares from time to time in the future as considered appropriate by the
Board of Directors.
Under the Corporation's Certificate of Incorporation, the
Corporation's shareholders do not have preemptive rights with respect to
Common Stock. Thus, should the Board of Directors elect to issue
additional shares of Common Stock, existing shareholders would not have any
preferential rights to purchase such shares. In addition, if the Board of
Directors elects to issue additional shares of Common Stock, such issuance
could have a dilutive effect on the earnings per share, voting power and
shareholdings of current shareholders.
The proposed amendment to increase the authorized number of shares of
Common Stock could, under certain circumstances, have an anti-takeover
effect, although this is not the intention of this proposal. For example,
in the event of a hostile attempt to take over control of the Corporation,
it may be possible for the Corporation to endeavor to impede the attempt by
issuing shares of the Common Stock, thereby diluting the voting power of
the other outstanding shares and increasing the potential cost to acquire
control of the Corporation. The Amendment therefore may have the effect of
discouraging unsolicited takeover attempts. By potentially discouraging
initiation of any such unsolicited takeover attempt, the proposed Amendment
may limit the opportunity for the Corporation's shareholders to dispose of
their shares at the higher price generally available in takeover attempts
or that may be available under a merger proposal. The proposed amendment
may have the effect of permitting the Corporation's current management,
including the current Board of Directors, to retain its position, and place
it in a better position to resist changes that shareholders may wish to
make if they are dissatisfied with the conduct of the Corporation's
business. However, the Board of Directors is not aware of any attempt to
take control of the Corporation and the Board of Directors has not
presented this proposal with the intent that it be utilized as a type of
anti-takeover device.
Vote Required
The affirmative vote of a majority of the outstanding shares of common
stock entitled to vote at the annual meeting is required for approval of
this proposal.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL TO ADOPT THE
CHEMUNG CANAL TRUST COMPANY
DEFERRED DIRECTORS FEE PLAN
The Bank's Deferred Directors Fee Plan (the "Plan"), attached herein
as Appendix A, enables the Bank's directors to defer all or any portion of
the fees ("Fees") payable on account of their service as directors. The
Fees include both the annual retainer fee and fees payable on account of
attendance at various committee meetings held throughout the year.
Participating directors may elect to allocate their deferred Fees to
the Memorandum Money Market Account, the Memorandum Unit Value Account or
any combination of the two. Deferrals to the Memorandum Money Market
Account obtain interest equal to the Applicable Federal Rate for short-term
debt as published by the Internal Revenue Service. Interest is added to
each Director's balance on a quarterly basis.
Fees deferred to the Memorandum Unit Value Account are expressed in
units, the number of which units is determined by dividing the Fees so
allocated by the closing price of the Corporation's common stock ("Market
Value") on the last trading day of each quarter. Subsequent dividends paid
by the Corporation increase the number of units in each account by the
equivalent of the Market Value of the Corporation's common stock as of the
dividend date. The number of units is also adjusted in the event of stock
dividends, stock splits or other similar recapitalizations effected by the
Corporation.
Fees deferred under the Plan are payable at the election of a
participating director, at a specified age or time, upon the termination of
the director's services as a director. Notwithstanding the above, payments
to directors must commence not later than the year in which the director
obtains the age of 72. Deferred Fees may be paid in either one installment
or in a number of installments, as elected by the director. The value of a
director's Memorandum Money Market Account must be paid in cash. All
amounts represented by the Memorandum Unit Value Account shall be paid only
in shares of the Corporation's common stock (except fractional shares which
shall be paid in cash).
Deferred Fees are accounted for as a general unfunded liability of the
Bank and Corporation. Participating directors have neither a claim nor
security interest against any asset of the Bank on account of such deferred
Fees. The Plan, first approved on April 13, 1977, was amended, effective
October 1, 1997 to require that Fees deferred into units of the
Corporation's common stock be paid only in shares of the Corporation.
Formerly, stock units were settled in cash. As of October 1, 1997, the
value of deferrals represented by the Memorandum Unit Value Account may not
be reallocated to the Memorandum Money Market Account.
Vote Required
The affirmative vote of a majority of the outstanding shares of common
stock entitled to vote at the Annual Meeting is required for approval of
this proposal.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
The following table sets forth information, as of January 31, 1998,
with respect to any person who is known by the Corporation to be the
beneficial owner of more than five percent of the Corporation's Common
Stock:
Name and Address of Number of Shares of Percent of Shares
Beneficial Owner Common Outstanding
Stock Beneficially
Owned
Chemung Canal Trust 376,2581 18.2%
Company
One Chemung Canal
Plaza
Elmira, NY 14902
Chemung Canal Trust
Company 227,1152 11%
Profit-Sharing, Savings
and Investment Plan
One Chemung Canal
Plaza
Elmira, NY 14902
David J. Dalrymple
274 Upper Coleman 308,7783, 5 15.0%6
Avenue
Elmira, NY 14905
Robert H. Dalrymple
875 Upland Drive 297,6624, 5 14.4%6
Elmira, NY 14905
1 Held by the Bank in various fiduciary capacities, either alone or with
others. Includes 25,613 shares held with sole voting and dispositive
powers, 350,645 shares held with shared power to vote and 184,717 shares
held with shared dispositive power. Shares held in a co-fiduciary
capacity by the Bank are voted by the co-fiduciary or fiduciaries in
the same manner as if the co-fiduciary or fiduciaries were the sole
fiduciary. Shares held by the Bank as sole trustee are voted by the
Bank only if the trust instrument provides for voting of the shares at
the direction of the donor or a beneficiary and such direction is in
fact received.
2 Voted by the Bank as trustee as directed by the Plan participants.
3 Includes 43,461 shares held directly, 1,904 shares held as custodian for
Mr. Dalrymple's children under the New York State Uniform Gifts to
Minors Act, 224,255 shares held by Dalrymple Family Limited Partnership
of which David J. Dalrymple and Robert H. Dalrymple are sole general
partners (see footnotes 5 and 6), and 39,158 shares held by Dalrymple
Holding Corporation, of which David J. Dalrymple and Robert H. Dalrymple
are officers, directors and principal shareholders (see footnote 4).
Excludes 1,988 shares held by Mr. Dalrymple's spouse as to which shares
Mr. Dalrymple disclaims beneficial ownership.
4 Includes 32,345 shares held directly, 1,904 shares held as custodian for
Mr. Dalrymple's children under the New York State Uniform Gifts to
Minors Act, 224,255 shares held by Dalrymple Family Limited Partnership
of which David J. Dalrymple and Robert H. Dalrymple are sole general
partners (see footnotes 5 and 6), and 39,158 shares held by Dalrymple
Holding Corporation (see footnote 3). Excludes 1,345 shares held by Mr.
Dalrymple's spouse as to which shares Mr. Dalrymple disclaims beneficial
ownership.
5 Excludes 15,115 shares held by Susquehanna Supply Company of which David
J. Dalrymple and Robert H. Dalrymple each own 23.1% of the outstanding
common stock.
6 Because of the definition of "beneficial ownership" under Section 13 of
The Exchange Act, and the rules and regulations promulgated thereunder,
David and Robert Dalrymple are each listed as beneficial owners of
263,413 of the same shares. Without such multiple counting, David and
Robert Dalrymples' total aggregate beneficial ownership is 16.6% of the
outstanding shares of Common Stock of the Corporation and if deemed to
be a member of a "group" within the meaning of Section 13(d)(3) of The
Exchange Act, such group would be deemed to hold said percentage of the
outstanding shares of Common Stock of the Corporation. Nothing
described herein shall infer or be deemed an admission by such person
that such a group exists.
SECURITY OWNERSHIP OF MANAGEMENT:
As of January 31, 1998, 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 Percent of
Executive Officers Nature Shares Outstanding*
of Beneficial
Ownership
Robert E. Agan 5,789A *
John W. Bennett 9,344B *
Donald L. Brooks, Jr. 6,895A *
David J. Dalrymple 308,778C 15.00%C
Robert H. Dalrymple 297,662C 14.04%C
Richard H. Evans 9,352 *
Frederick Q. Falck 3.06%
63,391A, D
Edward B. Hoffman 4,023A *
Stephen M. Lounsberry 5,873A *
III
Thomas K. Meier 2,000 *
Ralph H. Meyer 6,466A *
John F. Potter *
13,004A, E
Samuel J. Semel 6,143A *
Charles M. Streeter, 11,659A, *
Jr. F
Directors, Amount and Percent of
Nominees and Nature Shares Outstanding*
Executive Officers of Beneficial
Ownership
Richard W. Swan 19,193G *
William A. Tryon 9,332 *
William C. Ughetta 12,924A *
Jan P. Updegraff 4,055B *
Nelson Mooers van den 1,637 *
Blink
All Directors, Nominees 539,683H 26.18%
and Executive Officers
as a group (25 persons)
* Unless otherwise noted, less than 1% per individual.
A Includes shares that Messrs. Agan (5,339), Brooks (645), Falck (220),
Hoffman, (2,272), Lounsberry (1,379), Meyer (3,871), Potter (3,941),
Semel (1,511), Streeter (1,446), and Ughetta (2,924) have credited to
their accounts the equivalent of that number of shares shown in
parenthesis following their names of Common Stock in valuation entry
form under the Bank's Deferred Directors Fee Plan. Such deferred fees
will be paid solely in shares of the Corporation's Common Stock pursuant
to the terms of the Plan and the election of the Plan participants.
Said share equivalencies have no voting rights until shares are actually
issued to said directors under the terms of the Plan.
B 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 8,199 and 3,905 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
227,115 shares of the Corporation's Common Stock.
C See Footnotes 3 - 6 of the SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS table for further explanation of shares beneficially owned.
C Includes shares held in various trusts of which Mr. Falck is a co-
trustee or income beneficiary. Excludes 74,280 shares owned by The
Rathbone Corporation of which Mr. Falck is an officer, director and co-
trustee of various trusts which are shareholders of said corporation.
E Includes 6,042 shares owned by Seneca Beverage Corporation, of which
corporation Mr. Potter is an officer, director and the principal
shareholder.
F Includes 5,418 shares owned by Streeter Associates, Inc., of which
corporation Mr. Streeter is an officer, director and the principal
shareholder.
G Includes 5,850 shares owned by Swan & Sons-Morss Co., Inc., of which
corporation Mr. Swan is an officer, director and one of the principal
shareholders and 210 shares held by Mr. Swan as custodian for his minor
children. Does not include 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.
H Does not include 14,916 shares owned by spouses of certain officers and
directors as to which shares such officers and directors disclaim
beneficial ownership and does not include 263,413 shares included under
each of David J. Dalrymple and Robert H. Dalrymple (see footnote 6 under
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS).
COMPENSATION OF MANAGEMENT:
Directors' Personnel Committee Report on Executive Compensation
Under the supervision of the Personnel Committee of the Board of Directors
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. The
Committee also reviews and recommends to the Board of Directors compensation of
other senior management as first recommended by the Chief Executive Officer
based upon performance and other relevant factors. Aside from the fringe
benefit programs in which all Bank employees participate, compensation of all
Bank officers and exempt non-officers consists of an annual salary and a
management incentive bonus. The management incentive bonus is subject to the
terms and conditions of the Management Incentive Plan adopted by the Board of
Directors, which provides for the payment of bonuses to participants in
accordance with an allocation formula based in part on the Corporation's
attainment of specific operating objectives and in part on a subjective review
of the participant's individual performance. Additionally, those officers who
play a major role in setting and implementing long-term strategies, currently
being the Chairman of the Board and the Chief Executive Officer, may receive a
long-term incentive award. Payment of the long-term incentive award will be
deferred for three years following the accrual year and may be further deferred
at the election of the participant. The incentive bonus may or may not be
deferred at the officer's election. For 1997, Messrs. Bennett and Updegraff
received incentive bonuses of $40,000 and $20,000, respectively. No long-term
awards were issued. Senior Officer participants as a group, including Messrs.
Bennett and Updegraff, received incentive bonus awards totaling $287,140 for
1997.
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
ability during 1997 in achieving certain profit, growth, and operational
objectives which were established by the Board of Directors in the Bank Plan at
the beginning of 1997 and compared the Corporation's financial results against
the results reported by similar banks in New York and Pennsylvania. The
financial and operational measurements considered by the Board were: net
profit, return on assets, return on equity, new market penetration, new product
development, cost 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 salary. The Committee 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 Chairman of the Board and
Chief Executive Officer, the Committee periodically reviews reports prepared by
various organizations which provide comparative information on Executive
compensation for a nationwide peer group of independent banks and bank holding
companies having similar asset size. From this review it was determined that
the performance of the Bank was within the range reported by its peers and that
the compensation paid by the Bank was appropriate in comparison to the peer
group.
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 Bank. The committee has recognized that
profitability in any one year is considerably impacted by the general economic
conditions nationally and in its market 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 their evaluation, 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 Richard H. Evans William A.
Tryon
Donald L. Brooks, Jr. Ralph H. Meyer William C.
Ughetta
David J. Dalrymple Richard W. Swan
Executive Officers
During 1997, 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 64 Chairman of the Board and Chief Executive
Officer of the Corporation and the Bank
(1996); formerly President and Chief
Executive Officer of the Corporation and the
Bank (1991); and prior thereto President and
Chief Operating Officer of the Corporation
and the Bank (1988).
Jan P. Updegraff 55 President and Chief Operating Officer of the
Corporation and the Bank (1996); formerly
Vice President and Treasurer of the
Corporation and Executive Vice President of
the Bank (1990).
Daniel F. Agan1 64 Vice President of the Corporation (1988) and
Senior Vice President of the Bank (1984).
Robert J. Hodgson 52 Secretary and Corporate Counsel of the
Corporation and the Bank (1997); formerly
Vice President of the Corporation (1990); and
Senior Vice President of the Bank (1988).
James E. Corey III 51 Vice President of the Corporation (1993) and
Senior Vice President of the Bank (1993).
Joseph J. Tascone 50 Vice President of the Corporation and Senior
Vice President of the Bank (1995); and prior
thereto Vice President of the Bank (1987).
Jerome F. Denton 46 Vice President of the Corporation (1997);
formerly Secretary (1986); and Senior Vice
President of the Bank (1996).
1 Mr. Daniel F. Agan is a brother of Board member, Robert E. Agan.
Executive Compensation
The following information indicates compensation paid or accrued by
the Bank during 1997 for services rendered by each of the Chief Executive
Officer and the highest-paid executive officers of the Corporation and the
Bank whose total compensation exceeded $100,000.
At present, the officers of the Corporation are not separately
compensated for services rendered by them to the Corporation. It presently
is contemplated that such will continue to be the policy of the
Corporation.
Summary Compensation Table
Annual Compensation
Name and Principal All Other
Position Held Year Salary($ Bonus($)1 Compensation($)2
)
John W. Bennett 1997 209,308 40,000 9,218
Chairman of the
Board and Chief 1996 200,308 25,000 8,541
Executive Officer
of the Corporation 1995 194,000 18,000 8,418
and the Bank
Jan P. Updegraff 1997 128,846 20,000 8,463
President and Chief
Operating Officer 1996 114,039 15,000 7,342
of the Corporation
and Bank 1995 95,385 15,000 6,660
1 Includes amounts allocated for the year indicated, whether paid or
deferred, to such person under the Bank-Wide and Management Incentive
Bonus Plans.
2 Includes amounts allocated for the year indicated to such person under
the Bank's Profit-Sharing, Savings and Investment Plan.
Pension Plan
The Bank maintains a non-contributory, defined benefit Pension 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 consecutive 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 employee's salary, wages, or other regular payments from the Bank,
excluding bonuses, commissions, overtime pay, or other unusual payments.
The Pension 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 $29,304 for a
participant attaining age 65 in 1997).
The Bank made contributions to the Pension Plan totaling $262,200 for
1995. Due to a full funding limitation, the Bank made no contribution to
the Pension Plan for the years 1996 and 1997.
Additionally, 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,
Mr. Bennett is the only plan participant.
This 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.
The following table sets forth the estimated annual benefits under
both plans, 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 with Years of Service
Earnings Indicated
20 30 351
$100,000 33,190 48,786 56,083
$120,000 40,590 59,686 68,633
$150,000 51,690 76,036 87,458
$190,000 66,490 97,836 112,558
$200,000 70,190 103,286 118,833
1 Maximum number of years allowed under the terms of the Pension Plan
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,
1997: John W. Bennett (42) and Jan P. Updegraff (27).
Employment Contracts
The Bank has employment contracts with twenty 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 receiving for a period ending
December 31, 1999, except for Messrs. Corey, Denton, Tascone and Updegraff whose
guaranteed terms end December 31, 2000, Mr. Bennett whose guaranteed term ends
July 1, 1998 and Mr. Agan whose guaranteed term ends March 1, 1999. 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 and full-time employees. The Bank
does not maintain any stock option, stock appreciation rights or stock purchase
or award plans for officers or directors.
Comparative Return Performance Graph
Comparison of Five-Year Cumulative Total Returns For Fiscal Years
Ending December 31, 1993 - 1997 Among Chemung Financial Corporation,
CRSP Total Returns Index for NASDAQ Stock Market (US Companies) and NASDAQ -
Bank Stocks Index
(OMITTED GRAPHIC MATERIAL - SEE APPENDIX)
1992 1993 1994 1995 1996 1997
Chemung Financial 100.0 129. 150. 168.1 213.2 272.38
Corporation 0 23 23 5 1
CRSP NASDAQ 100.0 114. 112. 158.7 195.2 239.50
Composite 0 80 20 0 0
NASDAQ - Bank 100.0 114. 113. 169.2 223.4 377.40
Stocks 0 00 60 0 0
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
31, 1992.
The CRSP Total Returns Index for NASDAQ Stock Market (US Companies) and
Bank Stocks indices were obtained from the Center for Research in Security
Prices (CRSP), University of Chicago, Chicago, Illinois.
Compensation of Directors and Committee Meetings
The Board of Directors of the Corporation held eight (8) regularly
scheduled meetings during the year ended December 31, 1997. The Corporation has
no standing committees.
The Board of Directors of the Bank held twelve (12) regularly scheduled
meetings and one special meeting during the year ended December 31, 1997. Among
its standing committees, the Board of Directors of the Bank has an Examining
Committee and a Personnel Committee.
The Examining Committee makes an annual examination of the Bank as a whole,
reviews the Bank's internal audit and loan review procedures and recommends to
the Board of Directors the engagement and dismissal of independent auditors.
During 1997 this Committee held three (3) meetings. On December 31, 1997, its
members were Mrs. van den Blink (Chairperson) and Messrs. Agan, Brooks, R.
Dalrymple, Falck, Lounsberry, Potter, Semel and Streeter.
The Personnel Committee is responsible for the nomination of officers,
recommendation of Executive Officer compensation plans, and establishment of
guidelines for setting all other officers' salaries. Additional
responsibilities include the review and approval of employee benefit programs
and employee relation policies and procedures. The Committee held six (6)
meetings in 1997 and on December 31, 1997, its members were Messrs. Meier
(Chairperson), Brooks, D. Dalrymple, Evans, Meyer, Swan, Tryon and Ughetta.
During the year ended December 31, 1997, each director of the Corporation
and the Bank attended at least 75% of the aggregate of the number of Board
Meetings held and the number of meetings held by all committees of which such
director was a member, with the exception of Dr. Donald L. Brooks, Jr. who
attended 67% of such meetings.
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 Chairperson of each
committee who receives $350. The aggregate amount of directors' retainers and
fees paid or deferred under the Deferred Directors Fee Plan during 1997 was
$246,800.
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 were no such meetings held during 1997. Otherwise, directors of the
Corporation are not compensated for services rendered by them to the Corporation
and no change is presently contemplated in this policy.
Certain Transactions
Some of the Bank's directors and officers, and entities of which they are
associated, 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 directors, officers and entities will continue to
be customers of and indebted to the Bank on similar terms in the future. All
loans to these individuals and entities are made in the ordinary course of
business, involve no more than a normal risk of collectibility and were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable 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 their costs and expenses for claims
based on "wrongful acts" in connection with their duties as directors or
officers, including actions as fiduciaries of the Bank's Pension and Profit-
Sharing Plans under the Employee Retirement Income Security Act of 1974. The
insurance coverage, which expires in February 1998, costs $18,900 on an annual
basis, and has been paid by the Bank.
The Bank retained Sayles, Evans, Brayton, Palmer & Tifft, a law firm 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.
INDEPENDENT PUBLIC ACCOUNTANTS:
The accounting firm of KPMG Peat Marwick LLP, 113 South Salina Street,
Syracuse, New York 13202 has acted as the Bank's and the Corporation's
independent auditors and accountants since 1990 and will so act in 1998.
Representatives of KPMG Peat Marwick LLP 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 1999 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 December
3, 1998. Such proposals must comply in all respects with the rules and
regulations of the Securities and Exchange Commission.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, certain executive officers, and more than ten percent
owners of a registered class of the Corporation's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
changes in beneficial ownership. 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, 1997, all Section 16(a)
filing requirements applicable to its executive officers, directors and any ten
percent shareholder were met.
OTHER MATTERS:
Financial statements for the Corporation and its consolidated subsidiaries
are included in Chemung Financial Corporation's Annual Report to stockholders
for the year 1997 which was mailed to the stockholders beginning April 2, 1998.
A COPY OF CHEMUNG FINANCIAL CORPORATION'S 1997 ANNUAL REPORT ON FORM 10-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO
THOSE STOCKHOLDERS WHO WOULD LIKE MORE DETAILED INFORMATION CONCERNING THE
CORPORATION. TO OBTAIN A COPY, PLEASE WRITE TO: ROBERT J. HODGSON, SENIOR VICE
PRESIDENT, CORPORATE COUNSEL AND SECRETARY, CHEMUNG CANAL TRUST COMPANY, ONE
CHEMUNG CANAL PLAZA, ELMIRA, NY 14902.
BY ORDER OF THE BOARD OF DIRECTORS
Robert J. Hodgson
Secretary
Date: April 2, 1998
One Chemung Canal Plaza
Elmira, New York 14902
Appendix A
PROPOSAL TO ADOPT THE
CHEMUNG CANAL TRUST COMPANY
DEFERRED DIRECTORS FEE PLAN
CHEMUNG CANAL TRUST COMPANY
Deferred Directors Fee Plan
Any Director may elect from time to time that payment of all or any part of
the annual retainer thereafter payable to him or her and that payment of all or
any part of the fees thereafter earned by him or her for attendance at
subsequent meetings of the full Board of Directors and at subsequent meetings of
committees of the Board of Directors (such annual retainer and fees for
attendance being hereinafter collectively referred to as "fees") be deferred on
the following terms and conditions:
1) ELECTION -- All elections must be in writing and signed by the Director
and must designate the time and manner of payment of all fees deferred pursuant
thereto.
Provided such amendment is made before the year in which payment of
deferred fees would have commenced under the Director's existing election, an
election as to the time and manner of payment of deferred fees may be amended to
further defer the commencement of payment or to extend the period of payment but
no amendment may accelerate the commencement of payment or shorten the period of
payment.
2) PERIOD OF ELECTIONS -- Each election shall continue in effect as to all
fees thereafter earned as above provided by the electing Director until revoked
by written instrument signed by such Director.
3) SUCCESSIVE ELECTIONS -- A Director who revokes an election may make a
new election at any time thereafter as to fees to be so earned after such new
election but the prior revoked election shall govern the time and manner of
payment of all fees deferred pursuant thereto, except as otherwise specifically
allowed hereunder.
4) ACCOUNTING FOR DEFERRED FEES -- Deferred fees shall be a general
unfunded liability of Chemung Canal Trust Company ("the Bank"). No separate
fund shall be set aside or earmarked for their payment. Neither shall any
Director have a right or security interest in any asset of the Bank and no trust
or security interest shall be implied as a result thereof. A 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, provided,
however, that effective October 1, 1997, amounts allocated to the Memorandum
Unit Value Account as of October 1, 1997 or thereafter and earnings thereon may
not thereafter be transferred to the Memorandum Money Market Account. Any
change in such designation may be made no later than the last day of each March,
June, September and December during the deferral period to be effective on the
date next following such notification that compensation would have been paid in
accordance with the Bank's normal practice but for the election to defer.
a) Memorandum Money Market Account -- A memorandum account shall
be kept of the deferred fees by each Director with the balance in said
memorandum account to be credited with interest compounded quarterly
on the average balance during each such calendar quarter at a rate
during each calendar quarter equal to the Applicable Federal Rate for
short-term debt instruments as computed and published by the Internal
Revenue Service for the month immediately preceding the calendar
quarter for which the interest computation is being made.
b) Memorandum Unit Value Account -- The amount, if any, in or
allocated to the Director's deferred compensation Unit Value Account
on the dates compensation would have been paid in accordance with the
Bank's normal practice but for the election to defer, shall be
expressed in units on a quarterly basis, the number of which shall be
calculated as of the last trading day of each quarter and shall be
equal to the sum of the quarterly retainer plus the Director's
allocated fees other than the Director's quarterly retainer received
by the Director in such quarter divided by the closing bid price for
shares of the Bank's Common Stock (hereinafter referred to as "Market
Value") on such date. On each date that the Bank pays a regular cash
dividend on shares of its Common Stock outstanding, the Director's
account shall be credited with a number of units equal to the amount
of such dividend per share multiplied by the number of units in the
Director's account on such date divided by the Market Value on such
dividend date. The value of the units in the Director's Unit Value
Account on any given date shall be determined by reference to the
Market Value on such date. For the purposes of this Plan, the term
"Bank Common Stock" shall mean the common stock of Chemung Financial
Corporation, the parent company of Chemung Canal Trust Company. If a
valuation date shall not be a trading day, the Market Value on such
valuation date shall be deemed to be the Market Value on the trading
day next preceding such date.
c) Recapitalization -- The number of units in the Director's
Unit Value Account shall be proportionally adjusted for any increase
or decrease in the number of issued shares of Common Stock of the Bank
resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of
consideration by the Bank, or any distribution or spin-off of assets
(other than cash to the stockholders of the Bank).
5) TIME OF PAYMENT -- At the election of an electing Director, deferred fees
shall be paid to him or her, or payment thereof to him or her, shall commence
either:
a) at a specified age, or
b) at a specified time, or
c) at the termination of his or her services as a Director;
provided, however, that payment must be made or commenced not later than the
year in which the Director attains the age of 72 years, and provided further
that except in the case of death, retirement or disability, no payment from a
Unit Value Account shall be made until at least six (6) months after the last
credit of units to the Account.
6) MANNER OF PAYMENT -- A Director may elect to receive the compensation
deferred under the Plan in either (a) a lump sum, or (b) a number of annual
installments as specified by the Director on the election form. All amounts
distributed to a Director, his or her personal representatives or beneficiaries
in the Director's Money Market Account shall be paid in cash and, effective
October 1, 1997, all amounts in the Director's Unit Value Account shall be paid
in the form of shares of the Bank's Common Stock.
7) DEATH -- At the death of an electing Director, the entire balance of his
or her account shall be paid in a lump sum to his or her personal
representatives or, if the Director has named a beneficiary and such beneficiary
survives the Director, in a lump sum or in installments of not more than 10
years as the Board of Directors may determine after consultation with the
beneficiary.
8) TOTAL AND PERMANENT DISABILITY -- Upon the request of an electing
Director, together with satisfactory proof of his or her total and permanent
disability, the Board of Directors may direct the payment of the entire balance
of his or her account to the Director or the commencement of installment
payments to him or her.
9) TRANSFER, PLEDGE OR SEIZURE -- Title to deferred fees shall not vest in a
Director until actual payment thereof is made by the Bank in accordance with the
provisions of this Plan. A Director may not transfer, assign, pledge,
hypothecate or encumber in any way any interest in such deferred fees prior to
the actual receipt thereof. If a Director attempts to transfer, assign or
encumber any interest in his or her deferred fees, or any part thereof, prior to
the payment or distribution thereof to him or her, or if any transfer or seizure
of such deferred fees is attempted to be made or brought about through the
operation of any bankruptcy or insolvency law or other legal procedure, the
rights of the Director taking such action or concerned therein or affected
thereby or who would, but for this provision, be entitled to receive such
deferred fees, shall forthwith and ipso facto terminate and the Bank may
thereafter, in its absolute discretion at such time or times and in such manner
as it deems proper, cause the whole or any part of the balance of the Director's
account to be paid to any person or persons, including any spouse or child
of the Director, as the Bank in its uncontrolled discretion shall deem
advisable.
10) AMENDMENT OR REPEAL -- This Plan may be amended or repealed in whole or
in part at any time by the Bank, but no such amendment or repeal shall alter the
time or manner of the payment of fees, the payment of which has theretofore
been deferred pursuant hereto, except as expressly allowed herein.
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 MAY 13, 1998
ANNUAL MEETING OF SHAREHOLDERS - MAY 13, 1998
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 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 May 13, 1998 (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 and any
adjournment thereof, subject to any directions indicated.
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 IDENTIFIED IN ITEM (1) AND FOR ITEMS (2) AND (3).
NOMINEES FOR WITHHELD
1. Election of Directors. 3-year term: John W. Bennett
Robert H. Dalrymple
Frederick Q. Falck
Ralph H. Meyer
Samuel J. Semel
Richard W. Swan
William A. Tryon
FOR/AGAINST/ABSTAIN
2. Approval to increase the number of authorized shares of common stock
and reduce the par value of such stock.
(To be signed on Reverse Side)
FOR/AGAINST/ABSTAIN
3. Approval of the Chemung Canal Trust Company Deferred Directors
Fee Plan.
I/We will attend the Meeting
Number in group
SIGNATURE(S)
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.